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Establishing the Eu Funds Management System in Romania (2011 - 2015)

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Establishing the Eu Funds Management System in Romania (2011 - 2015) THE PROCESS WITHOUT AN OWNER: ESTABLISHING THE EU FUNDS MANAGEMENT SYSTEM IN ROMANIA (2011 - 2015) Cristian GHINEA Bucharest University of Economic Studies, Faculty of Administration and Public Management, Bucharest, Romania ABSTRACT The aim of this paper is to analyze the management system of EU funds in Romania, as it has evolved in the two financial exercises from the EU accession 2007 - 2013, respectively 2014 – 2020, with a clear accent on the evolution of the central public administration system. Romania has started its first financial exercise with a diluted decision-making system, with Managing Authorities spread across the line ministries. It evolved, rather following crises and harsh political decisions than clear and coherent plan, towards a system in which the Managing Authorities are subordinated to two ministries: Ministry for EU Funding and Development Ministry. KEYWORDS EU Funds, Managing Authorities, Management System, public administration. INTRODUCTION In 2016 I had the honor to serve as state adviser within the Romanian government (led by the independent Dacian Cioloș) and one of my responsibilities was to coordinate several ministries dealing with EU Affairs; later on, I was appointed minister for EU Funding. In both capacities, I had to deal with a complex and unwieldy administrative system in which the responsibilities were not clearly defined. As Minister for EU Funding in 2016, I’ve had to opportunity to closely watch and analyze the entire process from within and from the top, having to deal with critical situations and delays. Decisions had to be taken in order to adjust the system, but there were serious limits given the timing - too late in the process of implementing new EU budget for substantial changes. Knowing the current state of the affairs, I was curious to observe the beginning of the process and all the factors that had a key role in organizing it. So, following my experience as public official, I started this academic research in order to have an overall explanation on how the system has evolved until the point I was directly involved at the executive level. I am convinced that Romania needs a radical reform if it is to better use the money from the EU in the future budget (2020 - 2027) and I intend to use this academic analysis to propose policy recommendations. I remained involved in this topic as a Member of the Romanian Parliament, where I represent an opposition party. I am currently a vice-president of the party and I am what in UK they call a "Shadow Secretary" for Development and EU Funding from my party. Corresponding author. E-mail address: [email protected] 106 My research focuses on analysing the inside resorts of these transformations, evaluates the system efficiency and draws conclusions for the future programming period (2020 - 2027). To follow these objective, I’ve set up interviews with officials and decision makers involved in the programming process and administrative management and I’ve analyzed key official documents such as: Government memorandums submitted by the Ministry for European Affairs (MAEur) and then the Ministry for European Funds (MEF), during 2011 – 2015, when the inter- ministerial consultations for 2014 – 2020 programming were launched and they took place. Minutes and agendas of inter-ministerial committees organized during this process. Reports of the special consultants hired with technical assistance contracts to assist the coordinating minister in drafting the management system for 2014 - 2020 Key legislative acts that have been starting points in these administrative transformations. I had access to an archive of official documents that, to my knowledge, hasn’t been object for academic research before. In order to contextualize and better explain from an academic point of view the substance of these documents, I’ve concluded several interviews with officials from the institutions mentioned in the paper and with independent experts on the EU funds matter. General remarks on EU regulations 336 billion Euro, representing 33% of the EU budget, have been dedicated to the Cohesion Policy in 2014 - 2020 multiannual EU budget. Of these, 21,8 billion were put aside for Romania, a country that suffered in its first 7 year cycle (2007 – 2013) of chronic incapacity to spend the EU money, huge delays and low capacity to develop proper projects. The EU framework demanded a coherent multiyear policy cycle, strategic thinking and clear prioritization for spending the cohesion funds. None of these was specific to the Romanian central public administration. The PhD thesis I`m working on tells the story of this mismatch between two very different ways to think and implement public policies. In this preliminary paper I will focus on the management of the EU funds system and the way the internal consultations took place in Romania, from the European Commission (EC) launch of the EU wide dialogue on the future Cohesion Policy in 2012, until 2015, when the Romanian Government adopted the final decision on the Partnership Agreement and the structure of the management system. The Commission’s Proposal1 emphasizes the so called ”Thematic Objectives” (TOs): the key policy objectives for the Cohesion Policy: ”Regarding the Cohesion Policy, every action financed must be linked to a particular thematic objective. Reporting (on financial progress, indicators etc.) can also be linked back to particular thematic objectives2. Thus, the EU was reorienting the Cohesion Policy towards the following major themes: 1. Strengthening research, technological development and innovation. 2. Enhancing access to, and use and quality of, information and communication technologies 3. Enhancing the competitiveness of small and medium-sized enterprise, the agricultural sector (for the EAFRD) and the fisheries and aquaculture sector (for the EMFF) 4. Supporting the shift towards a low-carbon economy in all sectors 1 The European Commission presented the new framework in January 26, 2012 in a conference with all the relevant Romanian ministries and agencies. The following summary is based on the presentations made at this conference by the EC`s representatives. The conference title: ”Lansarea la nivel naţional a procesului de programare a fondurilor europene destinate unei dezvoltări inteligente, incluzive şi durabile 2014 – 2020” and presentation <<“Ambitious but realistic” proposals issued by the Commission in June 2011 for the Multiannual Financial Framework (MFF) 2014-2020>>. 2 Idem, pg. 6 107 5. Promoting climate change adaptation, risk prevention and management 6. Protecting the environment and promoting resource efficiency 7. Promoting sustainable transport and removing bottlenecks in key network infrastructures 8. Promoting employment and supporting labour mobility 9. Promoting social inclusion and combating poverty 10. Investing in education, skills and lifelong learning 11. Enhancing institutional capacity and an efficient public administration Regarding the institutional arrangements, the Commission had stated that “Operational Programs will constitute the main management and monitoring unit under the Cohesion Policy. Member States will have the flexibility to choose the appropriate level of programming (...). Operational Programs with support from the Cohesion Fund shall be drawn up at national level. The main unit for management and reporting within an operational program shall continue to be a priority axis3. Thus the EU money were to follow a clear national policy cycle imposed by the EU itself, but the institutional arrangements were to be settled by each Member State. Moreover, the EC involvement in the day to day management decreased compared with the 2007 - 2013 period, as shown by the decision to grant the European Commission only an observer role in the Monitoring Committees of each Operational Program (it enjoyed veto power previously)4. I will develop this topic in my PhD thesis. As for the scope of this paper, it is important to note that EU established clear policy goals, but let the decision about the institutional arrangement to be made by the Member States, with minimal involvement from its side. A description of the Process in the Early days. The beginning of Ministry for European Affairs (MAEur) Romania started managing the Cohesion Funds 2007 - 2013 through a structure called The Authority for Coordination of Structural Instruments (ACIS), while the Managing Authorities (MA) were subordinated directly to the Line Ministries (e.g.: MA Transportation, subordinated to Transportation Ministry; MA Environment, subordinated to Environment Ministry and so on). During the first years, the general assumption was that EU funds were to function on a sort of autopilot, without any top level political input. Surely, this proved to be a huge mistake. ACIS was too weak in the administrative and political pyramid, as it was led by a Secretary of State that had no real political leverage over the ministers that it was supposed to coordinate. Between 2010 - 2011, this administrative model had shown its limits, as weekly scandals concerning the low capacity of the country to absorb EU funds were occuring in the Romanian media. Who was to blame for this situation? Apparently no one, since the head of ACIS was traditionally a second level official unknown to the public opinion. Traian Băsescu, the president at the time, decided to step-in and lobbied the government that he was controlling to appoint Leonard Orban in charge of the EU funds. Orban had previously been the first EU Commissioner from Romania and at the moment was presidential advisor on EU Affairs. He carried out some credibility in Brussels, so Băsescu bet on his capacity to convince the EU Commission to allow some of the Operational Programs to continue, as these had been suspended several times until that date. A new structure – the Ministry for European Affairs (MAEur) - was to be created, taking over ACIS. Here is the reasoning behind the ministry’s founding, as stated in the Government Emergency Ordinance5: 3 Idem, pg. 17-18 4 Delia Ciorogariu, "Regional Policy of the European Union - Theories and Practice", Academy of EconomicStudies Phd Thesis, 2011 5 Emergency Ordinance no.
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