Romania ranks second among EU10 member states by the hourly labor cost, chief economist of the World Bank (WB) Bucharest-based office Catalin Pauna told a conference devoted to the release in Bucharest of the July 2010 edition of the EU10 Regular Economic Report.
The document shows that Romania’s reverting to economic growth also depends on its capacity to absorb European funding that can supplement state investments, thinned by fiscal adjustment needs.
The EU10 states (that joined the EU in 2004 and 2007, respectively) took a series of measures to enhance the administrative funds absorption capacity, including action related to management, planning, implementation, evaluation and monitoring, financial management and control. Whereas the steps taken by Poland fit into four of these five categories, Romania adopted only implementation-related measures.
„I think that Romania should take steps towards simplifying access to European funds,” said Catalin Pauna, who also advised „action towards stimulating exports and smoothing out difficulties in accessing European funds by local communities. Apart from European regulations, we come up with national regulations, but we need to see how necessary these really are.”
The authorities’ concern should be – in Catalin Pauna’s opinion – the fiscal adjustment and, in particular, identifying cheap financing sources, including from international financial institutions. „Bureaucracy is also a serious hindrance to the absorption of European funds.”
The proposal made in Brussels that states running excessive deficits be sanctioned „cannot be applied now, but could be discussed for the long-term,” said the chief economist of the WB Bucharest office.