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EC endorses preliminary assessment of Romania's third payment request under Recovery, Resilience Facility
The European Commission (EC) on Tuesday endorsed a positive preliminary assessment of the six targets and 62 out of 68 milestones linked to Romania's third payment request for EUR 2 billion (net of pre-financing) under the Recovery and Resilience Facility, the centrepiece of NextGenerationEU.
The commission found that six milestones have not been fulfilled at this stage: reforms of the governance of state-owned enterprises; investments in transport, and a reform of the tax regime for microenterprises, according to an EC press statement released on Tuesday.
The commission therefore proposes to suspend part of the payment as foreseen by Article 24(6) of the RRF Regulation. This procedure gives member states additional time to fulfil outstanding milestones or targets, while receiving a partial payment linked to the milestones and targets that have been satisfactorily fulfilled.
The third payment request covers important steps in the delivery of 37 reforms and 17 investments that will drive positive change for citizens and businesses in Romania in the areas of the green and digital transitions, sustainable transport, energy renovation, tax and pension regimes, the business environment, urban mobility, tourism and culture, healthcare, social reforms, good governance, education, and water, waste and forestry management.
Flagship measures in this payment request include boosting energy efficiency in industry. The legislative framework introducing measures to facilitate investment in energy efficiency in the industry entered into force. Among other things, this reform removes obstacles to energy performance contracting, introduces market surveillance and the application of standards for energy efficiency, and introduces new standards for green financial instruments.
As far as the reform of the public pension system is concerned, a new legislative framework entered into force, establishing that special pensions will be calculated based on the contributory principle, seniority in the profession and readjustment of the percentage related to the obtained income. The contributory principle requires that pension benefits will depend on the sum of contributions paid during working life.
Moreover, there will be investments to improve the energy efficiency of existing building stock: Contracts were signed for the energy efficiency renovation and integrated renovation (seismic consolidation and energy efficiency) of residential and public buildings.
The commission has now sent its positive preliminary assessment of the milestones and targets that it considers satisfactorily fulfilled to the Economic and Financial Committee (EFC), which has four weeks to deliver its opinion.
Concomitantly, the commission has communicated to Romania the reasons why it considers the respective milestones related to investments and reforms not to be satisfactorily fulfilled. Romania now has one month to submit its observations to the commission.
Following the EFC's opinion on the positive preliminary assessment and after assessing the observations submitted by Romania, the commission will adopt a payment decision, after which the payment to Romania can take place.
Should the commission, following Romania's observations, confirm its assessment that the milestones in question have not been satisfactorily fulfilled, it will suspend part of the payment. The suspended amount will be determined by applying the commission's methodology for payment suspensions that applies to all member states.
From that moment, Romania will have a period of six months to fulfil the outstanding milestones. At the end of this period, the commission will assess whether these milestones have been satisfactorily fulfilled. If so, it will lift the suspension and proceed with the payment of the suspended amount.
Romania's recovery and resilience plan includes a wide range of investment and reform measures. The plan will be financed by EUR 28.5 billion, of which EUR13.6 billion in grants and EUR14.9 billion in loans.