Vol. 4 No.1  

Turning down free money

Local authorities are snubbing free EU cash in favour of loans for large infrastructure projects, Ana-Maria Nitoi finds out why
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Romanian local authorities and the central administration are beginning a trend of taking out loans or using their own funds for large infrastructure works instead of using EU money.
But the irony is that European funds are the single source of finance available to authorities, outside of their own budgets, which they do not have to pay back.
However local and central administration can only access EU funds based on projects drawn up very carefully. They also come with a large number of conditions. Since EU money became available for Romania, around ten years ago, the central authorities have managed to recruit or train specialists in EU project management.
But this situation is not always to be found outside of Bucharest. There are still towns and especially villages in Romania which have not been able so far to access any EU money for rehabilitation or infrastructure construction. One example is Fagaras, a town located in the tourist-rich Brasov county.
Another problem for authorities who want to get their hands on European funds is the paperwork, which takes a long time to process and to gain approval both by the central Romanian authorities and the European officials in Brussels.
“It is more efficient to take out bank loans than to wait until you can access EU money even though it is non-reimbursable,” says Nicolae Florin Oancea, vice-mayor of Deva city, Hunedoara county.

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