Saturday, June 30, 2007

Romania: EU's Clarion Call

Oxford Business Group Latest Briefing

Romania, along with fellow new European Union member Bulgaria, has been told in no uncertain terms that it needs to get its house in order to bring the country into line with the membership requirements of the European Union, especially regarding the fight against corruption.

On June 27, the European Commission (EC) released a report on the progress made by the two countries in putting in place reforms and addressing issues left outstanding when they formally joined the EU on January 1 this year.

In handing down the report in Brussels, Justice Commissioner Franco Frattini said that corruption at high levels remained a problem in both countries and needed to be dealt with. He urged them to be more aggressive in implementing anti-corruption and judicial reforms.

In particular, the report said that insufficient measures have been taken to combat high-level corruption in Romania, though it acknowledged significant progress had been made towards the creation of a National Integrity Agency (ANI), which is to be tasked with combating such activity. The agency is expected to be in operation this coming October.

The report also recommended that adoption of the new codes for civil and criminal procedures be finalised, the new criminal code be reinforced and more be done to strengthen the independence of the judiciary, including making it more professional and giving it more funding and powers.

Romania has been told to put in place a coherent countrywide anti-corruption strategy and guarantee the legal and institutional stability of key institutions such as the National Anti-corruption Department (DNA).

While Romania had made progress in addressing weaknesses that could prevent an effective application of EU laws, policies and programmes, this progress was nowhere near enough to warrant an end to the EC keeping the country on its watch list, the report said. The commission said it would issue an updated version of its report on Romania's compliance early next year.

However, the situation was not so bad that the EC was prepared to recommend calling for sanctions to be applied to Romania under the safeguard clause built into its accession agreement. These could have included cutting agricultural subsidies by 25%, freezing other assistance and even suspending some of Romania's EU membership rights.

EC President Jose Manuel Durao Barroso said Romania must focus on implementing required legislation in the monitored fields rather than just adopting new laws or it could still incur the bloc's ire.

"Although at this stage the commission does not recommend any safeguard clause, we will remain vigilant. Acquiring additional necessary changes requires a long-term engagement," said Barroso when the report was released.

Failure to meet the EU's benchmarks could still result in sanctions when a new report is issued in June 2008.

"I would expect Romania and Bulgaria to meet the benchmarks," said Frattini. "They have adopted the laws necessary to get results. Now the focus is on implementation."

Despite the warnings, reactions to the report were for the most part positive.

President Traian Basescu, who has long championed both Romania's EU membership and the fight against corruption, said the report was objective and reflected the developments in judicial reform made since last September, when the EU had tabled its previous assessment.

Justice Minister Tudor Chiuariu also talked up the positives of the report, saying the EC had said progress had been made.

"The report confirms the priorities of my term: the adoption of the ANI law and efficiency in the fight against corruption," he said.

Chiuariu said he would present the government with a comprehensive plan of action to address all of the deficiencies set out in the report by October, as called for by the EC.

In its defence, in the six months covered by the report, Romania has been embroiled in a series of political crises that partly derailed the programme of reforms. The political turmoil centred around a clash between Basescu and Prime Minister Calin Popescu Tariceanu, which briefly saw the head of state removed from office over allegations he attempted to influence senior judges. Reinstated after a referendum in May, Basescu has said he will work with the premier to get Romania's reform train back on track.

Romania needs to address the issues raised by the EC report not only to get Brussels off its back but to counter the negative image corruption gives the country, one that could harm foreign investment and business confidence.

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