Romanian Govt Pledges To Cut National Co-Financing Rate For EU-Funded Projects By 10 Pct

The measure is stated in a new letter of interest the Romanian Government negotiated with the International Monetary Fund.

"We will make savings in the capital budget by eliminating non-performing projects identified during the prioritization exercise and by reducing the national co-financing of EU-funded projects. A new EU regulation will allow us to temporarily reduce the co-financing rate by 10 percentage points, as long as Romania is covered by this current FMI-UE program," reads the document obtained by MEDIAFAX.

The letter also reveals the Government's plan to replace budget subsidies allotted to the agricultural sector with funds from the European Union.

The country's draft state budget for next year, which was approved by the Government and has yet to be adopted by the Parliament, states that subsidies will fall to 0.91% of the gross domestic product in 2012, from 1.2 % of the GDP in 2011.

The European Parliament recently approved a temporary increase from 85% to 95% of the European Union's contribution to regional development projects financed from the European Regional Development Fund (ERDF) and the European Social Fund (ESF) for several member states, including Romania.

MEP Petru Luhan said in a press release early December that Romania is among the states to benefit from this measure, alongside Hungary, Latvia, Portugal, Greece and Ireland.

The new regulation temporarily increases by 10 percentage points the EU contribution to projects financed from the two funds.

Romania's co-financing rate will be reduced from 15% to 5% of the cost of an approved project, and the remaining 95% will be covered by the European Union, said Luhan.

If you liked this story, please follow MEDIAFAX.RO on FACEBOOK »

The content of mediafax.ro is for your information only. Republishing or using this content is forbidden without express consent of MEDIAFAX. For this consent, please ask for it by mail at vanzari@mediafax.ro.