COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - Romania Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Romania
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Romania, budget policy, economic policy, economic recovery, economic reform, employment policy, fiscal policy, social policy, stability pact, subsidised housing

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.6.2024  SWD(2024) 623 final  COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - Romania Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Romania {COM(2024) 623 final} - {SWD(2024) 600 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

Romania’s economy has slowed 
amid fiscal and macroeconomic 
vulnerabilities 

Romania’s  real  GDP  growth  declined  to 
2.1%  in  2023,  after  strong  growth  of 
4.1%  in  2022. (1)  Tight  financial  conditions, 
relatively slow disinflation and weak growth in 
private credit all combined to constrain growth 
in both real disposable incomes and domestic 
demand.  In  addition,  weak  external  demand 
took  a  toll  on  manufacturing  output  (see 
Annex  23).  Nevertheless,  Romania’s  labour 
market  remained  tight,  and  growth  in  real 
wages  picked  up  as  inflation  declined  in  the 
second half of 2023. A strong increase in EU-
funded  investment  in  public  infrastructure 
starting in 2022 compensated for a slowdown 
in private consumption and exports (see Graph 
1.1).  The  current  account  deficit  declined  to 
about 7% of GDP in 2023, reflecting both the 
slowdown  in  domestic  demand,  and  more 
favourable  terms  of  trade.  Nevertheless,  the 
current  account  deficit  remains  large  and  is 
being  fuelled  by  high  government  deficits,  as 
also discussed in the 2024 Romania’s in-depth 
review  under  the  macroeconomic  imbalance 
procedure (MIP) (2).  

Growth  is  expected  to  accelerate  in  the 
coming  years,  thanks  to  strong  domestic 
demand.  Real  GDP  growth  in  Romania  is 
projected  to  increase  to  around  3%  in  2024 
and 2025, supported by higher real disposable 
income  and  thus  private  consumption.  These 
increases  in  real  disposable  income  will  likely 
be  driven  by  public-sector  spending  and  large 
increases  in  wages  and  pensions.  Investment 

(1)  The cut-off date for the data used to prepare the 27 

Country Reports was 15 May 2024. 

(2)  SWD(2024) 83.  

in  the  coming  years  is  forecast  to  remain 
resilient on account of a still-supportive fiscal 
stance  and  robust  support  from  EU  funds, 
including  the  Recovery  and  Resilience  Facility 
(RRF)  and  the  Cohesion  Policy  Funds.  The 
current  account  deficit  in  2024  and  2025  is 
expected  to  remain  at  a  broadly  similar  high 
level as in 2023. 

Graph 1.1: Inflation – Real GDP growth and 
contributions 

Source: European Commission 

Inflation  has  declined  but  remains  high. 
Monetary  policy  tightening,  weaker  economic 
activity  and  a  fall  in  energy  prices  caused 
headline  inflation  (as  measured  by  HICP)  to 
fall  to  a  12-month  average  of  9.8%  in  2023 
after  reaching  12%  in  2022  (see  Graph  1.1). 
Nevertheless, core inflation (inflation excluding 
prices  for  energy,  food,  alcohol  and  tobacco) 
was  still  slightly  above  10%  at  the  end  of 
2023,  partly  reflecting  rapid  wage  increases, 
especially  in  the  private  sector,  and  a  strong 
contribution  from  energy-intensive  industrial 
goods.  Although  price  growth  is  set  to  slow 
further to around 4% in 2025, upside risks to 
inflation  remain 
if  salaries  and  pensions 
continue to increase rapidly. 

2 

-6-4-20246810121416171819202122232425InvestmentInventoriesPriv. consumptionGov. consumptionNet exportsReal GDP (y-o-y%)Inflationforecastpps.  
 
 
   
to 

continues 

experience 
Romania 
vulnerabilities  related to  its  high  current 
account and fiscal deficits. Earlier in 2024, 
the Commission conducted an in-depth review 
of the Romanian economy under the MIP. The 
in-depth review found that Romania’s external 
deficit  had  increased  gradually  over  the  last 
decade,  becoming  substantial  in  recent  years 
driven  by  large  general  government  deficits. 
With strong price dynamics, the Commission is 
concerned  about  high  growth  in  wages  that 
could 
competitiveness. 
Although  2023  saw  a  slight  correction  of  the 
current account deficit, the persistence of high 
government deficits under current policies may 
push  up  external  indebtedness  and  make 
Romania  more  reliant  on  external  financing 
sources.  This  would 
the  country 
vulnerable  to  changes  in  investor  sentiment 
and external shocks. 

undermine 

leave 

cost 

in  Romania,  well  above 

Labour  market  activity  has  improved 
further,  although  significant  challenges 
remain. The employment rate of people aged 
20-64  years  increased to 68.7%  in  2023,  but 
remains  one  of  the  lowest  in  the  EU.  The 
gender  and  disability  employment  gaps  are 
the 
very  wide 
respective  EU  averages.  In  addition,  the  low-
skilled  continue  to  face  challenges,  with  an 
employment rate of 44.9% in 2022. This was 
(57.2%)  and 
far  below  the  EU  average 
significantly  lower  than  the  employment  rate 
for  people  in  Romania  with  tertiary  education 
(89.5%)  (see  Annex  14).  The  unemployment 
rate decreased in 2023 and set to stabilise at 
around  5.5%,  which  is  below  the  EU  average. 
The  youth  unemployment rate  also  decreased 
in 2023 to 21.8%, but remains high above the 
EU average (14.5%). The rate of young people 
not  in  education,  employment  or  training 
(NEETs)  is  among  the  highest  in  the  EU 
(19.3%) in 2023, despite some improvement. 

Growth  in  nominal  wages  picked  up  in 
2023,  rising  above  the  rates  of  inflation 
and  labour  productivity  growth.  Although 
average  real  wages  remained  almost  flat  in 
2022,  nominal  compensation  per  employee 
has  grown  by  around  18%  in  2023.  This 
corresponds to about 8% growth in real terms, 
which  is  in  excess  of  labour  productivity 
growth  (see  Graph  1.2).  Romania’s  statutory 

minimum wage is the second lowest in the EU, 
and  the  country’s  in-work  at-risk-of-poverty 
rate  was  the  highest  in  the  EU  in  2022. 
Nevertheless 
the  minimum  gross  salary 
increased  twice  in  short  succession  in  2023, 
rising  by  a  cumulative  29.4%  over  the  full 
year. At the end of 2023, the minimum-wage-
to-median-wage ratio had increased to around 
58%,  which  is  broadly  in  line  with  one  of  the 
main  examples  of  indicative  reference  values 
in the Directive on Adequate Minimum Wages 
in the EU. At the same time, these high wage 
increases may also negatively impact both the 
already  low  employment  rate  of  low-skilled 
workers  and  external  cost  competitiveness (3). 
The  increase  in  public  wages  accelerated  in 
2023  and  continued  in  2024.  Overall  wage 
growth  is  expected  to  remain  elevated  in 
2024, compensating for the still-high inflation 
rate. 

Graph 1.2: Breakdown of rate of change of 
unit labour costs 

Source: European Commission 

Romania’s productivity is approaching the 
EU average, but stark regional disparities 
remain.  Romania  has  been  on  a  steep 
convergence  path  to  EU  levels  in  productivity 
over  the  last  two  decades,  reaching  78%  of 
the EU average in terms of gross value added 
per  worker  in  2021.  Nevertheless,  regional 
disparities are high, ranging from 146% of the 

(3)  Romania’s in-depth review highlights the emergence of 

potential issues related to external cost 
competitiveness due to large increases in wages and 
prices. 

3 

-10-505101520121314151617181920212223*24*25*Rate of change y-o-y (%)Inflation (GDP deflator growth)Real Compensation per EmployeeProductivity Contribution (negative sign)Nominal unit labour costULC in EU27 
   
 
EU  average  in  the  Bucharest-Ilfov  capital 
region  to  45%  in  Nord-Est  region  (see  Annex 
17).  Strong  investment  has  been  a  major 
contributing  factor  to  productivity  growth, 
driven by net public investment in recent years 
supported by EU funds. 

issues  continue 

Several 
to  hamper 
competitiveness.  Although  progress  has 
been made in recent years, Romania performs 
worse  than  its  EU  peers  for  government 
effectiveness  and  certain  aspects  of  the 
functioning  of  judiciary,  the  negative  impacts 
of  which  are  felt  especially  in  the  business 

Box 1: 

Romania’s competitiveness in brief  

while bank credit to the private sector remains 
among  the  most  expensive  in  Europe  (see 
Annex  18).  Administrative  capacity,  especially 
at local and regional level, needs to be further 
strengthened,  which  would  also  benefit  the 
implementation  of  the  RRP  and  cohesion 
policy. Other bottlenecks to investment include: 
infrastructure 
(i) 
civil 
in 
(despite  a 
engineering  works);  (ii)  a  shortage  of  skilled 
and  non-skilled  workers;  (iii)  the  low  level  of 
digitalisation;  and  (iv)  low  levels  of  IT  skills 
within the entire population.  

in  transport 
recent  acceleration 

large  gaps 

Against  the  backdrop  of  the  EU’s  long-term  competitiveness  strategy (4),  Romania  performs 
relatively  well  in  the  areas  of  public  investment,  access  to  public  financial  support,  and 
conformity with single-market directives. The Romanian RRP aims at tackling several challenges 
related  to  the  business  environment  through  simplification  and  digitalisation  of  regulatory 
requirements and more effective public administration and procurement. The RRP also targets: (i) 
a  better-functioning  judiciary;  (ii)  control  of  corruption;  (iii)  improvements  in  basic  transport 
infrastructure;  (iv)  the  monitoring  of  state-owned  enterprises;  and  (v)  energy  efficiency  in 
complementarity with cohesion policy funding. However, competitiveness challenges remain: 

•  Competitiveness  and  the  business  environment:  In  particular,  Romania  faces 
challenges  in:  (i)  access  to  finance;  (ii)  low  degree  of  digitalisation  and  insufficient 
competencies  in  public  administration;  (iii),  regulatory  restrictions  in  some  professions; 
and  (iv)  low  levels  of  investment  in  research  and  innovation,  in  part  due  to  weak 
science-industry collaboration. 

•  Education and skills: In particular, Romania suffers from: (i) low levels of basic skills 
and  high  inequalities  in  education;  (ii)  few  top-performing  students  in  mathematics, 
reading  and  sciences  -  as  shown  by  the  PISA  tests;  (iii)  low  rates  of  participation  in 
tertiary  education;  (iv)  a  high  prevalence  of  early  school  leaving;  (v)  poor  school 
infrastructure; and (vi) a lack of teaching staff with the right qualifications, especially in 
rural areas. Low levels of participation in adult learning remain a challenge to a  labour 
market already struggling with skills shortages. 

•  Clean energy and decarbonisation: Romania faces challenges to reduce its reliance 
on fossil fuels, in particular natural gas. Limited investments into the electricity grid are 
a significant bottleneck to scaling up renewables. 

environment (see IMD’s World Competitiveness 
the  World  Bank’s  Worldwide 
Index  and 
Governance 
problems 
Indicators).  Other 
include:  (i)  the  volatile  tax  and  regulatory 
environment  holding  back 
(ii) 
continued  restrictions  on  access  to  some 
regulated  professions;  and  (iii)  insufficient 
in  public  procurement,  which 
competition 
hampers  the  efficient  allocation  of  resources. 
Access  to  finance  is  still  limited  for  SMEs, 

investment; 

(4)  The long-term competitiveness strategy, outlined in the 
Commission Communication of March 2023, identifies 
nine drivers: 1. A functioning single market; 2. Access to 
private capital and investment; 3. Public investment and 
infrastructure; 4. Research and innovation; 5. Energy; 6. 
Circularity; 7. Digitalisation; 8. Education and skills; and 
9. Trade and open strategic autonomy. 

4 

 
 
 
 
decades, 

structural 

The  shortage  of  skilled  labour,  which 
hampers  competitiveness,  is  linked  to 
large  migration  outflows  over  the  last 
labour-market 
two 
low 
issues 
participation,  and 
related  to  education  and  training.  The 
transition to a higher value added, digital  and 
green  economy  requires  more  skilled  workers 
across economic sectors. Activity rates are low, 
and  employers  consistently  report  difficulties 
in  filling  positions.  In  addition,  Romania  is 
impacted  by  negative  demographics,  as 
working-age  and  skilled  and  non-skilled 
workers  continue  to  emigrate.  Projections (5) 
show  that  Romania  will  have  one  of  the 
largest  declines  in  population  between  now 
and  2070  of  all  EU  countries.  Romania 
continues  to  face  challenges  related  to  both 
the  quality  of  education  and  access  to 
education.  These  challenges  persist  despite 
some progress in recent years thanks to better 
funding,  salary  increases  for  teachers,  and  a 
new  education 
law.  Romania’s  poor  PISA 
scores, high rates of low achievement in basic 
skills,  and 
low  shares  of  top-performing 
students may  be  the  result  of  several  factors 
including: (i) the underfunding of the sector; (ii) 
the strong impact of socioeconomic factors on 
performance; and (iii) challenges linked to the 
teaching  profession 
In 
addition, 
labour-market 
insufficient 
relevance of vocational education and training 
(VET) and of higher education leads to greater 
skills shortages and skills mismatches. Tertiary 
educational attainment (for those aged 25-34) 
stood  at  22.5%  in  2023  one  of  the  lowest  in 
the  EU,  with  little  improvement  over  the  past 
decade. Tertiary education attainment remains 
constrained  due  to:  (i)  high  rates  of  early 
school  leaving;  (ii)  socioeconomic  factors;  (iii) 
low passing-rates in the baccalaureate exams; 
and  (iv)  high  drop-out  rates  from  tertiary 
education.  Romania  has  seen  a  considerable 
increase  in  the  rate  of  adults  participating  in 
learning  every  year,  with  this  rate  rising  from 
5.8%  in  2016  to  19.1%  in  2022 (6),  but  it 

(see  Annex  15). 

the 

(5)  See the ‘2024 Ageing Report’, Institutional Paper 257, 
European Economy, European Commission, DG ECFIN. 

(6)  Eurostat data (Adult Education Survey, special 

calculation excluding guided on-the-job training as 
available in the public excel file). 

remains  far  below  the  EU  average.  Further 
improvement  of  education,  skills,  as  well  as 
boosting  up-skilling  and  re-skilling  measures, 
to  building-up  human  capital, 
are  key 
fostering 
increasing  competitiveness  and 
social inclusion (see Annex 14). 

and 

foster 

upward 

Romania  needs  to  make  greater  efforts 
to deliver on the European Pillar of Social 
Rights 
social 
convergence.  Despite  some  improvement, 
Romania continues to experience some of the 
highest  poverty  risks  (including  for  children) 
and  levels  of  inequality  in  Europe.  This  is 
coupled  with  inadequate  access  to  –  and 
affordability  of  –  social  services,  health 
services,  and  long-term  care  services  (see 
Annex  14).  Romania’s  education  and  training 
systems  face  persistent  challenges  in  relation 
to quality, inclusiveness, including the need for 
enhanced  skills  development,  as  well  as  high 
NEET  rates  and  high  rates  of  early  school 
leaving.  Despite  progress 
in  some  areas, 
challenges  remain  to  ensure  a  fair  and  well-
functioning labour market and welfare system. 
The  effectiveness  of  active  labour  market 
policies  remains  a  concern  in  the  face  of 
demographic decline. 

on 

the 

Index 

perform  well 

Romania  continues  to  face  digitalisation 
challenges,  as  captured  by  the  Digital 
(DESI). 
Economy  and  Society 
Romania  remains behind  in  the DESI  index (7), 
the  EU’s  monitoring  tool  for  the  digital 
transformation. 
country 
However, 
fixed 
to 
continues 
connectivity, scoring significantly above the EU 
average.  Despite  expected  progress  in  5G 
deployment  due  to  several  measures  under 
the  RRP,  including  a  spectrum  auction  and  a 
new network-security law, the roll-out of 5G is 
expected  to  be  slow  due  to  various  factors 
lack  of  market  demand. 
including  a 
Digitalisation of public services (such as cloud, 
e-government  services  and 
telemedicine) 
remains 
recently  adopted 
measures  under  the  RRP  and  cohesion  policy. 
Finally,  Romanian  SMEs  need  to  adopt  e-
commerce/e-invoicing  and  make  greater  use 

low  despite 

(7)  Digital Economy and Society Index, European 

Commission, 2024. 

5 

 
 
 
of  AI  and  more  advanced  digital  technologies 
(see Annex 10).  

Romania has made progress in the green 
transition. However, more action is needed to 
make the economy less reliant on fossil fuels. 
To reach the 2030 EU effort-sharing target, it 
is  crucial  for  Romania  to  reduce  greenhouse 
transport  and 
gas  emissions  from 
industry.  Moreover,  the 
insurance  against 
potential losses from climate hazards needs to 
increase (see Annex 6). Challenges also remain 
in  tackling:  (i)  energy  poverty;  (ii)  labour  and 
skills shortages in energy-intensive sectors; (iii) 
environmental 
(iv)  air 
pollution (see Annexes 7 and 8).  

inequalities;  and 

road 

resilient 

Romania  is  one  of  the  EU  countries  that 
is  most 
to  supply  chain 
disruptions. However, there is an urgent need 
to  reduce  the  country’s  material  footprint  by 
stepping  up  recycling  rates.  Higher  resource 
efficiency  will  reduce  costs  and  improve  the 
economy’s sustainability. At this point in time, 
Romania  remains  at  risk  of  missing  both  the 
2025 target for municipal waste recycling and 
the 2035 target for landfilling (see Annex 9). 

Box 2: 

UN Sustainable Development Goals (SDGs) 

Romania  has  improved  its  performance  on  several  SDG  indicators,  but  its  overall 
performance  remains  below  the  EU  average.  The  country  has  progressed  especially  on 
indicators  related  to  environmental  sustainability  (SDGs  2,  6,  11,  12,  13,  14,  15).  It  has  also 
improved  on  all  SDGs  related  to  macroeconomic  stability  (SDGs  8,  16,  17).  Despite  progress, 
Romania continues to lag behind the EU average for SDGs related to education (SDG 4), poverty 
(SDG1) and decent work and economic growth (SDG 8) (see Annex 1).  

Of  the  17  indicators,  Romania  remains  below  the  EU  average  on  14.  Among  these, 
Romania  has  been  moving  away  from  the  EU  average  on  SDG  indicators  related  to  gender 
equality  (SDG  5),  affordable  and  clean  energy  (SDG  7)  and  industry,  innovation  and 
infrastructure (SDG 9).  

6 

 
 
 
 
IMPLEMENTATION OF KEY REFORMS AND 
INVESTMENTS USING EU INSTRUMENTS 

reforms  and 

investments  can  be 
that 
completed  on  time.  Investments,  in  particular, 
are highly concentrated towards the end of the 
RRP 
special 
attention.  

implementation  and  merit 

and 

territorial 

Cohesion-policy  funding  helps 
tackle 
Romania’s  growth  and  competitiveness 
challenges  and  is  aimed  at  reducing  the 
country’s 
social 
disparities. During the 2014-2020 cohesion-
programming  period,  support  focused  on: 
research and innovation; water and sanitation; 
energy  efficiency;  job  creation;  health  and 
social  services;  and  education  and  skills.  For 
the  current  2021-2027  programming  period, 
further support is aimed at helping Romania’s: 
competitiveness;  green 
social 
cohesion;  and  living  and  working  conditions 
(see Annex 4). 

transition; 

Promoting private-sector 
competitiveness and improving the 
business environment  

the 

several 

financial 

implementation 

As  part  of  the  RRF,  Romania  has 
advanced 
of 
investments to support the private sector 
and SMEs in particular. The government has 
launched 
instruments, 
including: (i) portfolio guarantees to small and 
medium-sized  firms;  (ii)  equity  support  for 
SMEs,  including  start-ups  and  midcaps;  (iii) 
loans  for  large  companies  for  climate  and 
digital  objectives;  and 
(iv)  guarantees  to 
promote  energy  efficiency  in  the  residential 
buildings sector. Romania also launched a call 
for support for Important Projects of Common 
European Interest in semiconductors, and took 
initial  steps  to  implement  an  aid  scheme  for 
the digitalisation of SMEs. 

RRF  and  cohesion-policy  funding  are 
mutually reinforcing Romania’s efforts to 
boost 
its  competitiveness  and  foster 
sustainable  growth.  Combined  ongoing 
support from RRF and cohesion-policy funding 
over  the  7-year  period  from  2021-2027 
represents  around  18.33%  of  the  country’s 
2023  GDP,  compared  to  the  EU  average  of 
5.38% of GDP (8) (Annex 4).  

of 

to 

In  particular, 

Under  its  RRP,  Romania  has  launched 
important  policy  measures  that  are 
the  country’s 
expected 
improve 
competitiveness. 
the  RRP 
contains plans for  major reforms in the areas 
of: healthcare; social care; education; corporate 
enterprises; 
governance 
research  and 
labour  markets; 
pension  systems;  waste  management;  water 
management;  and  renewable  energy  sources. 
Romania  has  also  started  making  substantial 
investments  in:  (i)  the  energy  renovation  of 
buildings; (ii) the green and digital transition of 
the  tourism  industry;  and  (iii)  reducing  the 
administrative burden for businesses. 

state-owned 

innovation; 

of 
resilience 

implementation 
and 

The 
Romania’s 
is 
recovery 
plan 
significantly  delayed  due  to  substantial 
challenges.  Romania  has  submitted  three 
to  146 
requests,  corresponding 
payment 
milestones  and  targets 
in  the  plan  and 
resulting in an overall disbursement of EUR 9.4 
billion  on  29  September  2023  (see  Annex  3). 
limited 
Structural 
administrative  capacity  and  often  the  lack  of 
involvement  of  other  entities  governing  on 
various  institutions,  and  different  stakeholder 
in  general  call  for  specific  actions  to  ensure 

challenges 

linked 

to 

(8)  RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion 
policy funds excluding ETC programmes. GDP figures 
are based on Eurostat data for 2022. 

7 

 
 
 
Cohesion  policy  will  further  support 
Romania’s  private-sector  competitive-
ness.  For  instance,  the  European  Regional 
Development  Fund  (ERDF)  and  the  Cohesion 
Fund will boost innovation and digitalisation by 
supporting  more  than  20 000  companies  and 
digitalising  more  than  400  public  institutions. 
The  European  Social  Fund+ 
is 
supporting  the  implementation  of  upskilling 
and  reskilling  actions,  such  as  the  ‘Keep  Up’ 
programme,  which  will  provide  training  for 
employees  on 
technological 
developments. Additionally, the Just Transition 
Fund  (JTF)  will  support  more  than  5  800 
Romanian  businesses,  helping  economic 
diversification  and  job  creation  in  the  six 
counties  most  affected  by  the  transition 
towards a climate-neutral economy.  

(ESF+) 

latest 

the 

Romania  has  also  made  progress  in  key 
reforms  to  reduce  regulatory  burden  in 
the  business  environment  and  to  reduce 
the size of the shadow economy. As part of 
the  RRF,  Romania  has  made  mandatory  the 
enrolment  of  legal  person  taxpayers  in  its 
online tax system, Virtual Private Space. It has 
also  made  operational  a  joint  action  plan 
the  National  Agency  for  Fiscal 
between 
Administration  and  the  Labour  Inspectorate, 
which  will  help  prevent  and  limit  unregistered 
work. 

Unlocking investments for the 
green and digital transitions 

of 

adoption 

The 
Romania’s 
Decarbonisation  Law  marks  a  significant 
step  in  its  energy  transition.  Under  this 
legal  framework,  3.78  GW  of  lignite  or  coal-
based power plants will be decommissioned by 
the  end  of  the  RRF  in  2026,  and  in  total  4.9 
GW  will  be  phased  out  by  2032.  The  Just 
Transition  Programme  will  help  alleviate  the 
impact  of  the  coal  phase-out  in  the  most 
affected  areas  of  the  country.  The  RRP 
includes  measures  for:  (i)  investments  of  at 
least 300 MW in efficient, combined-heat-and-
power  generation;  (ii)  investments  of  at  least 
970 MW 
in  additional  solar  and  wind 
capacities;  and  (iii)  vouchers  to  be  given  to 

households  to  help  them  with  the  installation 
of  solar  panels  and  batteries  for  electricity 
storage. Cohesion-policy programmes will fund 
additional  capacity  of  over  300 MW  from 
renewable  sources,  mostly  in  Just  Transition 
territories.  

consolidation, 

The  RRF  and  cohesion-policy  support 
measures  to  boost  the  energy  efficiency 
of  buildings.  Romania  has  put  in  place  the 
Renovation  Wave  fund  under  the  RRP  to 
accelerate 
renovations, 
energy-efficiency 
to 
including  also  seismic 
renovate at least 3.2 million m2 of residential 
buildings  and  2.2  million  m2  of  public 
buildings.  In  addition  to  these  Renovation 
Wave  funds,  the  cohesion-policy  programmes 
will make possible the renovation of a further 
1.5 million m2 of public buildings, and a further 
59  000  private  dwellings  will  see  an 
improvement  in  their  energy  performance. 
Under  the  REPowerEU  chapter,  Romania  will 
also:  (i)  introduce  ‘one-stop  shops’  to  inform 
and  assist  citizens  about  energy-efficiency 
renovations;  and 
introduce  a  voucher 
scheme  for  the  renovation  of  single-family 
dwellings. 

(ii) 

Romania  has  taken  steps  through  both 
the RRF and cohesion policy to green the 
transport  sector.  Ongoing  investments  in 
sustainable  transport  from  the  RRF  should 
support an increase in the use of clean public 
transport.  Support  for  the  modernisation  and 
renewal  of  railway  infrastructure  and  the 
development  of  the  underground  transport 
network  will  be  particularly  helpful  in  this 
regard.  This  will  contribute  to  reduce  air 
pollution, CO2 emissions and congestion. These 
measures  will  be  complemented  by  further 
investments  in  greening  the  transport  sector 
from cohesion-policy funding. 

Significant support is  provided  under  the 
RRF  and  cohesion-policy  programmes  to 
the  environment.  Romania  benefits  from 
funding  from  the  RRF  and  cohesion  policy  for 
waste  management,  water  management,  as 
well  as  forests  and  biodiversity.  Romania  has 
also adopted  a circular-economy strategy and 
a  circular-economy  action  plan  that  will  help 
the  country  move  away  from 
landfilling. 
Reforms  and  investments  in  the  water  sector 

8 

 
will  ensure  greater  access  to  water  and 
sanitation. 

for  employees  to  face  rapid  technological 
changes. 

in 

the 

laws 

the  RRF  and 

Both 
cohesion-policy 
programmes  have  supported  the  digital 
including 
Romania, 
transition 
digitalisation 
public 
of 
administration. As part of the RRP, Romania 
to  develop  a 
in  2022 
adopted 
government  cloud 
infrastructure  that  will 
enable all public entities to manage data in a 
secure  and  interoperable  environment,  in  line 
with the European Interoperability Framework. 
Furthermore, the Romanian RRP contributes to 
the  country’s  transition  to  the  EU’s  2025 
connectivity  targets  through  the  development 
of  5G  networks.  After  adopting  a  law  on  5G 
security  in  2021,  Romania  launched  selection 
procedures  in  2022  to  grant  5G  licences. 
Together, these reforms provide the necessary 
foundations  for  complementary  investments 
that  should  facilitate  the  digital  transition, 
including 
the  Romanian  public 
administration.  

that  of 

access 

EU 
to 

infrastructure 

programmes 
improve 

include 
Different 
to 
measures 
healthcare,  improve  the  effectiveness  of 
healthcare,  and  encourage  Romanians  to 
take  preventive  actions  to  stay  healthy. 
Life  expectancy  in  Romania  is  among  the 
lowest in the EU, while spending on health as a 
share of GDP is also low. The development of 
pre-hospital 
doctors’ 
practices  is  crucial  to  reduce  the  number  of 
unmet  medical  needs  in  the  country  (see 
Annex  16).  Under  an  RRP 
the 
Romanian  government  has  drafted  sectoral 
action plans to improve the working conditions 
of medical staff and make medical work more 
attractive,  especially  in  rural  areas.  Cohesion-
policy programmes and the RRP aim to invest 
in: health infrastructure; health equipment; the 
improved 
digitalisation  of  healthcare;  and 
access 
in 
disadvantaged and marginalised areas. 

to  basic  services  for  people 

reform, 

like 

Investing in people for economic 
and social resilience 

improving  access 

Making  effective  use  of  various  funding 
sources,  Romania  has  taken  steps  to 
address  challenges  in  its  education  and 
training  systems.  The  country  has  focused 
to  early  childhood 
on 
education  and  care,  reducing  early  school 
leaving,  and  supporting  socio-economically 
disadvantaged  groups.  Further  actions  were 
implemented in 2022 and 2023 to: (i) develop 
dual  education  aligned  with  the  needs  of  the 
jobs  market;  and  (ii)  ensure  quality  standards 
in schools through the provision of school and 
IT  equipment.  Romania’s  implementation  of 
the  ESF+ 
‘Education  and  Employment’ 
programme  is  progressing,  with  projects  such 
as:  (i)  supporting  the  labour-market  relevance 
of  education  and  training;  (ii)  apprenticeships 
and  traineeships;  (iii)  socioeconomic  support 
measures to encourage disadvantaged groups 
to  participate  in general  and  higher  education 
and  (iv)  upskilling  and  reskilling  programmes 

Romania  has  approved  a 
set  of 
legislative  changes  to  improve  social 
reforms,  Romania 
cohesion.  Under  RRP 
adopted guides for the deinstitutionalisation of 
people  with  disabilities  and  the  prevention  of 
institutionalisation.  The  government  has  also 
agreed  on  a  national  long-term  care  strategy. 
The implementation of the minimum inclusion 
income  has  started  aiming  to  help  the  most 
vulnerable  people  out  of  poverty  and  with 
finding  a  job.  As  a  complement  to  those 
reforms,  EU-funded  programmes  for  2021-
2027 aim to improve access to social,  health, 
education  and  employment  services,  with  a 
focus  on  vulnerable  groups.  The  programmes 
will  target  the  delivery  of  integrated  services 
in these areas to 2 000 disadvantaged rural or 
marginalised communities. In addition, the RRP 
includes plans for legislation on preventing the 
separation  of  children  from  their  families. 
Implementation  of 
the  European  Child 
Guarantee is ongoing, largely supported by the 
ESF+. 

Through  the  Cohesion  Policy  Funds, 
900 000  people  have  been  connected  to 
water  supply  and  sanitation  from  2014 
until  end  of  2023.  The  RRF  also  helped  to 

9 

 
support  vulnerable  households  in  Romania  by 
setting  up  the  ‘First  Connection  to  Water  and 
Sanitation’  programme,  which  aims  to  help 
people  on  low  incomes  to  pay  the  costs 
required to  get  a  connection  to  a  clean  water 
supply and sewerage system. 

Box 3: 

Combined action for more impactful EU funds 

To  boost  economic  growth  and  maximise  the  impact  of  EU  funding,  Romania’s  RRP 
includes  reforms  that  support  investments  under  other  EU  instruments.  This  creates 
important  synergies  and  complementarities  between  the  various  funds.  For  example, 
the RRP contains a reform to create a new legal framework to prevent the separation of 
children  from  their  families.  This  reform  will  support  investments  planned  under  the 
ESF+  and  the  ERDF’s  social  inclusion  and  dignity  operational  programme  (PoIDS).  The 
RRP  includes  a  reform  to  implement  measures  (such  as  counselling  and  support  for 
parents and children; day centres for children at risk of separation from their parents; 
and  day  centres  for  children  with  disabilities)  to  effectively  prevent  the  separation  of 
children  from  their  families  and  support  the  family  in  caring  for  children  at  risk  of 
separation.  In  turn,  the  PoIDS  measures  complement  this  framework  by  supporting 
infrastructure  and  services  in  daycare  centres  for  children  with  problematic  behaviour 
as  well  as  multi-functional  sports  and  cultural  facilities.  The  PoIDS  will  also  provide 
training  for  professionals  working  with  children;  counselling  for  children  and  families; 
and support for daily activities, including material support. 

10 

 
 
FURTHER PRIORITIES AHEAD 

decarbonisation. 

Romania  faces  additional  challenges 
related to macroeconomic vulnerabilities, 
competitiveness,  labour/skills  shortages, 
and 
these 
challenges  will  help  increase  Romania’s  long-
the 
term 
resilience  of  its  economy.  It  will  also  help  the 
country to make further progress in achieving 
the SDGs. 

competitiveness  and 

Tackling 

ensure 

It  is  important  for  Romania  to  address 
the  identified  challenges  at  both  the 
national  and  regional  level  to  reduce 
regional disparities and improve administrative 
and  investment  capacity  in  a  balanced  way 
across  the  country.  The  RRP  provides  an 
important opportunity to advance measures to 
tackle  informality  in  the  economy  and  social 
inequality. 

Romania would benefit from a 
credible and sustained fiscal 
consolidation 

High  fiscal  deficits  supporting  domestic 
demand result in external vulnerabilities. 
Despite  some  improvements  in  the  current 
account deficit in 2023, vulnerabilities remain 
high.  These  vulnerabilities  are  chiefly  due  to 
the high and persistent fiscal deficit, as well as 
concerns  over  the  large  recent  increase  in 
wages,  which 
cost 
could 
competitiveness. Due to its large fiscal deficit, 
Romania is currently under an excessive deficit 
procedure 
Macroeconomic 
vulnerabilities linked to the country’s high and 
persistent external deficit have been identified 
by 
the 
through 
Commission 
macroeconomic imbalance procedure .    

undermine 

(EDP). 

the 

Progress  with  fiscal  consolidation  would 
both  alleviate 
in  vulnerabilities  and 
support  RRP  goals.  The  most  efficient  way 

11 

to 

to  tackle  Romania’s  domestic  and  external 
vulnerabilities  would  be  to  engage  on  a 
credible  and  sustained  multiannual  path  of 
fiscal  consolidation.  This  would  avoid  putting 
excessive  burden  on  other  macro  policy 
instruments,  including  monetary  policy.  Fiscal 
adjustment  should  ideally  combine  further 
streamlining  of  government  expenditure 
through  spending  reviews,  and  would  benefit 
from  an  increase  in  government  revenue.  It 
will also be important for tax and expenditure 
policies 
predictable. 
become  more 
Romania’s  tax  revenues  are  low  across  all 
major  revenue  sources  in  relation  to  the 
country’s GDP, and are well below the levels in 
level  of 
other  countries  at  a  similar 
includes 
RRP 
Romania’s 
development. 
foresees:  (i)  an  ambitious  reform  of  the  tax 
regime  for  microenterprises;  (ii)  a  broad  tax 
reform;  and  (iii)  measures  to  strengthen  the 
tax  administration.  The  objective  of  these  tax 
measures  is  to  increase  the  revenue-to-GDP 
ratio  by  2.5  percentage  points  by  the  end  of 
2025  and  decrease  the  VAT  gap  by  5 
percentage points by mid-2026 compared with 
2019.  If  properly  designed,  these  measures 
could  lead  to  a  fairer  and  more  efficient  tax 
system supporting growth and tax compliance. 
Furthermore,  following  the  adoption  of  a 
major 
strict 
implementation  remains  key  to  contain  the 
projected 
in  the 
ratio. 
pension 
Consolidating Romania’s fiscal accounts would 
also  reduce  risks  associated  with  external 
imbalances 
investor 
confidence. 

large 
expenditure-to-GDP 

strengthen 

imminent 

increase 

pension 

reform, 

and 

its 

Strengthening  the  quality  of  public 
finances could create much-needed fiscal 
space  over  the  medium-term.      As  part  of 
the RRP, Romania shall introduce a systematic 
spending-review  process.  It  is  likely  that  this 
new  process  will  help  to  identify  inefficient 
spending  and  direct  this  spending  instead  to 
new  policy  priorities  or  to  generate  savings. 

 
 
The  management  of  public  investment  could 
be  improved  across  the  entire  investment 
cycle.  If  Romania  chose  to  put  in  place  a 
coherent  and  comprehensive  medium-term 
plan  for  investment  this  would  significantly 
increase the impact of public investment. Such 
a  plan  should  be:  (i)  anchored  in  long-term 
strategies  such  as 
(ii) 
financing, 
integrated  across  sources  of 
including  state-owned  enterprises  and  public-
private  partnerships;  and  (iii)  aligned  with  the 
medium-term  fiscal  strategy 
(Annex  13). 
Stronger  monitoring  and  more  systematic  ex 
post  reviews  would  also  strengthen  the 
efficiency of public investment. 

‘Romania  2030’; 

its 

efforts 

independent 

should  make 

these  fiscal  challenges, 
To  address 
to 
Romania 
strengthen 
fiscal 
institution (IFI). The Romanian Fiscal Council 
has  a  relatively  wide  mandate.  Its  members 
have  non-staggered  mandates  of  9  years, 
increasing  the  demands  on  a  non-partisan 
nomination  procedure.  At  its  Secretariat,  less 
than  half  of  all  available  positions  are  filled, 
issues.  Access 
indicating 
to 
information  for  the 
IFI  could  be  further 
improved.  

recruitment 

Romania continues to face 
competitiveness challenges 

Facilitating firms’ access to finance could 
spur  competitiveness.  Romania  has  the 
highest  share  of  finance-constrained  firms  in 
the EU (9). Access to finance remains an issue 
for SMEs in particular. Building on the targeted 
measures  included  in  the  RRP,  the  use  of 
financial instruments could be strengthened to 
support  institutional  and  market  capacity  to 
promote  the  faster  uptake  of  revolving  forms 
of  finance  for  private  investments  in  the 
sectors  with 
revenue-generating  potential. 
Bank credit to the private sector in Romania is 
among  the  most  expensive  in  the  EU,  making 
like  self-financing  and 
alternative  options 
credits 
trade 
extended  deadlines 

from 

(9)  EIB Investment Survey 2023. 

attractive.  However,  measures  under  the  RRP 
and  cohesion-policy  programmes  (such  as 
financial  instruments  for  SMEs  or  de  minimis 
schemes to assist firms in listing on the stock 
exchange) will help facilitate access to finance 
and diversify financing sources.  

investment 

Further 
in  research  and 
innovation  is  needed.  Romania  has  the 
weakest  innovation  performance  in  the  EU, 
and  the  gap  between  Romania’s  performance 
and  the  EU  average  is  widening (10).  The  lack 
of  skilled  workers  to  engage in  R&I is  holding 
back  Romanian  competitiveness  and  its  move 
towards a knowledge economy. Weak science-
industry  collaboration  remains  a  challenge, 
and  innovation  activity  and  R&D  absorption 
capacity  at  company  level  are  limited.  In 
particular,  although  ICT  is  one  of  the  largest 
sectors 
is 
insufficiently  innovation  driven.  The  RRP  and 
cohesion-policy programmes include measures 
to  strengthen  science-industry  partnerships, 
streamline  the  governance  of  research  and 
spur  innovation,  but  further  action  is  needed. 
In  particular,  Romania 
set  up 
multiannual  budget  planning  for  R&I  in  order 
increase  public  and  private 
to  steadily 
investment, a critical measure to help it reach 
its 2% R&I investment target by 2027 (Annex 
11). 

in  Romania’s 

economy, 

should 

it 

remains 

capacity 

Administrative 
a 
challenge.  Romania’s  public  administration  is 
characterised by: (i) a lack of skilled staff; (ii) a 
low  degree  of  digitalisation;  (iii)  excessively 
bureaucratic  processes;  and  (iv)  a  pressing 
need  to  attract,  develop  and  retain  qualified 
people.  Coordination  across  institutions  and 
levels  of 
collaboration  across  different 
government  need  to  be  strengthened.  The 
capacity  of  the  public  administration 
to 
provide  services  and  carry  out 
reforms 
remains limited, and government effectiveness 
is  significantly  below  the  EU  average  (see 

(10)  2023 European Innovation Scoreboard (EIS), Romania 

profile: 
https://ec.europa.eu/assets/rtd/eis/2023/ec_rtd_eis-
country-profile-ro.pdf. The EIS provides a comparative 
analysis of innovation performance in EU countries, 
including the relative strengths and weaknesses of their 
national innovation systems. 

12 

 
 
 
improve 

its 
Annex  13).  Romania  could 
implementation  of  the  EU-wide  Once-Only 
Technical  System  of 
the  Single  Digital 
Gateway,  which  will  enable  the  automated 
cross-border  exchange  of  evidence  in  the  EU. 
These  challenges  are  partly  addressed  by  the 
Cohesion Policy Funds and the RRP through: (i) 
administrative  capacity building;  (ii)  roadmaps 
administrative 
supporting 
and 
simplification and digitalisation (e.g. through a 
government  cloud);  (iii)  setting  competence 
frameworks 
(iv) 
developing  a  fair  public  sector  renumeration 
system linked to performance.  

for  civil  servants;  and 

reforms 

An 
incomplete  cadastre  continues  to 
affect  the  security  of  property  rights  in 
Romania.  Despite  some  progress,55%  of 
properties in the  country  are  registered in the 
integrated IT system for the cadastre and land 
book.  Filling in  the  gaps in  the  cadastre  could 
help attract investment and improve access to 
finance. Revenues from taxes on buildings and 
land.  These  taxes  are  the  main  source  of 
revenue  for 
local  authorities,  which  are 
allowed to set rates, within a range set out in 
Romania’s  tax  code.  Revenues  from  property 
tax remain limited (see Annex 19). The reform 
of the tax framework included in the RRP aims 
to reduce property tax distortions. 

Romania’s  industrial  transition  towards 
circularity is only in its initial stages. The 
implementation  of  circular  business  models 
improved,  and  eco-innovation 
should  be 
in  R&D. 
investments 
incentivised  through 
Investing more into the transition to a circular 
economy  improves  resource  efficiency  while 
reducing  waste  and  has  clear  potential  to 
increase competitiveness. 

could 

Acting  to  remove  the  restrictions  on 
boost 
regulated 
professions 
in  a 
productivity.  Regulatory  restrictions 
number  of  professions  remain  stricter 
in 
Romania  than  the  EU  average.  This  creates 
additional costs, especially for SMEs, and also 
lowers productivity. This is especially the case 
for  notaries,  civil  engineers,  architects  and 
accountants.  Lawyers  are  also  subject  to 
strictly  defined  means  of  practicing  the 
profession, 
and 
incompatibility 
multidisciplinary  restrictions,  all  of  which 

rules 

affect  the  innovation  potential  of  the  legal 
sector. The fragmented system regulating civil 
engineers  and  their  activities  appears  to  also 
be  a  barrier  to  their  free  movement  and 
hampers the efficiency of service provision (11).  

Public  procurement  in  Romania  could  be 
improved. The high levels of single bids (45% 
of  contracts  in  2023),  direct  awards  (22%), 
unsuccessful bids (44%, the highest in the EU) 
and  price-only  award  criteria  (83%)  signal  a 
lack  of  competition  in  the  Romanian  public 
procurement  market.  This  could  potentially 
result  in  low  value  for  money  in  public 
procurement.  The  capacity  of  SMEs  to  place 
quality bids could be improved. In addition, the 
staffing  and  administrative  capacity  of  public 
procurement authorities, including the National 
Agency  for  Public  Procurement,  could  be 
strengthened.  The  work  of 
contracting 
authorities  could  also  be  improved,  in  part  by 
issuing clearer specifications in calls for tender 
and making processes more predictable. 

Strengthening policies to help 
people find work or training, 
access to education, healthcare, 
and social services all remain 
important 

and 

skills 

shortages 

Labour 
and 
mismatches  remain  a  challenge  for 
employability.  According  to  the  European 
Skills  Index,  Romania  is  one  of  the  worst 
performers  in  the  EU  for  skills,  especially  in 
the area of skills development and in offering 
measures  to  help  people  to  find  work(5). 
Romania’s  changing  economy 
increasingly 
demands  higher-skilled  workers  in  fields  such 
as  ICT,  healthcare  and  other  professional, 
scientific  and 
This 
highlights the importance of increasing tertiary 
educational attainment. At the same time, the 
employment  outcomes  of  low-skilled  workers 
Adult 
in 

technical  activities. 

deteriorating. 

Romania 

are 

(11)  Communication on updating the reform 

recommendations for regulation in professional 
services, COM(2021)385. 

13 

 
 
low-skilled  hardly  engaging 

participation in learning is highly unequal, with 
the 
in  any 
continuous learning compared with those that 
have  tertiary  education  degrees  (3.9%  of  the 
low-skilled engage in training in any given year 
vs  41.2%  of  those  with  tertiary  degrees). 
Therefore,  tackling  skills  shortages  through 
timely 
reforms  and 
investments  in  education  and  skills  is  key  to 
both:  (i)  building  up  human  capital  and 
increasing  long-term  competitiveness;  and  (ii) 
improving  social  inclusion  to  ensure  that  no 
one is left behind (see Annex 14).    

implementation  of 

(ii)  people 

that  are  not 

The  low  coverage  and  effectiveness  of 
policies  to  help  people  find  work  or 
training  remains  a key challenge.  The low 
effectiveness  of  public  employment  services 
holds  back  reskilling,  upskilling  and  labour-
market participation. In particular, this affects: 
in 
(i)  women; 
employment, education or training (NEETs); (iii) 
(iv)  people  with  disabilities. 
Roma;  and 
the  public  employment 
Modernisation  of 
services 
(including  strengthening  outreach 
mechanisms  and  better  involvement  of  social 
partners)  could  improve  measures  to  help 
people  find  work,  enabling  stronger  and  more 
inclusive  growth.  Addressing  these  challenges 
would  help  Romania 
its  national 
employment-rate  target  of  74.7%  by  2030 
(see Annex 5 and 14).  

reach 

of 

Improving  the  quality  of  education  and 
ensuring equal access to this education is 
the  basis  of  a  skilled  workforce  and 
breaking  cycles  of  exclusion.  Romania 
continues to face challenges in participation in 
early  childhood  education  and  care.  It  also 
suffers from high rates of early school leaving, 
especially  for  Roma  and  in  rural  areas.  The 
impact 
socioeconomic 
background  on  their  educational  outcomes  is 
very  high  and 
is 
fragmented. These problems, coupled with the 
challenges  linked  to  the  teaching  profession 
are reflected in low achievement rates in basic 
skills,  especially  in  rural  and  disadvantaged 
communities. This in turn limits possibilities for 
people  to  find  employment  and  provide  the 
skills  that  companies  need,  perpetuating  high 
rates of poverty and inequality (see Annex 15). 

the  school  network 

person’s 

a 

Addressing  widespread  poverty  and 
inequality  remains  a  challenge.  Romania 
has  one  of  the  highest  rates  of  both  adults 
and  children  at  risk  of  poverty  and  social 
exclusion  within  the  EU.  Those  who  are 
particularly  affected  by  this  include  people 
living in rural areas, older people, children, and 
(including  people  with 
vulnerable  groups 
the 
disabilities  and  Roma).  Accelerating 
implementation  of  measures  under  both  the 
RRP and cohesion policy, in particular the ESF+, 
would improve the situation and help Romania 
to  meet  its  2030  target  of  reducing  the 
number  of  people  at  risk  of  poverty  or  social 
exclusion by 2.5 million (see Annex 14). 

The  coverage  of  social  services  remains 
low, with significant differences between 
income  groups,  regions,  and  urban  and 
rural  areas.  The  provision  of  quality  health 
and  social  services  remains  low  and  uneven, 
especially  in  marginalised  communities  and 
for  people  with  disabilities  and  older  people. 
to  healthcare  varies  significantly 
Access 
between  the  capital  region  around  Bucharest 
and  the  rest  of  the  country.  It  also  varies 
greatly  between  urban  and  non-urban 
areas.  The low availability and affordability of 
quality, non-residential, community-based care 
the 
services 
also 
deinstitutionalisation 
to 
independent  living  of  people  with  disabilities. 
Romania  has  one  of  the  highest  shares  of 
people  with  long-term  care  needs  in  the  EU 
(56%  vs  26.6% 
the  EU).  EU-funded 
programmes  for  2021-2027  are  supporting 
the  delivery  of  integrated  services  for  2 000 
disadvantaged  rural  communities  and  the 
deinstitutionalisation  process  of  people  with 
disabilities  (see  Annex  14).  Other  measures 
target  improved  access  to  health,  education 
and  employment  services,  with  a  focus  on 
including  people  from 
vulnerable  groups, 
remote areas or marginalised communities. 

transition 

delaying 

and 

in 

is 

boost 

upward 

Addressing  these  challenges  will  help 
social 
Romania 
convergence.  The  second-stage  analysis  in 
line  with 
the  Social 
Convergence  Framework  points  to  challenges 
social 
for  Romania 
convergence  in  relation  to  its  social  situation, 

that  may  affect 

features  of 

the 

14 

 
education  and  skills  as  well  as  the  labour 
market (12). 

subject of a measure in Romania’s REPowerEU 
chapter.  

there 

require 

targets, 

Romania’s 

comprehensive 

Energy-efficiency renovations in buildings 
need to be further accelerated. To meet its 
climate 
energy 
consumption  will  have  to  decrease.  In  2022, 
77%  of  primary  energy  consumption 
in 
residential houses originated from heating and 
cooling.  District  heating  is  one  area  where 
Romania  has  been  particularly  slow 
in 
decarbonising.  And  despite  some 
recent 
is  substantial  untapped 
progress, 
potential  in  the  country  for  energy  savings 
that 
renovation 
strategies  and  increased investment.  For  that, 
the  REPowerEU  chapter  includes  a  measure 
which  will  support 
the  energy-efficiency 
renovation of at least 33 000 buildings, while 
cohesion 
available 
policy  will  make 
EUR 2.1 billion  in  funding  to  improve  energy 
efficiency for households and public buildings. 
To 
increase  the  renovation  rate  of  both 
residential  and  non-residential  buildings,  it  is 
crucial  for  Romania  to  address  funding  gaps, 
improve  access  to  finance,  and  make  use  of 
private 
for  energy-efficiency 
projects.  Progress  in  this  area  will  ultimately 
contribute  to  the  country’s  national  energy-
efficiency goals. 

investments 

To make progress on the green transition, 
Romania’s workforce requires more green 
skills.  Under  REPowerEU,  4 000  Romanian 
workers  will participate  in  courses  in  the  field 
of  renewable-energy  production.  This  will 
increase  the  level  of  skills  in  the  workforce 
necessary  for  the  design,  installation,  and 
maintenance  of  renewable-energy  systems, 
technologies,  and  green 
energy-efficient 
building  practices.  As  the  country  progresses 
towards  its  energy-efficiency  and  renewable-
energy  objectives,  there  is  increasing  demand 
for  a  skilled  labour  force  that  can  drive 
innovation  and  adapt  to  new,  sustainable 
technologies (see Annex 8). 

Energy  poverty  remains  a  significant 
challenge  in  Romania,  with  a  significant 
share  of  the  population  unable  to  afford 
adequate heating. The cap on energy prices for 
industry  and  consumers  is  not  targeted,  and 
does not help the most vulnerable and energy 

Additional efforts for 
decarbonisation are needed  

events. 

Romania 

If  countries  act 

Climate change poses significant risks to 
Romania’s  economy,  ecosystems,  and 
population  health. 
to 
decarbonise  their  economies,  this  will  limit 
global  warming  and 
the  frequency  and 
severity  of  climate-related  challenges  and 
extreme  weather 
is 
vulnerable  to  the  effects  of  climate  change, 
particularly  in  agriculture,  which  accounts  for 
more  than  4%  of  its  GDP.  Households  and 
businesses  continue 
to  be  underinsured 
against natural hazards like floods (see Annex 
6).  Companies  that  adopt  new  environment-
friendly  technologies  before  their  competitors 
can  gain  a  competitive  advantage,  and 
Romania  should  encourage  its  companies  to 
do  this.  A  decarbonised  energy  sector  would 
low-cost  energy, 
provide 
the  Romanian 
particularly 
technology  sector.  By  reducing  emissions  of 
greenhouse  gases  and  other  pollutants, 
Romania  could 
the  health  and 
improve 
wellbeing of its people. 

industry  with 
important 

for 

is  making  progress  on 

Romania’s  reliance  on  fossil  fuels,  in 
particular  natural  gas,  remains  high. 
the 
Romania 
deployment  of  renewables  and  the  phasing 
out  of  coal,  in  part  thanks  to  RRF  support. 
However, the decarbonisation of the transport 
and  industrial  sectors  is  only  happening  very 
slowly.  Moreover, 
the 
electricity  grid,  in  particular  in  high-  and 
medium-voltage  transmission  infrastructure, 
would help address bottlenecks. The legal and 
administrative  procedure  for  approving  new 
renewable  power  plants  and  connecting  them 
to  the  grid  (i.e.  the  permitting  process)  needs 
to be simplified. This issue of permitting is the 

investments 

into 

(12)  European Commission, SWD(2024)132. The analysis 
relies on all the available quantitative and qualitative 
evidence and analysing the policy response undertaken 
and planned. 

15 

 
 
The mid-term review of cohesion-policy funds for Romania 

The  mid-term  review  of  cohesion-policy  funds  is  an  opportunity  to  assess  cohesion-policy 
programmes  and  to  tackle  emerging  needs  and  challenges  in  EU  Member  States  and  their 
regions. Member States are reviewing each programme, taking into account among other things 
the  challenges  identified  in  the  European  Semester,  including  in  the  2024  country-specific 
recommendations.  This  review  forms  the  basis  for  a  proposal  by  the  Member  State  for  the 
definitive allocation of 15% of the EU funding included in each programme.  

Romania  has  made  progress  in  recent  years  in  the  implementation  of  cohesion-policy 
programmes  and  the  European  Pillar  of  Social  Rights.  Nevertheless,  challenges  remain  as 
outlined  in  this  report,  including  Annexes  14  and  17.  In  particular,  territorial  disparities  in 
investment,  employment,  and  labour  productivity  remain  very  high  between  the  capital  region 
and the other regions, as well as between urban and non-urban areas. Against this background, it 
remains important to continue the implementation of planned priorities, with particular attention 
to:  (i)  improving  the  management  and  sustainability  of  the  water,  wastewater,  and  waste 
sectors; (ii) improving energy efficiency, in particular by leveraging private investments through 
financial  instruments;  (iii)  improving  labour  productivity  and  the  capacity  of  enterprises  to 
innovate,  focusing  on  targeted  business  support,  including  public-private  collaboration  and 
participation  in  European  research  and  innovation  initiatives;  (iv)  investment  in  the  railway 
network and sustainable urban transport; (v) investment in biodiversity protection; (vi) developing 
administrative  capacity  at  national  and  sub-national  levels,  with  a  focus  on  strengthening  the 
role  of  regional  and  local  authorities  in  addressing  key  investment  needs;  (vii)  Just  Transition 
Plans,  including  phasing  out  coal  by  2032;  (viii)  improving  public  employment  services and the 
effectiveness of measures to find work or training for women, NEETs and disadvantaged groups 
such  as  people  with  disabilities  and  marginalised  communities,  such  as  Roma;  (ix)  education, 
training,  and  boosting  the  upskilling/reskilling  of  the  population;  and  (x)  the  accessibility  and 
quality  of  social  services,  long-term  care  services,  and  health  services  across  the  country  for 
vulnerable groups while accelerating deinstitutionalisation efforts. 

In  preparation  for  the  mid-term  review,  some  areas  merit  special  attention  including:  (i)  the 
alleviation  of  poverty  and  the  promotion  of  social  inclusion,  including  the  provision  of  social 
housing  and  social  services for vulnerable  households;  and  (ii)  the  sustainable  development  of 
smaller urban areas which face persistent deficits in administrative capacity.  

The potential to increase funding for the sustainable use of natural resources to make up for the 
backlog of investments from the previous programming period, merits  specific  consideration in 
preparation for the mid-term review. Romania could benefit from the opportunities provided by 
the  Strategic  Technologies  for  Europe  Platform  (STEP) (13)  initiative  in  the  areas  of  digital 
technologies  and  deep  tech  innovation,  clean  and  resource-efficient  technologies,  and 
biotechnologies to support the transformation of industry. 

Box 4: 
poverty 
remains 
a 
signific
ant 
challen
ge in 
Romani
a, with 
a 
notable 
portion 
of the 
populat
ion 
unable 
to 
afford 
adequa
te 
heating. 
The cap 
on 
energy 
prices 
for 
industry 
and 
consum
ers is 
not 
targete
d and 
does 
not 
help 
poor. 
Increasing  the  energy  efficiency  of 
the 
housing  will  play  a  crucial  role  in  mitigating 
most 
energy  costs  and  could  be  prioritised  further. 
vulnera
Romania  could  also  benefit  from  a  regulatory 
ble and 
framework that encourages consumers to play 
energy 
a  more  active  role  in  the  energy  market,  for 
poor. 
example  by  facilitating  ‘prosumer’  initiatives 
Enhanci
and  the  development  of  energy  communities. 
ng the 
Addressing  these  issues  comprehensively  will 
energy 
be  essential  if  Romania  is  to  alleviate  energy 
efficien
poverty,  promote  economic  development,  and 
cy of 
housing 
will play 
a 
crucial 
role in 
mitigati
ng 
energy 
costs 

progress  towards  a  more  equitable  and 
sustainable energy landscape. 

(13)  Regulation (EU) 2024/795  

16 

 
 
 
KEY FINDINGS 

With its wide policy scope and substantial 
size,  Romania’s  recovery  and  resilience 
plan  includes  measures  to  address  a 
series of structural challenges, in synergy 
with  other  EU  funds,  including  cohesion 
policy  funding.  Some  of  these  measures 
are discussed below. 

•  Accelerating  the  green  transition  by: 
adopting  the  decarbonisation  law;  boosting 
the  energy  efficiency  of  buildings  and  the 
deployment  of  renewables;  and  greening 
the transport sector.  

•  Supporting 

transition 
the  digital 
including  the  digitalisation  of  the  public 
administration.  

•  Promoting 

by 

private-sector 
implementing 
competitiveness 
supporting 
financial 
Romania’s 
Important 
Projects  of  Common  European  Interest  in 
semiconductors.  

instruments  and 
in 

participation 

•  Improving the business environment by 
regulatory  burden  and 

reducing 
preventing grey/black work evasion.  

the 

•  Strengthening 

sustainability 
fiscal 
through  comprehensive  reforms  of  the 
public pension and taxation systems aiming 
at 
increasing  government 
revenue, including by reducing the scope of 
the special regime for micro-enterprises.  

structurally 

of 

delays 

implementation 

The 
Romania’s 
recovery  and  resilience  plan  is  facing 
significant 
substantial 
challenges,  which  require  decisive  actions  to 
ensure a successful implementation of all the 
measures of Romania’s recovery and resilience 
plan by August 2026. 

and 

Beyond  the  reforms  and  investments  in 
the  RRP  and  cohesion  programmes, 
Romania would benefit from:   

•  A 

sustained 

credible  and 

fiscal 
consolidation  path,  including  through 
more  efficient  public  spending, 
in 
compliance  with  the  excessive  deficit 
procedure  (EDP) (14).  This  would  help 
tackle  Romania’s  domestic  and  external 
vulnerabilities. 

•  Facilitating firms’ access to finance, as 
Romania has the highest share of finance-
constrained firms in the EU.  

•  Strengthening  the  capacity  of  the 
public  administration  at  national, 
regional  and  local  levels,  focusing  on 
skills  development,  digitalisation  of  the 
administration and stronger coordination.  

•  Increasing 

the 

staffing 

and 
administrative  capacity  of  public 
procurement  authorities 
increase 
competition. 

to 

•  Improving  access  to  early  childhood 
education  and  care  and  reducing  early 
school leaving.  

•  Improving  access  to  basic  healthcare 
services  and  long-term  care  services, 
in  particular  for  people  in  disadvantaged 
and marginalised areas.  

•  Removing 

regulatory 
unnecessary 
restrictions  in  certain  professions  and 
completing the cadastre.  

(14)  Council Recommendation of 18 June 2021 with a view 
to bringing an end to the situation of an excessive 
government deficit in Romania, COM (2021) 304, 
29.7.2021. 

17 

 
 
 
•  Promoting  further  public  and  private 
investment in research and innovation, 
while  addressing  investment  barriers. 
Strengthening 
science-industry 
collaboration  and  R&D  at  company  level 
might be particularly helpful. 

•  Boosting  the  transition  towards  a 
circular  economy  to  increase  resource 
efficiency and productivity. 

•  Advancing 

transition, 
the  energy 
reducing  reliance  on  fossil  fuels  and  in 
particular on gas while also: (i) stepping up 
the  decarbonisation  of  district  heating, 
transport  and  industrial  sectors;  and  (ii) 
accelerating the rollout of energy efficiency 
measures 
energy 
deployment. 

renewable 

and 

•  Strengthening 

investments 

the 
electricity  grid  and  making  it  easier  to 
obtain permits to connect renewable power 
plants to the grid. 

in 

•  To support upward social convergence, 
strengthening  efforts  to  address  high 
levels  of  poverty  and  material 
deprivation  and  strengthening  access  to 
social  services  and  capacity  to  provide 
targeted  and integrated  support,  especially 
for  vulnerable  population  groups  such  as 
Roma. 

•  Addressing  child  poverty,  ensuring 
equal  access  to  quality  education  and 
improving the level of basic skills, including 
digital  skills,  across  segments  of  the 
population and geographical areas. 

•  Promoting  adult  learning  to  tackle 
skills  shortages  and  mismatches,  by 
aligning  education  and  training  with  the 
needs of the labour market. Improving skills 
for the digital and green transitions. 

•  Increasing  the  effectiveness  of  active 
labour  market  policies  and  tackling 
persistent  employment  gaps  in  the  labour-
market  participation  of  women,  young 
people,  people  with  disabilities,  low-skilled 
people, and Roma.  

18 

 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan – implementation 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy transition and competitiveness 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2023 CSRs 
Key facts of the Romanian RRP 

21 

23 

23 

25 

29 

31 

34 

36 

36 

41 

47 

50 

50 

52 

55 

57 

62 

64 

64 

67 

69 

71 

75 

75 

78 

80 

81 

26 
29 

 
 
 
Support from EU instruments in Romania 
Resilience indices across dimensions for Romania and the EU-27 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
Key Energy Indicators 
Key indicators for a fair transition in Romania 
Circularity indicators 

A3.2.  Measures in Romania's RRP 
A4.1. 
A5.1. 
A6.1. 
A7.1. 
A8.1. 
A9.1. 
A10.1.  Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 
A11.1.  Key innovation indicators 
A12.1. 
Industry and the Single Market 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for Romania 
A14.2.  Situation of Romania on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at regional level in Romania 
A18.1.  Financial Soundness Indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - Romania 
A21.2.  Heat map of fiscal sustainability risks - Romania 

LIST OF GRAPHS 

Progress towards the SDGs in Romania 
Romania’s progress on the 2019-2023 CSRs (2024 European Semester) 
Total grants disbursed under the RRF 
Total loans disbursed under the RRF 
Distribution of cohesion policy funding across policy objectives in Romania 
Distribution of RRF funding by pillar in Romania 
Greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2022 
Changes in livestock density and organic farming 
Environmental investment gap, annual average 
Romania´s energy retail prices for households and industry & service 
Trends in electricity prices for non-household consumers (EU and foreign partners) 
Romania's installed renewable capacity (left) and electricity generation mix (right) 
Fair transition challenges in Romania 
Job vacancy rate in transforming sectors and mining and quarrying 
ETS emissions by sector since 2013 
Treatment of municipal waste 
Innovation performance 2016-2023 

A1.1. 
A2.1. 
A3.1. 
A3.2. 
A4.1. 
A4.2. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A11.1. 
A11.2.  R&D intensity 2010-2022 
A12.1.  Labour productivity (gross value added per person employed) ny sector (2015=100) 
A13.1.  Government effectiveness 
A15.1.  Underachievement rates in mathematics by socio-economic background, PISA 2022 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2024-2070 
A18.1.  Evolution of credit activity 
A19.1.  Tax revenues from different tax types, % of total revenue 
A19.2.  Tax wedge for single and second earners as a % of total labour costs, 2023 

LIST OF MAPS 

A17.1.  Romania, NUTS2: GDP per capita growth 2013-2022 

22 

30 
33 
34 
40 
45 
48 
51 
54 
56 
61 
63 
64 
65 
67 
70 
72 
76 
78 
80 
83 
83 

23 
25 
30 
30 
32 
32 
36 
38 
39 
41 
42 
43 
47 
48 
50 
51 
55 
55 
57 
62 
67 
69 
69 
77 
79 
79 

71 

 
 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Romania’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  and  the 
environmental crisis, while ensuring that no one is 
left  behind.  The  EU  and  its  Member  States  are 
committed  to  this  historic  global  framework 
agreement  and  to  playing  an  active  role  in 
maximising  progress  on  the  SDGs.  The  graph 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

related 

While  Romania  is  improving  on  several  SDG 
environmental 
indicators 
sustainability (SDGs 2, 6, 11, 12, 13, 14, 15), 
it  is  moving  away  from  the  targets  for 
SDGs 7  and  9.  Romania  needs  to  catch  up  with 

to 

it 

the  EU  average  for  most  of  the  SDGs  related  to 
environmental  sustainability,  on  which 
is 
improving  (SDGs  2,  11,  12,  13,  15).  On  SDG 12 
(Responsible  consumption  and  production),  the 
material  footprint  was  30.5  tonnes  per  inhabitant 
in  2022,  compared  to  an  EU  average  of  14.9 
tonnes. Romania has been moving away from the 
goal for SDG 7 (Affordable and clean energy) and 
although it is still faring better than the EU on this 
SDG  overall.  In  addition,  the  percentage  of  the 
Romanian  population  unable  to  keep  their  homes 
adequately  warm  is  higher  than  the  EU  average 
(15.2%  in  2022;  EU  average:  9.3%).  Romania  is 
moving away from the targets for SDG 9 and also 
needs to catch up with the EU average.  

While  Romania  has  made  progress  on  some 
SDG  indicators  related  to  fairness  (SDG 4), 
and  good  health and well-being  (SDG 3),  and 
in  some  cases  significant  progress  (SDGs 1 
and  8),  it  is  moving  away  from  the  targets 
for  SDG  5  (Gender  equality)  and  SDG  7 
(Affordable  and  clean  energy).  In  general, 

Graph A1.1: Progress towards the SDGs in Romania 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development 
indicators - Eurostat (europa.eu). A high status does not mean that a country is close to reaching a specific SDG, but signals that it 
is doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of 25 April 2024. Data refer mainly to the period 2017-2022 or 2018-2023. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

23 

 
 
 
 
 
 
 
As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other annexes. 

poverty  and  deprivation  declined  between  2017 
and  2022,  though  the  self-reported  unmet  needs 
for  medical  care  increased  slightly  from  4.7%  to 
4.9%  over  that  period.  However,  Romania’s  track 
record  on  gender  equality 
is  concerning,  as 
labour  market 
in 
women’s  participation 
remains low: between 2018 and 2023, the gender 
employment  gap  widened  from  18.5  percentage 
points  to  19.1  pps,  while  over  the  same  period  it 
decreased  from  11.3  to  10.3  pps  in  the  EU.  As 
regards SDG 7, measures in the RRP are intended 
to  support  clean  energy  production  and  energy-
efficiency renovation.  

the 

As  regards  SDGs  linked  to  productivity, 
Romania  is  improving  on  SDG 4  (Quality 
education)  and  SDG 8  (Decent  work  and 
economic  growth)  but  is  moving  away  from 
the  goal  for  SDG 9  (Industry,  innovation  and 
infrastructure).  On  SDG 8,  while  the  percentage 
of  young  people  not  in  employment,  education  or 
training decreased from 21.3% to 19.3% between 
2018 and 2023, the figure remains well above the 
EU  average  of  11.2% in  2023,  down  from  13.3% 
in 2018. On the topic of quality education (SDG 4) 
the percentage of adults with at least basic digital 
skills  remained  stable  from  2021  to  2023  at 
around 27.7%. This is significantly lower than the 
EU  average  of  55.6%  in  2023,  up  from  53.9%  in 
2021. Romania also needs to catch up with the EU 
average for SDG 9 (0.46% of GDP expenditure on 
R&D;  EU  average:  2.24%  in  2022).  To  address 
challenges linked to productivity, the recovery and 
resilience  plan  (RRP)  aims  to  create  a  full 
professional  route  for  higher  technical  education, 
digitalise the education process to improve digital 
skills  for  students  and  teachers  and  support 
research and innovation. 

Romania  is  improving  on  all  SDG  indicators 
related  to  macroeconomic  stability  (SDGs 8, 
16,  17).  Romania’s  real  GDP  per  capita  (SDG 8) 
increased from EUR 8 910 in 2018 to EUR 10 250 
in  2023  -  chain  linked  volumes  (2010)  (EU 
average:  EUR 28 940  in  2023).  However,  the 
country  faces  challenges  related  to  trust 
in 
institutions,  with  the  Corruption  Perceptions  Index 
standing  at  46  in  2022  (EU  average:  64).  The 
index’s  scale  runs  from  0  (highly  corrupt)  to  100 
(very  clean)).  Romania  performs  well  on  SDG 17 
(Partnership for the goals). The RRP is expected to 
further  improve  the  fight  against  corruption  and 
help increase trust in public administration. 

24 

 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

Graph A2.1: Romania’s progress on the 2019-2023 
CSRs (2024 European Semester) 

Source: European Commission. 

The Commission has assessed the 2019-2023 
country-specific  recommendations  (CSRs) (15) 
addressed  to  Romania  as  part  of  the  European 
Semester. These recommendations concern a wide 
range of policy areas that are related to 14 of the 
17  Sustainable  Development  Goals  (SDGs)  (see 
Annexes  1  and  3). The  assessment  considers  the 
policy action taken by Romania to date (16) and the 
commitments  in  its  recovery  and  resilience  plan 
(RRP) (17).  At  this  stage  of  RRP  implementation, 
65%  of  the  CSRs  focusing  on  structural  issues 
from  2019-2023  have  recorded  at  least  ‘some 
progress’,  while  26%  recorded  ‘limited  progress’ 
(see  Graph  A2.1).  As  the  RRP  is  implemented 
further,  considerable  progress 
in  addressing 
structural CSRs is expected in the coming years. 

(15)  2023 CSRs: EUR-Lex - 32023H0901(23) - EN - EUR-Lex 

(europa.eu) 

2022 CSRs: EUR-Lex - 32022H0901(23) - EN - EUR-Lex 
(europa.eu) 

      2021 CSRs: EUR-Lex - 32021H0729(23) - EN - EUR-Lex 

(europa.eu) 
2020 CSRs: EUR-Lex - 32020H0826(23) - EN - EUR-Lex 
(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(23) - EN - EUR-Lex 
(europa.eu) 

(16)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (twice a year reporting on progress in implementing 
milestones and targets and resulting from the payment 
requests assessment). 

(17)  Member States were asked to effectively address in their 
RRPs all or a significant subset of the relevant country-
specific recommendations issued by the Council. The CSR 
assessment presented here considers the degree of 
implementation of the measures included in the RRP and of 
those carried out outside of the RRP at the time of 
assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which have not yet been adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

25 

No Progress9%Limited Progress26%Some Progress50%Substantial Progress11%Full Implementation4% 
 
 
   
 
 
 
Table A2.1:  Summary table on 2019-2023 CSRs 

(Continued on the next page) 

26 

RomaniaAssessment in May 2024*RRP coverage of CSRs until 2026**Relevant SDGs2019 CSR 1Limited progressEnsure compliance with the Council recommendation of 14 June 2019 with a view to correcting the significant deviation from the adjustment path toward the medium-term budgetary objective. Not relevant anymoreNot applicableSDG 8, 16Ensure the full application of the fiscal framework. No progressSDG 8, 16Strengthen tax compliance and collection.Limited progressRelevant RRP measures planned as of 2022SDG 8, 162019 CSR 2Substantial progressSafeguard financial stability and the robustness of the banking sector. Substantial progressSDG 8Ensure the sustainability of the public pension system and Substantial progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023SDG 8the long-term viability of the second pillar pension funds.Some progressRelevant RRP measures being implemented as of 2022SDG 82019 CSR 3Some progressImprove the quality and inclusiveness of education, in particular for Roma and other disadvantaged groups.Some progressRelevant RRP measures being implemented as of 2021 and 2022 SDG 4, 8, 10Improve skills, including digital, notably by increasing the labour market relevance of vocational education and training and higher education. Some progressRelevant RRP measures being implemented as of 2022SDG 4Increase the coverage and quality of social services and Some progressRelevant RRP measures planned as of 2022SDG 1, 2,10complete the minimum inclusion income reform. Substantial progressRelevant RRP measures planned as of 2022SDG 1, 2, 10Improve the functioning of social dialogue. Some progressRelevant RRP measures planned as of 2022SDG 8Ensure minimum wage setting based on objective criteria, consistent with job creation and competitiveness. Limited progressRelevant RRP measures planned as of 2024SDG 8Improve access to and cost-efficiency of healthcare, including through the shift to outpatient care.Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023SDG 32019 CSR 4Some progressFocus investment-related economic policy on transport, notably on its sustainability, low carbon energy and energy efficiency, environmental infrastructure as well as innovation, taking into account regional disparities. Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023SDG 6, 7, 9, 10, 11, 12, 13Improvepreparationandprioritisationoflargeprojectsandaccelerate their implementation. Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023SDG 16Improvetheefficiencyofpublicprocurementandensurefullandsustainableimplementationofthenationalpublicprocurementstrategy.Some progressRelevant RRP measures planned as of 2023SDG 92019 CSR 5Some progressEnsurethatlegilsativeinitiativesdonotunderminelegalcertaintybyimprovingthequalityandpredictabilityofdecision-making,includingbyappropriatestakeholderconsultations,effectiveimpactassessments and streamlined administrative procedures.Limited progressRelevant RRP measures being implemented as of 2021 and planned as of 2022SDG 16Strengthen the corporate governance of state-owned enterprises.Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023SDG 92020 CSR 1Limited progressPursuefiscalpoliciesinlinewiththeCouncil’srecommendationof3April2020,whiletakingallnecessarymeasurestoeffectivelyaddressthepandemic,sustaintheeconomyandsupporttheensuing recovery. Not relevant anymoreNot applicableSDG 8, 16Avoidtheimplementationofpermanentmeasuresthatwouldendanger fiscal sustainability. Limited progressRelevant RRP measures being implemented as of 2021 and planned as of 2022SDG 8, 16Strengthen the resilience of the health system, including in the areas of health workers and medical products, and improve access to health services. Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022SDG 32020 CSR 2Some progressProvide adequate income replacement and Full implementationSDG 1, 2, 10extend social protection measures and Some progressRelevant RRP measures planned as of 2022 SDG 1, 2, 10extend access to essential services for all. Limited progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023SDG 1, 2, 10Mitigatetheemploymentimpactofthecrisisbydevelopingflexibleworking arrangements and activation measures. Substantial progressRelevant RRP measures planned as of 2024SDG 8Strengthen skills and digital learning and Some progressRelevant RRP measures being implemented as of 2022SDG 4ensure equal access to education. Some progressRelevant RRP measures being implemented as of 2021 and 2022 and planned as of 2023SDG 4, 8, 10 
 
 
 
  
 
Table (continued) 

(Continued on the next page) 

27 

2020 CSR 3Some progressEnsure liquidity support to the economy benefiting businesses and households, particularly small and medium-sized enterprises and the self-employed. Full implementationRelevant RRP measures being implemented as of 2021 and planned as of 2022SDG 8, 9Front-load mature public investment projects and Some progressRelevant RRP measures planned as of 2022 and 2023SDG 8, 16promote private investment to foster the economic recovery. Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022SDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularonsustainable transport,Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022SDG 11digital service infrastructure,Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023SDG 9cleanandefficientproductionanduseofenergyandenvironmentalinfrastructure, including in the coal regions.Limited progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023SDG 6, 7, 9, 10, 11, 12, 132020 CSR 4Limited progressImprove the quality and effectiveness of public administration and Some progressRelevant RRP measures planned as of 2022 and 2023SDG 16improvethepredictabilityofdecision-making,includingthroughanadequate involvement of social partners.Limited progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 SDG 162021 CSR 1Not relevant anymorePursuefiscalpoliciesinlinewiththeCouncilRecommendationof18June2021withaviewtobringinganendtothesituationofanexcessive government deficit in Romania.Not relevant anymoreNot applicableSDG 8, 162022 CSR 1No progressPursuefiscalpoliciesinlinewiththeCouncilRecommendationof18June2021withaviewtobringinganendtothesituationofanexcessive government deficit in Romania.No progressNot applicableSDG 8, 162022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementing Decision of 3 November 2021.SwiftlyfinalisethenegotiationswiththeCommissiononthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtostarting their implementation.2022 CSR 3Some progressReduce overall reliance on fossil fuels.Some progressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13Facilitatethefurtherexpansionofsustainableenergyproductionbyaccelerating the development of renewables,Limited progressRelevant RRP measures planned as of 2022SDG 7, 9, 13upgradingenergytransmissiongridsandincreasinginterconnectionwith neighboring Member States.Limited progressNot applicableSDG 7, 9, 13Increasethepaceandambitionofrenovationstoadvancetheenergy efficiency of the building stock.Some progressRelevant RRP measures planned as of 2022SDG 72023 CSR 1Limited progressPursuefiscalpoliciesinlinewiththeCouncilRecommendationof18June2021withaviewtobringinganendtothesituationofanexcessivegovernmentdeficitinRomaniaby2024,andtostrengthenRomania’s external position.No progressNot applicableSDG 8, 16Winddowntheemergencyenergysupportmeasuresinforce,usingtherelatedsavingstoreducethegovernmentdeficit,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable, and preserve incentives for energy savings.Limited progressNot applicableSDG 8, 16PreservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandotherEUfunds,inparticularto foster the green and digital transitions.Substantial progressNot applicableSDG 8, 16Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainablegrowth, to achieve a prudent medium-term fiscal position.No progressNot applicableSDG 8, 162023 CSR 2Ensureaneffectivegovernanceandstrengthentheadministrativecapacitytoallowforacontinuedswiftandsteadyimplementationoftherecoveryandresilienceplan.SwiftlyfinalisetheREPowerEUchapterwithaviewtorapidlystartingitsimplementation.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywiththerecoveryandresilienceplan.RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports.Progress on the cohesion policy programming documents is monitored under the EU cohesion policy.RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy programming is monitored in the context of the Cohesion Policy of the European Union. 
 
 
  
 
Table (continued) 

Note: 
* See footnote (18). 
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP may be necessary to fully implement CSRs and address their underlying challenges. Measures indicated as ‘being 
implemented’ are only those included in the RRF payment requests submitted and positively assessed by the European 
Commission.  
Source: European Commission. 

28 

2023 CSR 3Some progressReduce reliance on fossil fuels andSome progressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13acceleratetheenergytransition,inparticularbydeployingrenewableenergyfasterandimprovinggridcapacitytoallownewcapacity to operate in the market.Limited progressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13Increaseenergyefficiencyandtheambitionofbuildingrenovationefforts,includingbyprovidingbetteraccesstoinformationandsustainable finance options.Some progressRelevant RRP measures being implemented as of 2021SDG 7Stepuppolicyeffortsaimedattheprovisionandacquisitionofskillsand competences needed for the green transition.Limited progressRelevant RRP measures being planned as of 2024SDG 4 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

This Annex provides a snapshot of Romania’s 
implementation of its recovery and resilience 
plan  (RRP),  past  the  mid-way  point  of  the 
Recovery  and  Resilience  Facility’s 
(RRF) 
lifetime.  The  RRF  has  proven  central  to  the  EU’s 
recovery  from  the  COVID-19  pandemic,  helping 
speed  up  the  twin  green  and  digital  transition, 
while  adapting  to  geopolitical  and  economic 
resilience 
developments, 
against  future  shocks.  The  RRF  is  also  helping 
implement the UN Sustainable Development Goals 
and 
country-specific 
recommendations (see Annex 2).    

strengthening 

address 

and 

the 

The  RRP  paves  the  way  for  disbursing  up  to 
EUR  13.6  billion  in  grants  and  EUR  14.9 
billion in loans under the RRF over the 2021-
2026 period, representing 8.8% of Romania’s 
GDP (18). As of mid-May 2024, EUR 9.4 billion has 
been  disbursed  to  Romania  under  the  RRF, 
comprising  EUR  5.8  billion  in  grants  and  EUR  3.6 
billion in loans.  

Romania still has EUR 19 billion available in 
grants  and  loans  from  the  RRF.  This  will  be 
disbursed  after  the  assessment  of  the  future 
fulfilment  of  the  remaining  448  milestones  and 
targets (19)  included  in  the  Council  Implementing 
Decision (20)  (CID),  ahead  of  the  2026  deadline 
established for the RRF.     

Romania’s  progress  in  implementing  its  plan 
is  recorded  in  the  Recovery  and  Resilience 
Scoreboard (21).  The 
scoreboard  gives  an 
overview  of  the  progress  made  in  implementing 
the  RRF  as  a  whole.  Graphs  A3.1  and  A3.2  show 
the  current  state  of  play  as  reflected  in  the 
scoreboard.  

Romania’s RRP includes a REPowerEU chapter 
to phase out its dependency on Russian fossil 

(18)  GDP information is based on 2023 data. Source: 

https://ec.europa.eu/economy_finance/recovery-and-
resilience-scoreboard/index.html?lang=en     

(19)  A milestone or target is satisfactorily fulfilled once a Member 
State has provided evidence to the Commission that it has 
reached the milestone or target and the Commission has 
assessed it positively in an implementing decision.  

(20)  https://data.consilium.europa.eu/doc/document/ST-12319-

2021-ADD-1/en/pdf 

fuels,  diversify 
its  energy  supplies  and 
produce  more  clean  energy  in  the  coming 
years.  To  kick-start  the  REPowerEU  chapter’s 
implementation, EUR 288 million was disbursed as 
pre-financing  on  25  January  2024.  This  helped 
launch  relevant  reforms  such  as  setting  up  the 
one-stop shop  for renovations and deployment of 
renewables by prosumers.  

The  plan  has  a  strong  focus  on  the  green 
transition, dedicating 44.2% of the available 
funds  to  measures  that  support  climate 
objectives  and  21.9%  of  its  total  allocation 
to support the digital transition. It also retains 
a  strong  social  dimension  with  social  protection 
measures,  especially 
to  support  for 
children  from  vulnerable  families,  persons  with 
disabilities  and  the  elderly,  as  well  as  the 
implementation  of 
Inclusion 
Income.     

the  Minimum 

related 

Table A3.1:  Key facts of the Romanian RRP 

Source: RRF Scoreboard 

With  two  payment  requests  completed, 
Romania’s  implementation  of  its  RRP  is 
significantly  delayed.  The  Commission  gave  a 
positive  assessment  of  Romania’s  first  payment 
request,  taking  into  account  the  opinion  of  the 
Economic and Financial Committee. This led to EUR 
2.6  billion  being  disbursed  in  financial  support  on 
27  October  2022 (22).  The  related  21  milestones 
and  targets  covered  reforms  and  investments  in 
the areas of sustainable mobility, decarbonisation, 

(21)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html  

(22)  When requested payments are disbursed, the pre-financing 

is cleared proportionally. The net amounts are quoted here.    

29 

Initial plan CID adoption date29 October 2021Scope Revised plan with REPowerEU chapterLast major revision8 December 2023Total allocation EUR 13.6 billion in grants and EUR 14.9 billion in loans (8.8% of 2023 GDP)Investments and reforms 111 investments and 66 reforms Total number of milestones and targets518Fulfilled milestones and targets70 (13.5% of total) 
 
 
 
  
 
 
 
As  of  15  May  2024,  the  Commission  is 
working  in  collaboration  with  Romania  to 
assess  its  third  payment  request.  Table  A3.2 
highlights  some  relevant  measures  achieved  so 
far,  and  some  that  will  be  implemented  before 
2026 to keep making Romania’s economy greener, 
more digital, inclusive, and resilient.   

Table A3.2:  Measures in Romania's RRP 

Source: FENIX 

audit  and  control,  education  and  health,  and 
preliminary  steps  in  tax  and  pension  reforms, 
among others.  

culture, 

housing, 

The most recent payment request, which the 
Commission  assessed  positively  on  27  June 
2023,  led  to  the  disbursement  of  EUR  2.8 
billion  on  29  September  2023. 
The 
disbursement reflected the positive assessment of 
49  out  of  51  milestones  and  targets  covering 
among  others  the  digitalisation  of  healthcare, 
affordable 
business 
environment,  decarbonization  of  transport,  and 
rural 
two 
milestones concerning energy investments had not 
been  satisfactorily  fulfilled.  The  Commission  has 
‘payment  suspension' 
therefore  activated  the 
procedure,  as  envisaged  by  Article  24(6)  of  the 
RRF Regulation. Upon provision of evidence within 
the  period  stipulated  in  the  provisions  of  the  RRF 
the 
Regulation, 
satisfactory  fulfilment  of  the  milestones  and,  if 
appropriate, lift the suspension of the payment.   

the  Commission  will  assess 

prevention. The 

remaining 

fire 

the 

Graph A3.1: Total grants disbursed under the RRF 

Note: This graph displays the amount of grants, including pre-
financing, disbursed so far under the RRF. Grants are non-
repayable financial contributions. The total amount of grants 
given to each Member State is determined by an allocation 
key and the total estimated cost of the respective RRP. 
Source: RRF Scoreboard 

Graph A3.2: Total loans disbursed under the RRF 

Source: RRF Scoreboard 

30 

EUR 5.78billion (42.6%)Total allocation: EUR 13.566billionEUR 3.63billion (24.3%)Total allocation: EUR 14.942billionReforms and investments implemented• Reform of the compulsory education system to prevent and reduce early school leaving• Development of the architecture of a government cloud system• Reform of the long-term care systemUpcoming reforms and investments• New minimum wage setting mechanism • Modernization of railways• Energy efficiency one-stop-shops for citizens 
   
 
   
 
   
 
  
 
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

EU funding instruments provide considerable 
resources for recovery and growth to the EU 
Member  States.  In  addition  to  the  EUR  28.5 
billion  of  Recovery  and  Resilience  Facility  (RRF) 
funding  described  in  Annex  3,  EU  cohesion  policy 
funds (23)  provide  EUR  31  billion  to  Romania  for 
the 2021-2027 period (24). Support from these two 
instruments  combined  represents  around  18.33% 
of  the  country’s  2023  GDP,  compared  to  the  EU 
average  of  5.38%  of  GDP (25).  Cohesion  policy 
supports  regional  development,  economic,  social 
and  territorial  convergence  and  competitiveness 
through  long-term  investment  in  line  with  EU 
priorities and with national and regional strategies. 

During  the  2014-2020  programming  period, 
cohesion  policy  funds  boosted  Romania's 
competitiveness, with  tangible achievements 
notably  in  research  and  innovation,  water 
and  sanitation,  energy  efficiency,  health 
services  and  skills.  By  the  end  of  the  eligibility 
period  in  December  2023,  2014-2020  cohesion 
policy  funds (26)  had  made  EUR  24.1  billion 
available to Romania (27), of which EUR 16.5 billion 
has  been  disbursed  since  March  2020,  when  the 
COVID-19  pandemic  began (28).  The  achievements 
of  cohesion  policy  funds  over  the  programming 
period  included  support  to  R&D,  connections  to 
water  supply  and  sanitation  services  for  900 000 
people,  improved  energy  efficiency  for  60 000 
households,  and  improved  health  services  for  2.2 
million  people.  On  top  of  this,  the  REACT-EU 
programme  helped  mitigate  the  impact  of  the 
COVID-19  pandemic,  e.g.  through  grants  to  SMEs 

(23)  In 2021-2027, cohesion policy funds include the Cohesion 
Fund, the European Regional Development Fund, the 
European Social Fund Plus and the Just Transition Fund. 

(24)  European territorial cooperation (ETC) programmes are 
excluded from the figure. In 2021-2027, the total 
investment, including national financing, amounts to EUR 
46.6 billion. 

(25)  RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2022. 

(26)  In 2014-2020, cohesion policy funds included the Cohesion 

Fund, the European Regional Development Fund, the 
European Social Fund and the Youth Employment Initiative. 
REACT-EU allocations are included but ETC programmes are 
excluded. 

(27)  In 2014-2020, the total investment, including national 

financing, amounted to EUR 28.5 billion.  

(28) Cut-off date: 14 May 2024. 

31 

to 

and  purchase  of  health  and  IT  equipment.  SAFE 
reimburse 
flexibility  schemes  were  used 
vouchers  for  vulnerable  households  to  cover 
energy  costs.  During  the  same  period,  EUR  4.5 
billion  provided  by  the  European  Social  Fund 
benefited  more  than  1.9  million  participants, 
including  those  from  vulnerable  backgrounds, 
helping them to access training, gain qualifications 
and  improve  their  employment  outcomes.  Around 
EUR  500  million  in  EU  funding  was  spent  on 
material support and aid to the most deprived. For 
example, over 600 000 vulnerable people received 
vouchers for food and hot meals. 

in  six 

In  the  current  programming  period  (2021-
2027),  cohesion  policy will  provide a  further 
boost  to  Romania’s  competitiveness,  to  the 
green  transition  and  to  social  cohesion, 
improving  the  living  and  working  conditions 
of  Romania’s  people.  The  European  Regional 
Development  Fund  and  the  Cohesion  Fund  will 
boost  innovation  and  digitalisation  by  supporting 
more  than  20 000  companies  and  digitalising 
more  than  400  public  institutions.  Significant 
investments  are  planned  to  improve  the  water 
supply for more than 650 000 people. In addition, 
the  Just  Transition  Fund  will  help  workers  and 
carbon-intensive  counties 
businesses 
(Hunedoara, Dolj, Gorj, Prahova, Mureș and Galați) 
to  find  new  jobs  and  skills.  It  will  support  more 
than  5 800  businesses,  train  almost  30 000 
workers  and  help  almost  7 000  unemployed 
workers find a job. The European Social Fund Plus 
(ESF+) will support the modernisation of the public 
employment  services  with  EUR  216  million  and 
help develop the skills of over 350 000 people to 
enable  them  to  gain  new  qualifications,  including 
in  fields 
the  green  and  digital 
transitions. These measures will help people better 
overcome  the  challenges  of  the  green  and  digital 
transitions.  The  ESF+  will  help  implement  the 
European Child Guarantee action plan in Romania, 
benefiting more than 700 000 vulnerable children 
and  young  people.  Food  and  material  support  will 
reach more than 1.8 million disadvantaged people. 
In  education,  the  ESF+  will  contribute  EUR  1.6 
billion 
quality, 
improve 
labour-market  relevance  of 
inclusiveness  and 
education.  With 
this  work,  cohesion  policy 
substantially  contributes  to  achieving  the  UN 
Sustainable  Development  Goals 
in 
Romania, in particular SDG 9 (Industry, innovation, 
infrastructure), SDG 8 (Decent work and economic 
growth) and SDG 1 (No poverty). 

to  measures 

related 

(SDGs) 

to 

to 

 
 
 
 
 
Graph A4.1: Distribution of cohesion policy funding 
across policy objectives in Romania 

Graph A4.2: Distribution of RRF funding by pillar in 
Romania 

Source: European Commission 

to 

for  people 

Through combined action, cohesion policy and 
the recovery and resilience plan (RRP) have a 
mutually  reinforcing  impact  in  Romania.  For 
instance,  in  water  management,  cohesion  policy 
funds finance the collection of waste water across 
the  country,  while  the  Romanian  RRP  focuses  on 
urban  areas  with  a  population  of  2 000  or  less. 
Together,  cohesion  policy  and  the  RRP  also 
strengthen  people’s  access 
the  country’s 
healthcare  system.  A  priority  of  the  cohesion 
policy’s  health programme  is  providing  support  to 
outpatient care units and health facilities that will 
implement  population  diagnostics  and  treatment 
screening  programmes.  In  parallel,  both  cohesion 
policy  programmes  and  the  RRP  aim  to  improve 
access 
in  disadvantaged  and 
marginalised  areas  to  basic  healthcare,  and 
improve  access  for  people  with  disabilities  and 
long-term  care  needs  to  community  or  home-
based services. The RRP and the ESF+ are helping 
implement a national programme to combat early 
school  dropout.  Furthermore,  synergies  between 
cohesion policy and the RRF are also visible in the 
area of social  inclusion, for example, in measures 
preventing  the  separation  of  children  from  their 
families  in  vulnerable  situations.  An  RRP  reform 
legal  framework  for  family 
has  created  the 
support,  while  cohesion  policy  will 
finance  
recreational  and  educational 
multifunctional 
centres for the children, and services that prevent 
separation  and  support  deinstitutionalisation.  The 
contribution of cohesion policy and RRP funding by 
policy  objective  is  illustrated  by  Graphs  A4.1  and 
A4.2. 

(1) Each RRP measure helps achieve the aims of two of the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each contribution represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated to 
Romania. 
Source: European Commission 

The Technical Support Instrument (TSI) helps 
Romania  invest  in  its  public  administration 
and create a better enabling environment for 
EU  and  national  investment.  The  TSI  has 
funded  projects 
in  Romania  to  design  and 
implement growth-enhancing reforms since  2016. 
The  support  provided  in  2023  included  action  to: 
roll  out  a  renewable  energy  support  scheme; 
implement  the  economic,  social,  governance  risk 
management  framework  for  the  financial  sector; 
and  improve  the  efficiency  of  the  fiscal  control 
activity.  Assistance  from  TSI  has  helped  prepare 
JTPs.  The  TSI  is  also  helping  Romania  to  increase  
its  overall  capacity  to  implement  specific  reforms 
and  investments  included  in  its  RRP,  such  as 
investments  for  its  electronic  identification  (eID) 
system.  in  addition,  a  mechanism  to  identify 
schools  with  high  risk  of  early  school  leaving  so 
appropriate  remedial  actions  could  be  rolled  out 
was  developed  and  piloted  through  two  TSI 
projects implemented in previous years. 

Romania also receives funding from several other 
EU  instruments,  including  those  listed  in  Table 
A4.1. 

32 

PO1 Smarter EuropePO2 Greener EuropePO3 Connected EuropePO4 Social EuropePO5 Europe closer to citizensPO8 JTF specific objectiveGreen transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generation 
     
   
Table A4.1:  Support from EU instruments in Romania 

(1) RRF implementation period is 2021-2026. 
(2) The public sector loan facility’s programming period is 2021-2025 and the amount reflects the national share in its grant 
component reserved until the end of the period.   
(3) Common agricultural policy programming periods are 2014-2022 and 2023-2027.   
(4) EMFF – European Maritime and Fisheries Fund, EMFAF – European Maritime, Fisheries and Aquaculture Fund. 
(5) Data on the Connecting Europe Facility covers transport and energy and has a cut-off date of 15 May 2024. 
(6) Data on Horizon Europe (2021-2027) has a cut-off date of 13 May 2024. 
(7) 2021-2027 data on the LIFE programme has a cut-off date of 15 May 2024. 
(8) The amount of the EU guarantee signed under the EFSI Infrastructure and Innovation Window was derived based on the 
signed amount of the operations and the average internal multiplier, as reported by the EIB (cut-off date is 31 December 2023). 
(9) The amount of the EU guarantee and of the volume of operations signed under InvestEU includes the EU compartment as well 
as the Member State compartments (cut-off date is 31 December 2023).   
(10) SURE - European instrument for temporary support to mitigate unemployment risks in an emergency. 
Source: European Commission 

33 

Amount 2021-2027 (EUR million)Cohesion policy31 000.0RRF grants (1)13 566.1Public sector loan facility (grant component) (2)162.3Common agricultural policy (3)14 969.6EMFF/EMFAF (4)162.5Connecting Europe Facility (5) 893.8Horizon 2020 / Horizon Europe (6) 211.8LIFE programme (7) 10.8Volume of operations (EUR million)European Fund for Strategic Investment 2015-2020 (8)1 039.6InvestEU 2021-2027 (9)1 965.4PeriodTotal amount available (EUR million)Disbursed amount (EUR million)SURE (10)2020-20223 000.03 000.0RRF 2021-202614 9423 630.025 715.8EU grantsAmount 2014-2020 (EUR million)24 100.0-- 396.8 709.9EU loans223.31 151.6 301.419.2EU guaranteesEU Guarantee (EUR million) 
 
  
 
ANNEX 5: RESILIENCE 

Table A5.1:  Resilience indices across dimensions for Romania and the EU-27 

(1)  The synthetic indices aggregate the relative resilience situation of countries across all considered indicators. For an indicator, 
each country’s relative situation in the latest available year is compared with the collection of values of that indicator for all 
Member States and all years in the reference period. 
Source: Resilience Dashboards - version spring 2024, data up to 2022 

(RDB) (29) 

This  Annex  uses  the  Commission’s  resilience 
to  show  Romania’s 
dashboards 
relative resilience capacities and vulnerabilities (30) 
that  may  be  of  relevance  for  societal,  economic, 
digital and green transformations, and for dealing 
with future shocks and geopolitical challenges. (31) 

According  to  the  RDB’s  set  of  resilience 
indicators,  Romania  has  medium  overall 
vulnerabilities (on a par with the EU average) 
and  medium-low  overall  capacities  (below 
the  medium-high  EU  average).  Romania’s 
performance  is  reflected  in  the  distribution  of 
its  vulnerability 
indicators:  around  55%  of 
indicators  are  between  low  and  medium,  while 
60%  of  its  capacity  indicators  are  low  and 
and  most 
medium-low.  Overall 

resilience 

(29)  https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en. Resilience is defined as the 
ability not only to withstand and cope with challenges but 
also to undergo transitions, in a sustainable, fair, and 
democratic manner. 2020 Strategic Foresight Report: 
Charting the course towards a more resilient Europe 
(COM(2020) 493). 

(30)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals, 
while capacities refer to enablers or abilities to cope with 
crises and structural changes and to manage transitions. 

(31)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

dimension-specific 
unchanged from the previous year.  

resilience  have 

remained 

increasing 

in  employment  nor 

In  the  social  and  economic  dimension, 
Romania has a lot of potential for decreasing 
its 
its  vulnerabilities  while 
capacities.  Social  and  economic  vulnerabilities 
are  medium-high,  driven  by  some 
indicators 
displaying the highest challenges in the EU: the at-
risk-of-poverty-or-social-exclusion  rate,  regional 
household  income  dispersion  and  the  number  of 
young  people  neither 
in 
education and training. Romania has even greater 
potential  for  improving  its  capacities,  which  are 
below  the  EU  average.  Areas  where  it  could 
improve 
government 
expenditures and the impact of social transfers on 
poverty reduction, both of which are the lowest in 
the  EU.  Indicators  for  learning  and  skills,  such  as 
adult participation in learning, average Programme 
for  International  Student  Assessment  (PISA)  test 
scores,  and  children  under  3  in  formal  childcare, 
are  among  the  lowest  in  the  EU.  Medium-high 
vulnerabilities  and  low  capacities  make  the  social 
and  economic  dimension  Romania’s  biggest 
resilience  challenge,  with  no  improvements  from 
one year to the next. 

capacities 

are 

its 

the  green  dimension,  Romania  has 
In 
medium-low  vulnerabilities,  above  the  EU 
average,  and  medium-low  capacities,  below 
the  EU  average  (medium-high).  Among  its 
vulnerabilities,  it’s  still  struggling,  with  relatively 
high  raw  material  consumption  per  capita,  while 
on the capacity side it has low sustainable use of 
resources  (resource  productivity,  circular  material 

34 

ROROEU-272023 RDB2024 RDB2024 RDBHighMedium-highMediumMedium-lowLowHighMedium-highMediumMedium-lowLowDimensionDistribution of indicators by vulnerabilities and capacitiesOverall resilienceVulnerabilities0.410.410.50Capacities0.250.270.67VulnerabilitiesSocial and economicVulnerabilities0.220.240.47Capacities0.180.150.670.240.280.65GreenVulnerabilities0.560.600.44Capacities0.320.370.70CapacitiesGeopoliticalVulnerabilities0.850.800.41Capacities0.310.270.65DigitalVulnerabilities0.280.290.52Capacities0%20%40%60%80%100%Vulnerabilities(57 indicators)Capacities(63 indicators) 
 
 
 
   
 
 
use), and few insured losses from extreme climate 
events.  

its  primary  challenges 

Romania remains behind the rest of the EU in 
the  digital  dimension,  with  medium-high 
vulnerabilities  and  medium-low  capacities. 
Some  of 
include  the 
availability of and access to digital public services, 
as  well  as  the  high  and  increasing  proportion  of 
employees  who  do  not  telework,  and  the  high 
proportion  of  businesses  without  information  and 
communication 
training 
technology 
programmes.  The  country  also  has  some  low 
digital  capacities,  with  one  of  the  EU’s  lowest 
levels  of  digital  literacy  among  adults  and  young 
people,  and  one  of 
levels  of 
cybersecurity awareness and use of e-healthcare.  

lowest 

(ICT) 

the 

In  the  geopolitical  dimension,  Romania  has 
relatively  low  vulnerabilities  compared  to 
the  EU  average,  and  its  capacities  remain 
below  the  EU  average.  The  reasons  for  its 
medium-low  vulnerabilities  are  Romania’s  low 
metal footprint per capita, low import dependency 
in  energy  materials  and  low  concentration  of 
energy  carrier  suppliers,  value  chain  partners  and 
extra-EU  export  partners.  The  reasons  for  its 
capacities  being  medium-low  overall  –  below  the 
EU  average  –  are  low  financial  integration,  low 
extra-EU trade openness and low levels of migrant 
inflow  and 
labour 
markets.  However,  current  developments  related 
to the Russian aggression against Ukraine calls for 
additional 
overall 
resilience. 

into  Romania’s 

strengthening 

integration 

focus 

on 

35 

 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

Romania  has  made  progress  in  the  green 
transition,  with  more  action  needed  on 
specifying  the  policies  needed  to  attain  its 
2030  effort  sharing  target,  addressing 
greenhouse  gas  emissions 
road 
transport  and  potential  losses  from  climate 
hazards,  circular  economy,  and  other  areas. 
This Annex provides a snapshot of climate, energy, 
and  environmental  aspects  of  the  transition  in 
Romania (32). 

from 

Romania’s draft updated national energy and 
climate plan (NECP) provides only very broad 
information  on  the  investment  needed  to 
achieve its 2030 climate and energy targets. 
While 
the 
the  plan  presents  some  figures, 
information  is  inconsistent  across  sectors  and 
lacking in detail. The plan maps the main sources 
of funding available at EU, national and local level 
for  most  policy  actions,  showing  significant 
reliance  on  private  investment  and  public-private 
partnerships. Since funding needs are not specified 
for most actions, potential funding gaps cannot be 
pinpointed (33). 

With  the  policies  and  measures  currently 
planned,  Romania  is  set  to  fall  short  of  its 
2030  effort  sharing  target (34). 
In  2022, 
Romania’s  greenhouse  gas  emissions  from  its 
effort  sharing  sectors  are  expected  to  be  1% 
above 2005 levels. Current policies are  projected 
to increase Romania’s effort sharing emissions by 
7.1%  compared  to  2005  levels  by  2030.  The 
additional  policies  included  in  Romania’s  draft 
updated  NECP  are  projected  to  contain  the 

(32)  This Annex is complemented by Annex 7 on energy transition 

and competitiveness, Annex 8 on the fair transition to 
climate neutrality, Annex 9 on resource efficiency, circularity, 
and productivity, and relevant topics in other annexes to this 
country report. 

(33)  See the Commission’s (2023) assessment of the draft 

national energy and climate plan of Romania. 

(34)  The national greenhouse gas emission reduction target is 
laid down in Regulation (EU) 2023/857 (the Effort Sharing 
Regulation). The aim is to align action in the sectors 
concerned with the objective to reach the EU-level economy 
wide target of greenhouse gas reductions of at least 55% 
compared to 1990 levels. The target also applies to the 
sectors outside the current EU Emissions Trading System, 
notably buildings (heating and cooling), road transport, 
agriculture, waste, and small industry (known as the effort 
sharing sectors). 

increase  at  4.4 %  compared  to  2005  levels (35). 
This  leaves  a  gap  of  over  17  percentage  points 
below Romania’s effort sharing target to achieve a 
12.7%  reduction,  highlighting  the  importance  to 
plan  and 
implement  more  ambitious  climate 
action.  

Graph A6.1: Greenhouse gas emissions from the 
effort sharing sectors in Mt CO2eq, 2005-2022 

Source: European Environment Agency 

from 

road 
Greenhouse  gas  emissions 
transport  are  a  particular  concern  for 
Romania, despite the significant role of other 
modes  of  transport (36).  In  Romania,  rail  and 
buses/coaches  account  for  17%  of  passenger 
transport.  On  the  transport  of  freight,  inland 
waterways  and  rail  each  account  for  25%  of 
movements. However, only  37% of Romania’s rail 
network 
(EU  average:  56%). 
Regarding  passenger  cars,  Romania’s  shift  to 
sustainable transport has yet to take off. In 2022, 
battery electric vehicles accounted for 0.3% of the 
country’s  passenger  vehicle  fleet,  while  its  2 660 
publicly  accessible  charging  points  provided  a 
charging point for every 12 electric vehicles (below 
the EU average of 1:10). In 2022, greenhouse gas 
emissions  from  road  transport  increased  by  8.3% 
compared  to  2005  levels,  and  their  share  in  the 

is  electrified 

(35)  The effort sharing emissions for 2022 are based on 
approximated inventory data. The final data will be 
established in 2027 after a comprehensive review. 
Romania’s draft updated NECP does not provide emission 
projections for the effort sharing sectors. The information on 
such projections (‘with existing measures’ (WEM) and ‘with 
additional measures’ (WAM)) is based on the latest data that 
had to be reported by 15 March 2023 under Article 18 of 
Regulation 2018/1999 (the Governance Regulation). 

(36)  Unless otherwise indicated, data in this section refer to 
2021. See European Commission, 2023, EU transport in 
figures, transport.ec.europa.eu. 

36 

010203040506070809020052022MtCO2eWasteSmall industryAgricultureBuildings (under ESR)Domestic transport (excl. aviation) 
 
 
 
     
 
 
 
the 

effort  sharing  emissions  rose  to  23.4%,  from 
15.4% in 2005. As the upcoming emissions trading 
system  for 
(and 
buildings)  as  of  2027  draws  closer,  measures  to 
curb  greenhouse  gas  emissions 
road 
transport  targeting  vulnerable  consumers  appear 
particularly pertinent.  

transport  sector 

from 

road 

is 

significantly  below 

There  is  scope  for  increasing  Romania’s 
target  for  renewable  energy  in  its  final 
updated  NECP (37).  Romania’s  renewable  energy 
contribution set in its draft updated NECP, 34% by 
required 
2030, 
contribution of 41%. However, its energy efficiency 
contributions  of  31.4  Mtoe  in  primary  energy 
consumption  and  23.2  Mtoe 
in  final  energy 
consumption  for  2030  set  in  the  draft  updated 
NECP  are  more  ambitious  than  those  required  by 
the Energy Efficiency Directive, and in the case of 
primary  energy  consumption  even  above  the 
maximum authorised deviation. 

the 

Romania  is  unlikely  to  meet  its  2030  target 
for  removing  carbon  from  the  atmosphere 
through  land  use,  land  use  change  and 
forestry (LULUCF). In recent years, the country’s 
land  use  sector  has  acted  as  a  carbon  sink.  Its 
2030 LULUCF target will require additional carbon 
removals of 2 380 kt CO2 (38), but according to the 
latest  projections,  Romania  is  expected  to  fall 
short of this figure (39). 

A wide climate protection gap (40) could pose 
challenges  to  Romania’s  public  finances. 
Romania  is  vulnerable  to  extreme  events  related 
to  climate  change,  such  as  floods,  drought,  and 
heatwaves.  Agriculture  is  particularly  affected. 

(37)  The EU target set out in the revised Renewable Energy 

Directive is to have 42.5% of gross final energy consumption 
coming from renewable energy sources by 2030, with the 
aspiration to reach 45%. The formula in Annex I to Directive 
(EU) 2023/1791 sets the indicative national contribution for 
Romania at 30.2 Mtoe for primary energy consumption. The 
Commission communicated a corrected national contribution 
of 22.47 Mtoe in final energy consumption for 2030 in 
accordance with Article 4(5) of the Energy Efficiency 
Directive to increase the contribution towards the Union’s 
binding energy efficiency target. See the Commission 
Recommendation of 18.12.2023 to Romania. 

(38)  National LULUCF targets of the Member States in line with 

Regulation (EU) 2023/839. 

Romania  has  a  pronounced  insurance  gap  for 
flooding.  Indeed,  all  climate-related  hazards  have 
an  insurance  penetration  below  50%.  Data  from 
1980–2020  show  that  only  5%  of  economic 
losses  were 
institutional 
insured.  Appropriate 
mechanisms  are  crucial  for  climate  adaptation.  In 
this  regard,  Romania  has  weaknesses  in  the 
monitoring  and  evaluation  of  adaptation  policies, 
the  analysis  of  climate  vulnerabilities  and  risks, 
coordination  across  sectors  of  government,  and 
adaptation action at local level. Moreover, there is 
considerable  scope  for  integrating  nature-based 
local 
solutions 
adaptation plans (41). 

into  national,  sectoral  and 

can 

Sustainable  water  management  is  a  major 
environmental  challenge  for  Romania.  The 
water  exploitation  index  plus  (WEI+)  stood  at  9% 
in  2019,  and  the  country  experienced  the  worst 
seasonal  value  ever  in  Q3-2019  at  23.5% (42). 
Over 2000-2020, an average of 4% of Romania’s 
area  was  impacted  by  droughts,  while  in  2022  it 
reached  14.7%.  The  efficient  use  of  water 
resources 
by  water 
productivity (43). In  2021,  Romania  generated 
EUR 26  per  cubic  metre  of  water  abstracted, 
among  the  lowest  values  in  the  EU.  According  to 
the second river basin management plan (44), 66% 
of all surface water bodies reached at least good 
ecological status and 98% reached good chemical 
status.  All  marine  waters  are  not  yet  in  a  good 
environmental 
the 
descriptors used in the Marine Strategy Framework 
Directive.  

be  measured 

tracked  by 

status,  as 

There  is  still  room  for  improvement  on 
biodiversity  and  nature  protection  and 
restoration.  Romania’s 
is 
generally subject to long-term planning to protect 
biodiversity  in  a  sustainable  way.  However,  illegal 
logging seems to be a serious issue and may have 
a significant impact on biodiversity in the affected 
areas.  Romania  would  therefore  benefit  from 

forestry  system 

(41)  See the Commission’s 2023 assessment and 

recommendation on Romania’s progress on climate 
adaptation. 

(42)  Values above 20% are generally an index of water 

scarcity and values above 40% indicate that stress is severe 
and freshwater use unsuitable. 

(39)  Projections submitted in Romania’s draft updated national 

(43)  Measured as GDP over total fresh surface water abstracted 

energy and climate plan, 2023. 

in cubic metres. 

(40)  On the climate protection gap, see the annotations to Table 

(44)  Data from the third river basin management plan are not yet 

A6.1. 

available. 

37 

 
 
 
1.9%  of  Romania’s  UAA  is  composed  of  irrigated 
land,  and  the  water  abstracted  for  agricultural 
purposes accounts for 31.7% of total abstraction. 

Graph A6.2: Changes in livestock density and 
organic farming 

reforming  the  monitoring,  traceability  and  control 
of logging activities. At the end of 2021, 23.4% of 
Romania’s land and 21.4% of its marine area were 
under protection. According to the latest estimates 
on  protected  habitats  and  species,  68%  of 
protected  habitats  and  48%  of  protected  species 
were in a good conservation status in 2013-2018, 
placing  Romania  above  the  EU  average.  However, 
the  share  of  species  in  an  unfavourable/bad 
conservation  status  increased  since  the  previous 
reporting  period.  Romania’s  Natura  2000  network 
could  be  managed  more effectively  by  rolling  out 
management  plans  and  adopting  conservation 
objectives.  Romania  can  take  the  opportunity  to 
redirect  cohesion  policy  and  Recovery  and 
Resilience  Fund  funding  to  nature  objectives  and 
technical  and 
improve 
make  efforts 
administrative capacity. 

its 

to 

Composting  and  digestion  levels  could  be 
improved. Composting and digestion of municipal 
waste  is  insufficient.  It  decreased  to  14  kg  per 
capita 
in  2021,  representing  4.6%  of  total 
municipal waste treatment. 

On  agriculture,  between  2015  and  2023,  the 
value  of  the  agricultural  sector’s  annual 
output  fluctuated  between  EUR  15  and  19 
billion.  It  stood  at  EUR  15.6 billion (45)  in  2023. 
The  share  of  the  total  utilised  agricultural  area 
(UAA) under organic agriculture reached only 4.4% 
in 2021 (EU average: 9.1%) (46). In 2022, the share 
of  the  total  UAA  under  organic  agriculture  was 
around 5%. Romania’ s national goal is to achieve 
at  least  6%  of  agricultural  land  under  organic 
farming by 2030.  

Livestock  farming  is  intensifying  in  some 
Romanian  regions.  Romania’s  livestock  density 
index  decreased  from  0.37%  to  0.35%  between 
2010 and 2020, below the EU average of 0.75%. 
Regional differences remained and three regions – 
North-West,  West  and  Central  –  reported  an 
increase  in  livestock  units  over  the  same  period. 
Intensive rearing of poultry and pigs is one of the 
industrial activities that puts the highest burden on 
the  environment  in  terms  of  ammonia  emissions 
into the air. The agricultural sector was responsible 
for  generating  89.1%  of  all  ammonia  emissions, 
against  the  EU-27  average  of  90.7%  in  2021. 

(45)  Production value at basic price (2015=100). 

Livestock unit (LSU)/ha of UAA: it measures the stock of 
animals (cattle, sheep, goats, equidae, pigs, poultry and 
rabbits) converted in LSUs per hectare of UAA. 
Source: Eurostat 

Intensive  agriculture  continues  to  generate 
pollution. The latest figures for the gross nitrogen 
balance  on  agricultural  land  in  Romania  show 
nitrogen deficiencies, with an average of  -24.9 kg 
of nitrogen per hectare per year in 2019. However, 
12.6% of groundwater monitoring stations showed 
levels  above  the  maximum  50 mg  nitrate/l.  The 
country’s  gross  phosphorous  balance  increased to 
-6.1 kg/ha  in  2019.  In  addition,  there  remains 
room  for  limiting  agriculture’s  impact  on  climate. 
According  to  the  impact  assessment  for  the  Soil 
Monitoring  Law (47),  45%  of  Romanian  soil  could 
be considered as unhealthy (48). The loss of organic 
carbon affects 71% of the country’s cropland and 
grassland  area,  while  soil  erosion  affects  59%  of 
tillage 
cropland  area.  However,  conservation 
practices,  which increase soil  organic  carbon,  only 
covered 3% of Romania’s tillable area in 2016 (49). 
The  net  stock  change  of  organic  soils  in  cropland 
and  grassland  areas  increased  over  time  and 
stood at 150.5 kt in 2021. 

(47)  SWD 417 final of 05.07.2023 – impact assessment for the 
Directive of the European Parliament and of the Council on 
Soil Monitoring and Resilience (Soil Monitoring Law), (cfr. pg. 
10, pg. 189-190, pg. 835-845). 

(48)  However, not all soil degradation processes could be 

quantified for all land uses. This number indicates an order 
of magnitude. 

(46)  In 2020. 2021 data are not available. 

(49)  Eurostat Share of tillage practices in arable area EU-27. 

38 

012024681020162020% LSU per hectare% of total utilised agricultural areaLivestock density index Romania (% LSU per ha)Livestock density index EU-27 (% LSU per ha)Organic farming Romania (% of total utilised agricultural area)Organic farming EU-27 (% of total utilised agricultural area) 
 
      
 
(2021)  by 

Air  quality  in  Romania  continues  to  give 
cause  for  serious  concern.  The  latest  available 
annual  estimates 
the  European 
Environmental  Agency  point  to  Romania  suffering 
about  1,111  years  of  life  lost  for  every  100,000 
inhabitants  due  to  exposure  to  particulate  matter 
(PM2.5)  and  275  due  to  NO2.  Furthermore,  the 
indicator for smog-precursor emission intensity to 
GDP  decreased  by  64%  between  2008  and  2021 
and  reached  1.78  tonne/EUR’10,  performing  way 
worse than the EU average. 

Graph A6.3: Environmental investment gap, annual 
average 

The numbers are computed by the European Commission 
based on the latest internal reports, Eurostat, EIB and national 
data sources. 
Source: European Commission 

Romania  would  benefit  from 
investing 
notably  more in  water,  the  circular  economy 
invest 
and  waste,  but  also  further 
in 
pollution  prevention  and 
control,  and 
biodiversity  and  ecosystems.  Over  the  2014-
2020  period,  the  environmental  investment  gap 
was  estimated  at  EUR 3.7 billion  per  year, 
equivalent to 2% of average GDP over that period, 
above  the  EU  average  of  0.8%.  The  gap  is 
estimated  to  be  increasing  over  the  2021-2027 
period  at  EUR  4.1 billion  per  year.  The  annual 
investment 
sustainable  water 
for 
management  and  circular  economy  and  waste 
increased  (EUR  1.43  billion  and  EUR  534  million 
respectively),  while  the 
investment  gaps  for 
biodiversity  and  ecosystems  and  pollution 
prevention  and  control  decreased.   Romania  is 
invited  to  build  capacity  and  direct  sufficient 
resources  to  sustainable  water  management  and 
waste  in  particular,  and  to  increase  its  technical 
and administrative capacity to protect biodiversity 
and ecosystems. 

gaps 

39 

7313332622 3967211 1435341 88205001 0001 5002 0002 500Pollution prevention &controlWater managementCircular economy andwasteBiodiversity andecosystemsmillion EUR2014-20202021-2027 
      
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A6.1:  Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources:  (1)  Member  States’  emission  data  for  2019  and  2020  are  in  global  warming  potential  (GWP)  values  from  the  4th 
Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ 2005 base year emissions 
under  Regulation  (EU)  2018/842,  emissions  data  for  2021  and  2022,  and  2030  projections  are  in  GWP  values  from  the  5th 
Assessment Report (AR5) of the IPCC. 2021 data are based on the final inventory reports, 2022 data are based on approximated 
inventory reports and European Environmental Agency’s calculation of effort sharing emissions. The final data for 2021 and 2022 
will  be  established  after  a  comprehensive  review  in  2027.  The  2030  target  is  in  percentage  change  of  the  2005  base  year 
emissions. Distance to target is the gap between the 2030 target and projected effort sharing emissions with existing measures 
(WEM) and with additional measures (WAM), in percentage change from the 2005 base year emissions. The measures included 
for  the  2030  emission  projections  reflect  the  state  of  play  as  reported  in  Member  States'  draft  updated  national  energy  and 
climate plans or, if unavailable, as reported by 15 March 2023 as per Regulation 2018/1999. (2) Net removals are expressed in 
negative figures, net emissions in positive figures. Reported data are from the 2024 greenhouse gas inventory submission. 2030 
value  of  net  greenhouse  gas  removals  as  in  Regulation  (EU)  2023/839  –  Annex  IIa.  (3)  The  2030  national  objectives  for 
renewable  energy  and  energy  efficiency  are  indicative  national  contributions,  in  line  with  Regulation  (EU)  2018/1999  (the 
Governance  Regulation),  the  EU-level  2030  renewable  energy  target  set  out  in  Directive  EU/2018/2001  amended  by  Directive 
EU/2023/2413 (the revised Renewable Energy Directive) – 42.5% of gross final energy consumption with the aspiration to reach 
45% –, and the formula in Annex I to Directive (EU) 2023/1791 (the Energy Efficiency Directive). (4) Passenger battery electric 
vehicles (BEV) and fuel cell electric vehicles (FCEV). (5) The climate protection gap refers to the share of non-insured economic 
losses caused by climate-related disasters, based on modelling of the risk from floods, wildfires, windstorms, and the insurance 
penetration rate. Scale: 0 (no protection gap) –4 (very high gap) (European Insurance and Occupational Pensions Authority, 2022). 
(6) Total water consumption in renewable freshwater resources available for a territory and period. (7) Material extractions  for 
consumption and investment. (8) Years of potential life lost through premature death due to exposure to particulate matter with a 
diameter  of  less  than  2.5  micrometres.  (9)  Share  of  habitats  in  good  conservation  status  according  to  the  records  submitted 
under  Art.  17  of  the  Habitats  Directive  (Directive  92/43/EEC)  for  2013-2018.  (10)  Multi-species  index  measuring  changes  in 
population abundances of farmland bird species. (11) Source: annex 12 of the Commission’s proposal for a soil monitoring law, 
SWD (2023) 417 final. (12) Estimates of organic carbon content in arable land. 

40 

Target200520192020202120222030WEMWAMProgress to climate and energy policy targetsGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq, %, pp78 235.80%2%6%1%-13%-20-17Net greenhouse gas removals from LULUCF (2)Kt CO2eq-30 958-46 734-49 110-48 149 -46 466 -25 665n/an/aShare of energy from renewable sources (1) (3)%18%24%24%24%24%0.41--Energy efficiency: primary energy consumption (3)Mtoe36.132.130.933.131.030.2Energy efficiency: final energy consumption (3)Mtoe24.623.923.525.424.022.5Projected20182019202020212022202120222030Green transition: mobility         Greenhouse gas emissions: road transportMt CO2e---19.418.5769.0786.623.3Share of zero-emission vehicles in new registrations (4)% 0.412.35.38.9912.1n/aNumber of publicly accessible AC/DC charging points --47610841484299178446956n/aShare of electrified railways%37.4%37.4%37.5%37.5%-56.1%-n/aGreen transition: buildings         Greenhouse gas emissions: buildingsMt CO2e---14.512.6537.0486.713.0Final energy consumption in buildings2015=100106.7%106.3%107.7%116.2%107.3%104.0%97.2% Climate adaptation         Climate protection gap (5)score 1-4--1.72.11.91.51.5n/a20182019202020212022202020212022State of the environmentWater | Water exploitation index (WEI+) (1) (6)% of renewable freshwater19.49.0---3.6--Circular economy | Material footprint (7)tonnes per person23.327.930.431.030.014.214.814.9Pollution | Years of life lost due to air pollution by PM2.5 (8)per 100.000 inhabitants1 3691 1211 2151 111-545584-Biodiversity | Habitats in good conservation status (9)%68.214.7                       Common farmland bird index (10)2000=100-----78--Green transition: agri-food sectorOrganic farming% of total utilised agricultural area2.432.863.594.42-9.1--Nitrates in groundwatermg NO3/litre18.2817.9921.47--20.42--Food waste per capitaKg per capita---130131-Share of soil in poor health (11)%4541Soil organic matter in agricultural land (12)Mt per ha580----7 904--DistanceEU-27 
 
     
 
ANNEX 7: ENERGY TRANSITION AND COMPETITIVENESS 

This  Annex (50)  sets  out  Romania’s  progress 
and  challenges  in  accelerating  the  net-zero 
energy  transition  while  boosting  the  EU’s 
competitiveness 
energy 
sector (51). It considers measures and targets put 
forward in the draft updated National Energy and 
Climate Plans (NECPs) for 2030 (52). 

clean 

the 

in 

relatively 

to  keep  energy  prices 

Romania  displays  positive  developments  in 
terms  of  security  of  energy  supply,  and  has 
for 
managed 
households 
stable. 
However,  energy  prices  for  industry  and  services 
remain  higher 
the 
deployment of renewable energy is advancing very 
slowly,  Romania 
to  be  heavily 
continuing 
dependent  on  fossil  fuels,  and  energy  poverty 
remains a significant challenge.  

the  EU  average, 

low  and 

than 

In  2022,  estimated  fossil  fuel  subsidies  in 
Romania surged to EUR 2.5 billion marking a 
110%  increase  from  2021  and  accounting 
for  0.87%  of  Romania’s  GDP,  above  the  EU 
average  (0.71%).  This  increase  mainly  reflects 
the  much  larger  cross-sectoral  support  prompted 
by the energy crisis. Despite the discontinuation of 
these  short-term  measures  throughout  2023, 
fossil fuel subsidies in Romania had been steadily 
increasing  since  2019,  accounting  on  average  for 
more than half of all energy subsidies, indicating a 
structural 
this  aspect. 
Additionally,  Romania’s  long-term  commitment  to 
phase out these subsidies remains uncertain, with 
no  specified  end-date  for  the  vast  majority  of 
ongoing fossil fuel subsidy measures. 

lack  of  progress 

in 

In contrast to the trends observed in the rest 
of  the  EU,  household  electricity  and  gas 
prices  in  Romania  experienced  a  significant 
decline  as  early  as  the  first  semester  of 

(50)  It is complemented by Annex 6 as the European Green Deal 

focuses on the clean energy transition and by Annex 8 on the 
action taken to protect the most vulnerable groups, 
complementing ongoing efforts under the European Green 
Deal, REPowerEU and European Green Deal Industrial Plan. 

(51)  In line with the Green Deal Industrial Plan and the Net-Zero 

Industry Act. 

(52)  Romania submitted its draft updated NECP in October 2023, 
and the Commission issued an assessment and country-
specific recommendations on 18 December 2023. 
Commission Recommendation, Assessment (SWD) and 
Factsheet of the draft updated National Energy and Climate 
Plan of Romania - European Commission (europa.eu). 

41 

2023,  now  ranking  among  the  lowest  in  the 
EU.  Following  a  similar  trajectory,  average  prices 
for  the  industry  sharply  declined  during  the  first 
semester  of  2023  -  by  50%  for  electricity  and 
60% for gas - before stabilizing at average prices 
14% and 21% below the EU average, respectively, 
during the second semester of 2023. 

Direct  energy  support  measures  for  final 
consumers  and  retail  price  caps  have  been 
implemented  to  alleviate  the  impact  of  the 
energy  crisis  in  terms  of  prices.  Vulnerable 
consumers  receive  support  for  the  payment  of 
energy bills in the amount of 700 lei twice a year. 
These  are  given  to  approximately  4  million 
vulnerable  people,  who  live  in  approximately  2.8 
million  eligible  households,  to  offset  the  price  of 
energy. Retail cap pricing was introduced in March 
2022,  then  extended  until  31  March  2025  with 
some  amendments.  A  different  cap  price  applies 
depending on the level of household consumption, 
special  needs,  the  number  of  children,  and  sector 
(e.g.  schools,  hospitals,  nurseries,  transport),  size 
of the businesses, and type of industry. 

Graph A7.1: Romania´s energy retail prices for 
households and industry & service 

(1) For industry, consumption bands are I3 for gas and IC for 
electricity, which refer to medium-sized consumers and 
provide an insight into affordability 
(2) For households, the consumption bands are D2 for gas 
and DC for electricity 
(3) Industry prices are shown without VAT and other 
recoverable taxes/levies/fees as non-household consumers 
are usually able to recover VAT and some other taxes 
Source: Eurostat 

In  relative  terms,  electricity  prices  for  non-
household 
increased 
significantly compared to the US, Japan, and 
to  a  lesser  extent,  the  UK.  Although  there  has 

consumers 

have 

0.000.050.100.150.200.250.300.350.40€/KWhGas (industry & service) - ROGas (industry & service) - EUGas (households) - ROGas (households) - EUElectricity (industry & service) - ROElectricity (industry & service) - EUElectricity (households) - ROElectricity (households) - EU 
 
 
   
 
 
been  a  notable  decline  since  the  second  half  of 
2022,  Romania’s  electricity  prices  have  persisted 
above  those  of  the  US  and  Japan.  This  could 
potentially 
international 
competitiveness  of  energy-intensive  industries  in 
the country.  

affect 

the 

Graph A7.2: Trends in electricity prices for non-
household consumers (EU and foreign partners) 

(1) For Eurostat data (EU and RO), the band consumption is ID 
referring to large-sized consumers with an annual 
consumption of between 2 000 MWh and 20 000 MWh, such 
as in electricity intensive manufacturing sectors, and gives an 
insight into international competitiveness  
(2) JP = Japan 
Source: Eurostat, IEA 

According  to  Eurostat  data  for  2022, 
Romania’s  energy  mix 
remains  highly 
dependent  on  fossil  fuels,  with  less  than  one 
third of its energy coming from renewable energy 
(20%) and nuclear energy (9%).  

Natural  gas  remains  a  crucial  component  of 
Romania's energy system, constituting 26.5% 
of  the  overall  energy  mix  (slight  decrease 
from 29% the previous year) and 17% of the 
electricity  mix  in  2022 (53).  Despite  being  the 
second-largest  gas  producer  in  the  EU,  with 
considerable  domestic  production,  Romania  still 
depends  on  imports  for  about  23%  of  its  gas 
consumption,  mainly  during  periods  of  high 
demand  in  winter.  A  significant  part  of  Romania’s 
gas  imports  consumption  has  historically  been 
supplied  by  Russia.  The  decrease  in  Romania’s 
import  dependency  is  a  key  part  of  its  national 
energy  policy,  following  the  Russian  invasion  of 
Ukraine.  Romania’s  gas  storage  capacity  is  at  3.1 
bcm, 
its  annual  gas 
consumption  in  2022.  Romania  fulfilled  its  gas 

representing  31%  of 

(53)  Eurostat. 

42 

storage  obligations  last  winter,  reaching  102.8% 
by  1  November  2023,  and  ended  the  winter 
season with a storage filled  at 50.86% by 1 April 
2024. 

include  BRUA  phase 

To  increase  the  security  of  its  gas  supply, 
Romania  has  focused  on  improving  its  gas 
network  and  cross-border  interconnections. 
to 
Priority  projects 
developing  its  internal  transmission  network,  and 
connecting  the  Neptun  Deep  gas  field  to  the 
transmission  network.  After 
invasion  of 
Ukraine,  Romania  managed  to  reduce  its  gas 
demand  by  20%  between  August  2022  and 
December  2023,  compared  to  the  average  of  the 
previous 5 years.  

the 

II, 

is 

to 

consolidate 

Romania’s main electricity security of supply 
domestic 
objective 
generation  and 
the 
generation mix. The country has set an objective 
to install 30.4 GW of renewable capacity by 2030, 
and  have  76%  of  its  power  generated  from 
renewable energy sources, by the same year. 

the  diversity  of 

Romania operates two nuclear  reactors  with 
a  total  capacity  of  1400  MW,  at  the 
Cernavodă  nuclear  power  plant.  Both  are 
CANDU  (Canada  Deuterium  Uranium).  Romania 
plans 
its  nuclear  power 
programme,  by  adding  two  more  reactors  at  the 
Cernavodă nuclear power plant, and by developing 
small modules reactors (SMRs). 

to  further  expand 

Romania  has  electricity 
interconnections 
with  each  of  its  neighbours.  There  are  a 
number  of  projects  planned  until  2030  aimed  to 
strengthen interconnection capacities and to allow 
integrating  more  renewable  energy.  Romania  is 
also  part  of  several  important  on-going  cross-
border  projects,  including  a  Project  of  Common 
Interest  (PCI)  between  Romania  and  Hungary  and 
the  Central  and  South  Eastern  Europe  Energy 
Connectivity  CESEC  priority  projects,  namely  the 
mid-Continental  East Corridor and related internal 
reinforcement  projects,  as  well  as  two  electricity 
lines  with  Moldova,  particularly  the  Suceava-Balti 
interconnection  capacity  and 
line.  Expanded 
greater  system  flexibility  will  allow  an  easier 
integration of renewable energy.  

Romania indicated its coal phase-out date in 
its draft updated NECP. The draft updated NECP 
states  that  coal  will  be  phased  out  in  the  power 
the 
sector 

corresponding 

2032, 

by 

to 

050100150200250300350400Index ( 2018 S2 = 100)JPUKUSROEU 
  
 
Romania’s submitted contribution to the EU target, 
mentioned  in  its  draft  updated  NECP  (34%)  is 
significantly  below  the  one  resulting  from  EU 
legislation (estimated at 41%). 

Romania’s  share  of  renewables  in  heating 
and  cooling  (25.5%  in  2021),  slightly  above 
the EU average (22.9%), is mainly the result 
of  biomass  use.  The  draft  updated  NECP’s 
targets  are  not  ambitious  enough.  The  proportion 
of heat pumps in the heating and cooling sector is 
expected  to  almost  double  by  2030,  compared  to 
2022,  while  biomass  will remain  the main  source 
of renewable heat.   

The  implementation  of  a  number  of  priority 
projects  set  out  in  the  recently  endorsed 
CESEC  Electricity  and  Renewable  Energy 
Action  Plan  will  further  strengthen  market 
integration 
region  and 
accommodate the additional onshore and offshore 
wind  generation  capacity  (1GW)  that  Romania 
plans to commission by 2030.  

the  CESEC 

in 

Consumer  empowerment  in  the  electricity 
market is greater than in the gas market due 
to the increasing number of prosumers. In the 
last  report  published  by  the  Romanian  Regulator 
(ANRE),  the  number  of  registered  prosumers  in 
2021  was  13 582,  estimated  to  rise  significantly 
to  140 000  at  the  end  of  2023.  The  enabling 
framework  for  prosumers  has  been  put  in  place 
and  there  is  a  positive  trend,  but  this  is  not  the 
case 
the 
legislative framework and supporting measures to 
develop  significantly.  The  number  of  households 
integrated  into  the  smart  metering  system  at  the 
end of 2022 was 1 792 342.  

for  energy  communities, 

lacking 

to 

Romania  has  made  significant  progress  in 
contributing 
the  2030  EU  energy 
efficiency  targets.  In  2022,  its  primary  energy 
consumption  was  31.0  Mtoe,  a  6.3%  decrease 
compared 
to  2021,  and  a  6.8%  decrease 
compared  to  2012.  Its  final  energy  consumption 
was  24.0  Mtoe,  a  5.3%  decrease  compared  to 
2021, and a 5.5% increase compared to 2012. In 
the  last  year,  the  best  results  came  from  the 
industry  sector,  which  decreased  its  final  energy 
consumption  by  16.3%,  and  the  worst  from  the 
transport  sector,  which  increased  its  final  energy 
consumption by 8.2%. 

commitments  from  the  Territorial  Just  Transition 
Plans.  However,  the  intermediate  trajectory  after 
2025  is  not  clearly  described.  The  draft  updated 
NECP  has  however  no  information  on  the  closure 
of extraction sites or details on the phasing out of 
specific coal and lignite power plants (54). 

Renewable  installed  capacity  has  increased 
by  less  than  0.2%  in  2023.  Romania’s  total 
renewable  energy  capacity  in  2023  was  11  763 
MW (55),  almost  the  same  as  in  2022  (11  580). 
Wind  energy  capacity  in  2023  was  3  087  MW,  a 
slight  increase  compared  to  3  015MW  in  2022. 
Romania’s total solar capacity in 2023 was 1 917 
MW, a slight increase from 1 809 MW in 2022.  

Graph A7.3: Romania's installed renewable 
capacity (left) and electricity generation mix 
(right) 

(1) "Other" includes solid biofuels, solar thermal energy, 
biogas and geothermal energy 
Source: IRENA, Ember 

Romania has taken some steps to implement 
reforms  to  accelerate  the  deployment  of 
renewables.  An  Emergency  Order  adopted  in 
December  2022  introduces  single  contact  points, 
maximum  permit-granting  deadlines  based  on 
project  size,  and  a  simple  notification  procedure 
for connecting small renewable energy projects to 
the  grid.  It  also  sets  up  a  framework  for  self-
consumption  and  energy  communities,  although 
full  supporting  legislation  is  pending.  In  2023, 
Romania  simplified  permitting  procedures  by 
planning 
removing 
documentation  for  renewable  energy  projects.  It 
also  approved  a  general  legal  framework  for 
Contracts  for  Difference  support  for  renewable 
and low-carbon technologies projects. 

urban 

need 

the 

for 

(54)  See the Commission’s assessment of the draft updated 

NECP.  

(55)  International Renewable Energy Agency (IRENA) report 2024. 

43 

 
 
 
Romania  has  overachieved  its  2020  energy 
target,  but  new  additional 
efficiency 
measures are needed for it to reach its 2030 
targets. In 2021 its primary energy consumption 
was 33 Mtoe, and its final energy consumption 25 
Mtoe,  in  2021,  well  above  2020  figures  but  still 
below  the  2020  targets  of  43  and  30  Mtoe 
respectively.  In  cohesion  policy,  energy  efficiency 
represents 7% of overall EU financing, or EUR 1.6 
billion.  Most  of  this  is  allocated  to  the  renovation 
of  buildings  (EUR  1.2  billion),  while  only  EUR  115 
million 
in 
companies,  for  the  establishment  of  financial 
instruments  (expected  to  enable  over  300  million 
EUR of eligible investments). In the area of energy 
efficiency  in  building,  financial  instruments  are 
significantly underused.  

is  allocated  to  energy  efficiency 

in 

its 

residential 

In relation to buildings, Romania is expected 
to  continue  improving  the  energy  efficiency 
sector,  making  a 
of 
meaningful contribution to reaching its 2030 
target 
terms  of  buildings’  energy 
consumption reduction. Residential  final  energy 
consumption decreased by 2% in 2022 compared 
to  2021,  continuing  its  decrease  since  2019,  but 
was  still  above  2015-2017  levels.  Heating  and 
the  highest  proportion  of 
cooling 
residential  final  energy  consumption,  at  about 
77%  in  2022,  with  renewables  supplying  26%  of 
the  total  energy  used  for  heating  and  cooling 
across all sectors in 2022. Heat pump sales on the 
Romanian market were three times higher in 2022 
than  in  2021.  In  the  first  half  of  2023,  the 
residential  electricity/natural  gas  prices  ratio  was 
2.93,  while  the  non-residential  electricity/natural 
gas prices ratio was 3.06, making the deployment 
of efficient heat pumps difficult.  

represent 

Romania’s recovery and resilience plan (RRP) 
supports  the  green  transition  with  key 
investments  in  energy  efficiency  through 
buildings’  energy  renovation  and  seismic 
consolidation,  with  an  allocated  budget  of 
about EUR 2.9 billion. In addition, EUR 1.2 billion 
from  the  European  Regional  Development  Fund 
and  cohesion  funds  are  planned  to  be  spent  on 
energy  efficiency  in  buildings  between  2021  and 
2027.  Action  should  be taken  to  increase  building 

renovation for efficiency purposes and put in place 
more sustainable heating alternatives. (56) 

Romania  is  still  in  the  very  early  stages  of 
hydrogen development. To benefit from the PCI 
hydrogen  import  corridor  between  Greece  and 
Central-Eastern Europe,  Romania needs to further 
design and prioritise its cross-border and national 
hydrogen  infrastructure,  in  close  cooperation  with 
neighbouring countries.  

Romania currently has limited manufacturing 
capacity  for  clean  technologies,  but  several 
promising initiatives could make the country 
a  significant  hub  for  the  production  of 
batteries  and  key  solar  components.  Since 
2016,  a  lithium-ion  battery  manufacturer  has 
been operating out of Bucharest with a capacity of 
0.2  GWh  a  year.  Supported  by  an  investment 
agreement  with  the  EIT 
(Horizon 
in  2022  this  Romanian 
Europe  Programme), 
battery  producer  announced  plans  to  scale  up 
production  output  to  2  GWh  by  2024  and  to  8 
GWh  by  2026.  More  recently,  in  June  2023  a 
launched  a  EUR  1.4billion 
Belgian  company 
investment  into  building  a  22  GWh/y  lithium-ion 
battery  cell  factory  in  Galati,  expected  to  be  fully 
operational in 2026.  

InnoEnergy 

There  has  been  a  150  MW  solar  module 
manufacturing  unit  in  Giurgiu  since  2012, 
and  a  100  MW  assembly  line  has  recently 
been  set  up  in  Transylvania.  Two  large-scale 
photovoltaic  manufacturing  projects 
(modules, 
cells  and 
led  by  German  and 
ingot/wafers) 
Hungarian companies are also underway.  

investment 

low 
innovation  (R&I). 
to 

in 
levels 
Romania  has 
It 
is  an 
research  and 
the  2023 
innovator,  according 
emerging 
Innovation  Scoreboard (57).  With  an 
European 
overall  performance  index  at  33.1%  of  the  EU 
average, it is invariably the poorest performing of 
EU  Member  States.  One  of  the  main  weaknesses 
affecting  its  overall  performance  is  its  low  R&I 

(56)  Economic and distributional effects of higher energy prices 
on households in the EU, Publications Office of the EU 
(europa.eu). 

(57)  https://research-and-

innovation.ec.europa.eu/statistics/performance-
indicators/european-innovation-scoreboard_en#european-
innovation-scoreboard-2023  

44 

 
 
 
expenditure,  both  in  terms  of  public  and  private 
funding. This also applies to R&I supporting Energy 
Union  priorities.  Public  R&I  investments (58)  have 
remained very low (EUR 0.2 million in 2020), under 
0.0001%  of  Romania’s  GDP,  while  private  R&I 
investments (59)  were  around  EUR  7.9  million  in 
2020.  

(58)  Source: JRC SETIS (2023), 

https://setis.ec.europa.eu/publications/setis-research-and-
innovation-data_en. The figures do not include EU funding. 

(59)  Idem. 

45 

 
 
Table A7.1:  Key Energy Indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding). 
Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

46 

20192020202120222019202020212022Import Dependency [%] 30.3%28.2%31.6%32.4%60.5%57.5%55.5%62.5%of Solid fossil fuels 22.0%22.0%23.2%20.0%43.3%35.8%37.3%45.8%of Oil and petroleum products 65.4%64.6%68.2%72.7%96.7%96.8%91.7%97.7%of Natural Gas 23.2%16.6%22.8%18.1%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 36.9%44.8%77.6%12.8%39.7%41.3%41.1%21.0%of Crude Oil41.7%37.2%31.7%26.1%28.8%26.7%26.4%19.5%of Hard Coal98.5%99.2%99.0%59.4%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)11.3                 11.9                 11.8                 11.0               11.4               12.0               10.0               Gas Consumption year-on-year change [%]-0.3%5.4%-0.9%-6.6%3.3%6.0%-16.9%Gas Imports - by type (in bcm)1.5                   1.2                   1.5                   2.7                 2.1                 3.6                 2.9                 Gas imports - pipeline1.5                   1.2                   1.5                   2.7                 2.1                 3.6                 2.9                 Gas imports - LNG0.00.00.00.00.00.0-                 Gas Imports - by main source supplier (in bcm) (1)Bulgaria-                   0.0                   0.0                   0.1                 0.1                 0.7                 2.0                 Hungary0.0                   -                   0.2                   1.6                 1.1                 0.1                 0.4                 Russia1.5                   1.2                   1.3                   1.0                 1.0                 2.8                 0.4                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals00000LNG Storage capacity (m3 LNG)00000Underground StorageNumber of storage facilities7                      7                      7                      7                    7                 Technical Capacity (bcm)2.9                   3.0                   2.9                   2.9                 2.9                 20162017201820192020202120222023Gross Electricity Production (GWh) (2)65 103            64 296            64 876            59 623           55 935           59 470           56 003           -              Combustible Fuels26 871         28 672         27 308         23 787       20 088       22 162       21 569       -              Nuclear11 286         11 509         11 377         11 280       11 466       11 284       11 089       -              Hydro18 536         14 853         18 097         16 006       15 701       17 745       14 360       -              Wind6 590           7 407           6 322           6 773         6 945         6 576         6 997         -              Solar1 820           1 856           1 771           1 778         1 733         1 703         1 988         Geothermal-               -               -               -              -              -              -              -              Other Sources-               -               -               -              -              -              -              -              Gross Electricity Production [%]Combustible Fuels41.3%44.6%42.1%39.9%35.9%37.3%38.5%-              Nuclear17.3%17.9%17.5%18.9%20.5%19.0%19.8%-              Hydro28.5%23.1%27.9%26.8%28.1%29.8%25.6%-              Wind10.1%11.5%9.7%11.4%12.4%11.1%12.5%-              Solar2.8%2.9%2.7%3.0%3.1%2.9%3.6%-              Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Other Sources0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Net Imports of Electricity (GWh)5 017-              2 894-              2 544-              1 518             2 792             2 199             1 224             -              As a % of electricity available for final consumption -10.6%-5.9%-5.1%3.1%5.8%4.4%2.6%-              Electricity Interconnection [%]6.9%10.0%9.1%9.3%7.6%14.6%18.3%Share of renewable energy consumption - by sector [%]Electricity42.7%42.0%41.8%42.6%43.4%42.7%43.7%-              Heating/cooling26.9%26.6%25.4%25.7%25.3%24.6%26.3%-              Transport6.2%6.6%6.3%7.8%8.5%8.9%8.2%-              Overall25.0%24.5%23.9%24.3%24.5%23.9%24.1%-                 20192020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)-               -               -               2.00               6.35               as a % of total VC investment (3) in Romania start-ups and scale-ups-               -               -               1.8%5.0%Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)1.2               0.2               -               -              -              Public R&I (% GDP)0.001%0.000%-               -              -              Private R&I (EUR mln)24.8             7.9               -               -              -              Private R&I (% GDP)0.011%0.004%-                   -                 -                 ELECTRICITY/ENERGYCLEAN ENERGYRomaniaEUENERGY DEPENDNCEDIVERSIFICATION OF GAS SUPPLIES 
 
   
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

Romania’s 

situations. 

This  Annex  monitors  Romania’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
particularly  for  workers  and  households  in 
green 
vulnerable 
economy is contracting. Between 2015 and 2021, 
total jobs in the environmental goods and services 
sector  decreased  by  9.1%  (to  around  137  200) 
(EU: +18.2%), reaching 1.8% of total employment 
(EU:  2.7%).  Also  between  2015  and  2022,  the 
greenhouse  gas  emission  intensity  of  Romania’s 
workforce  (see  Graph  A8.1  and  Table  A8.1)  fell 
only slightly from 12.0 to 11.7 tonnes per worker 
but  remains  below  the  EU  average  (14.3  tonnes 
per worker in 2022) (60). Upskilling and reskilling of 
workers in declining and transforming  sectors has 
increased significantly, contributing to a fair green 
transition 
Council 
Recommendation on  ensuring  a  fair  transition 
towards  climate  neutrality (61),  but  it  remains 
below  the  EU  average.  The  development  of  green 
skills  remains  key  to  a  fair  transition  and  to 
implementing  the  REPowerEU  plan.  Romania’s 
recovery  and  resilience  plan  outlines  crucial 
reforms  and 
investments  for  a  fair  green 
transition (62),  complementing  the  territorial  just 
transition  plans  and  actions  supported  by  the 
European Social Fund Plus (ESF+). 

with 

line 

the 

in 

Employment  in  Romania’s  sectors  that  are 
most  affected  by  the  green  transition 
remains  stable  overall  and  above  the  EU 
average, showing the need for active support 
to be given to green businesses and workers 
in declining industries. In 2023, employment in 
industries  (63) 
Romania’s 
represented  5.2%  of  total  employment  (3.5%  in 
the  EU).  However,  employment  in  mining  and 
quarrying  has  fallen  by  31.7%  since  2015  (to 
around 49 900 workers in 2023). The job vacancy 

energy-intensive 

(60)  Workforce-related calculations are based on the EU Labour 
Force Survey. Note, in the 2023 country report for Romania, 
such indicators were calculated based on employment 
statistics in the national accounts. This may result in limited 
comparability across the two reports. 

(61)  The Council Recommendation of 16 June 2022 on ensuring a 
fair transition towards climate neutrality (2022/C 243/04) 
covers employment, skills, tax-benefit and social protection 
systems, essential services and housing. 

(62)  See also the 2022 country report (Annex 6) and Annex 3 for 

an overview. 

(63)  Mining and quarrying (NACE B), chemicals (C20), minerals 

rate in construction (see Graph A8.2), a key sector 
for  the  green  transition,  is  lower  than  the  EU 
average (0.3% vs 3.6% in EU in 2023). Still, 84% 
of  small  and  medium-sized  enterprises  (SMEs)  in 
the 
that  skills 
shortages  are  holding  them  back  in  general 
business  activities (64).  EUR  117.5  million  of  ESF+ 
funds  are  earmarked  for  developing  green  skills 
and jobs. 

construction  sector  agreed 

Graph A8.1: Fair transition challenges in Romania 

Source: Eurostat, EU Labour Force Survey, EMPL-JRC GD-
AMEDI/AMEDI+ and DISCO(H) projects (see Table A8.1). 

industries,  workers’  participation 

Upskilling  and  reskilling  in  energy-intensive 
industries  significantly  increased,  but  labour 
shortages remain, causing a bottleneck. Skills 
are  key  for  smooth labour  market transitions  and 
preserving jobs in transforming sectors. In energy-
in 
intensive 
education  and  training  increased  from  2.3%  in 
2015  to  12.4%  in  2023  (EU:  10.9%).  Around  a 
third of Romanian SMEs (36%) think that the skills 
required  for  greening  business  activities  are 
becoming  more 
If 
important 
Romania matches its projected contribution to the 
EU’s  2030  renewable  energy  target,  between 
2 000 and 6 000  additional skilled workers will be 
needed  for  the  deployment  of  wind  and  solar 
energy,  which may  require  an  investment in  skills 
of  EUR  4.9-6.2  million (65).  To  address  these 
challenges,  the  ESF+,  the Recovery  and  Resilience 
the  Just  Transition  Fund  are 
Facility  and 
supporting 
the  development  of  certification 
schemes for specialists in the energy performance 
of  buildings  and  qualifications  for  construction 
workers.  They  also  help  increase  green  skills  and 

(EU:  42%) (65). 

(64)  Eurobarometer on skills shortages, recruitment, and retention 

strategies in small and medium-sized enterprises. 

(C23), metals (C24) and automotive (C29) 

(65)  EMPL-JRC AMEDI+ project. 

47 

0.00.51.01.52.0Greenhouse gasemissions per workerEmployment inEnergy-IntensiveIndustriesEducation & trainingin Energy-IntensiveIndsutriesEnergy povertyTransport poverty(proxy)Carbon inequalityRO Latest vs EU LatestEU LatestRO 2015 vs EU Latest 
 
 
  
 
 
Table A8.1:  Key indicators for a fair transition in Romania 

Source: Eurostat (env_ac_ainah_r2, lfsa_egan2d, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-JRC 
GD-AMEDI/AMEDI+ and DISCO(H) projects. 

through  national 

jobs 
in 
education and training. In Romania, approximately 
1.6%  of  ESF+  funding  contributes  to  green  skills 
and jobs.  

investments 

level 

indicator 

poverty 

Energy 
indicators  worsened 
significantly  in  Romania  in  2022,  having 
already  dropped  between  2015  and  2021, 
and they  remain  well above  the  EU  average. 
The  share  of  the  population  unable  to  keep  their 
homes adequately warm increased from 13.1% in 
2015  to  15.2%  in  2022,  above  the  EU  average 
(9.3%) (66).  The 
increased  by  5.1 
percentage  points  between  2021  and  2022, 
reversing  previous  positive  developments,  on  the 
back  of  energy  price  increases  due  to  supply 
constraints caused by the COVID-19 pandemic and 
Russia’s  war  of  aggression  against  Ukraine, 
despite  the  emergency  measures  implemented  in 
Romania. In particular, 29.5% of the population at 
risk  of  poverty  (AROP)  (EU:  20.1%)  and  18.2%  of 
lower  middle-income  households  (in  deciles  4-5) 
(EU:  11.6%)  were  unable  to  keep  their  homes 
adequately  warm 
in  2022.  While  Romania 
establishes  a  national  target  to  reduce  energy 
poverty  in  its  draft  updated  National  Energy  and 
Climate  Plan  in  2023,  the  plan  lacks  information 
on the quantification of this objective and specific 
policies  and  measures.  Furthermore,  in  January 
2023,  4.3%  of  the  population  at  risk  of  poverty 
spent  a  significant  proportion  of  their  budget 
(more  than  6%)  on  private  transport  fuels  (EU: 
37.1%) (67). 

(66)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub. 

(67)  Affordability of private transport fuels is one key dimension 

of transport poverty. The indicator has been developed in the 
context of the EMPL-JRC GD-AMEDI/AMEDI+ projects. 
Methodology explained in Economic and distributional 
effects of higher energy prices on households in the EU. 

Environmental  inequalities  remain  critical 
issues  in  Romania.  In  2021,  the  consumption 
footprint  for  20%  of  the  population  with  the 
highest  income  was  2.0  times  higher  than  the 
footprint of the poorest 20% (EU: 1.8) (). For both 
groups,  the  consumption  footprint  is  highest  for 
food  and  housing.  In  addition,  in  Romania,  the 
average levels of air pollution in 2021 stood above 
the EU average (14.3 vs 11.4 µg/m3 PM2.5), with 
all  regions  exposed  to  critical 
levels  of  air 
pollution (68).  This  has  led  to  a  significant  impact 
on  health,  affecting  vulnerable  groups 
in 
particular,  and  around  19 600  premature  deaths 
annually (69).  

Graph A8.2: Job vacancy rate in transforming 
sectors and mining and quarrying 

B - Mining and quarrying 
C - Manufacturing 
D - Electricity, gas, steam and air conditioning supply 
E - Water supply; sewerage, waste management and 
remediation activities 
F - Construction 
H - Transportation and storage 
Source: Eurostat jvs_a_rate_r2. 

forward 

Romania  has  put 
significant 
measures to help achieve a fair transition to 
climate  neutrality.  It  introduced  policies  to 
increase  green  employment  and  skills,  including 
reskilling  employees, 
plans  for 

training  and 

(68)  Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3). 

(69)  EEA- Air Quality Health Risk Assessment 

48 

0,0%0,5%1,0%1,5%2,0%2,5%3,0%3,5%4,0%BCDEFHEU 2023RO 2023RO 2015IndicatorDescriptionRO 2015ROEUGHG per workerGreenhouse gas emissions per worker – CO2 equivalent tonnes12.011.7 (2022)14.3 (2022)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24) and automotive (C29)4.7%5.2% (2023)3.5% (2023)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries2.2%12.4% (2023)10.9% (2023)Energy povertyShare of the total population living in a household unable to keep its home adequately warm13.1%15.2% (2022)9.3% (2022)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport3.2%4.3% (2023)37.1% (2023)Carbon inequalityRatio between the consumption footprint of the top 20% vs bottom 20% of the income distribution2.02.0 (2021)2.7 (2021) 
 
 
      
 
 
  
 
National 

particularly  in  the  regions  most  affected  by  the 
transition (70). 
entrepreneurship 
programmes  have  been  presented  and  contain 
legislative  frameworks  expected 
to  play  an 
important  role  in  designing  the  appropriate  green 
policies and adequately responding to the changes 
of  the  labour  market  due  to  the  green  transition. 
More  focus 
is  needed  on  developing  policy 
measures  ensuring  proper  access  to  quality 
employment,  education  and  training,  and  social 
services,  which  are  specifically  targeted  towards 
the  people  most  affected  by  the  green  transition, 
situations. 
especially 
Furthermore,  it  is  acknowledged  that  tripartite 
social 
between 
employers,  workers  and  public  authorities)  to 
address these challenges needs to be ensured) (71).  

discussions 

vulnerable 

dialogue 

those 

(i.e. 

in 

(70)  Measures planned in the Romanian Just Transition 

Programme but not yet implemented. 

(71)  Based on the Employment Committee (EMCO) review of the 
Council Recommendation on ensuring a fair transition 
towards climate neutrality, which took place in October 
2023. 

49 

 
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The green transition of industry and the built 
environment,  in  particular  decarbonisation, 
resource  efficiency  and 
is 
Romania’s 
essential 
competitiveness (72). 
regard,  waste 
management is the priority for Romania. 

boost 
this 

circularity, 

to 

In 

Romania’s circular economy transition is not 
on track to achieve the EU Circular Economy 
Action  Plan  goals  due  to  its  high-impact 
economy and poor waste recycling and reuse. 
The material footprint dropped to 30.5 tonnes per 
capita in 2022 but remained among the highest in 
the EU. Total waste production per capita dropped 
to  7.3  tonnes  per  capita  in  2020 (73),  still  well 
above  the  EU  average.  The  2022  Eco-Innovation 
Scoreboard 
‘eco 
innovation  catching-up  group’,  with  a  score  of 
84.6. As of September 2023, Romania totalled 55 
awarded  EU  Ecolabel  licences  and  108  products 
with  the  EU  Ecolabel,  showing  a  rather  low  but 
steadily 
increasing  take-up  of  products  and 
licences. There is still room to make better use of 
the  potential  of  the  circular  economy  transition, 
also  to  drive  the  decarbonisation  of  Romania’s 
industry. 

the  country 

listed 

the 

in 

Graph A9.1: ETS emissions by sector since 2013 

Source: European Commission 

In  2019-2023,  greenhouse  gas  emissions 
covered  by  the  EU  emissions  trading  system 
(ETS)  in  Romania (74)  declined  by  35%.  In 

(72)  See also Annexes 6, 7 and 12. 

(73)  It is yet to be confirmed whether the trend was influenced by 

the Covid-19 crisis. 

(74)  This analysis excludes air travel. The data for 2023 reflects 
verified emissions as of 14 May 2024 and may still be 
revised due to late data submissions. For more details and 
the data sources, see Weitzel, M; van der Vorst, C. (2024), 
Uneven progress in reducing emissions in the EU ETS, JRC 
Science for policy brief, JRC138215, Joint Research Centre. 

2023,  54%  of  greenhouse  gases  emitted  by 
Romania’s  ETS  installations  came  from  power 
generation,  slightly  below  the  EU  average  (57%). 
Cement  and  lime  accounted  for  about  24%,  the 
metals  industry  for  8%,  and  refineries  and  other 
industries for 7%, each. Between 2019 and 2023, 
the  industry  sectors  registered  a  higher  reduction 
(37%) than power generation (33%), resulting in a 
35%  overall  emissions  decrease.  Since  2013, 
greenhouse gas emissions from power generation 
have  declined  by  half%.  Although  ETS  emissions 
‘other’  sectoral  category (75)  have 
from 
decreased  by  30%,  emissions  from  the  metals 
industry  have  increased  by  59%,  and  emissions 
from  cement  and  lime  have  grown  by  24%.  This 
has  resulted 
in  an  overall  greenhouse  gas 
reduction of 44% since 2013. 

the 

supply 

resilient 

Romania  is  not  keeping  up  with  the  EU 
average resource  efficiency  and  productivity 
levels  but  is  among  the  countries  that  are 
most 
chain 
against 
disruptions.  The  secondary  material  use  rate  is 
the lowest among EU countries and stood at 1.4% 
in 2022. Resource productivity stagnated between 
2017 and 2022 and the gap with the EU average 
remained wide – 0.94 purchasing power standards 
(PPS) per kilogram versus 2.45 PPS/kg on average. 
Resource  productivity  expresses  how  efficiently 
the  economy  uses  material  resources  to  produce 
wealth.  Improving  resource  productivity  can  help 
minimise  negative  impacts  on  the  environment 
and  reduce  dependence  on  volatile  raw  material 
markets.  Romania  was  dependent  on  imports  for 
only  10.6%  of  materials  used  in  2022,  making  it 
one  of  the  countries  that  are  least  vulnerable  to 
supply  chain  disruptions  in  the  EU.  The  Romanian 
national  energy  and  climate  plan  includes  few 
references  to  circular  economy  in  the  national 
objectives and targets. 

Romania is at risk of missing both the 2025 
target for municipal waste recycling and the 
2035  target  for  landfilling.  The  municipal 
waste  recycling  rate  stood  at  11.3%  in  2021,  the 
lowest  share  reported  in  the  EU.  Romania  is 
among the countries that are not on track to meet 
the  packaging  and  municipal  waste  recycling 
targets  for  2025.  The  recycling  rate  of  plastic 

(75)  Other than cement and lime production, chemicals, metals, 

refineries, and power generation. 

50 

00.20.40.60.81051015202530354020132014201520162017201820192020202120222023Emissions relative to 2013Mt CO2eCement & LimeChemicalsMetalsRefineriesPower generationOtherRomania (both axes) 
 
 
  
 
 
 
Table A9.1:  Circularity indicators 

Source: Eurostat, European Environment Agency 

packaging  was  30.2%  in  2020  –  well  below  the 
50%  target.  Furthermore,  Romania’s  e-waste 
recycling  has  decreased  in  the  last  few  years, 
going  from  83.4%  in  2017  to  76%  in  2021.  The 
country  is  still  at  risk  of  missing  the  2035  target 
for  landfilling.  There  is  a need  for  action  to  solve 
treatment 
the 
technologies  is  still  low,  as  illustrated  by  the  fact 
that only 5 new patents were registered in 2021. 

in  waste 

Innovation 

issue. 

Graph A9.2: Treatment of municipal waste 

Source: Eurostat 

Romania’s building stock is growing steadily, 
showing  an  opportunity  for  using  existing 
buildings  more  efficiently.  For  instance,  in  the 
first  9 months  of  2023,  Romania’s  building 
permits index – based on useful floor area – stood 
at  136.4  on  average,  showing  an  increase  in 
construction activities since 2015 (76). In 2020, the 

(76)  2015=100. 

51 

residential  floor  area  per  capita  stood  below  the 
EU average – 25.1 versus 54.4 m2 per capita – and 
increased at a higher pace than the EU average. A 
similar trend was reported for non-residential floor 
area  per  capita,  which  still  stood  below  the  EU 
average – 4.3 versus 18.0 m2 per capita – in 2020.  

There is still room for improving construction 
and  demolition  waste  management  and 
wastewater  treatment.  The  amount  of  waste 
generated  from  construction  and  demolition 
activities per capita fluctuated between 2012 and 
2020  and  remained  well  below  the  EU  average. 
Romania’s  recovery  rate  increased  to  88%  in 
2020,  achieving  the  Waste  Framework  Directive’s 
target  for  2020.  Furthermore,  the  population 
connected  to  at 
least  secondary  wastewater 
treatment  was  only  53%  in  2021,  well  below  the 
EU  level.  Alignment  with  the  higher  EU  standards 
must be prioritised. 

The  built  environment  impacts  the  climate, 
and  there  is  need  for  both  mitigation  and 
adaptation  strategies. 
Important  mitigation 
strategies  include  whole-life  carbon  approaches 
for buildings and Romania is yet to include them in 
its regulatory framework. 

272280290302301010020030040050020182019202020212022Kg per capita Waste treatment to be determinedLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27201820192020202120222023EU-27Latest yearIndustryResource productivity (purchasing power standard (PPS) per kilogram)0.90.80.80.80.9-2.52022Circular material use rate (%)1.61.41.51.41.4-11.52022Eco-innovation index (2013=100)84.077.680.581.584.6-121.52022Recycling of plastic packaging (%)43.031.130.131.6--40.72021Cost of air emissions from industry (EUR bn)13.511.810.911.0--352.72021Built environmentRecovery rate from construction and demolition waste (%)74.0-88.070.1--89.02020Soil sealing index (base year = 2006)103.9-----103.42018Non-residential floor area (m2 per capita)4.14.24.3---18.02020Waste backfilled (%)21.8-23.2-27.1-9.92020 
           
 
 
 
     
 
ANNEX 10: DIGITAL TRANSFORMATION 

infrastructure/connectivity 

transformation  by  2030, 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with  the  targets  in  that  Programme  for 
digital 
this  Annex 
describes  Romania's  performance  on  digital  skills, 
digital 
the 
digitalisation  of  businesses  and  public  services. 
Where relevant, it makes reference to progress in 
implementing  the  Recovery  and  Resilience  Plan 
(RRP).  Romania  allocates  21.8%  of  its  total  RRP 
budget  to  digital  (EUR  5.8  billion) (77).  Under 
Cohesion  Policy,  an  additional  EUR  3  billion  (10% 
of  the  country’s  total  Cohesion  Policy  funding)  is 
allocated 
digital 
transformation (78). 

country’s 

and 

the 

to 

The  Digital  Decade  Policy  Programme  sets 
out  a  pathway  for  EU’s  successful  digital 
transformation  by  2030.  Romania’s  national 
roadmap outlines the actions it intends to take to 
reach the objectives and targets at national  level. 
The first Report on the State of the Digital Decade 
highlighted the need to accelerate and deepen the 
collective efforts to reach the EU-wide targets and 
objectives (79).  Among  others,  a  digitally  skilled 
population 
the  development  and 
adoption  of  digital  technologies  and  leads  to 
productivity  gains  and  new  business  models.  It 
also  leads  to  higher  inclusion  and  participation  in 
an environment increasingly shaped by the digital 
transformation (80). 
technologies, 
infrastructure  and  tools  all  play  a  role 
in 
addressing 
the  current  structural  challenges, 
including  strategic  dependencies,  cybersecurity 
and climate change.  

increases 

Digital 

(77)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII to the 
Recovery and Resilience Facility Regulation. 

(78)  This amount includes all investment specifically aimed at or 
substantially contributing to digital transformation in the 
2021-2027 cohesion policy programming period. The source 
funds are the European Regional Development Fund, the 
Cohesion Fund, the European Social Fund Plus, and the Just 
Transition Fund. 

(79)  European Commission (2023): Report on the state of the 

Digital Decade 2023, 2023 Report on the state of the Digital 
Decade | Shaping Europe’s digital future (europa.eu). 

(80)  See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org) and OECD (2019): Going Digital: 
Shaping Policies, Improving Lives – Summary, 
https://www.oecd.org/digital/going-digital-synthesis-
summary.pdf. 

in 

Lack of basic digital skills and sufficient ICT 
the  workforce  are  key 
specialists 
challenges  for  Romania.  The  country  scores 
considerably  below  the  EU  average  on  both 
indicators.  Only  28%  of  people  aged  between  16 
and 74 have at least basic digital skills, compared 
with  an  EU  average  of  56%.  Moreover,  this 
percentage  has  not  increased  over  the  past 
3 years.  The  proportion  of  ICT  specialists  in  total 
employment  is  2.6%,  showing  stagnation  and 
lagging  significantly  behind  the  EU  average  of 
4.8%.  However,  it  should  be  noted  that  Romania 
scores  6th  highest  in  the  EU  regarding  the 
proportion  of  ICT  graduates  (6.8%  of  all  higher 
education  graduates)  and  that  the  proportion  of 
female  ICT  specialists  (26%)  is  also  one  of  the 
highest  in  the  EU.  Romania  is  implementing  a 
number of RRP measures expected to lead, in the 
medium  and  long  term,  to  progress  in  this  area, 
such  as  a  new  legislative  framework  for  the 
digitalisation  of  education,  a  grant  scheme  to 
upskill/reskill  employees  in  firms,  support  for 
libraries  to become  hubs for  digital  skills,  support 
for  the  digitalisation  of  universities,  and  support 
for educational establishments with a high number 
of students at risk of dropout. 

it 

to 

connectivity 

increase  and 

is  widespread 

Gigabit 
in 
Romania, however 5G deployment is delayed. 
The country was fast to deliver coverage with high 
capacity  network  (VHCN).  In  particular,  coverage 
with  fibre  to  the  premises  (FTTP)  stands  out  at 
95% compared to an EU average of 64%. Take-up 
has  continued 
is  now 
significantly  above  the  EU  average,  including  for 
connections  of  1  Gbps  or  higher.  By  contrast,  5G 
coverage  is  well  below  the  EU  average,  at  33% 
compared  to  an  EU  average  of  89%.  Several 
measures 
the  RRP  are 
expected  to  drive  progress  in  this  area,  including 
an  auction  of  5G  licences,  the  new  5G  Network 
Security  Law,  the  adoption  of  the  national 
cybersecurity strategy,  and the implementation of 
various  recommendations  set  out  in  the  EU 
connectivity toolbox. However, these measures are 
still to show results on the ground and progress is 
expected  to  be  very  slow,  as  confirmed  by  the 
roadmap 
strategic 
national  Digital  Decade 
submitted by the Romanian authorities.  

implemented  under 

Romania  scores  poorly  on  the  digitalisation 
of  businesses,  exhibiting  significant  but 
untapped  potential  for  innovation,  including 
in the ICT sector. The share of SMEs with at least 
a  basic  level  of  digital  intensity  as  well  as  the 

52 

 
 
 
 
ICT 

continues  to  support  the  digitalisation  of  public 
services for the benefit of citizens and businesses, 
as  well  as 
(digital) 
the  necessary 
infrastructure,  at both  national  and  regional  level. 
Finally,  Romania  also  scores  significantly  below 
the  EU  average  regarding  access  to  electronic 
health  records.  A  centralised  access  service  for 
citizens  does  exist,  but  the  health  data  available 
could  be  significantly  extended,  and  access 
services  should  be  rolled  out  to  the  entire 
population,  and  to  different  types  of  healthcare 
providers. 
significant 
investments  in  e-Health  infrastructure,  including 
the  platform  which  supports  the  access  to  health 
records  and  telemedicine  services  connecting 
patients  and  caregivers.  The  European  Regional 
Development  Fund  will  also  finance  e-health 
applications  and  software  development,  while  the 
European  Social  Fund  Plus  will  support  the 
provision  of  digital  skills  training  to  health 
professionals. 

envisages 

RRP 

The 

in 

this  area, 

take-up  of  advanced  technologies  –  like  cloud 
computing services, artificial intelligence, and data 
analytics  –  remain  considerably  below  the  EU 
average. Only 27% of SMEs have at least a basic 
level  of  digital  intensity,  compared  to  an  EU 
average  of  58%.  However,  the  digitalisation  of 
SMEs  is  further  supported  through  the  RRP  and 
cohesion funds. The ICT sector is one of the most 
important sectors in the Romanian economy, but it 
is  still  not  sufficiently  innovation  driven.  Several 
ongoing  RRP  measures  are  expected  to  lead  to 
progress 
including  Romania’s 
participation  in  the  important  project  of  common 
European  interest  on  low-power  processors  and 
semiconductor  chips,  as  well  as  various  direct 
support 
financial 
instruments)  for  the  digitalisation  of  businesses. 
Moreover,  the  European  Regional  Development 
Fund  will  finance investments  in the  digitalisation 
of  SMEs,  both  at  national  level,  through  support 
for  digital  innovation  hubs (81),  and  at  regional 
level, via targeted investments in SMEs included in 
the  eight  regional  programmes.  In  2022,  3.6%  of 
enterprises in Romania reported ICT service outage 
due  to  cyberattacks  (e.g.  ransomware  attacks, 
denial  of  service  attacks).  Over  the  same  year, 
39.6%  of  enterprises  developed  or  reviewed  their 
ICT security policy within the previous 12 months.  

schemes 

(grants 

and 

Digital  public  services  are  a  key  challenge 
for  the  country.  Romania  scores  significantly 
below  the  EU  average  for  availability  of  digital 
public  services  for  citizens  as  well  as  for 
businesses.  Moreover,  only  25%  of  Romanian 
online  users  engage  actively  with  e-government 
services,  compared  with  an  EU  average  of  75%. 
Various  RRP  measures  are  expected  to  lead  to 
significant  progress  in  this  area,  for  example  the 
entry  into  force  of  the  legislative  framework 
necessary  for  creating  a  government  cloud, 
including  an  emergency  ordinance  setting  up  the 
governmental  cloud  and  the  Interoperability  Law. 
Romania  has  pre-notified  ROeID  as 
its  first 
electronic  identification  (eID)  scheme.  Moreover, 
the RRP includes measures to deliver electronic ID 
cards to 5 million citizens by 2026. Via public and 
private  entities,  Romania is  also  involved  in  two 
large-scale  pilot  projects  testing  the  European 
Digital  Identity  Wallet  in  everyday  use.  Moreover, 
the  European  Regional  Development  Fund 

(81)  The European Regional Development Fund will finance 50% 
of the eligible cost of the digital innovation hubs, in synergy 
with the Digital Europe Programme.  

53 

 
 
 
Table A10.1:Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The fibre to the premises coverage indicator is included separately as its evolution will also be monitored separately and taken 
into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75% of EU enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.  .         

Source: Digital Economy and Society Index 

54 

EUDigital Decade target by 2030 2022202320242024(EU)Digital skillsAt least basic digital skills28%28%28%56%80%% individuals20212021202320232030ICT specialists (1)2.6%2.8%2.6%4.8%20 million% individuals in employment aged 15-7420212022202320232030Digital infrastructure/connectivityFixed very high capacity network (VHCN) coverage87%96%95%79%100%% households20212022202320232030Fibre to the premises (FTTP) coverage (2)87%96%95%64%-% households2021202220232023Overall 5G coverage25%27%33%89%100%% populated areas20212022202320232030Digitalisation of businessesSMEs with at least a basic level of digital intensity22%NA27%58%90%% SMEs2021202320232030Data analyticsNANA22%33%-% enterprises20232023Cloud11%11%16%39%-% enterprises2021202120232023Artificial intelligence1%1%2%8%-% enterprises2021202120232023AI or cloud or data analytics (3)NANA29%55%75%% enterprises202320232030Digitalisation of public servicesDigital public services for citizens44485279100Score (0 to 100)20212022202320232030Digital public services for businesses42455085100Score (0 to 100)20212022202320232030Access to e-health recordsNA575979100Score (0 to 100)2022202320232030Romania 
 
 
     
 
 
 
 
 
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of 
the  performance  of  Romania’s  research  and 
innovation  system,  which 
is  essential  for 
delivering  the  twin  transition  and  ensuring  long-
term competitiveness. 

Romania is an ‘emerging innovator’ with the 
weakest  innovation  performance  in  the  EU. 
Romania’s  innovation  performance  is  only  33.1% 
of the EU average and the gap between Romania’s 
performance  and  the  EU’s  is  widening,  according 
to the 2023 European Innovation Scoreboard (82). 

Graph A11.1: Innovation performance 2016-2023 

the 

research 

and 
promising 

innovation 
sign 

based  allocation  creates  unfavourable  conditions 
(R&I) 
for 
community (85).  A 
the 
government’s  reaffirmation  of  its  intention  to 
increase public R&D expenditure to 1% of GDP by 
2027 (86)  and  its  commitment  to  introducing  a 
biannual  funding  mechanism  that  provides  for 
regular evaluation mechanisms. 

is 

Graph A11.2: R&D intensity 2010-2022 

Source: European Innovation Scoreboard, 2023 

Romania’s  total  R&D  intensity (83)  is  the 
lowest in the EU. This, coupled with the high 
degree  of  fragmentation  in  the  Romanian 
public  research  system,  has  led  to  a  weak 
public  science  base.  At  0.46%  of  GDP  in  2022, 
R&D  intensity  remains  far  below  the  EU  average 
(2.24%)  and Romania’s own target  of 2% of GDP 
by 2027 (84). Public expenditure on R&D  has been 
decreasing in recent years and was 0.17% of GDP 
in 2022, just a quarter of the EU average (0.72%). 
This  significant  underfunding  combined  with  the 
absence  of  multiannual  budgeting  and  an 
insufficiently  developed  process  of  performance-

(82)  2023 European Innovation Scoreboard (EIS), country profile: 
Romania https://ec.europa.eu/assets/rtd/eis/2023/ec_rtd_eis-
country-profile-ro.pdf The EIS provides a comparative 
analysis of innovation performance in EU countries, including 
the relative strengths and weaknesses of their national 
innovation systems. 

(83)  Defined as gross domestic expenditure (GERD) on R&D as a 

percentage of GDP. 

(84)  Government of Romania (2022), Strategia Națională de 

Cercetare, Inovare și Specializare Inteligentă 2022-2027, 
https://www.mcid.gov.ro/wp-
content/uploads/2022/12/strategia-na-ional-de-cercetare-
inovare-i-specializare-inteligent-2022-2027.pdf. 

. 

Source: Eurostat, 2023 

The lack of human capital for R&I is holding 
its 
back  Romania’s  competitiveness  and 
move  towards  a  knowledge  economy.  The 
number  of  researchers  (full-time  equivalents) 
employed  by  the  public  sector  is  stagnating 
significantly  below  the  EU  average  at  the  bottom 
end  of  all  Member  States  (1.55  in  Romania  in 
2021  compared  to  an  EU  average  of  4.15).  This 
problem  is  exacerbated  by  the  lowest  share  of 
population  aged  25-34  who  have  successfully 
completed tertiary education (87) as well as by poor 
working  conditions  and  career  prospects  for 
researchers.  The  recovery  and  resilience  plan 
includes  reform  and  investment  measures  to 
increase  the  attractiveness  of  research  careers 
and  attract  researchers  from  abroad (88).  Similar 
measures  have  been  and  will  be  supported  under 
the cohesion policy. 

(85)  European Commission (2022): PSF Country review of the 

Romanian Research and Innovation System. 

(86)  See National Strategy for Research, Innovation and 

Intelligent Specialisation 2022-2027 and National RDI Plan 
2022-2027- PNCDI IV. 

(87)  In 2022, 24.7% of the population aged 25-34 successfully 
completed tertiary education against the EU average of 
42%. (See also Annex 15.) 

(88)  E.g. a reform of research careers, a measure to attract 

human resources from abroad, support for Marie Sklodowska 
Curie Fellowships, foundation of regional career guidance 
centres. 

55 

030609012020162017201820192020202120222023EURO00.511.522.5201020152016201720182019202020212022as % of GDPEURO 
 
   
 
   
 
 
Table A11.1:Key innovation indicators 

(1) EU average for the latest available year or the year with the largest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical Database), Invest Europe 

scientific 

challenge. 

remain  below 

the  EU  average 

Weak  science-industry collaboration  remains 
a 
co-
Public-private 
publications  as  a  percentage  of  total  number  of 
publications  have  increased  over  the  past  decade 
but 
(6.35% 
compared  to  7.6%  in  2022).  Deficiencies  in  the 
public  science  system  combined  with  a  lack  of 
incentives  for  public  research  institutions  to  seek 
industry collaborators result in this below average 
outcome (89).  While  the  recovery  and  resilience 
plan  and  cohesion  policy  programmes  include 
measures  to  improve  the  regulatory  framework 
and  incentivise  collaboration,  it  still  needs  to 
encourage  public  research  entities  to  engage  in 
entrepreneurial  activities  and  technology  and 
knowledge transfer (90). 

Business  enterprise  expenditure  on  R&D  (BERD) 
has  been  stagnating  (0.28%  of  GDP  compared  to 
EU  average  of  1.48%  in  2022)  and  Romania’s 
performance  in  terms  of  patents  applications 
remains the lowest in the EU. Also, the scaling up 
of  innovative  domestic  firms  is  hindered  by  the 
limited size of the local venture capital market (91). 
Under  the  cohesion  policy  and  RRP,  measures 
supporting  innovation  at  firm  level,  start-ups  and 
innovative  clusters  should  address  some  of  the 
deficiencies (92). 

Innovation  activity  and  R&D  absorption 
limited. 
capacity  at  company 

level  are 

(89)  European Commission (2022): PSF Country review of the 

Romanian Research and Innovation System. 

(91)  Invest Europe: venture capital investments as % of GDP. 

(90)  JRC (2024) - Strategic evaluation of the technology transfer 
and IPR protection systems of Bulgaria, Croatia and Romania 
and recommendations for their enhancement. 

(92)  https://rostartup.com/2022/09/28/starting-up-and-scaling-
up-romania-the-two-rostartup-reports-that-put-the-
romanian-entrepreneurial-ecosystem-under-the-microscope/  

56 

EUaverage (1)R&D intensity (GERD as % of GDP)0.460.490.470.470.462.24Public expenditure on R&D as % of GDP0.280.270.190.190.170.73Business enterprise expenditure on R&D (BERD) as % of GDP0.180.210.280.290.281.48Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 3.23.56::9.6PCT (Patent Cooperation Treaty) patent applications per billion GDP (in PPS)0.20.30.17::3.4Public-private scientific co-publications as % of total publications3.94.25.996.126.357.6Public expenditure on R&D financed by business enterprise (national) as % of GDP0.0370.0330.0240.026:0.054New graduates in science & engineering per thousand pop. aged 25-3418.411.212.012.6:16.9Total public sector support for BERD as % of GDP0.0570.0450.029::0.204R&D tax incentives: foregone revenues as % of GDP:0.0060.008::0.104Share of environment-related patents in total patent applications filed under PCT (%)12.95.97.8::14.7Venture capital (market statistics) as % of GDP0.0130.0020.0050.0090.0120.085Employment share of high growth enterprises measured in employment (%):5.865.21::12.51Green innovation Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)2022Romania2010201520202021 
 
 
 
  
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

High  productivity  growth  over  the  past  two 
decades  has  placed  Romania  on  a  strong 
convergence  path  with  the  EU.  Romania 
remains  one  of  the  top  performers  in  the  EU  in 
terms  of  productivity  growth.  Labour  productivity 
in terms of GDP per person employed grew by 4% 
in 2022 (the fourth highest growth rate in the EU) 
and  3%  in  2023  (the  highest  growth  rate  in  the 
EU)  (93). This has helped Romania reach a level of 
78%  of  the  EU  average  in  terms  of  real  GDP  per 
capita in PPP in 2023  (94). Despite this impressive 
performance,  real  GDP  per  capita  in  2022  (EUR 
10 080)  remained  less  than  35%  of  the  EU 
average (EUR 28 950)  (95).  

Graph A12.1: Labour productivity (gross value 
added per person employed) by sector 
(2015=100) 

Source: Eurostat 

Investment is  a major contributing factor  to 
productivity  growth  performance.  In  2023, 
both net private and public investment additions to 
the  capital  stock  were  in  the  top  three  in  the  EU 
and  double  the  EU  average.  Looking  at  the 
average figure for the last 5 years, Romania’s net 
public  investment  was  the  second  highest  in  the 
EU,  while  net  private  investment’s  evolution  was 
more modest (Romania was at the bottom of the 

(93)  2023 Autumn Forecast. Where no source for the data is 
given, the source is the table at the end of this annex. 

best  performing  quartile  in  the  EU)  (96).  The  flow 
of  EU  money  from  the  Recovery  and  Resilience 
Plan  (RRP)  and  the  structural  funds  greatly 
boosted  net  investment  in  2023,  especially  in 
infrastructure.  Civil  engineering  works  were  17% 
higher year-on-year.  

to 

EU 

its 

the 

average 

diversification 

Industry  and  construction 
represent  a 
relatively  high  share  of  the  economy  and 
contribute 
and 
resilience.  Despite  massive  deindustrialisation 
during the 1990s (when industry fell from one half 
to  one  third  of  gross  value  added  (GVA)  (97), 
Romania remains relatively industry-rich. In 2022, 
industry  still  represented  22.8%  of  GVA  (well 
20.5%  (98). 
above 
Manufacturing  (the  core  of  industry)  leads  in 
productivity  metrics.  Industry  overall  performs 
added 
modestly, 
specialisation 
labour 
productivity  per  person  in  industry  decreased  in 
2019  and  2020  but  grew  again  in  2021  (1.1%) 
and  2022  (1.4%  –  well  above  the  EU  average  of 
0.4%).  Romania  has,  in  relative  terms,  one  of  the 
EU. 
biggest 
Construction’s  share  of  GVA  was  the  second 
highest  in  the  EU  in  2022  and  the  highest  in 
2023 (99). 

lower 
(see  Graph A12.1).  Real 

construction 

reflecting 

sectors 

value 

the 

of 

in 

share 

remains 

Industry  is  declining  in  relative  terms  while 
construction’s 
constant. 
Construction  has  held  up  better  than  industry. 
Construction has represented 7-8% of GVA in the 
last 8 years. Industry declined from 30.4% of GVA 
in  2012  (the  second  highest  share  in  the  EU)  to 
25.4% in 2018 (the fifth highest share in the EU) 
to a low of 21.4% in 2023 (tenth place in the EU). 
  (100).  

decarbonising 

Industry  has  been  contributing  significantly 
to 
Total 
the 
greenhouse  gas  emissions  fell  by  an  impressive 
50% 
in 
2020  (101). The sweeping deindustrialisation of the 

in  1990-1999  and 

reached  -60% 

economy. 

(96)  Commission calculation based on Eurostat data.  

(97)  World Bank data. 

(98)  Eurostat, Gross Value Added by Industry. 

(99)Eurostat, Gross Value Added by Industry. 

(100) Eurostat, Gross Value Added by Industry for all figures in 

(94)  Eurostat, Relative volumes of GDP per capita for 2023.  

this paragraph. 

(95)  Eurostat. 

(101) World Bank data. 

57 

75100125150175200225201520162017201820192020202120222023Agriculture, forestry and fishingIndustry (except construction)ConstructionWholesale and retail trade, transport, accommodation and foodservice activitiesInformation and communicationFinancial and insurance activitiesProfessional, scientific and technical activities; administrative andsupport service activities 
 
   
 
 
 
 
thus 

(and 

terms 

to  contribute 

1990s,  rather  than  energy  efficiency,  is  the  main 
reason  for  this.  Industry  continued  to  shrink  in 
relative 
to 
decarbonisation)  from  2012  onwards  (as  shown 
above). Emissions from manufacturing and energy 
production  dropped  by  almost  4  million  tonnes  in 
2022,  thus  contributing  to  achieving  Romania’s 
lowest  total  level  of  emissions  in  the  last  decade 
(54.4 million tonnes, 18% lower than 2013)  (102). 

linked 

Plans  for  further  decarbonising  industry  are 
based  on  increasing  renewables  and  nuclear 
capacities. Installed renewable electricity capacity 
is  almost  60%  of  electricity  consumption  (above 
the  EU  average  of  50%). The  Competition  Council 
has conducted two studies, in cooperation with 80 
institutions,  on  barriers  to  the  deployment  of 
renewables.  The  first  study  focused  on  the  entire 
permitting process. 80% of required authorisations 
are 
study 
construction. 
recommendations  are  implemented,  the  approval 
time will be  cut from 544 days to 180 days. One 
of  the  main  recommendations  is  to  remove  the 
50-hectare  legal  cap  for  degraded  land  when 
allocated to renewables. The second study focused 
on  connecting  to  the  grid.  Getting  connection 
authorisation 
renewables 
project  (103). Significant investment is under way in 
nuclear and this will boost its share in the energy 
mix from the current 20% to 36% by 2030.  

for  a 

crucial 

the 

to 

is 

If 

The authorities’ plans to cut greenhouse gas 
(GHG)  emissions  by  78% 
in  2030  are 
ambitious  but  need  a  check  with  the 
stakeholders.  EU  financing  for  greening  the 
economy  in  the  current  multiannual  financial 
framework  is  significant.  More  than  40%  of  the 
EUR 28.5 billion  funding  from  the  Recovery  and 
Resilience Facility (RRF) and 30% of the structural 
funds  are  earmarked  for  greening.  This  level  of 
financing  is  recognised  as  a  major  reason  for 
placing the bar well beyond the Green Deal target 
of  -55%  (104).  As  the  OECD  has  indicated,  serious 
planning and administrative capacity is needed to 
deliver  on  the  greening  commitments  (see  Annex 
13  and  17).  Involvement  of  stakeholders  is  also 
(relatively) 
needed  because  Romania 

is  still 

(102) Eurostat, Air emissions by activity. 

(103) The studies may be consulted on the website of the 

Competition Council, http://www.consiliulconcurentei.ro. 

(104) OECD, Economic Survey of Romania, 2024 (forthcoming). 
Discussions with the authorities during the GROW country 
mission (November 2023) went along the same lines.  

58 

industry-rich  and  decarbonisation  becomes  more 
levels  of  GHG 
difficult  as  one  reaches 
emissions.  Industry  needs  significant  financing  to 
decarbonise. One large steelmaking company may 
need  investments  up  to  EUR 1 billion  to  transition 
to green steel by 2030.  

low 

since 

Romania  can  help  reduce  the  EU’s  strategic 
dependencies.  The  country  may  be  a  source  of 
critical  raw  materials 
(CRMs)  for  the  green 
transition,  but  their  certification  and  exploitation 
remain  difficult.  The  national  strategy  on  raw 
materials and the Mining Law have been awaiting 
governmental  approval 
spring  2023. 
Romania had a mining tradition but the extractive 
industry  all  but  disappeared  in  the  pre-accession 
period,  as  246  mines  were  closed.  Romanian 
authorities  indicate  the  following  barriers  to  the 
exploitation  of  CRMs:  absence  of  certified 
resources  or  confidentiality  of  data;  state 
companies  lack  the  means  to  invest,  including  in 
the  clean  technologies  needed;  lack  of  ownership 
titles for mining sites; environmental issues (there 
are  a  significant  number  of  protected  and 
sensitive  areas,  and  communities  are  sceptical 
regarding mining); lack of skilled staff; difficulties 
in attracting private investment because it requires 
taxation. 
predictability 
and 
attractive 
the 
concerns  are  preventing 
Environmental 
development of a project with valid licenses. 

Market  surveillance is fragmented  and  lacks 
resources.  No  fewer  than  16  authorities  are 
involved  in  market  surveillance.  All  the  resources 
they  collect  go  to  the  general  budget  and  little 
comes  back.  Resources  are  needed  for  staffing 
and tests. Testing possibly non-compliant products 
is very  expensive  (e.g. it  costs  EUR 30 000 to test 
a  washing  machine 
for  energy  efficiency, 
according  to  the  authorities).  More  extensive 
cooperation  between  competent  authorities  and 
customs  could 
improve  market  surveillance. 
Romania  solved  91%  of  the  SOLVIT  cases  (65)  it 
handled  as  lead  centre,  above  the  EU  average  of 
88.3%. 

Access to the Single Market is an opportunity 
that  many  SMEs  in  Romania  could  better 
exploit.  Romania’s  trade  integration  into  the 
Single  Market  is  below  the  EU  average  (30%  of 
GDP vs 43% of GDP). Over the last 20 years, trade 
in goods has increased by 10% per year. The bulk 
of  intra-EU  exports  in  value  terms  (70%,  which  is 
above 
large 
companies.  This  means  that  SMEs  are  not  so 

the  EU  average)  came 

from 

 
 
present  in  the  Single  Market  (105).  The  fact  that 
Romania  has  still  not  been  admitted  as  a  full 
member of the Schengen area (even though it has 
met  the  technical  criteria  since  2011) 
is  a 
significant  obstacle  for  the  business  environment 
and  to  attracting  foreign  investment.  Partial  (air 
and sea) access to Schengen has been granted as 
of March 2024. 

to 

restrictive 
boost 

lowering  productivity.  This  applies 

regulated 
the 
on 
Acting 
professions  may 
productivity. 
Regulatory restrictions in a number of professions 
remain  stricter  in  Romania  than  the  EU  average, 
creating  additional  costs,  especially  for  SMEs, 
while 
in 
particular 
architects, 
accountants, tourist guides, and notaries . Lawyers 
are also subject to legal form, incompatibility rules 
and  multidisciplinary  restrictions,  all  of  which 
affect  the  potential  of  the 
legal  sector  for 
innovation. The fragmented system regulating civil 
engineers and their activities seems to be a barrier 
to 
the 
their  free  movement  and  hampers 
efficiency of service provision.  

engineers, 

civil 

in 

level 

The effects of the measures implemented to 
improve  public  procurement  performance 
cannot be observed yet. Indeed, the 2023 data 
set  shows  high  levels  of  single  bids  (45%,  EU 
average 29%); negotiated procedures without prior 
publication  of  an  award  notice  (23%,  the  second 
the  EU;  EU  average  8%); 
highest 
unsuccessful  bids  (44%  (the  highest  rate  in  EU); 
and  price-only  award  criteria  (83%,  EU  average 
66%)  (106).  The  level  of  single  bids  is  particularly 
worrying. Indeed, the indicator’s increase on 2022 
values  means  that  Romania  was  not  able  yet  to 
stop or reverse the trend concerning the decrease 
of  competition  in  national  public  procurement 
markets.  The  capacity  of  SMEs  to  place  bids 
should be improved, but there is also a lot for the 
authorities to improve. Entrepreneurs regularly ask 
for  better-prepared  tenders  (more  regular,  with 
sufficient  time  to  prepare,  better  aligned  with 
inflation developments, etc.)  (107). 

Romania 
public 
procurement  as  a  strategic  tool  to  secure 

planning 

use 

to 

is 

(105) Eurostat. 

(106) The 2024 Single Market and Competitiveness Scoreboard. 

(107) Sources: SME associations and the GROW fact-finding 

and 

environmental 

social, 
innovation 
benefits  through  the  implementation  of  the 
National  Strategy 
field  of  public 
procurement  2023-2027.  However,  little  progress 
has been made to date in green procurement and 
almost none in social and innovative procurement. 

the 

in 

that 

shown 

policymaking 

The  business  environment  has  gradually 
improved,  but  recent  fiscal  measures  have 
again 
is 
unpredictable.  Improvements  in  overall  business 
conditions  over  the  last  decade  combined  with 
relatively  low  taxes  and  cheap  labour  have  been 
the  factors  behind  the  rapid  capital  accumulation 
and  speedy  convergence  of  the  economy,  partly 
for  other  disadvantages  (108). 
compensating 
Taxation for SMEs is still one of the lowest in the 
EU.  The  fiscal  consolidation  measures  adopted  at 
the  end  of  2023  lacked  proper  planning  and 
consultation.  The  legal  obligation  for  a  6-month 
period before a tax measure enters into force was 
disregarded  (109). Attracting long-term investors to 
extract  gas  resources  from  the  Black  Sea  or 
mineral resources requires predictability. The right 
balance  between  SMEs’  contribution  to  the  public 
purse and reform of public services has yet to be 
struck.  The  SMEs’  annual  tax  contribution  to  the 
budget  is  very  small: RON 2-3 billion  (EUR 0.4-
0.6 billion).  

The  business  environment  remains  dynamic, 
but  significant  barriers  persist.  Figures  for 
business  registration  are  above  the  EU  average 
and  show  that  the  business  environment 
is 
dynamic.  The  same  picture  is  conveyed  by  the 
broader  business  birth  and  death  figures  for 
2021 (110).  The  2023  EIB 
Investment  Survey 
showed  that  the  main  barriers  to  long-term 
investment  are  uncertainty  (86%  of  companies), 
energy costs (81%) and skilled staff (79%).  

(108) The Heritage Foundation’s Index of Economic Freedom 

shows that Romania has made marked progress in the last 
20 years. Moreover, tax burden is clearly the area where the 
country scores best. For labour-cost levels, Eurostat data for 
2022 show Romania in the last but one position (EUR 9.5 per 
hour). 

(109) The same analysis of the lack of predictability can be found 
in IMF, October 2023, Article IV consultation; and OECD, 
2024, Economic Survey of Romania (forthcoming). The IMF 
stated that ‘ad hoc tax changes in response to urgent fiscal 
needs create uncertainty and undermine the ability to plan.’ 

mission. 

(110) Eurostat. 

59 

 
 
 
Romania  is  in  the  preliminary  stage  of 
implementing  the  components  needed  to 
connect  to  the  Once-Only  Technical  System. 
As  part  of  the  Single  Digital  Gateway  Regulation, 
the  system  will  enable  the  automated  cross-
border  exchange  of  evidence  between  competent 
authorities, improving online access to information, 
administrative  procedures,  and  assistance  within 
the  EU.  The  onboarding  of  Romanian  competent 
authorities  is  crucial  for  the  system  to  function 
smoothly and to reduce administrative burden.   

and 

scaling-up 

Tax  setting  is  key  to  SME  financing  but 
companies’ 
impacts 
capitalisation. Low taxation  (111) and high policy 
uncertainty  have  made  retaining  profits  in  the 
lend 
company  uninteresting.  Owners  tend  to 
money to the company when in need of financing. 
This explains the high level of self-financing in the 
SME area. This tax-induced behaviour is important 
for  understanding  the  low  levels  of  capitalisation 
of  Romanian  companies  as  well  as  their  scaling-
up,  because  setting  up  new  firms is preferable to 
expanding  an  existing  entity.  The  number  of 
companies  with  negative  capital  is  the  second 
highest in the EU – only 20% of active companies 
are bankable. 

Access to finance remains an issue for SMEs. 
Bank  credit  to  the  private  sector  remains  among 
the  most  expensive  in  the  EU  (112),  which  makes 
alternative  options  like  self-financing  and  trade 
credit attractive. Romania has the highest share of 
finance-constrained  firms  in  the  EU  (113).  65%  of 
Romanian  companies  report  access  to  finance  as 
an important barrier to long-term investment (well 
above the EU average of 44%). The 2023 EIF SME 
Access to Finance Index ranks Romania 25th (down 
from  20th  place  in  2022,  which  was  due  to 
generous  COVID-19-related  support  measures). 
The bank loan segment offers particular scope for 
improvement.  In  2022,  8%  of  companies  in 
Romania used bank loans to finance their activity 
(the  EU  average  was  46%).  The  situation  is 
completely  different  for  self-financing,  which  is 
used  by  93%  of  companies  in  Romania  and  26% 
of firms in the EU. 38% of companies in Romania 
would be willing to take out a fixed-rate loan  (114). 
In  2021,  trade  credit  to  non-financial  companies 
amounted 
(EUR 68 billion), 
which  is  2.3  times  the  outstanding  value  of 
banking loans granted to non-financial companies 
(RON 148.5 billion/EUR 29.8 billion).  

to  RON 337 billion 

(111) For many years, small companies (below a certain ceiling 
which is usually generous but often changed) paid a 1-3% 
turnover tax and 5% dividend tax. That resulted in a total 
charge of around 8% when taking capital out of a company.  

(112) Only Hungary had a significantly higher interest rate for a 

loan relevant for the SMEs (under EUR 250 000) in the 2023 
edition of the EIF SME Access to Finance Index (11.9% vs 
8.4%). 

(113) EIB Investment Survey 2023. 

(114) National Bank of Romania, December 2023, Survey on 

Access to Finance, p. 13. 

60 

 
 
Table A12.1:Industry and the Single Market 

Source: (1) AMECO, (2) Eurostat, (3) Single Market Scoreboard, (4) OECD, (5) ECFIN BCS, (6) COMEXT and Commission 
calculations, (7) EIB Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index.  
* Own Commission calculations for the EU27 average 

61 

POLICY AREAINDICATOR NAME20192020202120222023EU27 average*Net Private investment, level of private capital stock, net of depreciation, % GDP14,75,76,16,57,83,8Net Public investment, level of public capital stock, net of depreciation, % GDP11,52,52,12,23,21,2Real labour productivity per person in industry (% yoy)2-0,2-1,11,11,4-0,4-1,24Cost competitivenessNominal unit labour cost in industry (% yoy)2933,86,919,99,83Single Market integrationEU Trade integration, % (Average intra-EU imports + average intra EU exports)/GDP230,628,731,633,230,442,9Transposition deficit, % of all directives not transposed31,11,12,90,30,20,7Conformity deficit, % of all directives transposed incorrectly31,31,30,911,21,1SOLVIT, % resolution rate per country398,488,486,993,291,088,3Number of pending infringement proceedings3243637303225,9RestrictionsEEA Services Trade Restrictiveness Index4-----0,05Single bids, % of total contractors3314133424528,6Direct Awards, %314221723238,1Material Shortage (industry), firms facing constraints, %52,03,56,56,83,417,2Labour Shortage using survey data (industry), firms facing constraints, %513,18,59,811,610,023,3Vacancy rate, % of vacant posts to all available ones (vacant + occupied)210,60,80,90,82,5Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials60,170,180,190,190,190,22Installed renewables electricity capacity, % of total electricity produced20,50,50,60,650Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle726,729,116,822,030,022,2Bankruptcies, Index (2015=100)271,967,588,337,435,3105,6Business registrations, Index (2015=100)2146,8123,4161,3183,1168,9120,2Payment gap - corporates B2B, difference in days between offered and actual payment8-1312121515Payment gap - public sector, difference in days between offered and actual payment8-139151616Share of SMEs experiencing late payments in past 6 months, %953,152,052,645,249,448,7EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1100,200,210,270,37-0,49EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 110 0,090,060,100,08-0,17RomaniaHEADLINE INDICATORSEconomic StructureSINGLE MARKETCompliancePublic procurement ECONOMIC STRUCTUREShortagesStrategic dependenciesBUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to finance 
 
   
 
ANNEX 13: PUBLIC ADMINISTRATION 

Romania’s  public  administration  is  essential 
for  the  economy’s  competitiveness  by,  in 
particular,  shaping  the  conditions  for  the 
twin  transitions  and  creating  a  favourable 
business  environment.  Perceived  government 
effectiveness in  Romania is  still  clearly  below the 
EU  average  and  has  deteriorated  in  recent  years 
(Graph  A13.1).  The  public  administration’s  ability 
to  make  significant  progress  is  limited  by  a 
fragmentation  of  reform  initiatives  and  strategic 
direction,  insufficient  coordination  and  capacity 
and high turnover of staff. These challenges have 
led to delayed implementation of some measures 
of the recovery and resilience plan (RRP) (115). 

Graph A13.1: Government effectiveness 

Average value over 2018-2022 and change over 2018-2022. 
The GDP per head bar shows the mean value of the 
government effectiveness indicator for the group of EU 
countries belonging to the same GDP per head cluster as 
Romania (EU countries are ranked in terms of their GDP per 
head and grouped into three equally sized clusters). 
Source: Worldwide Governance Indicators. 

is 
Romania’s  e-government  performance 
improving,  but  it  remains  well  below  the  EU 
average  (Table  A13.1).  The  country  also  ranked 
below  the  EU  average  for  the  provision  of  public 
services.  However,  the  situation  has  gradually 
improved 
in  recent  years:  47.0%  of  people 
surveyed rated the services favourably in 2022, up 
from  36.0%  in  2017 (116).  Romania  also  ranks 
below  the  EU  average  for  the  openness  of 

(115) MonitorPNRR, Bulletin de sănătate nr. 8/2023. PNRR-ul 
României a rămas în urmă. Ce se poate întâmpla mai 
departe?. 

(116) European Commission, Standard Eurobarometer 99, spring 

2023. 

government  data  (Table  A13.1).  There  has  been 
progress in adopting the methodological norms for 
free access to information on legislation, although 
no  visible 
in  publishing  public 
officials’ asset and income declarations. The bill to 
update  the  freedom  of  information  act  has  not 
been approved. 

improvement 

on 

ex ante 

Romania  is  taking  steps  to  improve  the  use 
of  evidence  in  policymaking.  In  2023,  efforts 
continued to consolidate and expand a community 
impact 
of  government  experts  on  regulatory 
impact 
Training 
assessments. 
assessments was organised, and several ministries 
have  carried  out  impact  studies.  The  interaction 
with  the  research  community  usually  occurs 
through  different  research  institutes  or  through 
joint  projects  that  are 
the  development  of 
technically  supported  by 
institutes. 
Consolidating the legislative process and ensuring 
public  consultations,  however,  still  need  to  be 
addressed. 

research 

Romania  faces  challenges  in  ensuring  that 
is  sufficiently 
the  public  administration 
is  hampered  by 
skilled.  The  civil  service 
bureaucratic  processes,  a 
low  degree  of 
digitalisation,  the  need  to  improve  skills  and 
attract,  develop,  and  retain  qualified  people.  Civil 
service and human resource management reforms 
continue, albeit slowly. The public function strategy 
for  2022-2027 (117)  notes  the  challenges  facing 
the  civil  service  and  lays  out  an  action  plan  to 
tackle  them.  In  the  same  strategy,  several  RRP 
measures  are  being  implemented,  such  as  (i) 
putting  competency  frameworks  into  action  in 
central  government;  (ii)  a  national  recruitment 
competition  for  the  public  administration;  (iii) 
developing  and  extending  the  civil  servants’ 
management platform (known as E-ANFP); and (iv) 
developing  digital  and  sustainable  development 
skills, leadership and talent management. 

Despite  ongoing  efforts,  the  management  of 
public  investment  in  Romania  remains  weak 
across  the  entire  investment  cycle.  Public 
investment  planning 
line 
ministries with limited coordination across sectors. 
(‘Romania 
A 
it 
2030’)  was  produced 

long-term  development  strategy 

in  2018.  Although 

is  carried  out  by 

(117) Guvernul României (2022), Strategia în domeniul funcției 
publice pentru perioada 2022-2027, Agenția Națională a 
Funcționarilor Publici, București. 

62 

-0.4-0.20.00.20.40.60.81.01.2ROEU-27GDP perhead clusterChange 2018-2022Average 2018-2022 
 
   
 
 
 
 
Table A13.1:Public administration indicators 

High values denote a good performance, except for indicator # 6. (2) 2023 value. If unavailable, the latest value available is 
shown. (3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as 
the existence of key enablers for the provision of those services. (4) Defined as the absolute value of the difference between the 
percentage of men and women in senior civil service positions. 
Flags: (b) break in time series; (u) low reliability. 
Source: E-government activities of individuals via websites, Eurostat (# 1); E-government benchmark report (# 2); Open data 
maturity report (# 3); Labour Force Survey, Eurostat (# 4, 5, 7); European Institute for Gender Equality (# 6); Fiscal Governance 
Database (# 8, 9); OECD Indicators of Regulatory Policy and Governance (# 10). 

identifies  key  objectives  at  national  level,  it  is 
insufficiently  aligned  with  sectoral  strategies  and 
EU-financed  priorities.  Mechanisms  to  support 
capital availability beyond the annual budget year, 
such  as  a  mechanism  for  appropriations  beyond 
the  budget  year  and  accompanying  restrictions  in 
fund-use  for  other  purposes,  are  missing.  Ex-post 
reviews  on  the  effectiveness  and  efficiency  of 
investment  projects  are  not 
systematically 
required (118). 

The 
justice  system  performs  efficiently 
overall,  but  this  slightly  decreased  in  2022 
compared  to  2021.  The  disposition  time  in 
administrative  cases  fell  significantly  from  2020 
to  2021,  particularly  at  first 
instance,  and 
increased slightly in 2022 (from 690 days in 2020 
to 293 days in 2021 and 321 days in 2022). The 
quality  of  the  justice  system  is  good  overall 
despite  persistent  challenges  related  to  staff 

some 

in  courts, 

to  procedural 

shortages  on  which 
progress  has 
nevertheless  been  made.  Continuous  efforts  have 
been  made  to  improve  digitalisation  within  the 
justice system. However, there are still challenges 
rules  enabling  digital 
related 
the  use  of  digital 
technologies 
technologies  in  the  prosecution  service,  access  to 
electronic  files  of  ongoing  cases,  and  digital 
solutions  to  conduct  and  follow  criminal  case 
proceedings.  Whilst  progress  has  been  made  to 
safeguard  the  independence  of  the  judiciary  with 
the  adoption  of  the  Justice  Laws  in  2022,  some 
concerns remain on certain aspects (119).  

To  help  address  fiscal  challenges,  the 
independent  fiscal  institution  (IFI)  could  be 
strengthened.  At  the  Romanian  IFI’s  secretariat, 
less  than  half  of  all  available  positions  are  filled. 
Access to information could be further improved.  

(118) Belu Manescu, C. (2022), ‘New evidence on the quality of 
public investment Management in the EU’, European 
Economy Discussion Paper No 177, European Commission. 

(119) For more details, see the 2024 EU Justice Scoreboard and 
the Commission’s 2024 Rule of Law Report (forthcoming). 

63 

RO20192020202120222023EU-27(2)1n/an/an/a23.624.675.02n/a40.141.845.847.775.830.60.70.80.70.60.8456.754.953.6 (b)54.254.752.95: (u): (u)6.9 (b)8.111.217.967.08.67.80.02.09.273.22.92.6 (b)2.42.21.580.70.80.80.8n/a0.792.22.22.22.2n/a1.410n/an/a1.47n/an/a1.7Medium-term budgetary framework indexIndicator (1)E-government and open government dataShare of internet users within the last year that used a public authority website or appE-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with higher education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance 
 
 
 
      
 
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS 

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU. This Annex provides an overview of Romania’s 
progress in implementing the Pillar’s 20 principles 
and the EU headline and national targets for 2030 
on employment, skills and poverty reduction. 

Table A14.1:Social Scoreboard for Romania 

(1) Update of 25 April 2024. Members States are categorised 
based on the Social Scoreboard according to a methodology 
agreed with the EMCO and SPC Committees. Please consult 
the Annex of the Joint Employment Report 2024 for details on 
the methodology. 
Source: Eurostat. 

improving, 

significant 

Although  the  labour  market  situation  has 
been 
challenges 
remain. In 2023, the unemployment rate (5.6% vs 
6.1% in the EU) and long-term unemployment rate 
(2.2%  vs  2.1%  in  the  EU)  were  close  to  the  EU 
averages.  While  the  employment  rate  has  been 
going  up  over  the  last  decade  to  reach  68.7%  in 
2023, it still lags behind the EU average (75.3%). 
The  introduction  of  work  cards  for  domestic 
workers,  supported  by  the  recovery  and  resilience 
plan  (RRP),  is  nonetheless  expected  to  have  a 
positive  impact  on  formal  employment  in  this 
is 
sector. 
characterised  by  a  low  participation  of  young 
people,  women,  persons  with  disabilities,  low-
skilled  people  and  Roma.  Youth  unemployment 

The  Romanian 

labour  market 

in  2023)  has  decreased  although 

(21.8% 
it 
remains  significantly  above  EU  average  (14.5%), 
and  the  rate  of young  people  not in  employment, 
education  or  training  (NEETs)  remains  among  the 
highest  in  the  EU  (19.3%  vs  11.2%  in  2023), 
despite  improvements.  The  gender  and  disability 
employment  gaps  are  very  wide,  well  above  the 
respective EU averages. Challenges persist also for 
the low-skilled, whose employment rate, at 45.3% 
in  2023,  was  far  below  the  EU  average  (58.3%) 
and  significantly  lower  than  that  for  people  with 
tertiary  education  (89.8%).  Only  41%  of  Roma 
were  engaged  in  paid  work  in  2021,  and  59%  of 
Roma  young  people  were  not  in  employment, 
education or training (120). The gender employment 
gap  among  Roma  is  very  wide,  with  only  23%  of 
women  in  paid  work.  Considerable  efforts  will  be 
including 
needed 
underrepresented  groups,  into  work  to  reach  the 
national  employment  rate  target  of  74.7%  by 
2030. 

get  more 

people, 

to 

jobseekers 
in  active 

The  effectiveness  of  active  labour  market 
policies  remains  a  concern  in  the  face  of 
demographic  change  and  labour  and  skills 
shortages.  The  working-age  population  (15-64 
years)  is  projected  to  fall  by  23.7%  by  2050. 
Activity rates are low, and employers are reporting 
difficulties  in  filling  positions.  Spending  on  labour 
market policy interventions is among the lowest in 
the  EU  (0.1%  of  GDP  in  2020).  Women,  NEETs, 
Roma  and  persons  with  disabilities  are  less  likely 
find  work  after 
than  other 
to 
participating 
labour  market  policy 
measures.  Finding  work  or  training  for  persons 
displaced  from  Ukraine  is  also  a  concern.  This 
highlights  the  need  to  increase  the  effectiveness 
of  active 
labour  market  policies  and  public 
employment  services,  notably  through  better 
outreach and an overhaul of internal processes in 
the  services.  Under  its  national  RRP,  Romania  has 
put  forward  a  new  law  on  social  dialogue  that 
aims to address deficiencies in the social dialogue 
process, and to promote the stronger involvement 
and 
of 
implementation of active labour market policy.  

partners 

design 

social 

the 

in 

(120) European Union Agency for Fundamental Rights (2022), 

Roma Survey 2021. 

64 

19,116,627,719,319,1668,75,62,234,441,516,54328,512,34,9Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2023)Unemployment rate(% of the active population aged 15-74, 2023)Long term unemployment(% of the active population aged 15-74, 2023)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2022)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2022)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2022)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2022)Disability employment gap (percentage points, population aged 20-64, 2022)Housing cost overburden (% of the total population, 2022)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2022)Self-reported unmet need for medical care (% of the population aged 16+, 2022)Better than averageBest performersPolicy areaHeadline indicatorEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2023)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2023)Gender employment gap(percentage points, population aged 20-64, 2023)Income quintile ratio (S80/S20, 2022) 
 
 
 
   
 
 
 
 
in 

The 

challenges, 

skills  and 

combination 

of  39.5%. 

Greater  efforts  on  skills  development  are 
essential  to  improve  education  and  labour 
market  outcomes.  Only  27.7%  of  people  aged 
16-74 had at least basic digital skills in 2023 (vs 
55.6% in the EU) and less than 1 in 5 people aged 
25-64  held  a  tertiary  education  qualification  in 
2023,  which  impacts  their  employability.  Adult 
participation  in  learning  over  the  past  12  months 
stood  at  19.1%  in  2022,  13.3 percentage  points 
higher  than  in  2016,  but  still  far  below  the  EU 
of 
average 
demographic 
labour 
shortages,  and  the  low  levels  of  participation  of 
various  groups 
labour  market  also 
the 
undermines  Romania’s  potential  to  increase  its 
economic competitiveness. The ESF+ is supporting 
upskilling  and  reskilling  measures  such  as  the 
‘Keep Up’ programme, which will upgrade the skills 
of over 27 000 employees to keep pace with rapid 
technological  developments.  Also,  ESF+  will 
support  the  implementation  of  the  2024-2027 
Adult  National  Training  Strategy 
in 
December  2023)  with  its  general  objective  to 
increase  the  adult  participation  rate  in  lifelong 
learning  to  12%  by  2027.  Further  efforts  and  a 
strategic vision are needed to enhance the skills of 
the  population,  namely  through  the  acquisition  of 
tertiary qualifications and digital skills, and with a 
focus  on  older  people  and  people  with  a  lower 
level of education. 

(adopted 

The  education  and  training  system  faces 
persistent  challenges  in  relation  to  quality 
and  inclusiveness.    Few  children  under  the  age 
of three receive formal childcare (12.3% vs 35.7% 
in the EU in 2022). The early school leaving rate is 
among  the  highest  in  the  EU  (16.6%  vs  9.5%  in 
the  EU  in  2023),  and  disproportionally  affects 
young  people  in  rural  areas,  Roma  and  persons 
with disabilities. In particular, 74% of young Roma 
(aged 18-24) had not completed upper secondary 
education  and  training  in  2021.  The  low  rate  of 
employment  of  recent  VET  graduates  (61.2%  vs. 
78.9%  in  the  EU  in  2023)  and  the  low  levels  of 
basic  skills  as  measured  by  the  2022  PISA  test 
(see  Annex  15)  point  to  challenges  in  the  quality 
and  equity  of  education  and  in  responding  to 
labour  market  needs.  The  new  laws  on  education 
(which entered into force in September 2023) are 
a  major  step  forward  (see  also  Annex  15). 
Concrete 
the  quality  and 
inclusiveness of the education and training system 
are  dependent  on  the  timely  implementation  of 
the wider sectoral reform. This reform is supported 
extensively by the Recovery and Resilience Facility 

improvements 

in 

(RRF),  the  ERDF  and  the  ESF+.  Inadequate  access 
and  the  lack  of  affordable  social  services,  long-
term care and health services pose challenges for 
disadvantaged  groups.  Unmet  needs  for  medical 
care are reported by 4.9% of the population, which 
is  more  than  double  the  EU  average  (2.2%),  with 
significant  differences  between  income  groups, 
urban  and  rural  areas,  and  regions.  As  many  as 
9.1%  of  Romanians  in  the  lowest  income  quintile 
reported unmet medical  needs compared to 1.8% 
in the highest quintile, while 58% of Roma do not 
have  medical  insurance.  The  coverage  of  quality 
and  affordable  care  services,  notably  for  persons 
with  disabilities  and  older  people,  is  inadequate 
and  uneven,  due  to  insufficient  funding  and 
fragmentation  in  delivery.  Only  4.7%  of  people 
aged over 65 and in need of long-term care used 
home care services, compared to an EU average of 
28.6%. (This is against the background of Romania 
having  one  of  the  highest  shares  of  persons  with 
long-term care needs in the EU, at 56% vs the EU 
average  of  26.6%).  16.4%  of  persons  with 
disabilities (vs 4.1% in the EU) report unmet needs 
for medical care, while a lack of community-based 
social  services  hinders  the  deinstitutionalisation 
process.  The  ESF+  supports  the  scaling  up  of  the 
delivery  of  services  at  national  level  in  2 000 
disadvantaged rural  communities. It also supports 
the 
strategic 
deinstitutionalisation  process,  in  complementarity 
with  the  RRP,  as  well  as  social 
innovation 
measures  to  improve  access  to  services  for 
persons with disabilities. 

including 

reforms, 

Table A14.2:Situation of Romania on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, special extraction: adults in 
learning in the past 12 months, special extraction excl. guided 
on-the-job training. 
(2) Change in the number of persons at risk of poverty or 
social exclusion (AROPE), reference year 2019. 
Source: Eurostat, DG EMPL. 

Romania is experiencing some of the highest 
poverty  risks  and  levels  of  inequality  in  the 
EU.  Despite  some  improvement,  in  2022  the 
income  of  the  richest  20%  of  the  population  was 
more  than  six  times  greater  than  that  of  the 
bottom 20% (vs 4.7 times in the EU).  The rate of 

65 

IndicatorsLatest dataTrend            (2016-2023)2030 targetEU target 68,7(2023)19,1(2022)-3086(2023)Poverty reduction2 (thousands)-2.532-15.000Employment (%)74,778Adult learning1 (%)17,460 
 
   
 
and 

poverty 

improve 

including  by 

equality 
implementing 

people  at  risk  of  poverty  or  social  exclusion 
(AROPE) is one of the highest in the EU (34.4% vs 
21.6%  in  the  EU  in  2022).  People  living  in  rural 
areas,  older  people  and  vulnerable  groups, 
including  persons  with  disabilities  and  Roma,  are 
particularly affected. Almost 8 in 10 Roma people 
are  at  risk  of  poverty  or  social  exclusion.  The 
AROPE  rate  among  children  is  high  and  increased 
between 2021 and 2022 (41.5% vs 24.7% in the 
EU in 2022). Further efforts are needed to reduce 
of 
child 
opportunities, 
the 
European  Child  Guarantee.  The  rate  of  severe 
material  and social  deprivation is also among the 
highest in the EU (24.3% vs 6.7% in 2022), with a 
significant  urban-rural  divide.  The  adequacy  and 
coverage  of  pensions  and  the  minimum  income 
are 
low  and  the  impact  of  social  transfers 
(excluding pensions) on poverty reduction is half of 
the EU average. Key challenges remain in ensuring 
that  social  protection  benefits  are  accessible  and 
adequate, in particular for workers in non-standard 
forms of work, the self-employed and unemployed 
people.  Only  7.8%  of  people  who  had  been 
less  than  12  months  were 
unemployed  for 
receiving benefits in 2023. The implementation of 
measures  envisaged  under  the  RRP  and  the  ESF+ 
will  need  to  be  accelerated  to  improve  the 
situation  and  help  meet  the  2030  target  of 
reducing  the  number  of  people  at  risk  of  poverty 
or  social  exclusion  by  2.5  million.  As  part  of  the 
RRP, Romania is reforming the minimum inclusion 
income  (VMI)  to  improve  social  assistance  and 
reduce  poverty,  while  reducing  the  administrative 
burden.  Likewise,  the  public  pension  system  is 
being  reformed,  aiming,  among  other  things,  to 
increase  the  minimum  and  lower  pensions,  in 
particular  for  people  living  below  the  poverty 
threshold. 
and 
available 
qualitative  evidence  and  the  policy  response 
undertaken  and  planned  analysed  in  the  second-
stage  analysis  of 
the  Social  Convergence 
Framework of May 2024 (SWD(2024)132) point to 
challenges  for  Romania  that  may  affect  social 
convergence  in  relation  to  its  social  situation, 
education and skills as well as the labour market. 

quantitative 

The 

66 

 
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  of 
Romania’s  education  and  training  system 
based on the 2023 Education and Training Monitor 
and  the  2022  OECD  Programme  for  International 
Student Assessment (PISA) results. 

in 

Romania’s poor PISA scores reflect structural 
challenges for education and training, linked 
to  quality  and  equity.  The  OECD's  2022 
PISA (121)  showed  that  48.6%  of  Romanian  15-
year-olds  had  difficulties 
interpreting  and 
recognising  how  a  simple  situation  can  be 
represented  mathematically.  41.7%  could  not 
identify the main idea in a text of moderate length 
and  reflect  on 
its  purpose.  44%  could  not 
recognise  the  correct  explanation  for  familiar 
scientific  phenomena  and  draw  evidence-based 
conclusions.  Compared  with  2012,  these  shares 
increased by 7.7 pps in mathematics (EU  7.3 pps), 
4.5 pps  in  reading  (EU  8.2 pps)  and  6.7 pps  in 
science  (EU  7.4 pps).  These  results  may  reflect 
challenges  linked  to  the  teaching  profession  (e.g. 
weaknesses  of 
initial  teacher  education  and 
continuous  professional  development,  challenges 
in  rural  areas),  the  curricula,  the  underfunding  of 
the  sector,  and  the  strong  impact  of  socio-
economic factors on performance. They could also 
reflect challenges due to the fragmentation of the 
school  network  in  rural  areas  and  segregation  in 
education.  Results  may  also  reflect  challenges 
linked  to  school  climate  and  discipline  and  the 
impact of the pandemic. 

acquisition 

impact  on 
skills 

Lack of basic skills among young Romanians 
their  future 
will  have  an 
and 
employability, 
productivity. Romania’s rates of low achievement 
in basic skills are among the highest in the EU and 
significantly  above  the  EU  averages,  which  also 
worsened in 2022 (29.5% in mathematics, 26.2% 
in  reading,  24.2%  in  science).  Insufficient  labour 
market  relevance  of  vocational  education  and 
training  and  higher  education,  and  low  adult 
learning  participation,  add  to  the  challenge  (see 
Annex  14).  Few  Romanian  15-year-olds  were  top 
performers  in  the  2022  PISA  test.  Only  4%  of 
in 
youngsters  demonstrated  advanced  skills 
mathematics (EU  7.9%),  2%  in  reading  (EU  6.5%) 
and 1.4% in sciences (EU 6.9%). The low shares of 
top-performing  students  represent  an  additional 

(121) OECD (2023), PISA 2022 Results (Volume I): The State of 

Learning and Equity in Education 

67 

obstacle  for  increasing  productivity  and  future 
innovation capacity. 

High  inequalities  in  education  persist.  75.4% 
of students from disadvantaged background were 
low achievers in mathematics (EU 48%), compared 
with  18.7%  of  advantaged  students  (EU  10.9%). 
The  gap  in  performance  (see  Graph  A15.1)  has 
increased compared with 2012 and is the highest 
in  the  EU,  pointing  to  the  strong  impact  of  socio-
economic factors on student outcomes (122). 

Graph A15.1: Underachievement rates in 
mathematics by socio-economic background, PISA 
2022 

Source: OECD (2023). 

There are challenges linked to school climate 
and  discipline  affecting  performance.  Only 
50%  of  15-year-olds  feel  that  they  belong  in 
school,  the  lowest  rate  in  the  EU.  57%  reported 
that  their mathematics  teachers  show  an  interest 
in  every  student’s  learning  (69%  in  2012).  25% 
reported 
frequent  bullying,  while  35%  get 
distracted using digital devices. 

Inequalities  in  education  start  early  and 
particularly affect rural areas and the Roma. 
In  2021,  only  75.6%  of  children  between  age  3 
and  compulsory  primary  education  were  enrolled 
in  early 
(EU  92.5%). 
Participation  rates  are  significantly  lower  in  rural 
areas (123) and for the Roma (124). The shortage of 
staff  with  proper  qualifications  especially  affects 
schools in rural areas, which provide education for 
more  than  40%  of  pupils  in  primary  and  lower 

childhood  education 

(122) PISA 2022 Results: Factsheets, Romania. 

(123) Ministry of Education 2022, Starea invatamantului pre-

universitar din România. 

(124) Fundamental Rights Agency (FRA), 2022, Headline indicators 
for the EU Roma strategic framework for equality, inclusion 
and participation for 2020–2030. 

01020304050607080ROEUROEUROEUTotalAdvantagedstudentsDisadvantagedstudents%2030 EU target 
 
 
  
 
Table A15.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: b = break in time series; d = definition differs; e = estimated; p = provisional; u = low reliability; : = data not available. 
Source: 1,3,4,5,7,8,9,10,12=Eurostat; 11= Eurostat, Adult Education Survey; 2,6=OECD, PISA. 

Implementation  details  remain  to  be  worked  out 
and will determine the success of the reform. 

Tertiary educational attainment remains low. 
The  percentage  of  university  graduates  aged  25-
34 was 22.5% in 2023 and is one of the lowest in 
the  EU  (EU  43.1%).  It  remains  constrained  due  to 
high  early  school  leaving,  socio-economic  factors, 
low passing-rates of the baccalaureate exam and 
high  dropout  rates  from  tertiary  education.  The 
new higher education law lays down measures to 
improve  retention,  equity,  quality  and 
labour 
market relevance (126). 

secondary  education.  This  challenge  is  worsened 
by  the  fragmentation  of  the  school  network, 
predominantly  in  rural  areas.  Early  school  leaving 
is among the highest in the EU (16.6%, compared 
with  the  EU  average  of  9.5%  in  2023),  and  is 
especially worrying in rural areas (27.5%) and for 
the Roma (125). Romania is implementing ambitious 
investments  and 
the 
reforms, 
Recovery  and  Resilience  Facility,  the  European 
Social  Fund  Plus  and  the  European  Regional 
Development Fund, at all levels of education. 

financed  by 

The new education laws aim to address some 
of the challenges for the teaching profession. 
To  overcome  weak  initial  teacher  education,  a 
master’s  programme  in  teaching,  combined  with 
traineeships  and  mentoring,  became  compulsory 
for  future  teachers.  A  newly  developed  teacher 
teacher 
competence 
education,  career  development  and  certification. 
Continuous  teacher  education  was  also  revised. 

framework  will  guide 

(125) 75% of Roma aged 18-24 did not complete upper secondary 

(126) For more information see Education and Training Monitor 

education (FRA, 2022). 

2023. 

68 

96%84.1%201391.8%201381.9%92.2%75.6%202192.5%2021,dReading< 15%37.3% 18.0%40.8% 22.5%41.7%202226.2%2022Mathematics< 15%40.8% 22.1%46.6%22.9%48.6%202229.5%2022Science< 15%37.3% 16.8%43.9%22.3%44.0%202224.2%2022< 9 %17.8% 12.6%16.4%10.5%16.6%9.5%Men18.5%14.5%16.7%12.1%16.5%11.3%Women16.9%10.6%16.1%8.7%16.7%7.7%Cities5.0%b11.2%4.2%9.4%3.3%8.6%Rural areas31.0%b14.0%25.4%11.0%27.5%9.9%5By country of birthNative17.8% 11.3%16.4%9.2%16.6%8.2%EU-born:u26.2%:u22.4%:u21.0%Non EU-born:u30.1%:u23.0%:u21.6%6Socio-economic gap (percentage points)43.9:46.029.556.7202237.220227Exposure of VET graduates to work-based learning≥ 60% (2025) ::: :8.1% 64.5%45%23.6%34.1%24.9%38.7%22.5%43.1%Men21.6%29.1%21.8%33.3%19.4%37.6%Women25.6%39.2%28.2%44.2%25.7%48.8%Cities41.0%b43.5%45.4%49.0%44.4%53.3%Rural areas6.9%b24.8%8.2%27.7%8.8%31.7%Native23.5%35.4%24.8%39.7%22.4%44.2%EU-born:u29.3%:36.7%:u40.2%Non EU-born:u24.2%:u31.0%:u37.1%11Participation in adult learning (age 25-64)≥ 47% (2025) ::5.8%201637.4%201619.1%202239.5%202219.5%201322.7%201318.4%23.8%16.9%202124.5%2021Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth12Share of school teachers (ISCED 1-3) who are 55 years or over1Participation in early childhood education (age 3+)2Low-achieving 15-year-olds in:Early leavers from education and training(age 18-24)3Total3By gender4By degree of urbanisation201220182023IndicatorTargetRomaniaEU-27RomaniaEU-27RomaniaEU-27 
 
 
 
  
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
in 
population  health  and  the  health  system 
Romania. 

Life  expectancy  at  birth  in  Romania  was 
among  the  lowest  in  the  EU  in  2022,  with  a 
wider gender gap than the EU average. There 
was  a  significant  drop  in  life  expectancy  in  2020 
and  2021  due  to  the  COVID-19  pandemic. 
Although  life  expectancy  rebounded  in  2022, 
partially  explained  by  a  significant  decrease  in 
COVID-19  mortality (127),  it  remained  below  the 
pre-pandemic level. In 2021, the leading causes of 
death  were  diseases  of  the  circulatory  system 
(‘cardiovascular diseases’) and cancer, followed by 
COVID-19. Treatable mortality is the highest in EU, 
suggesting 
the  effectiveness  of  public 
healthcare  interventions  is  limited.  At  the  same 
time, mortality in economically  active age groups, 
as  a  proportion  of  total  mortality  and  relative  to 
the workforce size, is among the highest in the EU. 
The  cancer  mortality  rate  is  slowly  falling  but 
remains  above  the  EU  average;  cancer  screening 
rates  are  below  EU  averages.  Behavioural  and 
environmental  risk  factors  account  for  more  than 
half of all deaths. 

that 

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

In  2021,  total  health  spending  was  one  of 
the lowest in the EU, both in per capita terms 
and  as  a  percentage  of  GDP.  Health 
expenditure  is  currently  financed  through  the 
compulsory social health insurance payroll system. 
However,  only  around  36%  of  those  covered  pay 

(127) Based on data provided directly by Member States to the 

European Centre for Disease Prevention and Control, under 
the European Surveillance System. 

69 

contributions and around 12% of the population is 
uninsured  (but  entitled  to  a  minimum  ‘basket’  of 
health services funded from the state budget). By 
far  the  largest  share  of  health  spending  in 
Romania  goes  on  inpatient  care  (around  44%  of 
total  health  expenditure  in  2021).  This,  and  the 
high  number  of  hospital  beds  (721  per  100 000 
population  in  2021,  much  higher  than  the  EU 
average),  illustrate  Romania’s  strongly  hospital-
centred care model. The share of health spending 
for  outpatient  care  is  well  below  the  EU  average. 
This  would  suggest 
that  primary-level  care 
services  play  a  limited  role  in  disease  prevention, 
early  diagnosis  and  treatment  –  making  it  harder 
to  reduce  avoidable  mortality  rates  and  provide 
quality  care  for  people  with  chronic  conditions. 
Out-of-pocket  payments  account  for  a  greater 
proportion of spending on health in Romania than 
in  the  EU  overall.  Nearly  two  thirds  of  all  out-of-
pocket 
outpatient 
pharmaceuticals.  Based  on  population  and 
demographic  projections,  public  spending  on 
health  is  projected  to  increase  by  0.7 percentage 
points (pps) of GDP by 2070, compared to 0.6 pps 
for  the  EU  overall,  raising  medium-term  fiscal 
sustainability  concerns 
(see  Graph  16.2  and 
Annex 21). 

payments 

are 

for 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2024-2070 

Baseline scenario 
Source: European Commission / EPC (2024) 

In  2021,  spending  on  prevention  in  Romania 
amounted  to  3.7%  of  total  spending  on 
healthcare, much lower than 6.0% for the EU 
overall.  Between  2019  and  2021,  spending  on 
prevention in Romania increased by around 145%, 
compared  to  a  106%  increase  for  the  EU  overall. 
Spending 
programmes 
(vaccination) was the main factor for this increase. 
The  consumption  of  antibiotics  is  increasing;  in 
2022  it  was  well  above  the  EU  average.  This  is 
despite  the  recommended  national  target  (set  by 
the  Council  Recommendation  on  stepping  up  EU 

immunisation 

on 

75.275.375.674.272.875.180.981.081.380.480.180.6201720182019202020212022RomaniaEU6.64.50.60.702468EURomania% of GDP20242070increase 
 
   
 
   
 
Table A16.1:Key health indicators 

Note: The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used. Doctors’ density data refer to practising doctors in all countries except Greece, Portugal (licensed to practise) and 
Slovakia (professionally active). Nurses’ density data refer to practising nurses in all countries except Ireland, France, Portugal, 
Slovakia (professionally active) and Greece (hospital only). 
Source: Eurostat Database; except: * OECD, ** Joint Questionnaire on non-monetary healthcare statistics, *** ECDC, **** Council 
Recommendation on stepping up EU actions to combat antimicrobial resistance in a One Health approach. 

actions  to  combat  antimicrobial  resistance  in  a 
One  Health  approach)  of 
total 
consumption  of  antibiotics  by  27%  by  2030 
compared to the 2019 level. A strategy to prevent 
and  limit  healthcare-associated  infections  was 
recently approved. 

reducing 

care  as  opposed 

Low  public  funding  for  outpatient  care  and 
uneven  distribution  of  healthcare  resources 
limit  access  to  care.  High  levels  of  treatable 
mortality in Romania may be linked to issues with 
to 
accessing  outpatient 
shortcomings in the quality  of inpatient care. Two 
such issues are the limited scope  of primary care 
services  (dealing  mainly  with  ‘non-complicated’ 
cases and providing only inconsistent follow-up of 
chronic  patients)  and  the  limited  availability  of 
general  practitioners.  These  result 
in  people 
making avoidable visits to emergency departments 
(as the easiest way to access specialist care). The 
national  health  strategy  for  2023-2030  aims  to 
enhance the role and improve the performance of 
outpatient  care.  The  level  of  unmet  needs  for 
medical  care  in  2022  was  among  the  highest  in 
Europe (see Annex 14; 4.9% in Romania compared 
to an EU average of 2.2%). Such unmet needs are 
mainly  cost-driven,  and  there  are  wide  income-
related  and  rural-urban  disparities.  This  may  be 
linked  to  the  average  travelling  distance  to 
healthcare  facilities  in  some  areas,  exceeding  the 
average distance reported for the EU. 

Shortages  of  healthcare  staff  limit  the 
availability  of  care.  The  density  of  doctors  in 
Romania  (3.5  per  1 000 population  in  2021)  has 
been  below  the  EU  average  for  several  years, 
despite a higher density of medical graduates than 
across  the  EU.  According  to  the  newly  adopted 

the 

Eurostat  definition  of  nurses,  following  the  EU 
recognition  of 
Directive  2005/36/EC  on 
professional  qualifications, 
there  are  only 
0.9 nurses  per  1 000 population  in  Romania  (one 
of the lowest rates in the EU) compared to an EU 
average  of  7.9,  and  the  number  of  nursing 
graduates  per  100 000 population  is  also  among 
the  lowest  in  EU.  Emigration  of  health  workers 
contributes to the staff shortages. To tackle health 
workforce  issues,  a  multiannual  strategy  (2022-
2030) and sectoral action plans were approved. 

human-resources 

EU  funds  support  substantial investments  in 
healthcare  in  Romania.  Under  the  Romanian 
recovery  and  resilience  plan,  investments  worth 
around  EUR 2.11 billion  are  planned  for  health 
reforms  and  health  infrastructure,  digitalisation 
and 
capacity-building. 
Significant  funding  for  healthcare (EUR 3.8 billion) 
is also planned under the EU cohesion policy funds 
in  2021-2027.  With  this,  Romania  will  invest  in 
health 
equipment, 
digitalisation  of  healthcare,  and  measures  to 
the  accessibility,  effectiveness  and 
improve 
resilience 
These 
investments may help Romania overcome the slow 
uptake of digital health solutions. For example, the 
number  of  individuals  accessing  personal  health 
records online in Romania is below the EU average, 
indicating that the country is lagging behind in the 
uptake  of  e-health  and  overall  health  systems 
digitalisation. 

infrastructure, 

services (128). 

health 

health 

of 

(128) The EU cohesion policy data reflect the status as of 13 May 

2024. 

70 

20182019202020212022EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)210.6208.6235.1254.7NA93.3 (2021)Cancer mortality per 100 000 population273.2264.2260.3243.2NA235.4 (2021)Current expenditure on health, % GDP 5.55.76.26.5NA10.9 (2021)Public share of health expenditure, % of current health expenditure79.780.580.378.3NA81.1 (2021)Spending on prevention, % of current health expenditure 1.41.52.03.7NA6.0 (2021)Available hospital beds per 100 000 population697706712721NA525 (2021)Doctors per 1 000 population3.03.23.33.5NA4.1 (2021)*Nurses per 1 000 population0.70.80.80.9NA7.9 (2021)Total consumption of antibacterials for systemic use, daily defined dose per       1 000 inhabitants per day ***25.125.825.225.727.619.4 (2022) 
 
 
  
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

Annex 17 showcases the economic and social 
regional  dynamics  in  Romania.  It  provides  an 
analysis  of  economic,  social  and 
territorial 
cohesion  in  the  Romanian  regions  and  assesses 
investment  and  subnational  reform 
emerging 
social 
needs 
development and competitiveness in the country. 

foster  economic  growth, 

to 

of 
Overview 
performance at regional level 

economic 

and 

social 

in 

Regional  disparities  in  Romania  remain  very 
labour 
important  gaps 
high,  with 
productivity, 
investment  and  employment 
between  the  capital  region  and  the  other 
regions.  In  2022,  GDP  per  capita  in  the  capital 
region of București-Ilfov corresponded to 177% of 
the  EU  average.  The  other  regions  lag  far behind, 
in  Nord-Est  GDP  per  capita  was  less  than  half  of 
the EU average.  

Disparities  in  GDP  per  capita  between  the 
capital  and  the  rest  of  the  country  reflect 
disparities  in  labour  productivity  leading  to 
polarisation in income and inequality. In 2022, 
labour  productivity  in  Romania  was  80.7%  of  the 
EU average. It varied extensively between regions. 
București-Ilfov  had  a  productivity  (GVA  (PPS)  per 
worker)  of  156.6%  of  the  EU  average,  compared 
to  44.9%  in  Nord-Est.  Similarly,  the  urban-rural 
income  gap  remains  significant,  standing  at  4.4 
times the EU average in 2022.. 

Despite  overall  convergence  with  the  EU 
average,  internal  divergence  has  deepened. 
Real  GDP  growth  between  2013  and  2022 
diverged substantially between the regions. The 5 
less  developed  regions  registered  lower  growth 
than  the  national  average  (4.1%),  namely  Centru 
(2.9%), Sud-Est (3.1%), Sud-Muntenia (0.9%), Sud-
Vest  Oltenia  (-0.2%),  with  Nord-Est  even  having 
negative  growth  (-0.3%).  This  contrasts  with 
growth of 7.4% in the capital region (Map A17.1). 

Map A17.1:  Romania, NUTS2: GDP per capita 
growth 2013-2022 

Source: DG REGIO 

in 

Although most regions lag behind the rest of 
the  EU 
socio-economic 
terms  of 
development,  this  was  particularly  the  case 
for  three  regions.  Nord-Est,  Sud-Muntenia  and 
Sud-Vest Oltenia were identified as having been in 
a development trap for the last 15 years (129).  

Human capital is considerably limited outside 
Bucharest, particularly in rural areas. In 2022, 
in  all  less  developed  regions,  fewer  than  25%  of 
the population had a tertiary degree (ranging from 
17%  to  23%  depending  on  the  region)  while  in 
București-Ilfov  this  share  was  54.2%,  (above  the 
EU average of 43%). This reflects persistent rural-
urban  disparities  in  education.  In  2022,  people 
living in  cities  were  significantly more  likely  to  be 
engaged  in  adult  learning  compared  to  their  rural 
counterparts  (36.0%  vs  16.0%,  respectively).  The 
rate  of  early  leavers  from  education  and  training 
was 24.5% in rural areas, compared with 3.9% in 
cities. 

All  less  developed  regions  have  experienced 
demographic  decline  and  depopulation. 
Between  2012  and  2021,  the  population  in  all 
Romanian  regions,  including  the  capital  region, 
if  to  different  degrees.  These 
shrunk,  even 

(129) Reference to publication on development traps. 

71 

 
 
 
 
 
 
 
 
 
Table A17.1:Selected indicators at regional level in Romania 

Source: Eurostat, EDGAR database 

population  reductions  in  combination  with  ageing 
have  shrunk  the  working  age  population  and 
increased  the  share  of  older  people,  making 
six (130)  out  of  seven  least  developed  regions  fall 
into a talent development trap (131) (132). 

by 

is  weak 

innovation 
Another  obstacle 
performance, 
regional 
accentuated 
disparities (133),  and  low  investment  in  R&D 
(0.5% of GDP in 2021). This remains far below 
the  EU  average  of  2.3%.  Only  the  capital  region 
has  R&D  intensity  above  the  national  average 
(1.1% of GDP), due to higher employment rates in 
high-technology  sectors  and  knowledge-intensive 
services  as  well  as  public 
research  base 
concentration.  In  2022,  11.3%  of  employment  in 
the  capital  region  was  in  high-technology  sectors 
and  46.9%  of  employment  was  in  knowledge-
intensive  services.  Both  these  figures  are  above 
the  EU  average,  and  far  above  the  rest  of  the 
country. 

(130) The West region is already part of the 10 pilot regions which 
will receive expert support in 2024 under Pillar 1 of the 
Talent Booster Mechanism to develop strategic thinking and 
actionable frameworks to address the challenges they face 
when it comes to attracting, developing and retaining talent. 

(131) Communication Harnessing talent in Europe’s regions, 

COM(2023) 32 final.  

(132) The West region is already part of the 10 pilot regions which 
will receive expert support in 2024 under Pillar 1 of the 
Talent Booster Mechanism to develop strategic thinking and 
actionable frameworks to address the challenges they face 
when it comes to attracting, developing and retaining talent. 

(133) 2023 Regional Innovation Scoreboard: 

https://ec.europa.eu/assets/rtd/ris/2023/ec_rtd_ris-regional-
profiles-romania.pdf.  

72 

The  lack  of  key  infrastructures  in  transport, 
waste,  water  and  sanitation  has  been 
identified  as  an  obstacle  to  socio-economic 
development and quality of life. In 2021, in the 
capital region, 74.9% of the population living in a 
radius  of  120 km  can  be  reached  in  less  than  90 
minutes,  but  this  ratio  drops  to  less  than  50%  in 
most of the less developed regions, bottoming out 
at 26.1% in Centru. These differences reflect huge 
disparities  in  access  to  key  public  and  private 
services, highly concentrated in the main cities. In 
addition, only 84% of the country's population has 
access to water supply and only 73% to sanitation 
services. 

Investment  and  subnational  reform  needs 
ahead 

capacity, 

insufficient 

coordination 

Weak  administrative 
complex 
governance  structures  and  gold  plating  lead 
to 
between 
national, regional and local levels and hinder 
investment and the efficient implementation 
of cohesion policy. Simplification measures, both 
at  legislative  and  administrative  level,  would  be 
key  for  better  absorption  capacity  at  all  levels. 
National  and  regional  authorities  should  ensure 
that the implementation of all mid-term and long-
term  strategies  are  systematically  monitored, 
particularly  in  the  R&I,  energy,  health,  education 
and social inclusion sectors.  

Increasing  the  capacity  for  businesses  to 
innovate in lesser developed regions remains 
further 
a  high 
advanced 
strengthening 
technologies, 
public-private 
increasing 
collaboration and the number of innovative SMEs, 
as well as supporting innovation enablers and the 

priority. 
the 

includes 
of 

This 
uptake 

GDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growthGDP per head growthPopulation growthAt-risk-of-poverty or social exclusionEarly school leaversR&D expenditureEmployment in high-technology sectorsEU Regional Competitiveness Index 2.0 - 2022 editionIndex, EU27 = 100 (2022)Index, EU27 = 100 (2022)Average % change on the preceding year (2022)Average % change on the preceding year (2013-2022)Average annual change per 1000 residents (2013-2021)% of population (2022)% of population aged 18-24 (2022)% of GDP (2021)% of total employment (2022)Index, EU27 = 100European Union (27 MS)100.0100.00.71.41.921.69.62.34.9100.0România75.080.73.64.1-5.634.415.60.53.456.5Nord-Vest70.074.04.65.1-3.127.415.90.22.656.0Centru71.085.91.42.9-4.131.723.40.42.352.5Nord-Est46.044.9-1.0-0.3-1.938.214.60.21.547.0Sud-Est60.072.82.33.1-7.446.923.10.10.846.1Sud-Muntenia57.067.21.50.9-9.437.113.70.31.552.1Bucureşti-Ilfov177.0156.66.17.4-0.719.27.91.011.393.7Sud-Vest Oltenia57.060.30.2-0.2-10.244.716.20.10.950.2Vest78.088.55.35.5-9.929.511.40.74.757.8Region name 
 
 
   
 
participation  in  European  research  and  innovation 
networks,  platforms  and  programmes.  Improving 
the  quality  of  governance  of  regional  innovation 
eco-systems  would  ensure  a  full  uptake  of  the 
additional investments.  

the 
Romania  could  also  benefit  from 
investment  opportunities  of 
the  STEP 
initiative,  notably  to  boost  investments  in  the 
development of critical technologies to support the 
industry  transformation,  namely  for  resource-
efficient  manufacturing  and  development  of 
critical raw materials. 

fragmentation  of  the  sector,  with  decoupled  and 
detached  responsibilities  across  a  number  of 
institutions at national and local level. The reform 
would have a national aspect aiming at long-term 
sustainability  of  infrastructure  investments  and 
consolidating the role of the national regulator for 
public  utility  services.  It  would  also  have  a  strong 
regional  dimension  because  it  would  reduce  the 
number  of  water  providers,  improving  efficiency 
and  governance,  and  introduce  a  more  efficient 
use  of 
in  compliance, 
performance-based  management  and  better 
quality of service. 

revenues 

invest 

to 

The  implementation  of  measures  to  address 
poverty  and  social  exclusion 
is  urgent. 
Romania  has  one  of  the  highest  rates  of  housing 
deprivation  in  the  EU.  The  housing  overcrowding 
rate  in  Romania  is  among  the  highest  in  the  EU 
(40.5% in 2022 vs 16.8% EU average). Additional 
investments  in  social  housing  integrated  in  the 
in 
community 
paramount, 
marginalised  urban  areas.  Coupling 
these 
infrastructure investments with social  services for 
vulnerable  groups,  including  Roma,  people  with 
disabilities and older people  is crucial. In addition, 
the 
pre-hospital  medical 
infrastructure is important as well as investments 
in  educational  establishments  with  a  high  risk  of 
drop-out.  

development 

particularly 

of 

is 

Stepping  up  investments  in  the  country’s 
railway  network  and  sustainable  urban 
transport 
the 
electrification  and  renewal  of  railway  lines,  and 
electric vehicle charging stations. 

is  essential,  especially 

in 

More  broadly,  Romanian 
regions  need 
support to achieve their green transition. It is 
key to focus on biodiversity protection, the uptake 
of  renewables  in  energy  communities,  as  well  as 
improving  the  water  and  sanitation  infrastructure 
and  developing  separate  collection  for  waste  and 
recycling facilities. 

Investment  bottlenecks  at  the  subnational 
level  should  be  addressed 
in  order  to 
facilitate  regional  investment,  including  the 
substantial 
investments  planned  under 
cohesion  policy  programmes  and  the  NRRP. 
the 
Effective 
continued  reform  of  the  governance  of  the  water 
sector, which has started with the support of EBRD 
and  OECD.  The  reform  would  address  the  high 

implementation  would 

require 

to 

strengthen 

institutions 

stakeholders 

Urban policy would benefit from institutional 
reform 
complementarity 
between  local,  regional,  national,  and  EU 
funding  by  introducing  a  single  platform  for 
all 
to 
and 
coordinate 
Administrative 
responsibilities. 
capacity deficits at the local level, coupled with the 
lack  of  a  unitary  and  complete  land  registration 
system,  hinders  the  cohesion  policy  priorities  of 
sustainable  and 
inclusive  urban  development, 
especially  in  small  or  shrinking  cities,  where  local 
authorities  often  lack  the  experience  or  financial 
stability to implement participatory and integrated 
territorial projects. Furthermore, the legal basis for 
metropolitan  associations  and  functional  urban 
area  partnerships 
is  weak,  disincentivising 
cooperation  between  municipalities.  Such  entities 
would  benefit  from  stronger  legal  provisions  to 
design and deliver projects that encompass a city 
and  its  surrounding  area,  and  to  consolidate 
urban-rural 
improved  and 
efficient use of integrated territorial instruments. 

linkages, 

though 

The  continuation  of  administrative  capacity 
building at regional and local levels remains 
a  key  challenge.  Lack  of  resources  and  lack  of 
coordination  at  the  national  level  lowers  the 
regions  ability  to  identify  and  address  structural 
bottlenecks.  To  address  this,  Romanian  regional 
authorities  are  committed  to  drawing  up  eight 
regional 
capacity-building 
roadmaps based on OECD methodology (134). Their 
implementation  is  expected  to  put  in  place  an 
effective  human  resources  management  in  the 
public sector at regional and local level, streamline 

administrative 

(134) OECD (2020), Strengthening Governance of EU Funds under 
Cohesion Policy: Administrative Capacity Building Roadmaps, 
OECD Multi-level Governance Studies, OECD Publishing, Paris, 
https://dx.doi.org/10.1787/9b71c8d8-en. 

73 

 
 
improved 

administrative  procedures,  increase  transparency, 
and improve policy and decision-making processes 
through 
consultations. 
Additional support and technical assistance will be 
key  in  sustaining  the  reforms  introduced  through 
their 
roadmaps 
the 
implementation.  

to  monitor 

stakeholder 

and 

74 

 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

The financial sector in Romania is dominated 
by  a  relatively  small  banking  sector,  and 
capital markets are still developing.  Financial 
intermediation remains low. In Q3-2023, the total 
assets  of  the  banking  sector  were  equivalent  to 
52.9%  of  GDP,  considerably  below  the  peer 
economies in the region and the lowest ratio in the 
EU,  where  the  average  is  257%.  A  vulnerability 
behind  this  figure  is  the  large  share  of  non-
financial  corporations  that  continue  to  have 
and 
significant 
therefore  have  less  access  to  finance.  Payment 
discipline in the economy remains weak. Romanian 
firms  rely  mainly  on  loans  from  suppliers  and 
shareholders,  rather  than  loans  from  financial 
institutions. In addition, borrowers show a modest 
degree  of  financial  literacy,  and  the  country  is 
lagging  in  digital  skills  compared  to  the  EU 
average (135),  which 
the 
development of financial intermediation. 

capitalisation  weaknesses, 

impedes 

further 

sector 

its  soundness  despite 

The  banking 
in  Romania  has 
the 
maintained 
challenges  posed  by  the  pandemic  crisis, 
Russia’s  war  of  aggression  in  Ukraine,  and 
last  year’s  global  turbulence  induced  by 
developments  in  the  US  and  Swiss  banking 
sectors.  Banking  sector  capitalisation  has  been 
relatively  stable  for  several  years,  giving  banks 
good  capacity  to  deal  with  possible  adverse 
conditions.  The  capital  adequacy  ratio  stood  at 
21.6%  in  Q3-2023,  above  the  EU  average  of 
19.6%  and  above  pre-pandemic  levels.  As part  of 
a  set  of  new  fiscal  measures,  the  Romanian 
authorities  have  adopted  an  additional  tax  on 
banks’  turnover.  The  measure  is  of  a  permanent 
nature  and  applicable to all  banks,  irrespective  of 
their  financial  results,  and  this  may  over  time 
affect both the capital levels and competitiveness 
of  Romanian  banks.  Bank  liquidity  ratios  also 
stand at high levels. Excess liquidity could also be 
highlighting  a  lack  of  opportunities  for  banks  to 
make  loans  or  investments.  Despite  the  uncertain 
economic  environment,  the  non-performing-loans 
ratio  has  continued  its  downward  trend,  reaching 
2.7% in Q3-2023, although this level is still higher 
than the EU average, and the trend might reverse 
if macroeconomic conditions deteriorate. 

(135) Digital Economy and Society Index, 2022. 

75 

if 

and 

risks. 

interest-rate 

indirect  exposures, 

The close link between banks and Romania’s 
sovereign  remains  a  matter  of  concern.  The 
large  share  of  government  debt  in  total  banking 
assets  (23%  in  September  2023)  generates  both 
concentration 
The 
sovereign-bank nexus is even higher (30% of total 
assets (136)) 
the 
outstanding amount of State guarantees for loans, 
are  taken  into  consideration.  In  the  past  2  years, 
there have been a number of challenges including: 
economic  uncertainty,  the  challenging  geopolitical 
context, monetary policy tightening and a lax fiscal 
policy. Taken together, these factors have led to a 
rise  in  yields  on  Romanian  government  securities, 
with  an  impact  on  the market  value  of  securities, 
which could be intensified if fiscal deficits persist. 

i.e. 

Profitability 
in  the  banking  sector  has 
remained  robust,  as  banks  have  benefited 
from  high  interest  rates  on  the  back  of 
rapidly tightening monetary policy (137). Return 
on equity has reached its highest levels in 7 years 
(18.2%  in  Q3  2023),  almost  double  the  EU 
average (9.9%). Net interest income has been the 
largest  source  of  profitability.  High  interest  rates 
have  generated  growing  revenues  due  to  a  large 
share  of  variable-rate  loans  in  the  portfolios  of 
banks.  By  contrast,  on  the  funding-cost  side, 
deposits  from  the  population  and  non-financial 
corporations  have  remained  stable  and  their 
remuneration  has  not 
increased  noticeably. 
Operational  expenditure  has  continued  to  grow 
increases  associated  with  the 
due  to  wage 
in 
inflationary  environment  and 
digitalisation,  although  this  growth  in  expenditure 
has  been  partly  compensated  for  by  a  continued 
reduction 
in  the  number  of  bank  branches. 
Operational  efficiency, determined by the cost-to-
income ratio, has improved, hitting its lowest level 
since 2017 (45.4% in Q3-2023). 

investments 

After  very  buoyant  lending  activity  in  2022, 
bank  lending  to  the  private  sector  has  lost 
some  momentum.  Loans 
to  non-financial 
corporations  and  households  continued  to  rise  in 
2023,  albeit  at  a  markedly  slower  pace  than  the 

(136) National Bank of Romania, Financial Stability Report, 

December 2023. 

(137) Since October 2021, the National Bank of Romania has 
raised the key monetary-policy rate several times until 
reaching 7% in January 2023, from its initial 1.25%. 

 
 
 
 
 
 
Table A18.1:Financial Soundness Indicators 

(1) Last data: Q3 2023. 
(2) Data is annualized. 
(3) Data available for EA countries only, EU average refers to EA area. 
Source: ECB, Eurostat. 

points 

year  before.  A  slowdown  in  the  growth  rate  of 
foreign-currency  corporate 
lending  has  been 
observed,  given  the  decrease  in  the  interest-rate 
differential between loans denominated in lei and 
in euro. This differential has fallen from a peak of 
6.9 percentage  points  in  October  2022  to  2.2 
percentage 
2023. 
in 
Consequently,  foreign-currency  lending  continued 
to  grow,  but  at  a  lower  rate  than  a  year  earlier. 
Despite  the  sustained  increases  in  interest  rates 
lending  to  households,  demand  for 
on  new 
in  Q3-2023 
mortgage  and  consumer  credit 
increased  compared  to  the  previous  quarter (138). 
At the same time, credit standards have eased for 
mortgages 
relatively 
and 
unchanged for consumer loans. 

September 

remained 

have 

In  capital  markets,  the  private  pension 
market  has  continued  to  grow  strongly,  and 
return  on  assets  has  rebounded.  Non-banking 
financial-sector assets were equivalent to 12.23% 
of GDP in Q2-2023, predominantly held by private 
pension  funds.  The  total  asset  value  of  the 
mandatory  private  pension  funds  (so-called  Pillar 
II) 
(about 
EUR 24.32 billion)  in  November  2023,  up  by  27% 
compared to November 2022, while the voluntary 
scheme  (Pillar  III)  is  less  developed  and  reached 
RON 4.5 billion (less than EUR 1 billion) in assets in 
November  2023.  The  development  of  Pillar  II 
pension  funds  is  largely  affected  by  government 

reached 

billion 

121.6 

RON 

(138) National Bank of Romania lending survey for non-financial 

corporations and households, Q3-2023. 

of 

pension 

decisions,  so  the  recent  regulation  increasing 
mandatory contributions from 3.75% to 4.75% of 
salary  from  January  2024  will  benefit  the  sector. 
However,  the  exemption  from  the  mandatory 
construction, 
scheme 
private 
agriculture,  food  industry  and  IT&C  workers  is 
holding  back 
the  sector’s  development.  The 
investment  policy  within  private  pension-fund 
portfolios, which is limited by legislation, continues 
to  be  focused  on  the  local  financial  market:  93% 
of  investments  are  in  Romanian  assets,  most  of 
which  are  denominated  in  lei.  A  large  part  of  the 
Romanian investments are government bonds and 
shares  listed  on  the  Bucharest  Stock  Exchange 
(BVB).  In  terms  of  profitability,  while  the  steep 
increase  in  inflation  and  interest  rates  in  2022 
weighed  on  pension  funds’  return  on  assets,  in 
2023  all  pension  funds  in  Romania  recorded 
higher  annualised  rates  of  return,  thus  broadly 
converging back to the levels recorded in 2021. 

The  Romanian  insurance  sector  is  relatively 
small  and  is  characterised  by  a  high  degree 
of concentration. The sector ranks last in the EU 
in  terms  of  assets  as  a  percentage  of  GDP  (1% 
compared  to  25.2%  on  average  in  the  EU  in  Q3-
2023).  The  Romanian  insurance  market  is  also 
characterised  by  a  high  degree  of  concentration, 
both  in  terms  of  the  types  of  insurance  offered 
and in terms of the significant market shares held 
by  a  relatively  small  number  of 
insurance 
is  dominated  by  the 
companies.  The  sector 
compulsory  motor  third-party  liability  insurance 
segment.  Around  83%  of  total  gross  written 
premiums  in  2022  were  recorded  in  the  non-life 

76 

2017201820192020202120222023EUMedianTotal assets of the banking sector (% of GDP)53.050.649.856.558.053.952.9257.0184.6Share (total assets) of the five largest banks (%)59.561.662.662.462.561.1--69.6Share (total assets) of domestic credit institutions (%)122.725.126.429.431.831.933.2-62.9NFC credit growth (year-on-year % change)5.19.36.06.720.019.112.8-2.4HH credit growth (year-on-year % change)8.510.97.04.79.76.03.9-1.4Financial soundness indicators:1        - non-performing loans (% of total loans)6.65.04.33.93.42.82.71.81.8- capital adequacy ratio (%)19.419.721.023.522.222.421.619.620.1- return on equity (%)211.713.612.39.013.115.718.29.913.2Cost-to-income ratio (%)154.953.553.451.451.148.645.452.844.9Loan-to-deposit ratio (%)169.271.772.067.668.671.069.293.380.2Central bank liquidity as % of liabilities-0.00.00.11.20.00.0-0.7Private sector debt (% of GDP)51.347.146.548.047.843.3-133.0118.4Long-term interest rate spread versus Bund (basis points)364.1429.0479.2440.4399.9633.9427.8107.7104.2Market funding ratio (%)29.727.527.227.825.523.6-50.839.8Green bonds outstanding to all bonds (%)3-------4.02.71-34-1011-1718-2424-27Colours indicate performance ranking among 27 EU Member States. 
 
 
  
 
insurance  sector 
(of  which  55%  was  car 
In  Q3-2023,  eligible  funds  were 
insurance). 
sufficient  to  cover  solvency  capital  requirements 
(SCR)  (174.4%),  but  the  level  was  well  below  the 
EU average (262.3%). Following the failure of the 
main car-insurance company in 2021 (139) and the 
withdrawal  of  the  operating  authorisation  of 
another relevant market player at the beginning of 
2023 (140),  the  insurance  sector  in  Romania  has 
been  recently  challenged  by:  (i)  increases  in  the 
value  of  claims  due  to  inflation;  (ii)  limits  on  the 
motor third-party premiums enforced in 2023; and 
(iii)  the  latest  increases  in  contributions  to  the 
National Insurance Guarantee Fund (FGA). 

Graph A18.1: Evolution of credit activity 

Source: ECB. 

(139) City Insurance 

(140) Following several control actions, the Romanian supervisor 
(ASF) concluded that Euroins Romania failed to meet the 
required eligible funds to cover the SCR and the minimum 
capital requirement. ASF decided to withdraw its operating 
authorisation, and to open the bankruptcy proceedings. 

77 

-20-10010203040Total privateNFCHH% 
   
 
 
 
 
 
ANNEX 19: TAXATION 

This  annex  provides  an 
indicator-based 
overview of Romania’s tax system. It includes 
information on the tax structure (the types of tax 
that  Romania  derives  most  of  its  revenue  from), 
the  tax  burden  on  workers,  and  the  progressivity 
and redistributive effect of the tax system. It also 
provides 
tax  collection  and 
compliance.  

information  on 

tax 

types:  while  consumption 

Romania’s  tax  revenues  across  all  major 
revenue sources are relatively low in relation 
to its GDP. Table A19.1 shows that Romania’s tax 
revenues as a percentage of GDP were below the 
EU aggregate in 2022. This holds for all major tax 
revenue  sources.  However,  there  are  differences 
across 
taxes 
the  EU  aggregate, 
revenues  were  close  to 
revenues  from  labour  taxes  were  significantly 
below  the  EU  aggregate.  In  addition,  revenues 
from  property  taxes  (and  more  specifically  from 
recurrent  property  taxes,  which  are  among  the 
taxes 
to  growth),  were 
comparatively low (as a percentage of GDP and of 
total  taxation)  (see  Graph  A19.1).  However,  the 
performance  of  the  tax  system  should  also  be 
viewed  within  the  context  of  the  high  fiscal  and 
current  account  deficit.  This  suggests  that  there 
may  be  scope  to  make  greater  use  of  underused 
tax  types,  such  as  recurrent  property  taxes,  and 
capital and labour taxes.  

least  detrimental 

Environmental  tax  revenues  mainly  derive 
from  energy  and  transport  taxes  –  91.8%  of 
environmental  tax  revenues  came  from  energy 
taxation  in  2022.  As  revenue  from  pollution  and 
resources  taxes  is  very  low,  there  could  be 
potential  to  strengthen  the  application  of  the 
‘polluter pays’ principle. Romania is one of the less 
advanced Member States in the implementation of 
such  taxes.  With  the  second  lowest  recycling  rate 
in  EU  (12%)  and  high  landfilling  levels,  Romania 
does  not  apply  a  well-designed  landfill  tax  or  an 
adequate collection system for bio-waste. ‘Pay-as-
you-throw’ schemes to increase rates of reuse and 
recycling are to be further developed. 

Romania has a flat-rate tax system, which is 
hardly  progressive  (unlike  the  EU  average). 
Graph A19.2 shows that the labour tax wedge for 
Romania in 2023 was higher than the EU average 
for  single  people  at  50%  of  the  level  of  the 
average wage, close to the EU average at average 
wage levels, and below the EU average for higher 
levels  of  income.  A  relatively  high  tax  wedge  for 
low-wage earners may reduce labour demand for 
low-skilled  workers.  The  low  progressivity  of  the 
tax system also reduces the ability of the tax and 
benefit system to redistribute income. The tax and 
benefit  system  reduced  the  Gini  coefficient  (a 
measure  of  income  inequality)  in  2022  by  only 
5.6 pps,  which  is  well  below  the  EU  average  of 
7.9 pps  (see  Table A19.1).  Moreover,  the  personal 
income  tax  system  is  complicated  by  exemptions 

Table A19.1:Taxation indicators 

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2022, if available. For more details on the VAT gap, see European Commission, Directorate-General for 
Taxation and Customs Union, 2023, VAT gap in the EU, https://data.europa.eu/doi/10.2778/911698. 
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage, 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
Source: European Commission and OECD 

78 

RO2010202020212022202320102020202120222023Total taxes (including compulsory actual social contributions) (% of GDP)25.826.126.426.737.940.040.440.2Labour taxes (as % of GDP)10.812.812.011.420.021.320.720.3Consumption taxes (as % of GDP)11.19.910.310.010.810.711.211.0Capital taxes (as % of GDP)4.03.34.05.47.18.08.68.9Of which, on income of corporations (as % of GDP)2.01.92.23.12.42.53.03.4Total property taxes (as % of GDP)0.80.60.60.61.92.32.22.1Recurrent taxes on immovable property (as % of GDP)0.70.50.50.51.11.21.11.0Environmental taxes as % of GDP2.11.92.22.72.42.22.32.0Tax wedge at 50% of average wage (Single person) (*)42.336.937.237.735.133.931.732.131.831.7Tax wedge at 100% of average wage (Single person) (*)44.638.338.338.338.341.040.139.940.040.2Corporate income tax - effective average tax rates (1) (*)14.414.414.419.519.019.0Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)6.36.96.45.68.68.18.27.9Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)48.041.040.935.5VAT Gap (% of VAT total tax liability, VTTL)(**)39.837.336.735.29.75.4RomaniaEU-27Tax structureProgressivity & fairnessTax administration & compliance 
 
 
 
 
    
 
Graph A19.1: Tax revenues from different tax types, % of total revenue 

Source: European Commission 

for  specific  sectors  (particularly  construction,  ICT 
and  agriculture),  special  treatments  (including  a 
low dividend tax) and loopholes (including through 
its 
micro-enterprises),  which 
effectiveness and fairness.  

further 

impair 

Graph A19.2: Tax wedge for single and second 
earners as a % of total labour costs, 2023 

The second earner tax wedge assumes a first earner at 100% 
of the average wage and no children. For the methodology of 
the tax wedge for second earners, see OECD, 2016, Taxing 
Wages 2014-2015. 
Source: European Commission 

Romania has experienced a  persistently high 
VAT compliance gap. Historically, Romania’s VAT 
gap  (the  gap  between  revenues  actually  collected 
and the theoretical tax liability) stayed well above 
the  30 %  threshold  and  was  substantially  higher 
than in any other EU Member State.  

It  is  critical  to  continue  the  reforms  and 
make  full  use  of  the  available  EU  support. 
Romania’s  Recovery  and  Resilience  Plan  includes 
ambitious  reforms,  such  as  the  reform  of  the 
National  Agency  for  Fiscal  Administration  (ANAF) 

79 

the 

review  of 

tax 
through  digitalisation;  a 
framework;  customs  modernisation; 
improving 
budgetary  programming;  and  the  reform  of  the 
public  pension  system  in  order  to  achieve  fiscal 
sustainability. Such reforms must continue in order 
to  help  Romania  reach  its  assumed  targets:  to 
increase 
tax 
administration by at least 3 pps of GDP, to reduce 
the  VAT  gap  by  at  least  5 pps,  and  to  ensure  the 
fiscal sustainability of the public pension system. 

revenue  collected  by 

the 

the 

tax 

fiscal  deficit.  Further 

An ambitious fiscal reform could help reduce 
the 
reforms, 
streamlining VAT and personal income taxes, could 
raise at least 2 pps of GDP in additional revenue – 
over  and  above  the  gains  from  the  recent  tax 
package,  which  will  put  the  fiscal  deficit  on  a 
sustainable  medium-term 
In  addition, 
consideration  could  be  given  to  more  progressive 
and  fairer  income  taxation,  improving  budgetary 
spending and reducing structural deficits.  

track. 

of 

its 

tax 

interaction  with 

administration, 
Romania 

EU  funds  available  until  2026  from  the  RRF 
and RePowerEU are significant, amounting to 
1.5 pps  of  GDP  per  year.  Such  funding  also 
finances measures to strengthen the capacity and 
and 
effectiveness 
particularly 
has 
digitisation. 
introduced  VAT  online  cash  registers;  digitalised 
the 
tax  administration  by 
expanding  the  virtual  private  space  (SPV);  and, 
more  recently,  introduced  digital  reporting  in  the 
form  of  e-invoicing.  The  data  collected  via  such 
integrated  tax  risk 
systems  should  feed  an 
management  system  to  close  the  currently  high 
compliance  gaps.  A  new  taxation  system  for  road 
transport is also planned, in line with the ‘polluter 
pays’ principle.  

35.138.238.338.338.22025303540455050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - ROSingle earner - EU averageSecond earner -  ROSecond earner -  EU average50.627.322.142.637.320.1Tax revenue shares in 2022, Romania (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital9.53.90.50.90.00.21.72.50.42.7024681012Romania -environmentaltaxationEU -environmentaltaxationRomania -propertytaxationEU - propertytaxationEnvironmental and property taxation as % of total tax revenue, Romania and the EUEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
 
     
     
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1:Key economic and financial indicators 

(1) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) NIIP excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2024-5-17, where available; European Commission for forecast figures (Spring forecast 2024). 

80 

2004-072008-122013-2020212022202320242025Real GDP (y-o-y)7.61.13.45.74.12.13.33.1Potential growth (y-o-y).2.53.92.52.62.92.82.7Private consumption (y-o-y)12.80.65.17.25.82.83.63.4Public consumption (y-o-y)1.91.22.61.8-3.36.06.81.6Gross fixed capital formation (y-o-y)23.6-3.34.22.95.914.46.86.1Exports of goods and services (y-o-y)13.97.05.212.69.7-1.41.83.2Imports of goods and services (y-o-y) 27.91.38.014.89.5-1.44.24.3Contribution to GDP growth:Domestic demand (y-o-y)15.2-0.64.65.44.46.45.24.1Inventories (y-o-y)-1.4-0.10.11.80.2-4.3-0.8-0.3Net exports (y-o-y)-6.41.3-1.2-1.5-0.50.1-1.1-0.6Contribution to potential GDP growth:Total Labour (hours) (y-o-y).-1.10.00.00.10.10.0-0.2Capital accumulation (y-o-y).2.31.11.51.62.02.02.0Total factor productivity (y-o-y).1.32.81.10.90.80.70.9Output gap4.7-0.8-0.9-2.7-1.3-2.0-1.4-1.0Unemployment rate8.98.56.75.65.65.65.55.5GDP deflator (y-o-y)13.46.74.25.413.212.27.35.3Harmonised index of consumer prices (HICP, y-o-y)8.15.71.64.112.09.75.94.0HICP excluding energy and unprocessed food (y-o-y)7.45.81.83.18.810.96.84.5Nominal compensation per employee (y-o-y)15.87.89.46.413.318.211.56.9Labour productivity (real, hours worked, y-o-y)7.83.34.01.13.83.12.52.4Unit labour costs (ULC, whole economy, y-o-y)7.44.65.61.48.914.78.64.0Real unit labour costs (y-o-y)-5.3-1.91.3-3.8-3.82.31.2-1.2Real effective exchange rate (ULC, y-o-y)9.0-3.42.5-0.64.76.73.01.4Real effective exchange rate (HICP, y-o-y)8.8-2.6-0.30.02.23.6..Net savings rate of households (net saving as percentage of net disposable income)........Private credit flow, consolidated (% of GDP)14.03.00.83.83.32.0..Private sector debt, consolidated (% of GDP)43.769.052.647.943.740.4..of which household debt, consolidated (% of GDP)12.020.916.515.814.012.5..of which non-financial corporate debt, consolidated (% of GDP)31.848.136.132.129.727.9..Gross non-performing debt (% of total debt instruments and total loans and advances) (1)1.4.7.12.62.1...Corporations, net lending (+) or net borrowing (-) (% of GDP)-2.77.811.512.315.716.816.817.1Corporations, gross operating surplus (% of GDP)26.631.030.330.635.035.235.536.6Households, net lending (+) or net borrowing (-) (% of GDP)...-12.4-17.3-15.4-15.3-14.8Deflated house price index (y-o-y)..1.3-0.2-6.4-5.9..Residential investment (% of GDP)2.02.92.43.13.23.2..Current account balance (% of GDP), balance of payments-10.3-6.2-2.9-7.2-9.2-7.0-7.3-6.9Trade balance (% of GDP), balance of payments-11.4-7.3-2.4-5.7-6.7-4.8..Terms of trade of goods and services (y-o-y)7.50.91.4-0.1-1.42.90.81.2Capital account balance (% of GDP)0.50.61.92.22.52.1..Net international investment position (% of GDP)-37.4-60.2-49.1-47.0-40.8-39.8..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-5.0-21.6-7.8-6.5-4.3-5.8..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)36.156.340.440.335.838.6..Export performance vs. advanced countries (% change over 5 years)..23.614.110.411.3..Export market share, goods and services (y-o-y)13.92.33.5-0.20.0-2.5-1.6-0.4Net FDI flows (% of GDP).-2.8.-3.7-3.1-2.0..General government balance (% of GDP)-1.7-6.3-3.3-7.2-6.3-6.6-6.9-7.0Structural budget balance (% of GDP)..-2.9-6.3-5.9-6.0-6.4-6.7General government gross debt (% of GDP)14.826.238.048.547.548.850.953.9forecast 
 
 
 
  
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks  for  Romania  over  the  short,  medium 
and  long  term.  It  follows  the  multi-dimensional 
approach  of  the  European  Commission’s  2023 
Debt Sustainability Monitor, updated based on the 
Commission 2024 spring forecast. 

fiscal 

1  –  Short-term  risks  to  fiscal  sustainability 
low  overall.  The  Commission’s  early-
are 
detection  indicator  (S0)  does  not  signal  major 
(Table A21.2) (141). 
short-term 
risks 
Government gross financing needs are expected to 
to  around  11-13%  of  GDP  over 
amount 
2024-2025 
Financial 
markets’ perceptions of sovereign risk is stable, as 
confirmed by the ratings of the main agencies.  

(Table A21.1, Table 1). 

2  –  Medium-term  fiscal  sustainability  risks 
appear  high.    The  DSA  baseline  shows  that  the 
government  debt  ratio  is  expected  to  increase 
rapidly  in  the  medium  term  (to  around  103%  of 
GDP  in  2034)  (Graph 1,  Table  1) (142).  The  debt 
increase  relies  on  the  assumption  of  a  structural 
primary  deficit  of  4.4%  of  GDP  as  of  2024. 
Compared  to  historical  data  running  from  1980, 
this  does  not  appear  ambitious.  Indeed,  93%  of 
past fiscal positions were more stringent than the 
one  assumed  in  the  baseline.  (Table  A21.2) (143). 
increases  notwithstanding  a  still 
The  debt 
in  absolute  terms,  declining 
favourable  but, 

(141) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of fiscal and financial-
competitiveness indicators that have proven to be a good 
predictor of emerging fiscal stress in the past.  

(142) The assumptions underlying the Commission’s ‘no-fiscal 

policy change’ baseline include in particular: (i) a structural 
primary deficit, before ageing costs, of 4.4% of GDP from 
2024 onwards; (ii) inflation converging linearly towards the 
10-year forward inflation-linked swap rate 10 years ahead 
(which refers to the 10-year inflation expectations 10 years 
ahead); (iii) the nominal short- and long-term interest rates 
on new and rolled over debt converging linearly from current 
values to market-based forward nominal rates by T+10; (iv) 
real GDP growth rates from the Commission 2024 spring 
forecast, followed by the EPC/OGWG ‘T+10 methodology 
projections between T+3 and T+10 (average of 2.1%); (v) 
ageing costs in line with the 2024 Ageing Report (European 
Commission, Institutional Paper 279, April 2024). For 
information on the methodology, see the 2023 Debt 
Sustainability Monitor. 

(143) This assessment is based on the fiscal consolidation space 

indicator, which measures the frequency with which a tighter 
fiscal position than assumed in a given scenario has been 
observed in the past. Technically, this consists in looking at 
the percentile rank of the projected SPB within the 
distribution of SPBs observed in the past in the country, 
taking into account all available data from 1980 to 2023. 

snowball  effect  of around  -0.7% of GDP annually 
on average over 2025-2034.  

the 

four 

interest-growth 

The  baseline  projections  are  stress-tested 
against 
deterministic 
alternative 
scenarios to assess the impact of changes in 
key  assumptions  relative  to  the  baseline 
(Graph 1).  Under  the  historical  structural  primary 
balance  (SPB)  scenario  (i.e.  the  SPB  returns  to  its 
historical  15-year  average  of  -2.7%  of  GDP)  the 
debt ratio would be lower than under the baseline 
by  about  14 pps.  in  2034.  However,  under  the 
adverse  interest-growth  rate  differential  scenario 
(i.e. 
differential 
deteriorates by 1 pp. compared with the baseline), 
the  debt  ratio  would  be  higher  than  under  the 
baseline  by  around  7 pps.  in  2034.  Under  the 
financial  stress  scenario 
rates 
temporarily  increase  by  1 pp.  compared  with  the 
baseline)  the  government  debt  ratio  would  be 
higher by 0.6 pps. in 2034. Finally, under the lower 
structural  primary  balance  scenario 
the 
projected  deterioration  in  the  SPB  from  2023  to 
2024 is increased by 50%) the debt ratio would be 
higher  than  under  the baseline  by  about  2 pps.  in 
2034. 

interest 

rate 

(i.e. 

(i.e. 

The  stochastic  projections  indicate  medium 
risk,  pointing  to  moderate  sensitivity  of 
these  projections  to  plausible  unforeseen 
events  (144). These stochastic simulations indicate 
a 92% probability that the debt ratio will be higher 
in 2028 than in 2023, implying medium risks given 
the  low  initial  debt  level  and  high  uncertainty 
surrounding  the  baseline  debt  projections  (as 
measured by the difference between the 10th and 
90th  debt  distribution  percentiles,  reaching  around 
42% of GDP in five years’ time) (Graph 2).  

3  –  Long-term  fiscal  sustainability  risks 
appear  overall  high.  This  assessment  is  based 
on  the  combination  of  two  fiscal  gap  indicators, 
capturing  the  required  fiscal  effort  to  stabilise 
debt  (S2  indicator)  and  bring  to  60%  of  GDP  (S1 
indicator) over the long term (145). This assessment 

(144) The stochastic projections show the joint impact on debt of 

10 000 different shocks affecting the government’s 
budgetary position, economic growth, interest rates and 
exchange rates. This covers 80% of all the simulated debt 
paths and therefore excludes tail events. 

(145)The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2025 that would be required 
to stabilise public debt over an infinite horizon. It is 
complemented by the S1 indicator, which measures the 

81 

 
 
 
 
 
 
 
loans  and 

to  non-performing 
the  country’s 
negative net international investment position. The 
latter  is  low  if  non-defaultable  instruments  are 
excluded.  On  the  other  hand,  risk-mitigating 
factors include the lengthening of debt maturity in 
recent  years,  and  the  low  share  of  external, 
private, and short-term debt. 

is  driven  by  an  unfavourable  initial  budgetary 
position and projected increase in ageing costs.  

The  S2  indicator  points  to  medium  fiscal 
sustainability  risks.  The  indicator  shows  that, 
relative  to  the  baseline,  the  SPB  would  need  to 
improve  by  5.2  pps.  of  GDP  to  ensure  debt 
stabilisation  over  the  long  term.  This  result  is 
primarily  underpinned  by  an  unfavourable  initial 
budgetary  position  (contribution  of  5 pps.)  and  a 
marginal  projected 
in  ageing-related 
increase 
costs  (contribution  of  0.2 pps.).  Ageing  costs’ 
developments are driven by a projected increase in 
health-care (0.6 pps.) and long-term care spending 
(0.3 pps.), partly offset by a projected decrease in 
public 
(-0.8 pps.). 
(Table A21.1, Table 2). As several investments and 
reforms  in  the  RRP  contribute  to  supporting  the 
efficiency  of  the  Romanian  health  care  system,  it 
will  be 
important  to  carefully  monitor  their 
implementation. 

expenditure 

pension 

The  S1 
indicator  points  to  high  fiscal 
sustainability risks. The indicator shows that the 
country  needs  to  improve  its  fiscal  position,  with 
an  upfront  adjustment  of  the  SPB  of  6.1  pps.  of 
GDP,  to  bring  its  debt  to  60%  of  GDP  by  2070 
compared  with  the  baseline.  This  result  is  mainly 
initial 
driven  by 
budgetary  position  (contribution  of  4.7 pps.)  and 
the  projected 
in  age-related  public 
spending  (1.5  pps.).  The  current  distance  of  the 
government debt ratio to the 60% reference value 
marginally  reduces  the  fiscal  adjustment  need  
(-0.2 pps.) (Table A21.1, Table 2).  

the  current  unfavourable 

increase 

4  –  Finally,  several  additional  risk  factors 
need to be considered in the assessment.  On 
the one hand, risk-increasing factors are related to 
the  recent  increase  in  interest  rates  and  public 
debt ratio, the share of debt held by non-residents, 
the currency denomination of debt, some exposure 

permanent SPB adjustment in 2025 needed to bring the debt 
ratio to 60% by 2070. The impact of the drivers of S1 and 
S2 may differ due to the infinite horizon component 
considered in the S2 indicator. For both the S1 and S2 
indicators, the risk assessment depends on the amount of 
fiscal consolidation needed: ‘high risk’ if the required effort 
exceeds 6 % of GDP, ‘medium risk’ if it is between 2% and 
6% of GDP, and ‘low risk’ if the effort is negative or below 
2% of GDP. The overall long-term risk classification 
combines the risk categories derived from S1 and S2. S1 
may notch up the risk category derived from S2 if it signals a 
higher risk than S2. See the 2023 Debt Sustainability Monitor 
for further details. 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A21.1:Debt sustainability analysis - Romania 

Source: Commission services. 

Table A21.2:Heat map of fiscal sustainability risks - Romania 

Source: Commission services. 

83 

Table 1. Baseline debt projections20212022202320242025202620272028202920302031203220332034Gross debt ratio (% of GDP)48.547.548.850.955.159.463.968.774.079.485.190.896.9103.1Changes in the ratio1.7-1.01.32.14.24.34.54.95.35.55.65.86.06.3of whichPrimary deficit5.74.84.64.96.16.06.05.95.95.95.95.95.96.0Snowball effect-3.3-5.8-4.0-2.8-2.0-1.7-1.5-1.1-0.7-0.5-0.3-0.10.10.3Stock-flow adjustments-0.60.00.70.00.00.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)10.411.213.311.213.114.015.016.017.218.519.721.022.423.7S1S2Overall index  (pps. of GDP)6.15.2of which Initial budgetary position4.75.0Debt requirement-0.2Ageing costs1.50.2of which    Pensions0.7-0.8     Health care0.50.6     Long-term care0.20.3Education0.10.0Table 2. Breakdown of the S1 and S2 sustainability gap indicators02040608010012020212022202320242025202620272028202920302031203220332034Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p90203040506070809010020212022202320242025202620272028% of GDPGraph 2. Stochastic debt projections 2024-2028MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallHIGHMEDIUMHIGHHIGHHIGHMEDIUMDebt level (2034), % GDP103.189.4105.2109.7103.7Debt peak year20342034203420342034Fiscal consolidation space93%76%96%93%93%Probability of debt ratio exceeding in 2028 its 2023 level92%Difference between 90th and 10th percentiles (pps. GDP)42.1(1)Debtlevelin2034.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2028its2023level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifferencebetweenthe90thand10thpercentilesmeasuresuncertainty,basedonthedebtdistributionunder10000differentshocks.Green,yellowandredcellsindicateincreasinguncertainty.(Forfurtherdetailson the Commission's multidimensional approach, see the 2023 Debt Sustainability Monitor)LOWHIGHMEDIUMHIGHHIGHShort termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)