Romania risks delaying or losing more than EUR 4.5 billion (over 1% of GDP) in grants under the EU Recovery and Resilience Facility (PNRR) unless Parliament adopts six key reform bills by the end of August, with the ongoing political crisis threatening the fragile cross-party support required to pass the legislation, according to a report by Digi24. Losing the money could drag the country’s economic growth into the negative area – where it would have been for the past couple of years in the absence of EU assistance.
The six legislative milestones are linked to the country’s next payment request under the PNRR and are expected to be debated during an extraordinary parliamentary session later this month.
Although the leaders of the former governing coalition agreed in the spring to support reforms required under the PNRR regardless of whether they were in government or opposition, the commitment has weakened following the collapse of the coalition. The Social Democratic Party (PSD) has since signalled that it will not support some of the key reforms without a broader political agreement on forming a new government.
The most politically contentious proposal is the new public sector wage law, which is expected to overhaul the remuneration system for state employees. Interim labour minister Dragoș Pîslaru is leading negotiations on the draft after taking over the portfolio from a PSD minister.
PSD leader Sorin Grindeanu has said the party cannot support a bill whose contents it has only recently received.
Another uncertain milestone concerns reforms to the National Integrity Agency (ANI), including amendments to legislation governing incompatibilities and conflicts of interest for public officials. Grindeanu has also expressed reservations about supporting these measures in the absence of a political consensus on governance.
Other reforms were not mentioned by the Social Democrats as unacceptable, but some of them may touch delicate topics. This is the case of the Urban Planning Code and the Decarbonisation Law, both of which are scheduled for discussions among party experts this week ahead of a parliamentary vote.
The remaining milestones include legislation introducing performance incentives for employees of the Ministry of Finance aimed at improving tax collection, as well as amendments to the Administrative Code affecting the status of civil servants.
President Nicușor Dan said there is still time for the political parties to reach an agreement.
“From my information, the salary bill proposal reached PSD yesterday [July 13]. It was expected that the parties would have different visions regarding this law. We will follow up. If our mediation is needed, of course. But it is clear that it is a very complicated law, considering the expectations of many social categories,” the president said.
Asked whether the legislation could still be adopted within the PNRR deadline (end-August), Dan replied: “I think there are still chances, yes.”
The outcome of the negotiations will determine whether Romania can secure the next tranche of PNRR funding, with the country’s political impasse increasingly spilling over into the implementation of reforms linked to EU financing.
iulian@romania-insider.com
(Photo source: Ruletkka/Dreamstime.com)
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