EU Funds Absorption: Case of Romania

Abstract

Article studies the absorption of European funds in Romania for the two post-accession periods: 2007-2014 and 2014-2020 and highlight the situation in Romania regarding the amount and evolution of European funds received (in relation to its contribution to the EU budget), the structure of these funds, the evolution of the absorption during the two intervals by program type and Romanian areas of development as well as difficulties encountered and the solutions adopted to overcome them. The analysis is based on primary statistical data provided by the Romanian Government and the European Commission, as well as studies and reports on national particularities and problems of absorption of European fund in Romania. In addition, a qualitative analysis of legislative and institutional framework aims to point out weakness and causes that hindered the absorption of funds. Paper highlights the increase of funds absorption in the current financial framework compared to the previous and emphasizes weaknesses in the Romanian institutional framework. The fact that many of the difficulties manifested in the first stage after adhesion were counter through appropriate solutions, enable better management of funds, which places Romania to the EU average in terms of rate of absorption. These solutions concern the improvement of administrative capacity (information, transparency, implementation, relationship with beneficiaries).

Application of Successful EU Funds Absorption Models to Sustainable Regional Development

“…The most important aspect of material resources relates to the "Level of technological readiness for the implementation of EU fund projects" whose beta coefficient is β = 0.432, t = 8.642, p < 0.01, followed by "Alignment of strategic documents with development needs" β = 0.315, t = 6.462, p < 0.01, and "Financial capacities for co-financing projects from EU funds" β = 0.232, t = 4.817, p < 0.01. According to Marcu et al (2020), the means to improve the absorption of funds from the EU are to increase administrative capacities, improve project quality, better coordinate among institutions, and involve regional and local stakeholders in governance. Wolleghem (2020) and Aivazidou et al (2020) also confirm in their research the importance of capacity over preferences, particularly regarding the assertion that decentralization, strategic planning, and financial capacities play a positive role in the utilization of EU funds.…”

“…Cunico et al (2021) emphasize that there is no adequate model for monitoring and analyzing the impact of EU funds on regional development, and that this depends on a range of factors. Conversely, Maras (2022) confirm that there is a significant connection between European funding and reduction in regional disparities, especially when including regional and local authorities in the processes (Marcu et al 2020). We can agree that there are a large number of variables that need to be measured in order to assess the impact of EU funds on the regional development of a particular country, but the position is that there are a number of ways in which this can be measured, such as economic growth models, regional development models, impact assessment models, multi-criteria decision analysis (MCDA), econometric models, panel data analysis, spatial analysis, and simulation models.…”

“…Murzyn (2018) noted that the smart growth of regions in Poland has significantly increased due to the use of EU funds. Marcu et al (2020) conducted a study in Romania where they highlight poor capacities at the start of using funds from EU sources due to a lack of experts in the field, while over time the situation stabilized. Progress in the absorption of funds from EU sources occurred due to the growth of knowledge and experience, and an increase in transparency and information and communication systems.…”

Sustainable Entrepreneurship: Romanian Entrepreneurs’ Funding Sources in the Present-Day Context of Sustainability

“…Funds for SMEs help companies develop their businesses in different fields of activity; their absorption represents a barometer for intelligent and sustainable growth [60]. According to a 2020 study [61], a series of difficulties were recorded in accessing the European funds, which could be overcome by a simplification of the bureaucracy in allocating them both at the European and national level as well as by the consolidation of financial security through audit measures [62]. The effect of structural funds have positive implications for public investments and aggregate well-being [63,64].…”