Romania and the European Union

Project Overview | Country Background | The Legacy of Commuism -10 years of severe economic instability | Romania and the European Union | Economic and Social Improvements conducive to EU Integration | Joining the European Union - Pros and Cons |Sources Cited

The major turning point in Romania’s development represented the decision of the EU Council of Ministers in December 1999 to begin accession negotiations for Romania, which resulted in the Romanian government becoming strongly compelled to implement reforms directed towards achieving stability, economic growth and private sector development (Romania – Country Assistance Evaluation 9). In recent years, gaining acceptance in the European Union has become the strongest driving force shaping the decision making process of the Romanian government. The country underwent radical transformations meant to accelerate the transition process from a centralized economic system to a market economy that protects and respects democratic values.

According to the European Union, in 2000 Romania “scored last among EU accession countries in the World Bank's composite index of government accountability, effectiveness, regulatory quality, rule of law, control of corruption, and political sta. More than this, Romania experienced “the least improvement in performance between 1998 and 2002” of all the Eastern European states that candidate for EU membership [|9]. The European Commission declared that, although Romania achieved a functional market economy and was moving towards a stable democratic system, that is able to guarantee “the rule of law, human rights, and respect for minorities”, the country still had major problems in what concerns the corruption level, which “affects almost all aspects of society” [|1]. The high level of corruption— most prevalent in parties and in courts— categorically infringed the process of economic and human development. Romania was listed in Transparency International's Corruption Perceptions Index as the most corrupt of the EU accession countries, ranking 85 out of the 133 countries surveyed and the second most corrupt in Europe, after Russia. One of the country’s most severe limitations consisted in the underdeveloped private sector “with state-owned enterprises continuing to account for a significant share of economic activity” [|4]. The principal reasons for the low level of foreign investment were represented by unofficial barriers, mainly “Romania’s inconsistent legal and regulatory system” [|9]. In 2002, what further discouraged foreign investors was that tax laws were frequently changed and were unevenly enforced. Moreover, tort cases required “lengthy, expensive procedures, and judges’ ruling faces uncertain enforcement.”[|9] In 2002, the World Bank ranked Romania “last among EU candidate countries in terms of the responsiveness and efficiency of its administration, the quality of government regulations, the rule of law, and political stability" [|9]

In an address to the Annual Meeting of Romania’s ambassadors and general consuls, the Romanian Prime Minister, Calin Popescu Tariceanu declared that Romania’s EU accession in 2007 is a fundamental objective and “the only policy option for the government”[|21]. The desire to become part of the European Union is what triggered the government to adopt a series of measures for the economic and social development of the country.

The European Union Comission conditioned Romania's acceptance in the European Union upon implementation of key stabilization policies (i.e. reduction in the general government budget deficit, strengthening of the finances of state-owned enterprises through energy price adjustments and wage restraint, measures to contain credit growth, strengthening of the judicial system, and decreased corruption, strengthening macroeconomic stability, carrying out intensive economic reforms, gradual decrease of inflation, cutting arrears, improving transparency and stability in the fiscal system, liberalization of prices and adjustments of regulated prices, accelerating privatization, improving administrative procedures for companies entering and leaving the market and improving the legal framework necessary for developing a market economy)[|23]. Romania was required to meet specific requirements which were comprised in 31 chapters adhere chapters (small and medium sized enterprises, science and research, education and training, external relations, common foreign and security policy, statistics, company law, health and consumer protection, fisheries, economic and monetary union, social policy and employment, industrial policy, telecommunications and IT, custom union, institutions, culture and audio-visual policy, free movement of capital, free movement of goods, taxation, free movement of persons, transport policy, financial control, agriculture, financial and budgetary provisions, energy, free movement of services, regional policy structural funds, environment protection, competition, justice and home affairs [|31]. So far the country managed to provisionally close all these chapters. However, the EU reserves the right to postpone Romania’s admission in the EU till January 2008, if it will be estimated that the country is not fully prepared to successfully meet membership requirements [|2]