28/09/2009 - THE BRITISH ROMANIAN CHAMBER OF COMMERCE SEES STRUCTURAL FUNDS AS STRATEGIC KEY TO ECONOMIC GROWTH

28/09/2009 - THE BRITISH ROMANIAN CHAMBER OF COMMERCE SEES STRUCTURAL FUNDS AS STRATEGIC KEY TO ECONOMIC GROWTH
Wed, 14th October, 2009
Bucharest, September 24, 2009 –The British Romanian Chamber of Commerce (BRCC) organized one of its series of business breakfasts, which focused on the Romanian authorities’ need to increase awareness for deeper transparency in streamlining the structural funds accession measures in order to obtain a higher level of absorption. The European Commission has rated Romania the 5th in relation to payment levels.
The event was held on Thursday, September 24th, at Intercontinental Hotel.

Largely perceived as the cheapest, easiest and most effective way for the Romanian economy’s growth, structural funds are one of the biggest challenges on the agenda of the current public finances authority. The strategy outlined by the Ministry of Public Finance (MPF)’s representative, Secretary of State Bogdan Dragoi, the Guest speaker of the event, pointed out that it takes less time to observe proceedings between tender and the actual sign-off of the documents. The necessary time from sign-off to reimbursement needs further work to be reduced to a correct level together with the procedures related to the appeals process for unapproved applications.

The talks revealed a vital reference point, stressed alike by Mr. Brian Davies, Chairman of BRCC and by Mr. Bogdan Dragoi. “Money and cash flow are the key to a sound economy, for future relevant investments to become possible, with direct support from the Ministry of Finance”, pointed out Brian Davies. Consequently, a sound Romanian economy needs a more flexible cash flow.

The Ministry reiterated, through its representative Mr. Bogdan Dragoi, its commitment to consolidate and render the budget more transparent in order to make room for investments. By carrying out investments especially in infrastructure, you create growth. In the light of a medium term budgeting on investments and infrastructure issues, cost cut measures appear to be critical to the Ministry of Finance. Fiscal accountability legislation will be passed, focusing on greater predictability, particularly regarding infrastructure projects (that means guaranteeing project finance for at least 3 years).

The International Monetary Fund (IMF) agreement has proven to be a very helpful safety net for Romania and has imposed the need for structural measures. Expected growth rates for Romania have been revised to around -8.5% with a 7.3% budget deficit with expected modest growth in 2010 of 0.5% and below 6% budget deficit.
The fiscal authorities must first of all cap salaries increase and readjust public spending on salaries and pensions as part of GDP, as they are the biggest burden on the public budget. Restructuring them now will help adjusting expenditure. The big challenge is the budgetary gap between needs and resources and also the restructuring of the different levels of employment.

One key solution to tackling some of the challenges ahead is the increased investment in Private Public Partnerships (PPPs), a field in which the ministry has recently promoted new guide. The PPP sector in Romania is still to be developed and the inroads have been made into this area with particular emphasis on 3 key sector - Infrastructure, Health and Education.

Another initiative, in order to promote job creation and economic growth, was to amend the existing legislation regarding state aid schemes allowing for more flexibility in terms of eligibility criteria for Romanian companies and increasing the allocated budget for this scheme.

As a conclusion, an increase in the level of expertise in Government departments is necessary so that there is a greater understanding of the practical issues which affect the business community at large
About the British Romanian Chamber of Commerce
The British Romanian Chamber of Commerce is a non-profit organisation, established in 1998. A registered company limited by guarantee and owned by its membership with the mission to use its good offices and activities to increase British-Romanian business and investments, to foster a better understanding between the two nations and encourage bilateral trade and industry, tourism, financial investment and cultural relations.

About the British Romanian Chamber of Commerce
The British Romanian Chamber of Commerce is a non-profit organisation, established in 1998. A registered company limited by guarantee and owned by its membership with the mission to use its good offices and activities to increase British-Romanian business and investments, to foster a better understanding between the two nations and encourage bilateral trade and industry, tourism, financial investment and cultural relations.

For more information please visit www.brcconline.eu 
The British Romania Chamber of Commerce was awarded the prestigious Council of British Chambers’ European Chambers’ 2009 award for Best Chamber.