RREGIONALEGIONAL GOVERNANCEGOVERNANCE ANDAND POLICYPOLICY ININ TRANSITIONTRANSITION COUNTRIESCOUNTRIES. A. A

COMPARATIVECOMPARATIVE ANALYSISANALYSIS BETWEENBETWEEN P POLANDOLAND ANDAND R ROMANIAOMANIA

Petre PRISECARU

AABSTRACTBSTRACT:: Regionalism is widely associated with decentralization – an assumption based on the

subsidiarity principle, which involves a certain transfer of attributions from governments or central

authorities to regional authorities. Regionalization implies the use of some newer concepts, like

governance, and aims at developing a strategic capacity, an institutional capacity and democratic

legitimacy, while at the same time strengthening the administrative capacity.  Regionalization is sustained

by two other concepts: sustainability and spatial identity. Within EU member states regionalism was based

on different considerations. In Poland regionalism was achieved with a strong legislative support and

relied on self-governance within three levels of administrative divisions of the country. During 2007-2013,

over € 16.5 billion were spent through 16 regional programmes, giving the Polish regions the opportunity

to implement their own development strategies. Romania has 8 regions around some major cities,

according to EU statistical level NUTS II. However, the real absorption rate for EU structural and

cohesion funds distributed through all seven existing operational programs reached only 9.72% at the end

of November 2012 due to high centralization, bureaucracy and corruption.

KKEYWORDSEYWORDS: regionalism, governance, decentralization, management, EU funds, absorption, bureaucracy,

corruption

1. A F1. A FEWEW C CONSIDERATIONSONSIDERATIONS O ONN R REGIONALISMEGIONALISM ANDAND R REGIONALEGIONAL G GOVERNANCEOVERNANCE

In recent decades, the issue of regional integration has determined a

reconsideration of the importance of the national state – overly-stressed in relation to the

requirements of spatial development and under-emphasized when it comes to managing

international affairs. As such, regions and cities have gained more and more influence

and authority by increasing their budgets and developing their institutional structures and

bureaucracy, which were grafted also on the revitalization of regional cultures. Moreover,

priorities shifted from that of ensuring the military and political security of the

democratic capitalist system guaranteed by NATO, to providing general economic

security – which is a much more pressing and difficult task to achieve in the globalization

context.

 Deindustrialization, unemployment, financial and economic crisis in Europe, as

well as the numerous failed austerity policies have strengthened the need to accelerate the

decentralization process, as based on the subsidiarity principle and implicitly upon the

ceding of attributions on behalf of the governments or central authorities in favour of

regional ones. The two parallel and related processes – regionalization and globalization

– have greatly contributed to the loss of credibility and support by the central authorities

and political parties. With varying speeds and degrees, the authority is transferred from

national capitals to regions and cities which are increasingly connected directly to the

global economy. In the opinion of some authors (John Newhouse, 1997)1 regionalism

within or beyond the current borders represents the future dynamics of the integration

process and Europeanization process.

In addition, an analysis of the regionalization process implies the use of newer

concepts, such as that of governance introduced by the neo-institutionalist school,

including multi-level governance (launched almost 20 years ago), as well as an analysis

of the fundamental principle of European Governance - the subsidiarity principle -

associated with the decentralization process, and also the use of strategic and institutional

management principles.

 Regionalization associated with decentralization or implementing the subsidiarity

principle aiming at intensifying the economic competitiveness and increasing the

efficiency of governance implies endowing the regions with resources and

responsibilities for dealing with economic, social, ecological problems and relies on three

arguments (Arnoud Lagendijk, 2003)2: a) development of a strategic capacity to improve

economic cohesion, specialization, competitiveness and governance through development

coalitions; b) development of institutional capacity and democratic legitimacy to better

represent the interest groups and regional actors identity; c) strengthening of the

1 John Newhouse, 1997, Europe’s Rising Regionalism, Foreign Affairs, published by the Council on Foreign Relations, January/February 1997 Issue, pp.1-122 Arnoud Lagendijk, 2003 Regionalisation in Europe. Stories, institutions and boundaries, edited by Henk van Houtum, Olivier Kramsch and Wolfgang Zierhofer, pp.3-4

administrative capacity within the reinforcement policy of networks and regional

governance structures.

EU regional development policies and initiatives are grafted on three mentioned

arguments, focusing on strategic capacity, if national level is primarily responsible for

implementation and monitoring, regional level has more responsibilities based on specific

administrative structures. Many states have established regional administrative structures

endowed with sufficient powers and skills to implement EU policies or programs. In line

with competitiveness, regionalization is a vital tool by promoting clusters and innovation,

by supporting the modernization of physical infrastructure oriented towards associational

investments hinting at networking (between business circles and regional organizations),

building skills and strategic development, but it is also a support level for the single

market, implicitly an important step to more competition. Creating institutional capacity

at regional level through democratic representation is related to the implementation of

subsidiarity principle and to ensuring the partnership configurations. Through the

Committee of the Regions the regions from EU have an advisory role in shaping EU

policies, but simultaneously play a key role in their implementation.  

The structure of regional governance has its role within multilevel governance, in

the design and implementation of regional development policies. There are pros and cons

of regional government. From the pros would be that the regional administration

democratically legitimized reinforces the role and functions of regions, from the cons that

it would have a modest role, would complicate the political and administrative process,

would increase the burden of bureaucracy. There is the dilemma of establishing the

regional administrative structures: at the central or at the regional level. There is also the

dilemma of strategic governance versus democratic governance, in the first variant the

region is seen as a strategic actor that has to turn into good account the local resources

and managerial skills to ensure its sustainable competitiveness. In the second

variant, unlike a corporation, the regional structure is a form for drawing up the public

policies and has to be legitimate and democratically controlled. Reality shows that the

public decision factors and business circles are the actors who matter, and this induces

the opinion of corruption proliferation and lack of democratic responsibility for spending

the public money. Developing the strategic regional governance and administrative

capacity has the imperative argument of ensuring the competitiveness and the practical

administrative requirements.

 Regionalization is sustained by two other concepts: sustainability and spatial

identity (Arnoud Lagendijk, 2003)3. Sustainability is related to the activities with

environmental impact, from ecological area, it reflects the qualitative side of economic

development, and the regional administrative structures are those that harmonize or

mediate different interests and positions, propose solutions and open new perspectives for

action and organization. All conceptual, organizational, managerial, innovations reveal

the sustainability role in coupling the dominant economic interests with environmental

and social considerations. The importance of identity in the regional construction is

obvious, being an image vehicle, and a foundation of institutionalization and

governance. Local community with its values (informal institutions) legitimizes the

formation of a region, often one may debate on the particular regional characteristics and

demarcations, nevertheless it counts a lot the specificity of economic and social

development. Regional identity is not the determining factor in establishing the regions

that may be created artificially or administratively, they can lead to the formation of new

regional identities, based on distinct spatial features. Regional administration/bureaucracy

may build a new regional identity through its activities and may also contribute to the

creation of regional networks and promotion of regional programs. Regions role seemed

to change from a functional/administrative one to a political/strategic one.

 More recently there is an index of European Quality of Government (EQI), the

governance has its particularities at national and regional level, at regional level good

governance depends much on economic and social development measures (GDP/capita,

health, education) and on the degree of social confidence in the government and to a

certain extent on population size or area, and to a less degree on decentralization and

regional governance relationships with national governance. These are the findings of a

study made by the European Commission in 2012 (Nicholas Charron, Victor Lapuente,

Lewis Dijkstra, Regional Governance Matters: A Study on Regional Variation in Quality

3 Arnoud Lagendijk, 2003 Regionalisation in Europe. Stories, institutions and boundaries, edited by Henk van Houtum, Olivier Kramsch and Wolfgang Zierhofer, pp.6-7

of Government within EU)4. The study has focused on the measurement of quality of

regional governance in the fields of education, health and law enforcement, respondents

assessing these areas compared to the three concepts associated with governance: quality,

impartiality, corruption level.

  Regionalism, strongly promoted at EU level, was based on historical regions

(Spain, Netherlands, Italy) or on administrative and statistical considerations or related to

decentralization (France), on considerations of absorption of EU funds (Ireland, new

members states), on strategic considerations for creating political regions (substitute for

federalization, the United Kingdom case), on decentralization and development

considerations (Central and Eastern Europe). Decentralization has prevailed but there

were trends of centralization (Netherlands and Germany). The number of regions may be

related to the size of the population, less to the geographic size. Romania with about 20

million inhabitants has 8 regions, France with a triple population has 26 NUTS 2

regions Poland with a double population has 16 NUTS 2 regions.  Romania’s option for

eight NUTS 2 regions is therefore comparable. More regions on Hungarian-

Bulgarian model mean more bureaucracy and higher costs, but also difficulties in scaling

the new regions.

2. R2. REGIONALISMEGIONALISM ININ P POLANDOLAND

  2.1. I2.1. INSTITUTIONALNSTITUTIONAL BUILDINGBUILDING ININ P POLANDOLAND

  2.1. 1. C2.1. 1. CONSTITUTIONALONSTITUTIONAL ANDAND LEGALLEGAL PROVISIONSPROVISIONS

Administrative reform in Poland took place two years after the Parliament

approved the new Constitution where the chapter 7 is dedicated to territorial government,

that can perform for all local areas the public tasks which are not assigned by the

Constitution or by the Parliament's decisions to other authorities. The municipality was

declared Poland's territorial basic unit and other units of regional and local administration

were to be defined by a parliamentary act. Based on Constitution’s provisions all

territorial units are legal persons and have property rights and Constitution has defined

two types of public tasks which were to be performed by territorial administrative units:

4 Nicholas Charron, Victor Lapuente, Lewis Dijkstra, 2012, Regional Governance Matters: A Study on Regional Variation in Quality of Government within EU, Working Paper 01/2012, European Commission, pp3-6

the first ones are their own tasks performed to meet the needs of community and the other

ones are those delegated by the government on the basis of some special

regulations. Distribution of public duties and the powers at central and local level (Viktor

Glowacki, 2002)5 is based on principles of unitary state (it was considered necessary to

place a representative of central government in each region, as a guarantee of unitary

character of the state), local self-governance for the management at the local level in

Poland (self-governing units being established at each level of administrative division the

country, territorial governments are only municipal and district public administration

authorities and at regional level there are two levels: regional government and the central

government representative), three levels of administrative divisions of the country

(representing the most appropriate structure adapted to the current stage of development

given the historical considerations and also the requirements of a modern state, that wants

to have international cooperation relations). The reform was carried out in order to

allocate as many local tasks and powers to municipal and district authorities, which

concern directly almost every member of the local community. This means mainly

providing certain goods and services and taking decisions regarding individual citizens.

Territorial governance was implemented by assuming that any public task should

be performed in the first instance by the municipality and only when the municipality is

unable to perform the task, due to financial or organizational reasons, or owing to the fact

that certain tasks extend to a greater area than that covered by the municipality, or due to

any other important reason, then it can be assigned to another administrative

structure (more often to the district). Thus, supplying of basic services constitutes the

largest part of tasks and skills of the municipality which has exclusive responsibilities in

supplying of water, heat and electricity; keeping the cleaning within the city (this

includes sewer systems, solid waste management, scouring of public areas);

e.g. providing facilities for cemeteries, parks and public green spaces. In other areas, the

municipality actions are shared with those of district.

5 Viktor Glowacki, 2002, Regionalization in Poland, Regionalization for Development and Accession to the European Union: A Comparative Perspective, Local Government and Public Service Reform Initiative, pp.105-107

The powers of regional governments differ from those of districts and

municipalities. The main purpose of this governance form (Viktor Glowacki, 2002)6 is to

stimulate the economic and social development of the region by creating the favourable

conditions for economic growth, through stimulating the labor market, getting and

gathering public and private funds to be used for public tasks, international cooperation

and promoting the region, maintaining and developing the technical infrastructure. But

regional governance should support activities aiming at improving education and health,

backing the cooperation between the scientific community and the business

community, supporting the technology development and innovation, supporting cultural

activities and protecting cultural heritage; should define and protect the natural

environment, in accordance with the norms of sustainable development.

 The defined fields of activity of regional governments clearly indicate that they

focus on organizational, creative and promotion activities. Hence, regional governments

have to make extensive use of non-governmental methods with the emphasis on

negotiations and contracting. Second group equally important of regional government

tasks is to provide highly specialized services in the same areas where basic services have

to be provided locally. This includes hospitals specialized in health care field and forming

teachers in the education sector.

    The role of central government at regional level is to implement the national

policy in the region, by supervising the integrated government administration in the

region. Central government control over regional government is limited to the legal

control and delegated governmental tasks at regional level. Regional administration of the

central government is solely responsible for the problems of national defense and security

in the region. The official of the central government in the region has a special

responsibility in the event of natural disaster or other extraordinary situation, especially

when human life health or property is in danger and in such a situation, he is bound

to ensure cooperation of all public central and local government units in the region and he

is responsible for the entire rescue operation. Due his supervisory role over territorial

governments and as the representative of the central government in the region, he meets

his duties and for instance he has the right to introduce binding rules for all inhabitants in

6 Idem 5

the region, with the aim to protect the life, the human health and public property and to

maintain order, public safety and peace.

General division of responsibilities between the administrative bodies is contained

mainly in the Law on regional government, Law on the district government, Law on

government administration in the region. However, the fields listed in these documents

quite often overlap, therefore, it was required to pass a separate law on amending some

provisions governing public administration powers, known as the Competence Act, so

that to clarify the division of powers between the three levels of government, as well as

between local administration and central government administration. As a result, more

than 140 other acts have been changed and the content of Competence Act gives a

comprehensive idea about the extent of reform undertaken in Poland.

Polish administrative reform has not limited the role of municipalities. On the

contrary, to some extent, the powers of municipalities have been improved. However,

many administrative tasks have been allocated to district and regional governments and

because they are newly established bodies, their responsibilities are an essential part of

the reform, and they focus on some areas of administrative responsibility involving

public transportation, real estate management, physical planning, environment and

natural resources, jobs, unemployment and social protection, health, education, culture.

The municipalities have their own revenues like taxes on legal entities, personal income

tax, local government properties, other incomes, subsidies, general subsidies, and they

can borrow funds or issue bonds.

Poland has decentralized the use of EU funds from the operational programs at

the voivodeship level. In the period 2004-2007, this was done with Regional Operational

Programme and with Sectoral Operational Programme-Human Resources. And the best

results were obtained just with the decentralized funds. Polish experts have noted,

however, that EU funds have provided significant economic growth, but on the other

hand, the disparities between the regions have increased. Thus it has been successfully

negotiated with European officials, for the period 2007-2013, the transfer of some

operational programmes at regional level and their adaptation to the needs of each

region. For 2007-2013, Poland has not a single Regional Operational Programme, as has

Romania, but 16 such programmes, one for each  voivodeship. Particular attention was

given to the poor eastern voivodeships which managed to achieve remarkable economic

performances. In order to facilitate the absorption of European funds, the Warsaw

government has advanced payments totalling seven billion euro for supporting European

financed projects. Of this amount, 800 million euro were put at the disposition of the

managers of private companies, which were thus encouraged to complete the projects

started and write new ones. The amount is not large for a country like Poland but the

seven billion invested in the real economy during the crisis period provided a good

support for the economy, and strengthened the confidence of population and business

environment in the government and also in the central bank of Poland. It is remarkable to

note that Poland stands by Turkey as one of the few countries not affected by the recent

crisis and not registering an economic downturn.

2. 1. 2. 1. 2. R2. REGIONALEGIONAL A ADMINISTRATIVEDMINISTRATIVE B BODIESODIES

In Poland there are 6 major regions (NUTS 1), 16 voivodeships (NUTS 2)

corresponding to development regions, which are divided into 66 sub-regions (NUTS

3). Voivodeship councils (16) and district councils (308) are elected in separate

elections. Voivodeship councils are in charge with the development and implementation

of regional economic policies, are meant to stimulate business and to improve the

competitiveness and innovation in the region, have independent budgets as districts and

municipalities. They have responsibilities in higher education, specialized services of

health and local cultural specific activities. Preservation and rational use of local cultural

heritage and local environment fall under their jurisdiction, and also the rural

modernization and spatial development. Elected councils are the main decision making

bodies and they elect the Governing Boards to exert the executive authority and they are

led by elected marshals. But there are also voivodes who are central government officials

at the regional level supervising the regional level activities and they may cancel the

decisions of regional authorities if they do not comply with the law. Their presence

confers a dual structure to the regional administration.

Self-governance of districts and communes allows the citizens to participate in

setting up local public authorities and also to exert their control on policies that influence

their life. Regional and administrative restructuring of the Polish State was based on the

subsidiarity principle promoted at EU level. Effectiveness, transparency, openness,

accountability, flexibility are the principles governing the administrative reform in

Poland, similar to those set out by the European Commission in July 2001 for the

European governance, noting that instead of flexibility it was the coherence principle.

Also the public finance reform was meant to make local public administration more

transparent and responsible towards the electorate.

 However, in Poland there was no political consensus on the benefits and costs of

reform measures and unfortunately in Poland decentralization and regionalization have

been hampered, slowed by the political partisanship, by the disputes and political

manoeuvres, by the concerns of some communities to lose their political and economic

influence on government, by existing an ongoing conflict on the process of

decentralization. It was too much overstated the role of decentralization and

regionalization as an instrument of removing the communist centralism, excessive

bureaucracy and administrative inefficiency.

The functioning of public administration at the regional level is quite complicated,

with almost five levels. There are regional units of special administration (40 branches)

operating at the same level as voivodeships, but subordinated directly to ministries and

less to voivodeships. Other institutional structures are operating on larger territories than

the regions, such as water management units.

2.2. R2.2. REGIONALEGIONAL D DEVELOPMENTEVELOPMENT P POLICYOLICY I INN P POLANDOLAND

Regional policy in Poland was founded on its EU membership and was based on

the objectives and principles of the EU Cohesion Policy and its model changed from the

passive implementation of them to the creation of its own development vision and to

elaboration of specific implementation mechanisms. In 2010 it was adopted the National

Strategy of Regional Development, which defines the bases for the implementation of the

new regional policy in Poland and introduced a new way of thinking about development

and public intervention mechanisms. The most important change is the enhancement of

the regional policy role and importance as the main policy determining spatial

development in Poland in the line of measures implemented under other policies. Having

in mind the implementation of norms for the EU Cohesion Policy, the national system of

regional policy is based on the principle of partnership, complementarity and

coordination, as well as on verified and efficient rules of strategic and financial

programming and management.

The funds transferred to Poland (from Structural and Cohesion Funds) increased

from 12.8 billion Euro (fixed prices 2004) in 2004-2006 to 67.3 billion Euro (in current

prices) for 2007-2013 and to 72.9 billion Euro for 2014-2020. Out of 67.3 billion Euro

covering 2007-2013 period over 25 billion Euro were allocated for transport

infrastructure, 17.8 billion Euro for environment protection, 14 billion Euro for

innovation, 3.6 billion Euro for supporting the entrepreneurship. Over €16.5 billion were

spent through 16 regional programmes, giving the Polish regions the opportunity to

implement their own development strategies in line with national and European Cohesion

Policy priorities. Poland’s real absorption rate for EU structural and cohesion funds

exceeded 50% in January 2013.While in the period from 2004 to 2010 the regional policy

got an increased role based on a more complex approach (regulations on development

policy), on the development of a set of strategic programming documents for EU funds,

on the decentralization of the EU fund management, during the current decade a new

system of strategic development management was introduced and also better multilevel

and multi-sectoral coordination mechanisms, a new stage of decentralization process has

begun (Daniel Balinski, 2012)7.

The new regional policy is meant to improve and use the territorial potentials of

all regions, to serve to territorial self-governments and other public entities needs, to

provide a multisectoral (horizontal) territorial approach to development measures, to

support the multilevel governance, by assigning an important role to regional level

authorities in development processes. The strategic objective of the new regional policy

is the efficient use of the specific regional and territorial development potentials for the

purpose of achieving the national development objectives: growth, employment and

cohesion in a long term–perspective. For 2020 the following objectives of regional policy

were set out: 1) support for the growth of competitiveness of the regions

(Competitiveness) 2) establishment of territorial cohesion and preventing the

marginalization of problem areas (Cohesion) 3) establishment of conditions for efficient, 7 Daniel Balinski, 2012, National regional policy – the case of Poland, National Strategy of Regional Development, Ministry of Regional Development, 22 May, pp 1-11

effective, partnership implementation of development measures targeted at territories

(Efficiency).

The new regional policy measures are focused on the areas of strategic

intervention (ASI) determined under individual objectives of the regional policy. These

cover: a) areas characterised by the highest level of socioeconomic development in

Poland (e.g. main urban centres and their functional infrastructure), b) areas beyond the

impact of the strong centres requiring improvement of capacity building and better

conditions for development processes, c) problem areas with the greatest number of

negative phenomena blocking regional or even national development. The new territorial

contract, as opposed to the previous voivodeship contracts, will enable the government

and the self–government of the voivodeship to agree on the most important objectives

and projects implemented (and financed) under the regional development policy. The

contract applies only to those projects, whose implementation is significant in terms of

government regional policy and self-governments development policy.

3. R3. REGIONALISMEGIONALISM I INN R ROMANIAOMANIA

3.1. S3.1. SHORTHORT C CONSIDERATIONSONSIDERATIONS

Geographically Romania is divided into some important historical provinces, but

the regions (28), as administrative territorial entities, were firstly introduced after 1950

during the early stage of communist regime, but in 1968 they were dissolved and

replaced by counties (40). Industrial policy was meant to support the territorial

development and to reduce the inter-county disparities. But the forced and accelerated

extensive industrial development led to an irrational and wasteful use of natural

resources, extremely harmful environment pollution, important migration of labor force

within the country. Now there are 42 counties (including the country’s capital)

corresponding to EU statistical level NUTS III and 263 towns and 2688 communes

corresponding to EU statistical level NUTS IV.

Subdivision of our country or defining the development regions was achieved

based on the criterion of potential functional integration, by establishing 8 regions around

some major cities and corresponding to EU statistical level NUTS II. Some other criteria

were taken into account: complementarity of resources, of economic and social activities,

functional links, need for social cohesion with the major objective of diminishing or

canceling the economic and social disparities.

3.2. R3.2. REGIONALEGIONAL D DEVELOPMENTEVELOPMENT P POLICYOLICY I INN R ROMANIAOMANIA

It was based on Law no.151/1998 which was replaced by Law no.315/2004.

Before EU accession, Romania has passed through 6 preliminary stages of legislative and

institutional building (Daniela Antonescu, 2011).8 It was a long, slow, contradictory

process when National Council for Regional Development, Regional Development

Councils, Regional Development Agencies and also other institutional structures were

created, but one could see a trend towards centralization (2000-2002), many mistakes and

wrong decisions, overlapped attributions of newly created institutions, centralization of

financial resources allocated by EU, lack of long-term vision, the absence of regional

governance. According to the provisions of Law no.315/2004 it was the responsibility of

the Ministry of European Integration to develop, coordinate and implement the regional

development policies and strategies in Romania, also the economic and social cohesion

programmes.

After accession a new legislation was adopted regarding EU free financial

assistance, control and recuperation of EU funds, public procurements, state aid, public

finances. Besides National Agency for Regional Development it was created the Ministry

for Regional Development in charge with the management of Regional Operational

Programme and also other programmes financed from EU and national sources. At

regional level the implementation of Regional Operational Programme (ROP) was the

responsibility of Regional Development Agencies, with a NGOs statute and acting like

intermediate bodies for ROP 2007-2013. Regional Development Agencies had also other

tasks like the administration of a portfolio of programs and projects, regional

programming and planning, promoting of regions, development of local partnerships,

assisting the Regional Development Councils.

Romania had received on behalf of European Fund for Regional Development for

ROP around 3.72 billion Euros for the period 2007-2013, which represent 19% of all

structural funds allocated to our country (4.4 times less than Poland that has a double 8 Daniela Antonescu, 2011, Regional Development. Trends. Mechanisms. Institutions, Top Form Publishing House, Bucharest, pp.180-182

population). Funds are distributed on 6 priority axes related to sustainable development

of towns, improving regional and local transport infrastructure, improvement of social

infrastructure, supporting the development of regional and local business environment,

sustainable development and tourism promotion, technical assistance. But the regional

development process was also supported by other operational programmes in order to

ensure a balanced development of all regions by turning into good account of all local

resources, developing the physical and business infrastructures, and also the institutional

capabilities. The implementation method for ROP was based on the eight Regional

Development Plans and on the eight Regional Programming and Implementation

Documents.

But the implementation of ROP and other operational programmes overlapped

with the financial and economic crisis which badly affected the economic growth and

also had a negative impact on the absorption of EU funds. Besides strategic and

managerial shortcomings, the potential recipients of financial assistance had to face

numerous and hard financial, administrative and technical blockages both at central and

regional/local level. Conspicuous corruption and infernal bureaucracy, which are the

characteristics of poor governance, and also the long period of selection and evaluation of

submitted projects have badly affected the use of European funds, Romania having a very

low percentage of absorption comparing with Poland. It was clearly visible a shortage of

co-financing capacity on behalf of local authorities and SMEs due to difficult access to

banking sector resources and due to very limited funds available at central level, mainly

as a result of austerity policy imposed by IMF and EU.

On the other hand European Commission which had guided, supervised and

evaluated the absorption of EU funds was not able to identify and recommend some few

and real development priorities of Romania, to provide a more flexible allocation of

funds between programmes, to simplify and ease the bureaucratic procedures for

accessing EU funds, to involve more the civil society (NGOs) in the evaluation and

improvement of the institutional and administrative framework, to encourage and support

the decentralization of funds allocation as happened in Poland. Due to irregularities

notified for 2009-2011 European Commission has temporarily suspended the financing of

some operational programmes in 2012.

Romania’s real absorption rate for EU structural and cohesion funds distributed

through all seven existing operational programs reached 9.72 percent at the end of

November 2012, almost double the level recorded in December 2011, according to the

latest status report published by the Ministry of European Affairs. The best absorption

rate, measured by intermediary payments from the European Commission, namely 21.2

percent (786 million Euros), was in the Regional Operational Program managed by the

Ministry of Regional Development and Tourism. In November 2012, the European

Commission has proposed the development of a new action plan for improving the

administrative capacity for EU funds management and this plan includes all unrealized

measures of the previous Priority Action Plan and contains new short, medium and long

term measures, and in December 2012 the first elaborated version of this plan was agreed

with the European Commission.

But Romania has not only the lowest absorption rate of EU funds but also the

highest level of financial corrections, due to public procurement activities according to

the Institute of Public Policy (IPP). In December 2012 these corrections amounted to

almost 300 million Euros, which is double of Spain’s (158 million Euros) and 15 times

more than Poland’s (24 million) or Germany (22 million).

By March 15th, 2013, the payments to the beneficiaries reached to almost 5.2

billion Euros, representing around 24.48% of the EU allocation for 2007-2013, while the

intermediary reimbursements from the European Commission reached 2.46 billion Euros,

which represents an absorption rate of 12.82%. Between July and October 2012, no

payment claims have been sent to the European Commission for four Operational

Programmes (Regional Operational Programme, SOP Environment, SOP Transport and

SOP Increase of Economic Competitiveness). In November - December 2012, the

transmission of expenditure statements to the European Commission was resumed for

these programs, which allowed the minimization of decommitted amounts at the end of

2012. In August 2012, the European Commission pre-suspended the SOP Human

Resources Development (SOP HRD). As a result of corrective measures taken by the

Romanian authorities, payments were resumed in February 2013, and the EU funds

attracted by Romania increased to 410.4 million Euro. As a result of pre-suspension (in

October 2012) of three Operational Programmes (SOP Transport, Regional Operational

Programme – partially and SOP Increase of Economic Competitiveness – totally), a

number of action plans to address existing deficiencies are under implementation during

the first semester of 2013 (see the National Reform Programme Progress Report, March

2013).

4. C4. CONCLUSIONSONCLUSIONS

1) Poland started the transition to market economy earlier as compared to

Romania and adopted a shock therapy which proved to be more adequate and effective

than gradual therapy implemented in Romania;

2) Poland is seen as a good example worth following in maintaining economic

growth during the recession, partially due to effective absorption of EU funds and

partially due to reduced scale of deindustrialization process and profound and rapid

structural reforms;

3) While Romania was facing a severe economic contraction in 2009 and a lot of

corruption and mismanagement of the EU funds, Poland has performed much better due

to its political and cultural model. Romania has not attempted to follow Poland’s good

model in economic policy and in the management of EU funds because in Romania the

political class and public managers did not have the competence, ability and morality to

promote national interests, just tracking personal and group interests.

4) I fully agree with the opinion (Gratian Mihailescu, 2013)9 that Romania

remained a heavy centralized state after 1989 associated with corruption, tax evasion,

resource waste and inefficiency while Poland has undergone a decentralization process,

which had very positive effects on economic development and also on the absorption of

EU funds. But similar to Poland in Romania there is the same false perception over the

exaggerated role of decentralization and regionalization as an instrument of removing the

centralism, excessive bureaucracy and administrative inefficiency. Only the strong

control and involvement of civil society may improve the quality and effectiveness of

local and regional governance.

5) The role of civil society was very important in Poland while in Romania was

quite insignificant, for instance Polish civil society has a long tradition and is much more 9 Gratian Mihailescu, 2013, An analysis of EU funds in Romania for 2007-2013, pp.1-5, www.cursdeguveranare.ro

developed and supported by the state than the one in Romania, Poland having 50,000

associations and 7,000 foundations with 8 million members.

6) Romania was not able to effectively counteract tax evasion and corruption, by

implementing good and reliable strategies, to create a favourable framework for the

absorption of EU funds due to a monstrous bureaucracy and to correct and improve it

once the problems and difficulties were detected. Although huge sums were paid to

foreign consultants, all Romanian civil servants responsible for funds management and

absorption were not financially motivated and thus they had no interest in getting the best

results.

7) It is obvious Romania needs a rapid improvement and strengthening of the

institutional system and the rule of law, a new approach in attracting EU funds, in

counteracting corruption and ineffective bureaucracy, in significantly reforming all pillars

and levels of national governance.