magda r tepoi, april 2009, turkey 1 eu enlargement – the case of romania magda r tepoi, magda r...

Magda R Tepoi, April 2009, TurkeyMagda R Tepoi, April 2009, Turkey 11

EU Enlargement – the case of EU Enlargement – the case of RomaniaRomania

Magda R Tepoi, Magda R Tepoi,

IstambulIstambul, April, 1, April, 166thth, 2009, 2009


EU EnlargementEU Enlargement

Enlargement is one of the European Union most powerful Enlargement is one of the European Union most powerful policy tools.It is a carefully managed process which helps the policy tools.It is a carefully managed process which helps the trasformation of the countries involved, extending peace, trasformation of the countries involved, extending peace, stability, prosperity, democracy, human rights ad the the rule stability, prosperity, democracy, human rights ad the the rule of law across Europe.of law across Europe.

It began with the It began with the Inner SixInner Six, who founded the , who founded the European Coal and Steel CommunityEuropean Coal and Steel Community (the EU's predecessor) (the EU's predecessor) in 1951. Since then, the EU's membership has grown to in 1951. Since then, the EU's membership has grown to twenty-seven with the most recent expansion to twenty-seven with the most recent expansion to BulgariaBulgaria and and RomaniaRomania in 2007. in 2007.

There is more to come …Croatia and Turkey, Macedonia, There is more to come …Croatia and Turkey, Macedonia, Albania, Bosnia-Herzegovina….Albania, Bosnia-Herzegovina….


Snagov DeclarationSnagov Declaration

RomaniaRomania signed its signed its EuropeEurope Agreement in 1993 Agreement in 1993 and submitted its official application for and submitted its official application for membership in the membership in the EUEU in 1995, the third in 1995, the third country to do so after country to do so after HungaryHungary and and PolandPoland. . Along with its official Along with its official EUEU application, application, RomaniaRomania submitted the “Snagov Declaration,” submitted the “Snagov Declaration,” signed by all fourteen political parties signed by all fourteen political parties declaring their full support for declaring their full support for EUEU membership.membership.


Benefits of EU AccessionBenefits of EU Accession

Removal of any obstacles in the trade with EU Removal of any obstacles in the trade with EU Member StatesMember States

Common trade policy with third countriesCommon trade policy with third countries Harmonization of entire legislation, capital Harmonization of entire legislation, capital

market regulations, taxation, accounting rules market regulations, taxation, accounting rules => higher transparency and simplification=> higher transparency and simplification

Structural funds (33 billion euro till 2013)Structural funds (33 billion euro till 2013) Open gate for EU towards CIS, Asia, Middle Open gate for EU towards CIS, Asia, Middle

East, Northern AfricaEast, Northern Africa Participation in major projects in the Black Participation in major projects in the Black

Sea Extended Area and in the Central & Sea Extended Area and in the Central & Eastern European RegionEastern European Region

Romania-important role in assuring the Romania-important role in assuring the energy security for Europe (major transit energy security for Europe (major transit pipelines, energy production & supply)pipelines, energy production & supply)


10 indicators where Romania is 10 indicators where Romania is over the EU averageover the EU average

21

165.5

316

475

175

80

4

58

7

26

0 50 100 150 200 250 300 350 400 450 500

1.Forta umana2.Dinamism economic

3.Datorie publica redusa4.Deficit bugetar redus

5.Intensitatea investit iilor6.Independenta energetica

7.Harnicie8.Credinta

9.Speranta unui loc de munca10.Optimism

10 indicatori la care Romania depaseste media U.E.

Indicatorul Romaniei raportat la indicatorul U.E., %


Pre-accession assistance granted to Romania Pre-accession assistance granted to Romania by the EUby the EU

1992-1999 amounted to approximately 1.2 billion euro1992-1999 amounted to approximately 1.2 billion euro

2000-2003 Romania received approximately 660 million euro 2000-2003 Romania received approximately 660 million euro per year, through the three pre-accession instruments: per year, through the three pre-accession instruments: PHARE, ISPA and SAPARD PHARE, ISPA and SAPARD

2004-2006 of up to 40% increase in 2006 (around 2.8 billion 2004-2006 of up to 40% increase in 2006 (around 2.8 billion euro)euro)


Absorption rate of pre-accession fundsAbsorption rate of pre-accession funds

PHARE, ISPA and SAPARDPHARE, ISPA and SAPARD

Beginning of March 2009, from the total of Beginning of March 2009, from the total of 5.679.000.000 euro for the period 2000-2007, have 5.679.000.000 euro for the period 2000-2007, have been made contracts of 5.110.000.000 euro, been made contracts of 5.110.000.000 euro, absorption rate 90%. absorption rate 90%.

The payments for these contracts represents The payments for these contracts represents 3.469.000.000 euro, absorption rate 70%.3.469.000.000 euro, absorption rate 70%.


Pre-accession and structural fundsPre-accession and structural funds

PharePhare - Stuctural Funds ( - Stuctural Funds (European Regional Development European Regional Development Fund (ERDF) and Social European Fund ESFFund (ERDF) and Social European Fund ESF))

SapardSapard - - European Agriculture Fund for Rural Development (EAFRD) and and The European Fishery Fund The EFF The European Fishery Fund The EFF

ISPAISPA - - European Cohesion Fund


IPA Instrument for Pre-accession IPA Instrument for Pre-accession AssistanceAssistance

From 2007 onwards EU is channeling its pre-accession funding through one single instrument called From 2007 onwards EU is channeling its pre-accession funding through one single instrument called IPAIPAIPA’s aim is to be a bridge between external assistance and internal policies. IPA’s aim is to be a bridge between external assistance and internal policies.

IPA objectives are the following:IPA objectives are the following: Support Turkey in its bid for membership, including the necessary economic, political and social reformsSupport Turkey in its bid for membership, including the necessary economic, political and social reforms Help prepare the country for the management of Help prepare the country for the management of structural funds.structural funds. As a consequence IPA also: As a consequence IPA also: Readies Turkey for multi-annual planning Readies Turkey for multi-annual planning Supports Turkey in sound financial management of EU funds Supports Turkey in sound financial management of EU funds IPA will provide countries seeking EU membership with a total amount of € 11.5 billion in the seven-year IPA will provide countries seeking EU membership with a total amount of € 11.5 billion in the seven-year

term from 2007 onwards. term from 2007 onwards.

The preliminary EC draft budget for 2007 envisages that Turkey could get over € 2 billion for the The preliminary EC draft budget for 2007 envisages that Turkey could get over € 2 billion for the first four years of IPA (2007-2010)first four years of IPA (2007-2010)

IPA’s five componentsIPA’s five components are: are: Transition Assistance and Institution BuildingTransition Assistance and Institution Building – Component 1 – Component 1 Regional and Cross-Border Co-operationRegional and Cross-Border Co-operation – Component 2 – Component 2 Regional DevelopmentRegional Development – Component 3 – Component 3 Human Resources DevelopmentHuman Resources Development – Component 4 – Component 4 Rural DevelopmentRural Development – Component 5 – Component 5


Structural Funds for RomaniaStructural Funds for Romania

Romania will benefit of more than Romania will benefit of more than 30 billion Euro30 billion Euro structural structural and cohesion funds from the EU for the 2007-2013 period. and cohesion funds from the EU for the 2007-2013 period.

19.7 billion Euro under Convergence objective19.7 billion Euro under Convergence objective 13.3 billion Euro under 13.3 billion Euro under Common Agricultural PolicyCommon Agricultural Policy

The structural funds are managed by the European The structural funds are managed by the European Commission and the goal is to finance the structural measures Commission and the goal is to finance the structural measures from the community for helping regions with a delay in their from the community for helping regions with a delay in their development, for reconversion of affected area's where there is development, for reconversion of affected area's where there is a industrial decline and to fight against long time a industrial decline and to fight against long time unemployment.unemployment.


Structural Funds for RomaniaStructural Funds for RomaniaThere are 4 types of structural funds. Each one handles specific domains and they have specific There are 4 types of structural funds. Each one handles specific domains and they have specific

aims. aims. European Regional Development Fund (ERDF)European Regional Development Fund (ERDF) - intended to reduce regional imbalance - intended to reduce regional imbalance

and assist less favoured regions via local development (local development, create and and assist less favoured regions via local development (local development, create and safeguard sustainable jobs and support SME's). safeguard sustainable jobs and support SME's).

European Social Fund (ESF)European Social Fund (ESF) - focuses mainly on training and job creation, the reintegration - focuses mainly on training and job creation, the reintegration of the work force and the fight against unemployment. There is a specific topic: this funds of the work force and the fight against unemployment. There is a specific topic: this funds finances projects for training and assistance to hire people.finances projects for training and assistance to hire people.

European Cohesion FundEuropean Cohesion Fund contributes to very large infrastructure projects, such us the trans-European contributes to very large infrastructure projects, such us the trans-European transport networks (TEN-T) and large-scale investments in the environment sector.transport networks (TEN-T) and large-scale investments in the environment sector.

In Romania, the investments from the structural funds will be complemented by the Common Agricultural In Romania, the investments from the structural funds will be complemented by the Common Agricultural Policy funds. These are: Policy funds. These are:

The European Fishery Fund The EFFThe European Fishery Fund The EFF (2007-2013) (2007-2013) will have a financial contribution to will have a financial contribution to adapt and to modernize this sector.adapt and to modernize this sector.

FEADR = FEADR = European Agriculture Fund for Rural Development (EAFRD) will will finance the rural development measures and support agriculture (especially in the regions that finance the rural development measures and support agriculture (especially in the regions that are under developed).are under developed).


Structural Funds for RomaniaStructural Funds for Romania

The National Development PlanThe National Development Plan (NDP) is a specific concept for the European (NDP) is a specific concept for the European economic and social cohesion politics that provide a stable and coherent economic and social cohesion politics that provide a stable and coherent concept for the development of the member states.concept for the development of the member states.

The first step to access the funds for Romania is the approval of the national The first step to access the funds for Romania is the approval of the national development plan. NDP 2007-2013 is a strategic planning and multi annual development plan. NDP 2007-2013 is a strategic planning and multi annual financing document approved by the Romanian Government. The primary financing document approved by the Romanian Government. The primary objective of the Romanian NDP is to reduce the economical and social gap objective of the Romanian NDP is to reduce the economical and social gap between the members states and Romania as quickly as possible.between the members states and Romania as quickly as possible.

The global objectives are based on 3 specific objectives:The global objectives are based on 3 specific objectives: To increase the competitiveness of the Romanian economy (long term) To increase the competitiveness of the Romanian economy (long term) To develop the European standards for basic infrastructure To develop the European standards for basic infrastructure To optimize the efficient use of the autochthon human capitalTo optimize the efficient use of the autochthon human capital


14 domains that can be financed with structural funds and 14 domains that can be financed with structural funds and cohesion funds from the EUcohesion funds from the EU

Technical Research and Development Technical Research and Development Informatization (ICT) of the society Informatization (ICT) of the society Transport Transport Energy Energy Environmental protection and prevention of risks Environmental protection and prevention of risks Tourism Tourism Culture Culture Urban and rural development Urban and rural development Support for SME's and entrepreneurs Support for SME's and entrepreneurs Access to stable work places Access to stable work places Social inclusion for disfavoured persons Social inclusion for disfavoured persons Development of the human capital and resources Development of the human capital and resources Investments in social infrastructure including those in health and education Investments in social infrastructure including those in health and education Promoting the development of partnershipsPromoting the development of partnerships


Responsable authoritiesResponsable authorities

The Ministry of Public Finance from Romania is the authority responsible for the coordination of the national authorities in charge of the administration of the structural funds.

The operational programmes will be coordinated by the following national authorities:

Ministry of Economy and Trade: Increase of Economic Competitiveness- Ministry of Transport, Construction and Tourism: Transport Infrastructure- Ministry of Environment and Water Management: Environment Infrastructure- Ministry of Labour, Social Solidarity and Family: Human Resources Development- Ministry of Agriculture, Forests and Rural Development: Agriculture and Rural Development- Ministry of European Integration: Regional Development and European Territorial Cooperation- Ministry of Public Finances: Technical Assistance- Ministry of Administration and Interior: Administrative Capacity Development


Sectoral Sectoral Operational ProgrammesOperational Programmes2007 -20132007 -2013

Technical Assistance Operational Programme 0.9%Technical Assistance Operational Programme 0.9%

Sectoral Operational Programme (SOP) “Increase of Sectoral Operational Programme (SOP) “Increase of Economic Competitiveness”Economic Competitiveness” 13.3% 13.3%

Sectoral Operational Programme for Environment 23.5% Sectoral Operational Programme for Environment 23.5% ((audited by the Commissionon on 16 Jan 2009)audited by the Commissionon on 16 Jan 2009)

Sectoral Operational ProgrammeSectoral Operational Programme Transport (SOPT) 23.7%Transport (SOPT) 23.7% Regional Operational Programme 19.4%Regional Operational Programme 19.4% Operational Programme: Administrative Capacity Operational Programme: Administrative Capacity

Development 1.1%Development 1.1% Sectoral Operational Programme- Human Resources Sectoral Operational Programme- Human Resources

DevelopmentDevelopment 18.1% 18.1%


Obstacles in the way of a better Obstacles in the way of a better use of Structural Fundsuse of Structural Funds

1. The in-efficiency of civil servants - 1. The in-efficiency of civil servants - almost 20.000 civil servants (> half in ministries, the other in county councils, prefectures, almost 20.000 civil servants (> half in ministries, the other in county councils, prefectures, town halls; town halls; in 2007 and 2008, Romania absorbed structural funds of 176 millions euro, but the civil servants from public administration received 300 millions euro a lot of consumtion, smqll investments)

2. Bureaucracy 2. Bureaucracy Almost all applicant guides are full of too many specific and technical termsAlmost all applicant guides are full of too many specific and technical termsBusiness people should be concentrated on the business project not on understanding a complicated processBusiness people should be concentrated on the business project not on understanding a complicated process 3. Lack of experience 3. Lack of experience In certain situations for instance big contracts, which are international auctioned, the authorities try to In certain situations for instance big contracts, which are international auctioned, the authorities try to

contract local experts or consultants to help or to train the permanent personal. The companies that participate to the auction contract local experts or consultants to help or to train the permanent personal. The companies that participate to the auction are looking for the cheapest not the best experts. This aspect make most of the times, that the projects that are going to are looking for the cheapest not the best experts. This aspect make most of the times, that the projects that are going to improveimprove the performance of the people employed in the organisations that are responsible for the European fund to have a limited impact. the performance of the people employed in the organisations that are responsible for the European fund to have a limited impact. The legal framework does not help at all The legal framework does not help at all those who wants to make projects.those who wants to make projects.

4. National obstacles4. National obstacles 5. Time formalities5. Time formalities6. Errors in funds demanding 6. Errors in funds demanding Not only state institutions are responsible of the low level of Not only state institutions are responsible of the low level of

European Structural Funds absorption. (European Structural Funds absorption. (The OP -do not answer to a development vision we are aiming at and do not indicate stong and distinctive directions of development; -rather seem to feel some gaps and refresh an exhausted economy then to look after a deep srtuctural reform) ) the mentality (CCI work)the mentality (CCI work)pre-accession assistance especially Phare component helped us a lot in building the adm. capacity for structural funds. Over pre-accession assistance especially Phare component helped us a lot in building the adm. capacity for structural funds. Over 30 handbooks and procedures required for managing and implementing structural assistance were made with the help of 30 handbooks and procedures required for managing and implementing structural assistance were made with the help of foreign experts; and projesct preparation benefit from the support of the pre-accession assistance.foreign experts; and projesct preparation benefit from the support of the pre-accession assistance.the way in which a program is running, the payment conditions are quite restrictive. the way in which a program is running, the payment conditions are quite restrictive. in the case of the private companies this kind of financing is accessible for those which could implement the project by their in the case of the private companies this kind of financing is accessible for those which could implement the project by their own, with own resources or with credits, but with the help of European funds they will implementing faster.own, with own resources or with credits, but with the help of European funds they will implementing faster.this aspect should be explained very clearlythis aspect should be explained very clearly. For this reason, there are still many companies that has very low profitability . For this reason, there are still many companies that has very low profitability and limited resources, who hope that they will make mirracols with the help of an European fund. and limited resources, who hope that they will make mirracols with the help of an European fund.


Countries from the first wave and the use of Countries from the first wave and the use of European Funds European Funds


Structural funds useStructural funds use

First year of membershipFirst year of membership

Cehia* 41,5 Cehia* 41,5 absorbtion 0,18absorbtion 0,18 Polonia* 42,8 Polonia* 42,8 0,190,19 Slovacia* 41,6Slovacia* 41,6 0,24 0,24 Ungaria* 42,9 Ungaria* 42,9 0,380,38

România 21,7 (2007)România 21,7 (2007) contribution-0.36contribution-0.36


Challenges for a better use of Challenges for a better use of Structural FundsStructural Funds

The maintain of an increasing economic growth over 5% yearly till the Euro adoption

Building an effective administrative capacity in order to increase the number of the eligible projects (training, change mentality, to make a long term strategy)

(see the European Innovation Scoreboard 2006, Romania occupies the lowest position among the European countries in what concerns the innovation capacity, and this fact represent a concern; tourism see Spain )

the OP do not answer to a development vision we are aiming at and do not indicate stong and distinctive directions of development; -rather seem to feel some gaps and refresh an exhausted economy then to look after a deep srtuctural reform

The possibility for the general consolidated budget to generate co financing of almost 1% yearly GDP, without the exceeding of 3% of the fiscal deficit

The insurance of a proper level of co-financing both through private sources and also credits


Chambers of CommerceChambers of CommerceIssues from Romanian businessesIssues from Romanian businesses

(in the implementation of pre-(in the implementation of pre-accessionaccession funds) funds)

1) Programme Administration1) Programme Administration

The financing programmes are managed at central level, by The financing programmes are managed at central level, by the public administration, yet often responsibilities for the public administration, yet often responsibilities for coordination – also as intermediaries –, management, coordination – also as intermediaries –, management, monitoring and reporting are separate and applied by different monitoring and reporting are separate and applied by different institutions for different programmes, which makes funding institutions for different programmes, which makes funding accessionaccession procedures both bureaucratic and difficult to procedures both bureaucratic and difficult to

evaluate and monitor, as a wholeevaluate and monitor, as a whole..




2) Applying for Funds2) Applying for Funds The business community in Romania was often confronted with a number The business community in Romania was often confronted with a number

of concrete problems in accessing community funding which do not differ of concrete problems in accessing community funding which do not differ to European businesses:to European businesses:

burdensome and bureaucratic procedures and documentation while burdensome and bureaucratic procedures and documentation while applying for funds applying for funds

too detailed reporting procedures, consuming an important amount too detailed reporting procedures, consuming an important amount of time and resources of time and resources

a slow decision a slow decision processprocess that may lead to losing opportunities for that may lead to losing opportunities for businesses businesses

the projects must be financed in advance and refunding is often the projects must be financed in advance and refunding is often delayed of the actual payment delayed of the actual payment

approval competencies are raised at too high levels, losing sight of approval competencies are raised at too high levels, losing sight of the real needs in planning and running the businesses the real needs in planning and running the businesses




general problems”, the business communitygeneral problems”, the business community the need for the need for training and education in drafting of projects and training and education in drafting of projects and financing mainly in view of preparing the use of financing mainly in view of preparing the use of European funds (example CCRUNER VPN)European funds (example CCRUNER VPN)

insufficient consultancy in the field insufficient consultancy in the field

the credit market is underdeveloped which makes the credit market is underdeveloped which makes difficult to ensure the required co-funding difficult to ensure the required co-funding


Regional Economic Development by Continuous Regional Economic Development by Continuous

Entrepreneurs ImprovementEntrepreneurs Improvement The main purpose of the project was to increase the regional economic development by: The main purpose of the project was to increase the regional economic development by:

improving the quality of the staff of Chambers in providing services of professional trainingimproving the quality of the staff of Chambers in providing services of professional trainingimproving the quality of enterprises management specialists from the North-East Region in the following improving the quality of enterprises management specialists from the North-East Region in the following fields:fields:assimilation of hi-technology novelties;assimilation of hi-technology novelties;assimilation of good practicing and international commerce management; assimilation of good practicing and international commerce management; applying the management of quality.applying the management of quality.so that to be ensured the development of the local area business environment and integration of regional so that to be ensured the development of the local area business environment and integration of regional business environment in European area.business environment in European area.

In the first section of the project will be organized seminars of improvement regarding the staff of the In the first section of the project will be organized seminars of improvement regarding the staff of the Chambers from the North-East Region, provided by European and Romanian specialists, in the following Chambers from the North-East Region, provided by European and Romanian specialists, in the following fields:fields:foreign trade foreign trade TQMTQMe-signe-signcommercial arbitration commercial arbitration project management in international economic cooperationproject management in international economic cooperationEuropean politics and strategy for SMEsEuropean politics and strategy for SMEsEuropean economic legislation for international cooperation.European economic legislation for international cooperation.

In the second section of the project, beneficiaries are the companies from the North-East Region willing to In the second section of the project, beneficiaries are the companies from the North-East Region willing to expand their businesses across the borders, in EU.expand their businesses across the borders, in EU.

The seminars have been organized in a Virtual Private Network system, in the following Romanian The seminars have been organized in a Virtual Private Network system, in the following Romanian counties: Iasi, Neamt, Suceava, Bacau and Botosanicounties: Iasi, Neamt, Suceava, Bacau and Botosani. .




3) Market Failure and Displacement3) Market Failure and Displacement Establishing the fields in which additional funding is Establishing the fields in which additional funding is

necessary is difficult to make unless businesses are dully necessary is difficult to make unless businesses are dully consulted. However analyses that are carried to this purpose, consulted. However analyses that are carried to this purpose, are often based on incomplete or outdate information, while, are often based on incomplete or outdate information, while, between the assessment period and the actual allocation of between the assessment period and the actual allocation of funds market conditions may change.funds market conditions may change.

To ensure a better allocation of funding, the To ensure a better allocation of funding, the chamberschambers of of commerce and industry initiate a mechanism of regular commerce and industry initiate a mechanism of regular consultation with the business community on the real needs consultation with the business community on the real needs for financing, through specialized public hearings, for financing, through specialized public hearings, questionnaires and a market surveillance mechanism questionnaires and a market surveillance mechanism




4) Administration of Funds4) Administration of Funds The cooperation between the public administration and the The cooperation between the public administration and the

chamberschambers must be based on the understanding of the must be based on the understanding of the rolerole that that chamberschambers of commerce and industry play in supporting the of commerce and industry play in supporting the enterprises, their capacity to work in a structural, professional enterprises, their capacity to work in a structural, professional network of centers for information, consultancy, network of centers for information, consultancy, representation and coordination of the business community.representation and coordination of the business community.

The The chamberschambers of commerce and industry make the necessary of commerce and industry make the necessary efforts to create mechanisms and instruments for efforts to create mechanisms and instruments for communication, cooperation and partnership with the public communication, cooperation and partnership with the public administration and NGOs that have responsibilities in regional administration and NGOs that have responsibilities in regional development issues. development issues.


THE ROLE OF THE ROMANIAN CHAMBERS OF COMMERCE AND THE ROLE OF THE ROMANIAN CHAMBERS OF COMMERCE AND INDUSTRY IN DEVELOPING THE REGIONAL POLICIES INDUSTRY IN DEVELOPING THE REGIONAL POLICIES

and implementing the European Fundingand implementing the European Funding

• Lobbying and …advising national governments on Lobbying and …advising national governments on the formation of regional policiesthe formation of regional policies

The The chamberschambers of commerce and industry from Romania (CCIT) participate in of commerce and industry from Romania (CCIT) participate in regional programming, within the mechanism of elaboration in partnership of regional programming, within the mechanism of elaboration in partnership of the multi-annual Regional Development Plans.the multi-annual Regional Development Plans.

The The ChamberChamber of Commerce and Industry of Romania and Bucharest of Commerce and Industry of Romania and Bucharest Municipality (CCIRB) was a member of the Municipality (CCIRB) was a member of the National Transparency Committee National Transparency Committee for Monitoring the Community Fundsfor Monitoring the Community Funds..

CCIRB participates to the social dialogue, both at national level (as a permanent CCIRB participates to the social dialogue, both at national level (as a permanent guest, in the guest, in the Economic and Social CouncilEconomic and Social Council and the and the Social Dialogue CommitteesSocial Dialogue Committees of the economic ministries) and at local level – of the economic ministries) and at local level – Social Dialogue CommitteesSocial Dialogue Committees of of the counties Prefectures.the counties Prefectures.

CCIRB participates to the CCIRB participates to the Consultative Council for the Negociation of Consultative Council for the Negociation of Romania’s Romania’s AccessionAccession to the to the EUEU and the Working Groups, on negociation and the Working Groups, on negociation chapters, established within the Council.chapters, established within the Council.

EPE bringing companies closer to Lisbon agenda (the movie)EPE bringing companies closer to Lisbon agenda (the movie)


Some facts & figures on EPE companiesINVOLVEMENT OF EU INSTITUTIONS

EU political representatives involved in national programmes & EPE(11programmes received):

Members of the European Parliament: Approx. 115

European Commission: 7 EU commissioners

Other representatives from EU institutions (Commission’s DGs, EESC, etc.): Approx. 35

740 MePs have received an information letter on the companies’vote


THE ROLE OF THE ROMANIAN CHAMBERS OF COMMERCE AND THE ROLE OF THE ROMANIAN CHAMBERS OF COMMERCE AND INDUSTRY IN DEVELOPING THE REGIONAL POLICIES and INDUSTRY IN DEVELOPING THE REGIONAL POLICIES and

implementing the European Fundingimplementing the European Funding

• Representing businesses on regional partnership Representing businesses on regional partnership groupsgroups

In Romania, the In Romania, the chamberschambers of commerce and industry were nominated of commerce and industry were nominated as members in the Regional Development Councils (having as members in the Regional Development Councils (having responsibilities in: programming and implementation of the regional responsibilities in: programming and implementation of the regional development policies; aproval of the regional programming documents; development policies; aproval of the regional programming documents; monitoring of the funds use). monitoring of the funds use). In the meantime In the meantime ChambersChambers of Commerce and Industry in Romania of Commerce and Industry in Romania closely cooperate with the Regional Development Agencies (NGOs set closely cooperate with the Regional Development Agencies (NGOs set up as “executive” entities of the Regional Development Councils, for the up as “executive” entities of the Regional Development Councils, for the elaboration and implementation of the programming documents; elaboration and implementation of the programming documents; implementation of the regional development programmes; technical implementation of the regional development programmes; technical monitoring of the funds use)monitoring of the funds use)




• Carrying out of regional policy and implementing Carrying out of regional policy and implementing local initiatives for the benefit of the arealocal initiatives for the benefit of the area

CCIRB and the local CCIRB and the local chamberschambers of commerce and industry participate to the of commerce and industry participate to the organization of networks of centers for information and consulting, in organization of networks of centers for information and consulting, in cooperation with the National Agency for SMEs and Cooperation, Minister of cooperation with the National Agency for SMEs and Cooperation, Minister of Environment and local public administration.Environment and local public administration.

Romanian Business School of the Romanian Business School of the ChambersChambers of Commerce and Industry of Commerce and Industry participates to a series of projects, mostly with European funding in the field of participates to a series of projects, mostly with European funding in the field of education for businesses, entrepreneurship and continuous vocational training. education for businesses, entrepreneurship and continuous vocational training.

Very important is the training for EPSO (European Selection Personal Office) Very important is the training for EPSO (European Selection Personal Office) competition for those who wants to become public servants in European competition for those who wants to become public servants in European Institutions.Institutions.




• Advising businesses on the access to funds and Advising businesses on the access to funds and projectsprojects

ChambersChambers of Commerce and Industry trains specialists and sets up of Commerce and Industry trains specialists and sets up information and consultancy structures for entrepreneurs, in projects information and consultancy structures for entrepreneurs, in projects evaluation and applying for pre-evaluation and applying for pre-accessionaccession funding funding

Through the programs initiated by Eurochambres (CAPE I, CAPE II and Through the programs initiated by Eurochambres (CAPE I, CAPE II and CAPE III) local CAPE III) local ChambersChambers of Commerce and Industry in Romania have of Commerce and Industry in Romania have been given assisstance and training in order to better advise their been given assisstance and training in order to better advise their members on members on EUEU matters. matters.

Through the Euro Info Centres network Through the Euro Info Centres network chamberschambers of commerce and of commerce and industry in Romania contribute to the readiness of businesses for industry in Romania contribute to the readiness of businesses for EUEU integration, with information and advice on the acquis communautaire integration, with information and advice on the acquis communautaire issues, Internal Market, explaining of community mechanisms and issues, Internal Market, explaining of community mechanisms and policies. policies.


Romania’s Geo-strategic Romania’s Geo-strategic PositionPosition

Our friend the wind

AreaArea

238,391 238,391 kmkm22

92,043 92,043 sq sq mi.mi.

the 9th in the 9th in EUEU

PopulatioPopulationn

21.7 mill 21.7 mill inhabitantinhabitantssthe 7th in the 7th in

EUEU

Capital Capital citycity

BucharestBucharest

1.9 mill 1.9 mill inhinh

Member Member ofof

EU, WTO, EU, WTO, IMF, WB, IMF, WB, NATONATO


Romania’s Strategic Romania’s Strategic LocationLocation

Helsinki – Kiev - Helsinki – Kiev - Bucharest –Bucharest –Odessa/AlexandropoulosOdessa/AlexandropoulosIXIX

The Danube riverThe Danube river

2,300 km long2,300 km longVIIVII

Dresden/Nuremberg - Dresden/Nuremberg - BucharestBucharestConstanta/Thessaloniki/Constanta/Thessaloniki/Istanbul Istanbul

IVIV

Pan European Pan European

Transport CorridorsTransport Corridors

The Eastern border of The Eastern border of the inland European the inland European

Union Union

Strategic position at Strategic position at the turning point where the turning point where EU meets the Balkans EU meets the Balkans

and CIS countriesand CIS countries


FLATFLAT TAX TAX 16%16%VATVAT 19%19%

SOCIAL SOCIAL SECURITYSECURITY

4433.5.5%%

39.5%39.5% by the by the end of 2008end of 2008

AVERAGE AVERAGE GROSS GROSS

WAGE WAGE (2008)(2008)

480480 euroeuro

MINIMUM MINIMUM GROSS GROSS WAGE WAGE (2008)(2008)

113535 euroeuro

Competitive TaxationCompetitive TaxationCountrCountr

yyCorporatCorporat

e Taxe Tax

RomanRomaniaia

16%16%

HungaHungaryry

16%16%

SlovakiSlovakiaa

19%19%

PolandPoland 19%19%

EstoniEstoniaa

20 %20 %

CroatiaCroatia 20.32%20.32%

SloveniSloveniaa

25%25%

Czech Czech Rep.Rep.

28%28%


Macroeconomic Macroeconomic Performance Performance

GDP real growthGDP real growth

Source: National Institute of Statistics

4.1%

7.7%

6.1%

8.6%8.4%

5.2%5.1%5.7%

2.1%

2000 2001 2002 2003 2004 2005 2006 2007 2008H1


Macroeconomic Macroeconomic Performance Performance Inflation rateInflation rate

6.5% 7.5%4.86%

8.6%

40.7%

30.3%

17.8%14.1%

9.3%

2000 2001 2002 2003 2004 2005 2006 2007 2008 e

Source: National Bank of Romania


Macroeconomic Macroeconomic Performance Performance

Unemployment rateUnemployment rate

9.5

6.68.9

10.411.8

10.5

8.88.1

76.2

5.5 5.2 54.2

0

2

4

6

8

10

12

%

1995 1997 1999 2001 2003 2005 2007 2008e


Foreign direct investmentsForeign direct investments - million Euro -- million Euro -

1294 1212 1627

40985197

91008000

4750

0100020003000400050006000700080009000

10000

Source: National Bank of Romania


Foreign Investors Foreign Investors AdvantagesAdvantages

foreign investments allowed in all sectors of foreign investments allowed in all sectors of economyeconomy

possibility to freely manage the company possibility to freely manage the company with full ownership rightswith full ownership rights

full repatriation of capital and profitsfull repatriation of capital and profits

protection against expropriation and protection against expropriation and nationalizationnationalization

national treatment for foreign investorsnational treatment for foreign investors


Main trade partners Main trade partners - 2007 -- 2007 -

Top import partner countriesTop import partner countriespercentage percentage of total import of total import

GermanyGermany 17,2517,25

ItalyItaly 13,7213,72

HungaryHungary 6,756,75

FranceFrance 6.486.48

Russian FederationRussian Federation 6,306,30

TurkeyTurkey 5,785,78

AustriaAustria 4,674,67

HollandHolland 3.523.52

PolandPoland 3.283.28

ChinaChina 2,832,83

Czech Rep.Czech Rep. 2.342.34

SpainSpain 2.072.07

BelgiumBelgium 1,931,93

Great BritainGreat Britain 1,921,92

GreeceGreece 1,491,49

Top export partner countriesTop export partner countriesppercentageercentage of total export of total export

ItalyItaly 18,1018,10

GermanyGermany 16,9516,95

FranceFrance 7,647,64

TurkeyTurkey 7,127,12

HungaryHungary 5,345,34

Great BritainGreat Britain 4.364.36

BulgariaBulgaria 2.672.67

AustriaAustria 2.662.66

SpainSpain 2.272.27

PolandPoland 2.182.18

SUASUA 2.092.09

Holland Holland 2,062,06

GreeceGreece 1.761.76

BelgiumBelgium 1.601.60

UkraineUkraine 1.541.54


Top Top reasons to invest in reasons to invest in RomaniaRomania (1) (1)

Market & Location Advantage :

Second largest market in Central and Eastern Europe (over 21 million inhabitants)

Easy access to the countries of the former CIS countries, Balkans, the Middle East and Northern Africa

Junction of three prospective European transportation corridors nos. 4, 7 & 9

Resource Advantage:

Skilled labor force, with solid knowledge in technology, IT and engineering

Rich natural resources, including fertile agricultural land, oil and gas

Important potential for tourism


Top Top reasons to invest in reasons to invest in RomaniaRomania (2) (2)Economic Advantage

Sustainable economic growth Functional Market Economy status Competitive tax policy Decreasing inflation Permanent financial assistance for SME's

Development Structural funds

Improving Infrastructure Advantage Well-developed networks of mobile

telecommunications in GSM systems Branch offices and representatives of well-

known international banks Commitment to improve the highway

infrastructure to EU standards Extensive maritime and river navigation

facilities


Map of Industrial Map of Industrial ParksParks More than 40

Industrial Parks

Both private & public

Greenfield & Brownfield

Access to utilities

Package of services offered by the park administration

Wide variety of activities to be developed

Some created for high-tech activities


Potential Sectors for Potential Sectors for InvestmentInvestment

o ManufacturingManufacturingo Automotive partsAutomotive partso IT & IT &

CommunicationCommunicationo Electric & Electric &

ElectronicsElectronicso Wood processingWood processing

o Construction Construction materialsmaterials

o TextileTextileo Food processingFood processingo InfrastructureInfrastructureo Outsourcing and Outsourcing and

logisticslogistics


AutomotiveAutomotive Industry Industry OpportunitiesOpportunities

Experience in the field of car makersExperience in the field of car makers

Automotive component parts – rapidly growing Automotive component parts – rapidly growing sector: currently over sector: currently over 175 major manufacturers175 major manufacturers

Availability of labor forceAvailability of labor force• Labor cost: monthly average salary approx. Labor cost: monthly average salary approx.

Euro 250-300;Euro 250-300;• Total number employed: 600.000;Total number employed: 600.000;

Trained work forceTrained work force• 7 colleges in vehicle technology – 500 7 colleges in vehicle technology – 500

graduates each year;graduates each year;• 25 colleges in mechanical engineering – 1.000 25 colleges in mechanical engineering – 1.000

graduates / year;graduates / year;

Availability of suppliers and subcontractorsAvailability of suppliers and subcontractors

Presence of R&D centersPresence of R&D centers

Successful investment stories in the fieldSuccessful investment stories in the field


AutomotiveAutomotive top-tier investorstop-tier investors

20062006 1 bill € 1 bill €

investment investment 1.6 bill € 1.6 bill €

turnoverturnover 12 thou 12 thou

employeesemployees20072007 230.500 cars 230.500 cars

soldsold

New projectsNew projects

A gear boxes facility 217 mill A gear boxes facility 217 mill € of Renault-Nissan Alliance€ of Renault-Nissan Alliance A R&D Centre "Renault A R&D Centre "Renault

Tehnologie Roumanie" – 456 Tehnologie Roumanie" – 456 mill € - 2012mill € - 2012

Ford took over the state-owned shares of Ford took over the state-owned shares of Automobile Craiova (72.4 %) for €57 million, and Automobile Craiova (72.4 %) for €57 million, and pledged to invest €675 mill to modernize the pledged to invest €675 mill to modernize the factory and increase the number of employeesfactory and increase the number of employees Ford is awaiting for the results of the EC Ford is awaiting for the results of the EC

investigation on the Romanian government investigation on the Romanian government helping the takeover helping the takeover

Automotive component parts sector Automotive component parts sector

the fastest growing sector in Romania;the fastest growing sector in Romania;

5.8 bill € investment inflows to increase up to 9-10 bill until 5.8 bill € investment inflows to increase up to 9-10 bill until 2010;2010;

Huge presence of international top-tier players: TYRES (Michelin, Huge presence of international top-tier players: TYRES (Michelin, Pirelli, Continental); WIRES (Yazaki, SEWS, Leoni, Lear, Valeo, Pirelli, Continental); WIRES (Yazaki, SEWS, Leoni, Lear, Valeo, Delphi); BEARINGS (SNR, Ina Schaeffler, Koyo), SOFTWARE Delphi); BEARINGS (SNR, Ina Schaeffler, Koyo), SOFTWARE (Siemens VDO); SEATS (Johnson Controls), etc.(Siemens VDO); SEATS (Johnson Controls), etc.


High density of Romanian IT specialists (five High density of Romanian IT specialists (five times higher than in Russia, and seven times times higher than in Russia, and seven times than in India). than in India).

Romanian Olympic students are usually placed Romanian Olympic students are usually placed in top 4 with China, US and Russia. in top 4 with China, US and Russia.

In Microsoft the second spoken language is In Microsoft the second spoken language is Romanian;Romanian;

Low brain drain phenomenon in Romania;Low brain drain phenomenon in Romania;

IT sector is constantly growing;IT sector is constantly growing;

Major multinational IT companies such as Major multinational IT companies such as Microsoft, HP, Oracle, Cisco, Intel and Microsoft, HP, Oracle, Cisco, Intel and Motorola are present in Romania - many of Motorola are present in Romania - many of them use Romania as regional headquarters.them use Romania as regional headquarters.

RomanianRomanian ITC Industry ITC Industry TrendsTrends


A Top European Location for product A Top European Location for product R&D, outsourcing, customer service and R&D, outsourcing, customer service and BPOBPO

In 2006 Microsoft In 2006 Microsoft opened a Global opened a Global Technical Support Technical Support Center creating Center creating around 700 jobsaround 700 jobs

One GE group One GE group companies companies established an IT established an IT outsourcing, financial outsourcing, financial services and supply services and supply chain BPOchain BPO

HP set up a BPO in HP set up a BPO in Bucharest for Bucharest for financial and financial and administrative administrative services, dedicated services, dedicated to EMEA region - to EMEA region - up to 1200 up to 1200 employeesemployees

In 2006 WIPRO In 2006 WIPRO decided to set up a decided to set up a BPO center in BPO center in Bucharest for IT Bucharest for IT services covering the services covering the East European market East European market - 700 employees- 700 employees

Ericsson opened in Ericsson opened in Romania, in July this Romania, in July this year, a New Global year, a New Global Service Delivery Service Delivery Center - 70% of the Center - 70% of the employees will be employees will be young graduatesyoung graduates

BPO aiming to offer BPO aiming to offer outsourcing outsourcing services in services in HR, HR, finance and finance and procurement to procurement to workwork


Availability of Human Availability of Human CapitalCapital

Young population (more than 55% is under the age of 40 and 37% is between 25 and 49 years old)Almost 21.7 million people

Demographics

Talent pool104 higher education institutions112 thou university graduatesAvailability of technical engineersHigh industrial experienceFlexibility

Cities with more than Cities with more than 100,000 100,000 inhabitantsinhabitants

more than 1,000,000 inhabitantsmore than 1,000,000 inhabitants

300,000 – 400,000 inhabitants300,000 – 400,000 inhabitants



Source: National Institute of StatisticsSource: National Institute of Statistics


Law9%

Arts2%

Engineering23%

Education31%

Medicine5%Economy

30%

University graduates in Romania

(by education field)

ValuableValuable Human Human PotentialPotential

high performances in international competitions

high percentage of technically competent professionals (23% are engineering graduates out of 720 students enrolled)

highest growth rate of IT specialists in the region (Annually 7000 university graduates in the software field & More then 3.000 students in 105 local Cisco academies)

Source: National Institute of Statistics

strong language skills (English, French, German, Italian, Spanish, Russian, etc.)

large skilled labor force at comparatively low wage rates

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