PNRR implementation, delayed by 18 months

George Marinescu
English Section / 20 mai

PNRR implementation, delayed by 18 months

Versiunea în limba română

The National Recovery and Resilience Plan is not a failure, but its implementation has been delayed for a year and a half (18 months) due to the indecision of the governing coalition in Bucharest, PNL-PSD, which has not implemented certain reforms, among which is the abandonment of special pensions and the taxation of micro-enterprises, said four of the five candidates for the European Parliament elections on June 9, in a debate they participated in on Friday at the Global Forum for Modern Direct Democracy that took place last week in Bucharest.

The former Minister of Labor in the Orban government, Violeta Alexandru, candidate from the United Right Alliance (USR-FD-PMP), said: "PNRR is a success, an important step forward for Romania because it clearly defines the areas where there is a need reforms. It is about some system changes that must happen in Romania in key areas: in the field of pensions, the field of the public system, of the public apparatus, in terms of taxation. There are some things that put the finger on the wound in a country where things are stagnating, going by themselves, but you don't see anything changed, modernized and pointed in the right direction. In this respect, the PNRR is the first document that puts a mirror in front of us and shows us how far behind we are compared to many modern European countries".

The former Minister of Labor added that, during the implementation, the PNRR could be improved and gave an example in this direction: "I, personally, in the social area, would have liked to see more investments in services, less than in funds for certain vulnerable categories because, I repeat, giving money, giving vouchers, aid so that those people who do not work reach a higher income level than people who go to work, means discouraging work. I would like the European Union and PNRR to strike a balance: aid, support for the vulnerable, for those who really need it and take a step to reduce taxation, encourage work, support those who have initiative, encourage those who they invest in the private sector and take risks".

Dragoş Pâslaru, former Minister of Labor in the Cioloş Cabinet and candidate from REPER stated: "The 30 billion euros are a breath of fresh air for Romania in the conditions where one of the largest budget deficits in Europe, but the implementation of the PNRR is a failure monumental in our country. Why? Because on the reform side, some reforms were tried, others were postponed, corporate governance is still not resolved today, the installments were delayed. We are a year and a half behind schedule at this point from the original schedule that was negotiated. The European Union gave us the framework, gave us money, but it has no way to put it in our pocket, it has no way to do things in your place as Government. PNRR is Romania's chance to do those delayed things, to make crucial investments. We, since December when we submitted payment request number 3, have recreated at the level of the European Commission a concept of technical postponement, in which they wait for us from one month to the next - because we exceeded the procedural deadline of 2 months -, and for a month at another we are in limbo. European Commissioner Paolo Gentiloni told me that he stopped time for Romania. This is the monumental failure of PNRR implementation".

On the other hand, the former Minister of European Funds in the Dăncilă government, Roxana Mânzatu, a candidate for the European Parliament from the PSD-PNL alliance, said: "We are in limbo because milestone 206 (written in the PNL-USR government) which targets taxation is one of themes involving tax increases for micro-enterprises. PNRR is an extraordinarily rigid instrument, the plan was written by a government team without a public consultation in 2021. I joined the Ministry of Investments and European Projects as secretary of state and stayed for three months to find out what it was about, how it is written and how it was negotiated. PNRR is not a failure. It could definitely be written better. When you have reforms that somehow put a burden on subsequent governments... Yes, you wrote in the PNRR to eliminate tax incentives for builders. I was a deputy, campaigned and worked for the reduction of taxes in construction because we absorb European funds with the builders, who were facing a fantastic crisis regarding the labor force. As soon as we introduced those facilities, it was seen in the turnover in the construction sector, in the pace of execution of works. Look now at what is happening in the transport sector, what a lightning pace we have in the execution of works and in absorption. But in the PNRR it was written that it is an anomaly, that we must eliminate the facilities. These are examples of reforms that, in my view, were poorly written. At the moment the 3rd tranche of PNRR is in stagnation because the government led by Prime Minister Ciolacu cannot take certain decisions because someone wrote in 2021 in the PNRR that we will increase taxes on micro-enterprises".

Mrs. Mânzatu specified that another problem that Romania's PNRR had was the fact that the states that had mature projects received immediate funding and not a list of projects without documentation behind them.

Vlad Gheorghe, independent candidate, accused the fact that the implementation of PNRR is difficult in our country, because European funds are harder to steal. Vlad Gheorghe pointed out: "PNRR is the same story as with the other European funds. Statistically, Romania has an extra 65 billion euros since its accession in 2007 until now, the difference between what we contributed and what we received. It's a lot, but it's also very little at the same time, because we could have more. I heard earlier that PNRR is a rigid tool. I tell you that European funds are also rigid, because they are difficult to steal. You cannot manage many billions of euros coming from all European citizens and have a serious problem of stealing. It cannot be stolen, it is very difficult to steal PNRR. You can't manage it with people who steal. And the rigidity of the reforms... Not to have special pensions. Well, parliamentarians should no longer have special pensions. Let all kinds of dubious people from the state apparatus no longer have special pensions. (...) Let's do some fiscal reforms. The European Union does not say stop giving tax breaks, but tells us to balance the budget, which is a common sense thing".

He also pointed out that two weeks ago the European Public Prosecutor's Office published a statistic from which it appears that in our country frauds of 2.5 billion euros were detected in projects with European funding.

Nicu Ştefănuţă, independent candidate added: "PNRR cannot be a failure. That European funds do not become a reality in Romania is a crime against this country. For example, the PNRR includes the three regional hospitals, but also 27 other hospitals in the country. In 2021, it was decided that three large regional hospitals in Cluj, Craiova and Iaşi would be financed from the PNRR, for which no brick has been built so far, Iaşi being the most advanced in the feasibility study and other things that are on the sheet. Dart 21 localities that are waiting for the money from PNRR, they did not see those maternity hospitals, those obstetrics-gynecology clinics and that is why in some areas the women ended up giving birth on the pavement in Romania in 2024. How is it possible that 21 hospitals are not raised under the conditions in which the PNRR started more than three years ago?".

Mr. Ştefănuţă gave another example, namely the construction of social housing. He showed that more than 300 million euros are allocated for the construction of social housing, but none has been built. The candidate mentioned that 289 million euros are allocated for the renovation of 3,700 accommodation places in dormitories, but no dormitories were renovated.

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