The European Commission has encouraged Romania to complete its economic reforms programme with the EU and the IMF and identified the poor administrative capacity as a core concern that contributes to the low absorption of EU funds – as part of the country-specific recommendations issued for the country on May 29.

Romania runs a second economic adjustment programme with the EU and the IMF, which should be formally completed after a final review in the summer 2013. Major obstacles related to the reforms in the public sector companies, however, question the successful completion. All the recommendations drafted by the EC for Romania are in the areas of:

Implementation of the precautionary programme – successful completion should be reached.

Sustainable public finances and taxation system - low tax compliance represents a major challenge. The country should improve tax collection, equalise the retirement age for men and women and underpin the pension reform.

Health sector reform - inefficient use of resources. Romania should put more efforts into increasing the cost-effectiveness of the system by reducing the excessive use of hospital in-patient care.

Labour market, youth unemployment and poverty - low employment rate, particularly among the youth. The country should implement without delay the National Plan for Youth Employment;

Education reform – quality of education is a major challenge. Education should be matched with labour market needs.

Better public administration - poor administrative capacity is a core concern for Romania. Governance and quality of public administration should therefore be strengthened.

Business environment - weak business environment and low support for research and development. The country should improve the efficiency and independence of the judiciary system and the effectiveness of policies to prevent and combat corrupt practices, notably in the area of public procurement.

Energy and transport - low degree of competition and efficiency in the energy and transport industries. Romania should pursue liberalisation of gas and electricity prices, strengthen the governance of state-owned enterprises and regulators, and complete cross-border connections.