Dragoș Pîslaru, MEP, in dialogue with AmCham members

by AmCham Romania May 20, 2020

During his dialogue with AmCham Members, MEP Dragoș Pîslaru pointed to post - crisis opportunities for Romania and what should be the focus of the country's economic recovery, as follows:

Post Crisis opportunities for Romania

Deficit – RO should have been subject of the excessive deficit procedure of the EU as of April 2020 yet with the COVID crisis and the expected impact upon all EU economies RO would possibility no longer rank such high in terms of deficit.

State-aid norms have become flexible during the pandemic. There are new types of state-aid for SMEs and also for industrial policy.

Flexibilization of rules on the use of EU funds – mobilization of non-used resources and transfer of funds between programs in order to finance crisis measures – allowed RO to mitigate the risk of decommitments from EU funds + no need to reimburse pre-financing. The impact would be of at least EUR 470 million direct funding plus appx. EUR1 billion avoided decommitments.

EU INSTRUMENTS – opportunities for development/investments

EGF – European Globalization Fund – companies could apply for aid in cases of massive layoffs

EU Package of 540 bln – SURE (loans with minor interest rates / active measures for labor – this resource should be used for flexibility of the labor force via measures such as Kurzerbeit) + ESM (only for Eurozone members – 200 bln) + BEI (240 bln – for guarantees). It is expected that non-Eurozone members benefit from a balance of payments facility since EC promised similar access to loans with low interest rates. This package should be available starting with June 1.

Resilience and Recovery Instrument – between 1 and 2-3 trillion EUR (double the 2021-2027 MFF) – Macron & Merkel agreed to support a program 500 bln. by EC to be provided as grants (addition to JTF, MFF) + other financial instruments – part by the EC + completed by BEI (also opening other funding lines)

500 bln. grants – aiding most affected countries + Industrial Policy – Thierry Breton noted 14 industrial ecosystems – tourism, local affairs, distribution, heavy industry, automotive, creative & cultural industries, pharma, critical digital infrastructure (5G/6G), R&D, clean energy, cyber security, defense. RO should map these ecosystems nation-wide and design projects in such sectors aligned with the 14 clusters at EU level.

Drivers at EU level – Green Deal + Digital Transfomation + New Industrial Strategy (ecosystems + change of competition rules advocated by FR) + SMEs Strategy (financing, de-birocratization, innovation) + New Skills Agenda (labor force flexibility) + Health Strategy (care industry in RO should be elevated as a strategic sector).

RO should seize the moment to articulate ambitious investment plans and finance them via EU funds.

Urgent mobilization is needed in order to prepare projects / not to wait for the official program to be released by the EC.

Predictability for measures for re-starting sectors – handbooks with sectorial measures (created by PLUS party – also by M. Labor just released one on safety).

Lack of coordination between key Ministries – strategic thinking + linear scheme for projects assumed by all Ministries.

Access to financing/capital – IMM Invest good in principle, implementation low.

Labor – 35-45% bonus for post-technical unemployment is not efficient. Kurzarbeit would be a better option. We should push the debate on flexibility measures in the social dialogue.

Attracting foreign investments – we should not attract businesses only for the sake of creating jobs/cheap labor force but aim for well-paid jobs - value-added investments should be a priority for Romania.

Public infrastructure – 2016 – Centura București + M6 / no progress until today. We should invest in public and private projects seizing all financing opportunities.