EU funds absorption rate of 60% would add 1.6pps to Romanias 2012 GDP growth.

By bne IntelliNews June 5, 2012
A moderate 60% EU funds absorption rate in Romania would result in a potential GDP growth rate of 3.6% this year vs. the current baseline scenario for a 2% economic expansion without the EU funds, a study of Romanian think-tank CEROPE, quoted by news agency Agerpres, indicated. A full absorption would raise the potential growth to 4.4% in 2012. The study concludes that based on the experience of other new EU member states Romania should give more power in the absorption process to its European affairs ministry, which was set up only last autumn. Only after the de-centralised structures gain sufficient experience, they should be involved to a larger extent in the process, the study says. Currently the country manages to absorb only some 6.5% of the 2007-2013 allocations and PM Victor Ponta admitted that the target announced by the former cabinet of PM Ungureanu was unrealistic. The intermediary payments from the EU budget for projects in Romania were only EUR 200mn in Q1 against a EUR 3.5bn target for the whole of 2012.
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