Communication from the Commission - Romania: Accession Partnership
Date: 1998-06-29
Institutions: European Commission
Subjects: EU aid, EU programme, Romania, accession to the European Union, cooperation policy, financial aid

29.6.98

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C 202/73

ROMANIA:  ACCESSION  PARTNERSHIP

(98/C 202/08)

1.

INTRODUCTION

2. OBJECTIVES

In  the  opinion  which  it  submitted  to  the  Council  in  July
1997,  in  accordance  with  the  provisions  of  Article  O
of  the  Treaty,  the  Commission  recommended  that
negotiations 
for  accession  should  be  opened  with
Romania  as  soon  as  it  has  made  sufficient  progress  in
satisfying  the  conditions  for  membership  defined  by  the
European  Council  in  Copenhagen.  This  recommendation
derives  from  the  analysis  contained  in  the  opinion,  in
which the Commission is of the view that Romania (i) is
on  its  way  to  satisfying  the  political  criteria  with  respect
to  the  existence  of  stable  institutions,  guarantees  for  the
rule  of 
law,  human  rights  and  the  protection  of
minorities,  (ii)  has  made  considerable  progress  in  the
creation  of  a  market  economy,  but  would  still  face
serious  difficulties  in  coping  with  competititive  pressure
and market forces within the Union in the medium term,
and  (iii)  despite  the  progress  that  has  been  made,  it  has
neither  transposed  nor  taken  on  the  essential  elements  of
the  acquis,  particularly  as  regards  the  internal  market.  It
is  therefore  uncertain  whether  Romania  will  be  in  a
position  to  assume  the  obligations  of  membership  in  the
medium  term  and,  moreover,  substantial  administrative
reform  will  be  indispensable  if  Romania  is  to  apply  and
enforce  the  acquis  effectively.

The  Europe  Agreement  will  remain  the  basis  for  the
European  Union’s  relations  with  Romania.  However  the
pre-accession  strategy  will  be  reinforced  to  enable
assistance  to  be  directed  towards  the  specific  needs  of
each  applicant  so  as  to  provide  support  for  overcoming
particular  problems  identified  in  the  opinion.  As  the
Commission  indicated  in  Agenda  2000:  ‘The  reinforced
pre-accession  strategy  has  two  main  objectives.  First,  to
bring together the different forms of support provided by
the  Union 
the  Accession
Partnerships,  and  to  work  together  with  the  applicants,
within  this  framework,  on  the  basis  of  a  clearly  defined
involving
programme 
commitments  by  the  applicants  to  particular  priorities
and  to  a  calendar  for  carrying  them  out.  Second,  to
familiarise  the  applicants  with  Union  policies  and
procedures  through  the  possibility  of  their  participation
in  Community  programmes.’

for  membership, 

in  a  single 

to  prepare 

framework, 

that 

At  its  meeting  in  Luxembourg  in  December  1997  the
the  Accession
decided 
European  Council 
Partnerships  would  be  the  key  feature  of  the  enhanced
pre-accession  strategy,  mobilising  all  forms  of  assistance
to  the  applicant  countries  within  a  single  framework.
This  Accession  Partnership  has  been  decided  by  the
Commission,  after  consulting  Romania  and  on  the  basis
of  the  principles,  priorities,  intermediate  objectives  and
conditions  which  have  been  decided  by  the  Council.

The purpose of the Accession Partnership is to set out in
a  single  framework  the  priority  areas  for  further  work
identified  in  the  Commission’s  opinion  on  Romania’s
application  for  membership  of  the  European  Union,  the
financial  means  available  to  help  Romania  implement
these  priorities  and  the  conditions  which  will  apply  to
that  assistance.  This  Accession  Partnership  provides  a
framework for a number of policy instruments which will
be  used  to  help  the  candidate  countries 
in  their
preparations  for  membership.  These  will  include,  inter
alia,  the  National  Programme  for  the  Adoption  of  the
Acquis  to  be  adopted  by  Romania,  the  Joint  Assessment
of  Economic  Policy  Priorities,  the  Pact  against  Organised
Crime  and  the  internal  market  road  maps.  Each  of  these
instruments  is  different  in  nature  and  will  be  prepared
and  implemented  according  to  specific  procedures.  They
will  not  be  an  integral  part  of  this  Partnership  but  the
priorities  they  contain  will  be  compatible  with  it.

3. PRINCIPLES

The  main  priority  areas  identified  for  each  candidate
country relate to their ability to assume the obligations of
that
meeting 
membership  requires:

the  Copenhagen  criteria  which  state 

— that  the  candidate  country  has  achieved  stability  of
institutions  guaranteeing  democracy,  the  rule  of  law,
human  rights  and  respect  for  and  protection  of
minorities,

— the  existence  of  a  functioning  market  economy,  as
well as the capacity to cope with competitive pressure
and  market  forces  within  the  Union,

— the  ability  to  take  on  the  obligations  of  membership,
including adherence to the aims of political, economic
and  monetary  union.

At  its  meeting  in  Madrid,  the  European  Council  stressed
the  need  for  the  candidate  countries  to  adjust  their
administrative  structures  to  ensure  the  harmonious
operation  of  Community  policies  after  accession  and  at
Luxembourg  it  stressed  that  incorporation  of  the  acquis
into  legislation  is  necessary,  but  not  in  itself  sufficient;  it
is  necessary  to  ensure  that  it  is  actually  applied.

4. PRIORITIES  AND  INTERMEDIATE  OBJECTIVES

The  Commission’s  opinions 
the  Council’s
examination  of  these  have  highlighted  the  extent  of  the

and 

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29.6.98

efforts which still have to be made in certain areas by the
candidate countries to prepare for accession and took the
view  that  none  of  these  countries  fully  satisfies  all  of  the
Copenhagen  criteria  at  the  present  time.  This  situation
will  require  the  definition  of  intermediate  stages  in  terms
of priorities, each to be accompanied by precise objectives
to  be  set  in  collaboration  with  the  countries  concerned,
the  achievement  of  which  will  condition  the  degree  of
assistance  granted  and  the  progress  of  the  negotiations
under  way  with  some  countries  and  the  opening  of  new
the  others.  The  priorities  and
negotiations  with 
intermediate  objectives  have  been  divided 
into  two
groups — short and medium term. Those listed under the
short  term  have  been  selected  on  the  basis  that  it  is
realistic  to  expect  that  Romania  can  complete  or  take
them  substantially  forward  by  the  end  of  1998.  In  view
of  the  short  time  span,  and  taking  into  account  the
administrative  capacity  required  to  achieve  them,  the
number  of  priorities  selected  for  the  short  term  has  been
limited.  The  priorities  listed  under  the  medium  term  are
expected  to  take  more  than  one  year  to  complete
although  work  may  and  should  also  begin  on  them
during  1998.

Romania  will  be 
invited  to  draw  up  a  National
Programme  for  the  Adoption  of  the  Acquis  (NPAA)  by
the  end  of  March  which  should  set  out  a  timetable  for
achieving these priorities and intermediate objectives and,
where  possible  and  relevant,  indicate  the  necessary  staff
and  financial  resources.

The  Accession  Partnership  indicates  that  Romania  will
have  to  address  all  issues  identified  in  the  opinion.  The
annex  provides  a 
these.
summary 
Incorporation of the acquis into legislation is not in itself
sufficient;  it  will  also  be  necessary  to  ensure  that  it  is
actually  applied  to  the  same  standards  as  those  which
apply  within  the  Union.  In  all  of  the  areas  listed  below
there  is  a  need  for  credible  and  effective  implementation
and  enforcement  of  the  acquis.

checklist  of 

Drawing  on  the  analysis  of  the  Commission’s  opinion
and  the  Council’s  examination  of  this,  the  following
short  and  medium-term  priorities  and 
intermediate
objectives  have  been  identified  for  Romania.

4.1. Short  term  (1998)

— Economic  reform:  establishment  of  medium-term
economic policy priorities and joint assessment within
the  framework  of  the  Europe  Agreement;  make
satisfactory  progress  on  the  Government’s  economic
reform programme, including the privatisation of two
banks, the transformation into commercial companies
of  most 
the  efficient  and
transparent  implementation  of  the  foreign  investment
regime,  and  restructuring/privatisation  of  a  number
of  large  State-owned  industrial  (e.g.  coal  and  steel)
and  agricultural  companies  (notably  by  reducing
losses  and  financial  arrears);  continue  the
their 

régies  autonomes, 

implementation  of 
international  financial  institutions.

the 

agreements  with 

the

— Reinforcement  of 

in  public  administration 

institutional  and  administrative
capacity:  adoption  of  draft  law  on  the  civil  service
reform,
and  progress 
phytosanitary  and  veterinary  controls,  particularly  as
regards  facilities  at  the  external  borders,  the  financial
sector 
supervisory  bodies  of
banking,  financial  services  and  capital  markets),
customs;  strengthening  of 
financial  control  and
auditing  mechanisms  and  competition,  anti-trust  and
State  aid  monitoring  bodies  and  environment,  begin
to set up structures needed for regional and structural
policy.

(strengthening  of 

— Internal  market: 

law 

reform, 

including 

the  restructuring  of
the  banking  sector  and  the  capital  markets,  the
including
completion  of  company 
measures for the promotion of enterprise development
and  SMEs,  foreign  direct  investment,  harmonisation
and 
taxation,
harmonisation  of  public  procurement,  adoption  of  a
law  on  State  aid  and  a  first  State  aid  inventory.
Establishment  of  standardisation  and  conformity
assessment  structures.

improved  application  of 

indirect 

— Justice  and  home  affairs:  in  particular  further  efforts
to  implement  measures  to  combat  corruption  and
organised  crime  and  improve  border  management.

— Environment:  continue  transposition  of  framework
legislation,  establishment  of  detailed  approximation
programmes  and  implementation  strategies  related  to
individual  acts.  Planning  and  commencement  of
implementation  of  these  programmes  and  strategies.

4.2. Medium  term

— Political  criteria:  continuation  of  child  protection
reform, 
the  Roma,
consolidation  of  protection  of  individual  liberties  and
improvement  of  the  functioning  of  the  courts.

further  efforts 

integrate 

to 

— Economic  reform:  particular  attention  should  be
devoted  to  creating  the  basis  for  a  sustained  increase
of  productivity  and  to  the  further  restructuring/
privatisation  of  State-owned  enterprises,  including
banks.

— Economic  policy: 

the 

regular 

review  of 

joint
assessment  of  economic  policy  priorities,  within  the
Europe  Agreement  framework,  focusing  on  satisfying
the Copenhagen criteria for membership of the Union
and the acquis in the area of economic and monetary
policy  (coordination  of  economic  policies,  submission
of  convergence  programmes,  avoidance  of  excessive
deficits);  while  Romania  is  not  expected  to  adopt  the

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euro  immediately  on  accession,  it  is  expected  to
pursue policies which aim to achieve real convergence
in accordance with the Union’s objectives of economic
and  social  cohesion,  and  nominal  convergence
compatible  with  the  ultimate  goal  of  adoption  of  the
euro.

— Reinforcement  of 

to 

public 

administration 

in  particular  the 

institutional  and  administrative
implementation  of  a
capacity: 
reform
comprehensive 
programme;  major 
improve  public
efforts 
administration  including  competition,  strengthening
of  internal  financial  control;  improved  operation  of
the  judicial  system;  training  for  the  judiciary  in
Community  law  and  its  application;  reinforcement  of
justice  and  home  affairs 
(ensuring
sufficient and properly trained personnel, in particular
police,  border  guards,  ministries  and  courts),  reform
to  ensure
of  customs  and 
readiness to apply the acquis and the reinforcement of
food  control  administration,  strengthening  of  the
nuclear  regulatory  authority.

tax  administrations 

institutions 

— Internal  market: 

of 

promotion 

enterprise
development,  including  SMEs,  alignment  with  the
acquis  in  the  fields  of  telecommunications,  consumer
protection, the internal energy market and audiovisual
policies,  enforcement  of  intellectual  property  rights,
insurance,  competition  policy,  in  particular  effective
enforcement  of  competition  law,  reinforcement  of
standardisation  of  conformity  assessment  structures,
establishment  of  a  market  surveillance  system  and
alignment  of 
industrial
products.

legislation  on 

technical 

— Justice  and  home  affairs:  improvement  of  border
management  systems,  capacity  to  handle  asylum  and
migration  questions,  fight  against  organised  crime  (in
particular  money  laundering,  drugs  and  trafficking  in
human  beings)  and  corruption,  and  to  align  visa
policy  with  that  of  the  European  Union  and  to
complete  alignment  to 
international  conventions,
notably  in  view  of  the  Schengen  acquis.

— Agriculture:  including  the  establishment  of  a  land
register  and  functioning  land  market,  alignment  with
the  agricultural  acquis  (including  veterinary  and
phytosanitary  matters,  in  particular  external  border
controls),  attention  to  environmental  aspects  of
agriculture  and  biodiversity.  Development  of  the
capacity  to  implement  and  enforce  the  common
agricultural  policy,  in  particular  the  fundamental
administrative
management  mechanisms 
structures  to  monitor  the  agricultural  markets  and
implement structural and rural development measures,
adoption  and  implementation  of  the  veterinary  and
phytosanitary  requirements,  upgrading  of  certain
food-processing  establishments  and 
testing  and
diagnostic  facilities,  restructuring  of  the  agri-food
sector.

and 

— Fisheries:  development  of  capacity  to  implement  and

enforce  the  common  fisheries  policy.

— Transport: further efforts on alignment with acquis in
particular  in  maritime,  rail  and  road  freight  sectors
(safety  rules  and  taxation),  and  to  provide  necessary
investment 
infrastructure,  notably
extension  of  trans-European  networks.

transport 

for 

labour  market  structures  and 

— Employment  and  social  affairs:  development  of
appropriate 
joint
review  of  employment  policies  as  preparation  for
participation 
coordination;
in  European  Union 
alignment  of  labour  and  occupational  health  and
safety  legislation  and  development  of  enforcement
structures, 
the
framework  Directive  on  health  and  safety  at  work;
enforcement  of  equal  opportunities  between  women
and  men;  further  development  of  active,  autonomous
social  dialogue;  development  of  adequate  social
protection,  undertake  steps  to  bring  public  health
standards  into  line  with  European  Union  norms.

in  particular  early  adoption  of 

— Environment: 

the 

including 

capacities, 

development 

of
monitoring  and  implementation  control  structures
and 
and
continuous 
implementation of approximation programmes related
to  individual  legal  acts.  A  particular  emphasis  should
be  given  to  the  air  and  water  sectors.  Environmental
protection  requirements  and  the  need  for  sustainable
development  must  be  integrated  into  the  definition
and  implementation  of  national  sectoral  policies.

planning 

— Regional policy and cohesion: complete establishment
of 
legal  basis,  development  of  administrative
structures  and  budgetary  procedures.  Strengthening
financial 
in
order  to  participate  in  European  Union  structural
programmes  after  membership.

instruments  and  control  mechanisms 

5. MAIN  INSTRUMENTS  FOR  COMMUNITY

TECHNICAL  AND  FINANCIAL  ASSISTANCE

5.1. Programming  of  financial  resources

The  Phare  allocation  for  the  period  1995  to  1997  has
totalled  ECU  284  million.  Subject  to  the  approval  of  the
Phare  budget  for  the  remaining  period,  the  Commission
will  confirm  the  allocations  for  1998  and  1999.  In
addition,  Romania  is  eligible  for  support  from  the
‘catch-up’  facility  envisaged  for  1998  to  finance  projects
to  privatisation/restructuring,  promotion  of
relating 
foreign direct investment and the fight against corruption.
Financial  proposals  will  be  submitted  to  the  Phare
Management  Committee  as  provided  for  in  Council

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Regulation  (EEC)  No  3906/89.  Joint  financing  by  the
applicant  countries  will  be  systematically  required  for  all
investment  projects.  The  Commission  will  work  with
Romania, the EIB and international financing institutions,
in  particular  the  EBRD  and  World  Bank,  with  a  view  to
facilitating  the  co-financing  of  projects  relating  to
pre-accession priorities. Financial assistance from the year
2000  onwards  will  comprise  aid  for  agriculture  and  a
structural instrument which will give priority to measures
similar  to  the  Cohesion  Fund.  In  addition  Romania  will
have  access  to  funding  from  multi-country  programmes
directly  related  to  the  acquis.

The Phare programme is the main financial instrument of
the  reinforced  pre-accession  strategy.  Phare’s  prime
objective  is  to  help  prepare  Central  and  East  European
countries  for  accession  by  focusing  the  assistance  it
provides  on  the  adoption  of  the  Community  acquis  and
in  particular  on  the  priorities  identified  in  this  Accession
Partnership  and  in  the  National  Programme  for  the
Adoption  of  the  Acquis.  Each  year  the  Commission  will
sign  a  financing  memorandum  with  Romania  in  which
Romania  will  undertake  to  meet  a  number  of  the
priorities  identified  in  this  Accession  Partnership  and  the
Commission  will  undertake  to  contribute  financially  to
their  realisation.  Programming  of  Community  financial
assistance  will  take  into  account  the  priorities  and
timetable  of  the  NPAA.

In  addition,  the  subsequent  allocation  of  financial
assistance  will  be  closely  tied  to  the  respect  by  the
Romanian  Government  of  the  commitments  made  in  the
NPAA.  Certain  pre-accession  activities  can  be  reinforced
now  (e.g.  support  for  institution  building)  but  others,
such  as  the  financing  of  major  investment  projects
designed  to  meet  the  requirements  of  the  acquis  in  areas
such  as  environment  and  nuclear  safety  will  have  to  be
programmed  over  a  period  of  five  to  six  years.

From  1998  Phare  assistance  will  be  channelled  through
the  following  types  of  actions:

— Institution  building  (around  30 %),  which  involves
the  strengthening  of  democratic  institutions,  rule  of
law,  public  administration  and  all  entities  responsible
for  public  services  in  order  to  establish  the  necessary
institutional  and  administrative  structures  and  train
the  people  required  to  apply  the  acquis.  Institution
building  support  will  be  implemented,  inter  alia,
through,  training  actions,  technical  assistance  and
twinning  of 
in
Romania  with  relevant  bodies  in  the  Member  States.
Initially this twinning will focus on priority areas such
as finance, agriculture, environment, justice and home
affairs.

institutions  and  administrations 

— Investment  support  (around  70 %),  in  order  to  make
the  necessary  investments  possible  for  the  adaptation
of Romanian infrastructure to the Community acquis.
This  support  will  concentrate  on:  (i)  structural

in 

covering 

particular 

agricultural
actions, 
restructuring,  regional  development  and  investment
in  human  and 
intellectual  capital,  which  could
include  Phare  contributions  to  participation  in  the
research  and  technological  development  framework
programme;  (ii)  compliance  with  Community  norms,
in  particular  as  regards  environment,  agriculture,
industry,  occupational  safety  and  health,  transport
and  telecommunications;  (iii)  co-financing  of  large
scale  infrastructure (1)  and  (iv)  small  and  medium-
sized  enterprises  development (2).

5.2. Role  of  international  financial  institutions

Cooperation  between  Romania  and  the  international
financial  institutions  will  receive  a  new  impetus  and  a
new  focus  through  the  Accession  Partnership.  The  grant
resources made available under the Accession Partnership
will  serve  as  seed  money  and  a  catalyst  for  larger
amounts  of  development  finance  from  the  IFIs.  This
process  will  be  developed  by  the  Commission  in  liaison
with  the  candidate  countries,  the  EIB  and  the  IFIs,  in
particular the EBRD and the World Bank with a view to
facilitating  the  co-financing  of  projects  relating  to
pre-accession  priorities.

Under  a  new  lending  mandate  covering  the  period  1997
to  1999,  the  EIB  can  make  available  ECU  3 520  million
in  Central  and  Eastern  Europe.  The  new  pre-accession
facility  approved  by  the  EIB’s  governors  in  early  1998
increases this amount to ECU 7 billion. EIB loans shall be
used  in  all  sectors  eligible  for  EIB  financing  to  facilitate
the  accession  process.

6.

CONDITIONALITY

steps 

further 

Community  assistance  will  be  conditional  on  respect  by
Romania  of 
the  Europe
its  commitments  under 
the
Agreement, 
Copenhagen  criteria  and  progress  in  implementing  this
Accession  Partnership.  Failure  to  respect  these  general
conditions could lead to a decision by the Council on the
suspension of financial assistance on the basis of Article 4
of  Council  Regulation  (EC)  No  622/98.

satisfying 

towards 

7.

IMPLEMENTATION  OF  PRE-ACCESSION
ASSISTANCE

The  provision  of  financial  assistance  to  Romania  will
depend  on  the  maturity  of  projects  proposed  by  the

(1) Concerning  investment  projects  in  general,  Romania  will  be
required  to  fulfil  the  principle  of  complementarity  by  means
of  contributing  a  minimum  amount  of  25 %  to  jointly
financed  projects.

(2) A  horizontal  facility  for  SMEs  will  be  available  to  remedy
investment  capital  available  to  small

the  shortage  of 
enterprises.

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Romanian  Government  for  inclusion  in  a  financing
memorandum.  Where  projects  need  to  be  tendered  the
Commission  will  only  finance  those  projects  which  are
ready  for  tendering  at  the  stage  of  the  signature  of  the
financing memorandum. In addition any previous/existing
commitments  in  the  same  sector  must  have  been  fully
contracted  or  be  on  track.  In  order  to  ensure  efficient
implementation,  projects  to  be  financed  must  not,  in
principle, fall below a threshold of ECU 2 to 3 million, in
particular  in  the  case  of  infrastructure  projects.  If  these
principles  lead  to  a  situation  where  Romania  cannot
absorb  its  full  indicative  allocation,  the  allocation  will
be  reduced  accordingly.  The  difference  between  the
indicative  and  final  allocation  will  be  transferred  to  the
horizontal  SME  and/or  the  large  scale  infrastructure
facility. No subsequent compensation of this amount will
be  made.

The Government of Romania is invited to put in place an
implementation  structure  which  ensures  coherence  and
complementarity  between  all  types  of  European  Union
financial  assistance  and  national  resources.  A  national
coordinator  will  be  responsible  for  ensuring  a  close
link  between  the  general  accession  process  and  the
programming  of  the  Community  financial  assistance.

investment  promotion  and 

The Government of Romania will establish (preferably in
the  Ministry  of  Finance)  during  1998  a  national  fund
for 
institution  building
functioning  under  the  responsibility  of  a  National
Authorising Officer (NAO). As the central entity through
which  Phare  and  other  forms  of  Community  financial
assistance  will  be  channelled,  the  national  fund  will  be
responsible  for  the  management  of  these  funds  under
decentralised 
increase
transparency  and  reduce  dispersion  of  funds.  It  will  have
overall  responsibility  for  management  of  funds  including
respect  of  provisions  of  the  financing  memorandum  and
be  accountable  to  the  Commission  for  the  use  of  the
funds.  It  will  also  ensure  and  supervise  the  flow  of
national  and  other  co-financing  resources  as  set  out  in
the  financing  memorandum.  The  detailed  functions  and
responsibilities of the national fund will be set out in the
individual financing memoranda.

implementation 

in  order 

to 

In  cooperation  with  the  Government  of  Romania,
the  Commission  will  pursue  a  policy  of 
further
decentralisation  of  the  implementation  of  the  financial
assistance  where  certain  pre-conditions  are  met,  and  to
the  extent  permitted  by  the  European  Communities’
Financial  Regulation,  in  particular  Article  105(3).  This
will be done with the intention to establish, within limits
and  in  a  gradual  manner,  a  relationship  between  the
Commission  and  Romania  where  responsibility  is  shared
along  the  lines  of  the  relationship  existing  with  the
Member  States  for  implementing  the  Structural  Funds.

In  this  context,  the  possibility  of  applying  national
procurement  procedures  in  the  tendering  and  contracting

of Phare projects may be explored by the Commission, if
so  requested  by  the  Government  of  Romania, 
in
particular  in  the  field  of  investment.  The  Commission’s
decision on this matter will be taken following, inter alia,
examination  of  the  Romanian  national  procurement  law
for respect of and compatibility with the basic provisions
the  European  Community’s  public  procurement
of 
rules  and 
including  equal
participation in tenders and the provisions of Article 118.
Any  decision  on  the  use  of  national  procurement  rules
will  be  taken  by  the  Commission  on  a  case-by-case  basis
and  will  be  confirmed 
individual  financing
memoranda.

its  Financial  Regulation, 

in  the 

in 

the 

individual 

implementation  of  assistance  under 

The  monitoring  of  programme  implementation  shall
be  carried  out  jointly  with  the  Commission  through
procedures  established 
financing
memoranda.  In  order  to  ensure  effective  monitoring
the  Phare
of 
programme,  each  Phare  programme  will  incorporate
quantified physical and financial objectives which will be
specified  in  the  financing  memorandum.  In  order  to
gauge their effectiveness all operations financed under the
Phare programme will be subject to ex-post evaluation to
appraise  their  impact  with  respect  to  their  objectives.

8. MONITORING

The  implementation  of  the  Accession  Partnership  will  be
monitored  in  the  framework  of  the  Europe  Agreement.
This  will  commence  in  1998  before  the  Commission
presents  its  first  regular  report  to  the  Council  reviewing
the progress made by Romania including implementation
of  the  Accession  Partnership.

The  relevant  sections  of  the  Accession  Partnership  will
be  discussed 
in  the  appropriate  subcommittee.  The
Association Committee will discuss overall developments,
progress  and  problems  in  meeting  its  priorities  and
intermediate  objectives  as  well  as  more  specific  issues
referred  to  it  from  the  subcommittees.  The  Association
Committee  will  report  to  the  Association  Council  on  the
implementation  of  the  Accession  Partnership.

The  Phare  Management  Committee  will  ensure  that
financing  decisions  are  compatible  with  the  Accession
Partnerships.

The  Accession  Partnership  will  be  amended  as  necessary
in  accordance  with  Article  2  of  Regulation  (EC)
No  622/98.  The  Commission  will  propose  a  review  of
this  partnership  before  the  end  of  1999  and  at  regular
intervals 
include
consideration  of  the  need  to  further  specify  intermediate
objectives  in  the  light  of  the  progress  made  by  Romania
in  meeting  the  objectives  set  out  in  this  partnership.

thereafter.  These 

reviews  will 

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29.6.98

ANNEX

Romania will have to address all issues identified in the opinion. The purpose of this Annex is to provide a
summary  checklist  of  these  issues.  These  are  formulated  as  recommendations  for  action.  They  are  listed  in
the order in which they appear in the opinion without any ranking in terms of importance or urgency. The
priority  areas  for  action  by  each  candidate  are  set  out  as  priorities  and  intermediate  objectives  in  the
Accession  Partnership  itself.

1.

Political criteria

Continuing attention should be paid to ensuring respect of the primacy of law at all levels of the apparatus
of  the  State.

Further  efforts  are  needed  to  root  out  corruption,  improve  the  work  of  the  courts  and  protect  individual
liberties  from  the  activities  of  the  police  and  secret  service  or  in  the  course  of  criminal  proceedings.

Further  improvements  in  the  situation  of  the  Roma  are  needed.  Reforms  concerning  the  protection  of
children  need  to  be  pursued.

2.

Economic criteria

Sustained  and  consistent  efforts  are  needed  to  consolidate  the  economic  situation  and  implement  a
comprehensive,  consistent  and  realistic  economic  reform  strategy.  Major  structural  transformation  of  the
economy  consistent  with  and  supported  by  sound  fiscal  policy  management  is  still  necessary.  Privatisation
and  restructuring  of  large  State-owned  enterprises  need  to  be  accelerated.  Price  liberalisation  needs  to  be
completed,  in  particular  as  regards  energy.  Uncertainty  about  property  rights  and  blockages  on  land
transactions  should  be  removed  quickly.

Specific attention must be paid to the restructuring of the financial sector including further privatisation of
State-owned  banks,  strengthening  the  financial  market  and  setting  up  effective  regulatory  mechanisms.
Reform  of  the  agriculture  sector  is  needed  to  increase  efficiency  and  competitiveness.

3.

Ability  to  assume  the  obligations  of  membership

3.1.

Internal  market  without  frontiers

The  four  freedoms

G e n e r a l   f r a m e w o r k   —   in  general,  efforts  to  accelerate  approximation  of  legislation  need  to  be
intensified. Law reform in the field of public procurement, completion of legislation on data protection and
strengthening  control  mechanisms  for  intellectual  and  industrial  property  need  to  be  undertaken.

F r e e   m o v e m e n t   o f   g o o d s   —  progress in adopting framework legislation needs to accelerate to enable
Romania to take up the basic principles of the European Union system. Framework legislation on industrial
products  will  have  to  be  implemented  and  independent  standardisation  and  conformity  assessment
infrastructures  will  have  to  be  established.  Sectoral  legislation  needs  to  be  harmonised  and  a  market
surveillance mechanism created.

F r e e   m o v e m e n t   o f   c a p i t a l   —   the  regulatory  and  administrative  environment  for  foreign  direct
investment  must  be  streamlined,  supported  by  an  overall  improvement  in  the  administrative,  judicial  and
macroeconomic  framework.  Efforts  to  remedy  the  structural  weakness  of  the  financial  system  must  be
stepped  up.

F r e e   m o v e m e n t   o f   s e r v i c e s   —   Romania  must  take  additional  measures  concerning  money
laundering,  the  supervision  of  banks,  and  limiting  the  credit  risks  of  credit  establishments.  To  further
stabilise  the  fragile  banking  sector  the  privatisation  of  State-owned  banks  is  crucial.  The  independence  and
supervisory capacity of the National Bank needs to be strengthened. The securities market is still embryonic
and  law  reform  needs  to  be  intensified,  while  the  market  supervision  authorities  must  be  strengthened.
Insurance  legislation  and  related  implementation  and  supervisory  mechanisms  need  to  be  established.

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F r e e   m o v e m e n t   o f   p e r s o n s   —  as regards mutual recognition of professional qualifications, efforts to
harmonise legislation and set up implementing structures must be intensified. Further efforts must be made
to  ensure  the  necessary  legislative  and  enforcement  measures  as  regards  the  coordination  of  social  security
schemes.

Competition

Effective  enforcement  of  anti-trust  legislation  must  be  enhanced.  In  the  field  of  State  aid,  a  comprehensive
inventory  of  all  existing  aid  must  be  established  and  continuously  updated  in  accordance  with  Community
practice.  A  national  legal  framework  on  State  aid,  covering  the  monitoring  and  admissibility  of  State  aid
must be created. A review of all existing aid measures should be undertaken and those measures which are
not  compatible  with  the  Europe  Agreement  must  be  modified  or  abolished.  New  aid  measures  must  be
effectively  monitored  on  a  systematic  basis.  Certain  exclusive  rights  and  State  monopolies  which  are  not
compatible  with  the  Community  acquis  must  be  progressively  adjusted  and/or  abolished.

3.2.

Innovation

Education,  training  and  youth

Further  reform  of  the  educational  system  is  necessary.  In  order  to  achieve  progress  in  competitiveness  and
quality  of  production,  special  emphasis  should  be  placed  on  higher  education,  investment  in  curriculum
reform,  teacher  training  and  remuneration,  text  books,  and  equipment.

Research  and  technological  development

Efforts  to  strengthen  enterprise  targeted  research  and  development  need  to  be  continued  and  financial
allocations  further  shifted  to  private  sector  activities,  aimed  at  the  rationalisation  of  the  current  system.

Telecommunications

Substantial  changes  of  policy  and  regulation  are  needed  to  comply  with  European  Union  Directives  and  to
ensure  the  efficiency  and  independence  of  the  regulatory  authority.  At  the  same  time,  the  acquis  now
requires  governments  to  ensure  that  a  modern  telephone  service  is  available  everywhere  at  an  affordable
price.  Meeting  this  obligation  will  require  significant  investment  in  the  system.

Audiovisual

Amendments  to  the  existing  legislation  must  be  completed,  in  particular  with  regard  to  questions  such  as
promotion  of  European  independent  production  and  certain  advertising/sponsorship  rules.

3.3. Economic  and  fiscal  affairs

Economic  and  monetary  union

Macroeconomic  policy  should  seek  to  keep  inflation  and  interest  rates  low  and  ensure  confidence  in  the
economy.

Taxation

Particular  efforts  are  needed  as  regards  the  scope  of  exemption  from  VAT  and  the  VAT  refund  scheme  to
foreign  taxable  persons.  The  significant  discrepancies  between  the  Romanian  excise  regime  and  the
European Union requirements need to be addressed. In the field of excise duties particular attention should
be  given  to  the  setting  up  of  a  warehousing  system  for  the  movement  of  goods  under  duty  suspension
arrangements.  Tax  structures  and  the  level  of  excise  rates  need  to  be  aligned  with  the  Community  model.
Control  procedures  need  to  be  strengthened.

Statistics

Efforts must be made to address sectoral deficiencies in sectors such as regional, household, agricultural and
environment  statistics,  and  to  improve  national  quarterly  and  financial  accounts.  The  quality  of  business
and  land  registers  needs  to  be  improved.

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3.4. Sectoral  policies

Industry

To enhance competitiveness, further efforts should be made to pursue policies aimed at promoting open and
competitive markets and taking on the instruments which make up European Community industrial policy,
relating  both  to  the  operation  of  markets  (product  specification  and  market  access,  trade  policy,  State  aids
and  competition  policy)  and  measures  related  to  industry’s  capacity  to  adapt  to  change  (stable
macroeconomic environment, technology, training, etc.). Further restructuring is necessary in certain sectors
such  as  food,  steel,  other  heavy  industry  and  mining.

Agriculture

Considerable  efforts  must  be  made  to  adopt  the  Community  acquis  for  the  primary  agricultural  and
agri-food  industries.  Priority  should  be  given  to  implementation  and  enforcement  of  veterinary  and
plant-health  requirements  and  upgrading  of  establishments  and  management  practices  to  meet  European
Community  food  hygiene  and  quality  standards.  Administrative  structures  must  be  strengthened  to  ensure
effective  implementation  and  enforcement  of  the  policy  instruments  of  the  common  agricultural  policy
including  external  trade  arrangements  and  associated  rural  development  and  diversification  measures.  The
agriculture  and  the  agri-food  privatisation  should  be  completed  rapidly  and  measures  taken  to  support
increased  efficiency  and  competitive  capacity.

Fisheries

The  fisheries  administration  must  be  strengthened  to  ensure  the  effective  implementation  of  the  common
fisheries  policy,  in  particular  as  regards  the  conservation  and  the  management  of  resources,  the
implementation  of  a  monitoring  and  control  system,  the  management  of  the  common  organisation  of  the
market  in  the  fishery  and  aquaculture  sector,  the  implementation  of  a  structural  policy  in  the  fisheries  and
aquaculture  sector,  the  keeping  of  a  fishing  vessel  register,  the  collection  of  statistical  data  as  well  as  the
implementation  of  European  Union  fishery  policy  on  environmental  protection.

Energy

Efforts need to be stepped up considerably in particular with regard to legislative alignment, adjustment of
monopolies,  including  import  and  export  issues,  energy  pricing,  State  intervention  in  the  solid  fuel  sector
and  emergency  preparedness,  including  the  building-up  of  mandatory  oil  stocks.  There  is  a  need  for
rationalisation  and  financial  transparency  in  the  operation  of  this  sector.  Special  attention  must  be  paid  to
energy  efficiency  and  environmental  norms.  Nuclear  safety  standards,  in  particular  those  related  to  plant
operation  should  be  handled  appropriately.  The  independence  of  the  safety  authority  should  be  supported.
Longer-term  solutions  for  the  storage  of  waste  need  to  be  found.  There  is  a  need  to  develop  an  overall
energy policy.

Transport

Steps must be taken to ensure upgrading and extension of the trans-European networks, especially regarding
the  major  road  network.  Efforts  must  be  made  to  ensure  the  necessary  legislation  and  effective
implementation  in  road  haulage  (road  safety,  weights  and  dimensions,  taxation),  the  maritime  sector
(safety),  and  air  transport.  Shipping  and  road  haulage  both  pose  a  problem  in  particular  with  regard  to
safety.  Romania’s  administrative  structures  need  to  be  strengthened,  in  particular  bodies  supervising  areas
such  as  safety.  At  a  national  level  there  is  a  need  to  develop  specific  strategies  for  transport  infrastructure
development  and  financing.

Small  and  medium-sized  enterprises

Steps  must  be  taken  to  further  refine  and  increase  the  coherence  of  small  and  medium-sized  enterprise
(SME)  policy,  to  simplify  legislation  and  the  administrative  environment  to  make  it  more  SME-friendly,  to
strengthen  support  infrastructures  and  to  develop  SMEs’  access  to  financing.

3.5. Economic  and  social  cohesion

Employment  and  social  affairs

Legislation  must  be  aligned  with  European  Union  requirements  in  all  areas.  Major  efforts  need  to  be
undertaken  in  the  fields  of  health  and  safety  at  work,  public  health  and  labour  market  and  employment
policies.  Labour  inspectorates  must  be  strengthened  and  the  social  security  system  reformed  in  line  with
fiscal  constraints.  The  administrative  structures  must  be  strengthened  to  ensure  effective  implementation  of
legislation.

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Regional  policy  and  cohesion

A  comprehensive  framework  for  regional  development  incorporating  policy,  legislation  and  instruments
needs  to  be  developed  as  well  as  the  administrative  capacity  to  manage  European  Community  funds  and
conduct  an 
integrated  regional  development  policy  after  membership.  The  respective  roles  and
responsibilities  of  existing  authorities  have  to  be  clarified.

3.6. Quality  of  life  and  environment

Environment

Major  efforts  must  be  undertaken  to  advance  the  very  low  level  of  approximation  of  environmental
legislation. There is a need to improve administrative capacity to deal with environmental issues in a market
economy.  Particular  attention  should  be  given  to  the  quick  transposition  of  framework  Directives  dealing
with  air,  waste,  water  and  the  Integrated  Pollution  Prevention  and  Control  Directives,  as  well  as  the
establishment  of  financing  strategies  for  legislation  in  the  water,  air  and  waste  sectors  requiring  major
investments.

Overall,  Romania  will  have  to  place  higher  priority  on  environmental  issues,  significantly  increase  related
finance  and  develop  its  administrative  and  financing  capacity.  A  considerable  effort  must  be  made  to
develop  adequate  implementation  and  enforcement  structures.  Public  awareness  with  regard  to  the
environment  field  must  be  stimulated.

Consumer  protection

Legislation  must  be  amended  in  such  areas  as  the  indication  of  prices,  sales  away  from  business  premises,
distance  selling,  timeshare  property,  unfair  contract  terms  and  consumer  credit.  Effective  application  of
consumer legislation must be ensured and the necessary financial resources made available to these ends. A
strong  and  independent  consumer  movement,  sustained  by  public  authorities,  will  need  to  be  developed.

3.7.

Justice  and  home  affairs  (JHA)

Accountability  of  the  JHA  authorities  needs  to  be  improved  in  practice.  Corruption  must  be  addressed.
Substantial progress in all major areas of JHA must be achieved. Progress in this area depends critically on a
more general institutional and administrative reform. In terms of legislation, Romania should ratify the Data
Protection  Convention,  sign  the  international  money  laundering  conventions  and  ratify  the  main  drugs
conventions,  change  key  elements  of  the  law  relating  to  drugs  and  complete  the  new  law  on  foreigners,  in
particular  aiming  at  tackling  illegal  immigration,  clandestine  labour,  deportation  of  illegal  migrants  and  to
tighten  the  residence  regime.  Further  key  international  criminal  conventions  must  be  ratified,  judicial
cooperation  with  European  Union  countries  improved  and  Romania  should  accede  to  the  Lugano
Convention.

As  regards  asylum,  the  special  office  needs  to  be  staffed  properly  and  requires  substantial  training.  The
border  management  system  must  be  strengthened  and  the  frontier  guard  reformed.  Policy  on  drugs
prevention and supply reduction is at an early stage of development and must be strengthened. Considerable
further  work  needs  to  be  done  to  increase  the  professionalism  of  the  police.  The  fight  against  organised
crime must be intensified in the economic and financial spheres, including also trafficking arms, radioactive
materials,  stolen  cars,  drugs  and  human  beings,  counterfeiting  and  racketeering.

Particular  attention  must  be  paid  to  ensuring  the  necessary  resources  for  institutional  development.
Considerable  effort  will  have  to  be  made  to  continue  reforms  to  JHA  institutions  and  the  judiciary.

3.8. External  policies

Trade  and  international  economic  relations

Preparations  must  be  made  for  applying,  on  accession,  the  Community’s  various  cooperation  and
preferential  agreements,  multilateral  and  bilateral  commercial  policy  commitments  and  its  autonomous
commercial  defence  instruments.

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Development

Preparations  must  be  made  for  applying,  on  accession,  the  Lomé  trade  regime  to  the  ACP  States  and
participating,  together  with  the  other  Member  States,  in  financing  the  European  Development  Fund.

Customs

Customs legislation must be aligned with that of the European Community and the organisation and duties
of  staff  must  be  aligned  with  those  of  a  modern  customs  administration.  A  major  effort  must  be  made  to
ensure  that  the  customs  services  are  fully  conversant  with  the  legislation.  An  effort  must  be  made  to
introduce  computerised  systems  for  full  participation  in  the  customs  union  and  the  internal  market.
Particular  attention  must  be  paid  to  preparing  the  customs  administrations  for  the  operation  of  all  the
customs  procedures  with  economic  impact,  the  system  of  tariff  suspension  and  the  administration  of  tariff
quotas and ceilings. Strategic planning needs to take account of the reinforcement of border posts along the
external  frontier  that  Romania  will  have  with  countries  other  than  European  Union  Member  States  at  the
time  of  accession.

3.9. Financial  questions

The  necessary  financial  management  and  control  mechanisms  must  be  established  to  ensure  satisfactory
implementation  of  Community  policies.  Major  efforts  are  essential  to  strengthen  internal  financial  control
functions  while  the  Romanian  Court  of  Auditors  should  be  limited  to  carrying  out  external  control
functions.  A  central  body  for  the  fight  against  fraud  should  be  established.  The  existing  accounting  system
as  well  as  the  customs  system  should  be  amended  to  ensure  the  efficient  administration  of  the  ‘own
resources’  system.  The  reliability  of  the  national  accounts  must  be  ensured  with  a  view  to  the  accurate
calculation  of  the  GNP  resource.

4.

Administrative  capacity  to  apply  the  acquis

To  ensure  the  effective  implementation  and  enforcement  of  the  acquis,  major  reform  efforts  must  be  made
to  strengthen  Romania’s  administrative  structures  in  virtually  all  European  Union  relevant  sectors.  Special
efforts  must  be  made  to  strengthen  the  authorities  ensuring  the  correct  application  of  Community
requirements  in  the  Single  Market  and  the  customs  authorities.  The  adoption  of  the  law  on  the  status  of
civil servants is a prerequisite for successful reform. A comprehensive public administration reform strategy
should  be  developed,  to  be  monitored  and  supervised  by  Central  Government  institutions  responsible  for
steering  the  process.

The regulatory and monitoring bodies must be strengthened in such fields as banking, insurance, State aids,
telecommunications,  transport  safety  as  well  as  standards  and  certification,  the  labour  inspectorates,
taxation,  veterinary  and  phytosanitary  control,  food  control,  financial  control,  environment,  consumer
protection,  money  laundering,  asylum  and  migration,  border  management,  police  and  judicial  cooperation,
efficient  management  and  control  systems  for  public  expenditure,  including  provisions  to  fight  fraud.

Increased  efforts  must  be  made  to  upgrade  staff  qualifications  on  European  Union-related  issues  and
efficient  public  management  in  general.  This  should  include  the  setting  up  of  a  national  institute  for  the
training  of  civil  servants  and  the  elaboration  of  a  comprehensive  national  training  strategy.

The  judicial  system  must  be  strengthened  in  terms  of  staffing,  resources  and  relevant  expertise.  A
comprehensive  upgrading  of  judges,  in  particular  in  European  Union  matters,  must  be  carried  out.