The European Commission (EC) proposed on Tuesday the partial suspension of payments from Romania’s third payment request under the National Recovery and Resilience Plan (PNRR) program.
The EC thus approved “a positive preliminary assessment” in the case of six targets and 62 of the 68 milestones related to Romania’s third payment request in the amount of two billion euros (without pre-financing) within the Mechanism of recovery and resilience (MRR), the central element of the NextGenerationEU program, according to a press release from the Community Executive.
“The commission found that, at this stage, six milestones have not been reached. It is about reforms of the governance of state enterprises, as well as investments in the field of transport and a reform of the fiscal regime of micro-enterprises”, the EC statement says.
“Therefore, the Commission proposes to partially suspend the payment in accordance with Article 24(6) of the MRR Regulation. This procedure gives Member States additional time to meet outstanding milestones or targets, while they receive a partial payment linked to milestones and targets that have been satisfactorily met,” the European Commission informed.
Adrian Câciu told Digi24’s Jurnalul de Sără show, that “the partial payment is being made” and also specified the milestones that will not be met.
“We do not have the amount that will be suspended, we are waiting for this amount from the Commission. This request for payment, however, I submitted a year ago to the Commission. We spent a year negotiating or fixing certain situations in this payment request. So with the Commission you don’t play with this money from the PNRR, we have to make these reforms, it’s very simple. Corporate governance must be as it is across Europe. If nothing is done in a month, we will have another six months to solve them, but we will not receive the value of those six milestones”, said the Minister of European Funds.
Milestones that Romania achieved
The third request for payment covers important stages in the implementation of 37 reforms and 17 investments that will generate positive changes for citizens and businesses in Romania in the following areas: green and digital transition, sustainable transport, renovation energy, fiscal and pension regimes, business environment, urban mobility, tourism and culture, healthcare, social reforms, good governance, education and water, waste and forest management.
Among the emblematic measures in this payment request is the stimulation of energy efficiency in industry. Thus, the legislative framework that introduces measures to facilitate investments in energy efficiency in industry came into force.
Among other things, this reform removes obstacles to energy performance contracts, introduces market surveillance and enforcement of energy efficiency standards, as well as new standards for green financial instruments.
Also, with regard to the reform of the public pension system, a new legislative framework has entered into force that establishes that special pensions will be calculated based on the principle of contribution, seniority in the profession and the readjustment of the percentage related to the income obtained. According to the contributory principle, the amount of pensions will depend on the amount of contributions paid during professional life.
In addition, there will be investments to improve the energy efficiency of the existing real estate park under the conditions in which renovation contracts were signed in order to improve energy efficiency and integrated renovation contracts (seismic consolidation and energy efficiency) of public buildings.
The Commission has already submitted its preliminary positive assessment of the milestones and targets it considers satisfactorily achieved to the Economic and Financial Committee (CEF), which has four weeks to issue an opinion.
The European Commission has communicated to Romania the reasons why it considers that the respective benchmarks related to investments and reforms have not been satisfactorily met. Romania now has one month to submit its observations to the Commission.
“Following CEF’s opinion regarding the positive preliminary evaluation and after evaluating the observations submitted by Romania, the Commission will adopt a payment decision, after which payment can be made to Romania. If, following the observations submitted by Romania, the Commission confirms its assessment that the benchmarks in question have not been satisfactorily met, part of the payment will be suspended. The suspended amount will be established by applying the Commission’s methodology regarding payment suspensions (presented in Annex II to the communication published on February 21, 2023), which applies to all member states”, the EC statement also states.
From that moment, Romania will have a period of six months to fulfill the outstanding milestones. At the end of this period, the Commission will assess whether the respective milestones have been met satisfactorily. If so, it will lift the suspension and make the payment of the suspended amount, according to EC representatives. Romania’s recovery and resilience plan includes a wide range of investment and reform measures. The plan will be financed with 28.5 billion euros, of which 13.6 billion euros in the form of grants and 14.9 billion euros in the form of loans.
Row in the ruling coalition
The President of PNL, Nicolae Ciucă, commented, on Tuesday evening, on the announcement of the European Commission regarding the third request for payment and states that it “is not at all similar to what Mr. Ciolacu told us publicly about the risk of losing money from PNRR “.
In addition, the president of the Senate believes, this news “hits us when we needed to know how to project the budget for 2025”. Prime Minister Marcel Ciolacu responded to the PNL leader, saying that “this opposition circus does not help anyone”, adding that no money will be lost: “You are part of the decision! Assume it“, Ciolacu also sent to Ciucă.
“I saw the European Commission’s response to payment request number 3 from the PNRR. What the Commission announced today is not at all similar to what Mr. Ciolacu told us publicly about the risk of losing money from the PNRR. The worst thing is that this news hits us just when we needed to know how to project the budget for the year 2025″, Nicolae Ciucă wrote on Facebook. The President of the PNL asks the Prime Minister Marcel Ciolacu “to urgently explain what he will do so that Romania does not lose the approximately 1.1 billion euros from the PNRR”.
“Mr. Ciucă, for the first time I am embarrassed to answer you. This opposition circus does not help anyone. And neither you! Romanians expect something else from a statesman. First of all, he is waiting for acceptance. And all that the Commission invoked are things that happened during your mandate”, Marcel Ciolacu wrote on Facebook on Tuesday evening.
Ciolacu states that, fortunately, he works well with the current Minister of Energy, Sebastian Burduja.
“Fortunately, I work very well with Mr. Minister Burduja and we will correct all the misfortunes done in the energy companies by former minister Virgil Popescu, your colleague. I work very well with the Minister of Transport and you may have noticed that today another colleague of yours has finally resigned from Metrorex. I work very well with the SGG led by the PNL and we will resume the procedures at AMEPIP as soon as possible. I work very well with everyone, Mr. Ciucă, so that we can correct what went wrong and not lose a single euro from the PNRR”, the prime minister added.
According to him, however, there is one thing that must be established in the coalition: “There is only one thing left, which we must decide together in the Coalition: what is the best decision for the small entrepreneurs, whom you claim to support. We need a clear political decision on the threshold for micro-enterprises. The one put in the PNRR by the right-wing government led by the president of the PNL at that time – Mr. How much”. Ciolacu also states that “people must know”: “We have a choice between lowering the threshold for micro-enterprises and taking around 300 million euros or giving up the money and keeping the current amount of 500 thousand euro”.
“Whether you want it or not, Mr. Ciucă: you are part of the decision! Take responsibility”, Ciolacu told Ciuca.
A small step for the new Government for a huge sum of free money! Vote for government stability. Vote with your mind and not your heart.