No <http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2006/ December/business_December497.xml§ion=business&col=> immediate EU jackpot for Romania, Bulgaria (Reuters)
18 December 2006 BUCHAREST - In theory, Romania and Bulgaria will hit the jackpot on January 1 when they join the European Union and become eligible for billions of euros of the rich club's cash. In reality they will struggle for years to get their hands on some 40 billion euros ($52 billion) the EU has earmarked for projects such as modernising their potholed roads and backward agriculture and building waste treatment plants. Diplomats and analysts say both nations will simply not be able to handle so much money and look set to do a worse job in this respect than the eight former-communist nations which joined the EU in 2004 and which also failed to draw down all the funds available to them. 'These two countries are less fit to spend the EU cash than Poland two years ago,' said Nicolae Idu, head of the state-sponsored European Institute think-tank said. 'It is impossible to attain a 5 percent absorption rate in 2007 for technical reasons.' Poland, the biggest former-communist newcomer, has spent 2.7 billion euros, or 24 percent, of the EU funds allocated to it for 2004-2006. Overall, Brussels says the newcomers spent only a quarter of the regional development aid they were entitled to. This is because the state administration in former-communist countries is ill-prepared to handle the money. In Romania and Bulgaria the main obstacles are: * Companies and officials lack experience in preparing large scale projects to EU standards. Tender procedures are far from transparent. * Rampant graft means government officials are often afraid of making decisions while local officials are ignorant of EU procedures. The EU has imposed strict controls to prevent embezzelment. * Businesses have little understanding of how to apply for EU aid. Political drift The absorption of EU funds is additionally hampered by political wrangling which has beset some newcomers in the last two years, distracted decision-makers and slowed down administrative reforms that could speed up procedures. Initially Romania seemed poised to buck the trend and continue reforms, but in recent weeks it has sunk into political deadlock. The reformist centre-right government has lost its majority in parliament, which will possibly lead to early elections. In Sofia, the government is for the time being stable, although the country lags Romania's reforms, particularly in fighting corruption and organised crime. Analysts say, however, that gradually both countries should be able to tap more efficiently into EU funds and say fears that either could become net payers into EU coffers in the first couple of years of membership are exaggerated. For that Romania and Bulgaria will need to spend about 1.1 billion euros and 330 million respectively -- the equivalent of their yearly dues to the EU budget. 'There's no real risk of becoming net contributors as sums for projects already started during pre-accession are flowing, while cash advances from Brussels will help start new ones,' said Sorin Ionita, head of the Romanian Academic Society. C 2006 Khaleej Times ---------------------------- Vali "Noble blood is an accident of fortune; noble actions are the chief mark of greatness." (Carlo Goldoni) "When the power of love overcomes the love of power, the world will know peace." (Jimi Hendrix)
