Regular Report on
progress towards accession
Romania continues to fulfil the political criteria.
The political will to address administrative and judicial
reform exists and a number of positive initiatives have been launched over the
last year to reform the public administration and the judiciary. For example,
the Civil Servant Statute was revised and a major reorganisation of the court
system was launched. However, the reform process is at an early stage. The
Romanian civil service remains characterised by cumbersome procedures, limited
transparency and a limited capacity for policy execution. The judicial system
needs to improve the management of cases and the consistency of judgements as
well as to increase the independence of the judiciary. These key issues must be
Romania still needs to develop a strategy to address reform
of the policy and legislative process. Progress was made with the restriction
of the use of emergency ordinances. Laws on the freedom of information and
transparency in the legislative process are also positive developments but have
only been partially implemented. Constitutional reform of the parliamentary
system should be accompanied by measures to increase parliamentary capacity to
effectively scrutinise draft legislation.
Corruption in Romania continues to be widespread and affects
all aspects of society. A number of high-profile measures were launched over
the reporting period - but the implementation of anti-corruption policy as a
whole has been limited. The measures taken have yet to have an impact and
substantially increased efforts are needed.
Romania continues to respect human rights and fundamental
freedoms, and has made good progress in a number of important areas.
Structures have been established to implement anti-discrimination
legislation and a number cases of discrimination were sanctioned. The capacity
of the Ombudsman's office was strengthened. The good progress noted in last
year's report in reforming the system of child protection has continued and
further initiatives have been taken to enhance the rights of national
minorities. The implementation of the Roma Strategy has continued although a
lack of resources has meant that the results have been somewhat limited.
Similarly, the process of property restitution has continued, but remains far
Reforms have been launched in a number of other areas: modernisation
of the police, improving care for the disabled, reducing social exclusion,
improving the social dialogue. To date, the main work in these fields has
consisted of developing strategies and preparing framework legislation. The
challenge for the future will be the effective implementation of these
initiatives. While the proposals to reform the Penal Code are positive
developments, further efforts are needed to strengthen the freedom of
expression. Additional measures are also needed to further reduce prison
Romania can be considered as a functioning market economy
once the good progress made has continued decisively. In addition, a vigorous
and sustained implementation of its structural reform programme is required in
order for Romania to be able to cope with competitive pressure and market
forces within the Union in the near term.
Further progress towards macroeconomic stability was made as
inflation continued to decline from a relatively high level despite further
adaptations of regulated prices. The external position remained sustainable and
fiscal policy prudent. Measures to improve tax administration are being
progressively put into place. The commitments to control the total wage bill in
the public sector were broadly respected and some actions were taken to enforce
enterprises' financial discipline, most notably a somewhat higher disposition
to disconnect energy users in arrears. Privatisation and restructuring of
public enterprises accelerated. Public ownership also decreased in a banking
sector that continued to develop its intermediation role. Administrative
improvements of market entry and exit mechanisms were undertaken along with
various initiatives to improve the business environment.
The authorities should now consolidate the progress achieved
in these areas while addressing more decisively those issues where advances
were insufficient. In order to preserve the momentum towards greater
macroeconomic stability, the recent tightening in monetary policy should be
accompanied by prudent fiscal and wage policies as well as by a continued
reduction in the quasi-fiscal deficit. Medium-term fiscal prospects also need
to be strengthened by advancing expenditure reform and improving tax
compliance. This would help strengthening enterprise financial discipline which
remains a key, unresolved issue. Measures should focus on the root causes of
the continued accumulation of arrears to the budget and the energy sector.
Efforts to improve the workings of the market mechanism must be completed by a
greater willingness to liquidate loss-making enterprises and establish natural
gas prices that appropriately reflect short and long-term costs. Having moved
beyond the initial phases, restructuring and privatisation in key sectors, such
as energy, mining and transport, must be brought forward. This would greatly
support the establishment of a functioning market economy and the development
of Romania's capacity to cope with competitive pressure and market forces
within the Union.
Romania has made steady progress with the adoption of the acquis
and is on track to transpose the required legislation before the planned date
of accession provided the current pace of progress is maintained. Weaknesses in
the legislative process mean that the quality of legislation transposed is
uneven and in some cases revisions will be needed before laws can be
In the area of the internal market, Romania has continued to
make progress with the transposition of sector specific legislation on the free
movement of goods and public procurement. Particular attention must be paid
to developing the ability to administer the public procurement, the foodstuffs
and food safety acquis. Romania should also continue the screening for
measures that may be incompatible with the principle of free movement of goods.
Progress on the free movement of persons has been limited and additional
efforts should now be focused on preparations for implementing the acquis
on mutual recognition of professional qualifications. Work to identify barriers
to the free movement of services has continued - although only a few
restrictions have been removed. While alignment with the acquis on free
movement of capital is steadily improving greater efforts are needed to
improve payments systems and the fight against money laundering.
Romania has made progress in the field of company law as
such. Implementation of new accountancy and auditing rules should be prioritised.
Greater efforts to protect industrial and intellectual property rights are
needed. While the Romanian competition legislation is broadly in line
with EC anti-trust rules, in the area of state aid there is not yet sufficient
control. In the steel sector, Romania's obligations for transparency with
regard to direct and indirect state aid should continue to be respected.
Further progress has been made in transposing the agricultural
acquis and in the restructuring of the agricultural sector. Enforcement of
legislation is hampered by limited management and administrative capacity.
Particular attention should therefore be paid to reinforcing the administrative
capacity to implement and enforce the acquis, in particular in the veterinary
and phytosanitary fields. Only limited progress has taken place in the fisheries
sector and delays have occurred with regards to the transposition of the acquis,
in particular on the Fishing Vessel Register. The administrative capacity needs
to be considerably reinforced.
Romania has continued to make good progress with the
transposition of the transport acquis and with the establishment of the
required administrative structures but maritime safety remains a concern.
Priority should be given to developing institutions to enforce the new
legislation and securing the funding needed to make the heavy investments
Romania has made some progress in aligning with the acquis
on taxation and particular attention should now be paid to the modernisation
of the tax administration and improvement of IT systems. The adoption of the Labour
Code was a major step forward in the transposition of the acquis on social
policy and employment. The main focus of future efforts should be ensuring
the implementation of the various initiatives that have been taken and to
strengthen the administrative capacity. Legislative progress in the energy
sector needs to be matched by establishing effective implementation structures,
carrying through with structural reforms and improving the functioning of the
internal energy market.
The building blocks for a modern industrial policy
are now in place, but the key challenge is its implementation as structural
weaknesses limit the capacity for enforcement. Considerable efforts have been
made to improve the business environment although the situation facing Small
and medium-sized enterprises, remains difficult. Romania has made
significant progress in the area of telecommunications with the
establishment of a regulatory body, the liberalisation of the
telecommunications market and the transposition of the new telecommunication acquis.
The institutional framework for regional policy and
co-ordination of structural instruments is still not clearly defined and
specific arrangements for financial management and control have still to be
made. Considerable further efforts are needed to bring the administrative
capacity up to the level required. In the area of the environment,
although Romania has transposed a considerable amount of legislation,
administrative capacity and financial resources dedicated to the sector remain
Legislative alignment on consumer and health protection
has continued and Romania has made some progress as regards market surveillance
activities and the co-ordination of control activities between competent
ministries and authorities.
Legislative progress has been made in most areas of justice
and home affairs and especially so in migration, organised crime, fight
against money laundering, and judicial co-operation in civil matters. However,
implementation capacity remains weak in almost all areas and Romania should
increase its efforts to develop administrative capacity and inter-agency
Progress has also been made in the area of customs
although additional efforts should address corruption within the Customs
Administration and prepare in advance for the application of measures that will
be introduced at the time of accession. Considerable progress has been made in
the financial control area. Further efforts should concentrate on
implementing sound financial control systems, completing legislative alignment,
and strengthening the administrative capacities.
Steady progress is being made in the other chapters of the acquis.
In a number of important sectors, there has been a continued
gap between progress in legal transposition and the limited overall capacity
of the public administration to implement and enforce the newly adopted
legislation. This represents a major constraint on Romania's accession
preparations and to address this issue will require a comprehensive, structural
reform of both the public administration and the judicial system. These
concerns extend beyond adoption of the acquis and also apply to the
management of EU financial assistance. Progress in establishing the new
institutional structures required by the acquis has continued although
results to date have been uneven.
In the accession negotiations, 20 chapters have been
provisionally closed. The commitments made in the negotiations are with a view
to accession in 2007. They are generally being met, although delays have been
noted in certain specific areas.