When the state has expenses for pensions and salaries in the state system of about 90% of the budget resources that it collects from fees and taxes, the need for structural reforms becomes indisputable. Development and modernization are impossible without investments, and Romania spent about 5-6% of GDP for these purposes in recent years, about five times less than for salaries and pensions. If you increasingly hear that without EU money and without PNRR reforms next year we will have real difficulties, not only budgetary, but also economic, think about these numbers and about all the ratings that put our country in last place in Europe in many sections – from infrastructure to health or functional literacy.
The PNRR is seen as a project for the country because it means more than the possibility of attracting the allocated 29 billion euros, thanks to the way it was designed as a combination of grants and loans, a combination of reforms and investments, with elements of conditionality between investments and reforms with detailed monitoring through targets and milestones and limited time frames for completion of the investment.
Romania has so far raised around €6.3 billion from the PNRR, representing pre-financing and the first tranche, and will receive another €2.7 billion in September for the second payment request. But no payment request was made in 2023 due to delays and missing milestones, although a third request for €3.14 billion was due to be submitted to the European Commission (EC) in the spring.
The most painful issue for this request is pension reform, and the EC has already expressed its unwillingness to negotiate reforms. Given the current conditions, with the postponement of the Special Pensions Act in Parliament and the amendment of the PNRR to introduce the REPOWEREU component, a delay is foreseen for the fourth payment request, which was due in December 2023.
Read the rest of the article on the PwC Romania blog
The article was signed by Dina Bumbeca, managing partner of PwC in Romania
Article supported by PwC Romania
Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.