He indicated that in the past years the problem has not been the lack of financing for the development of infrastructure projects, but the lack of managerial capacity.
"There's no point in our talking about high budgetary deficits for infrastructure projects when we, with the money we get, are not able to conclude projects that were announced as far back as seven years ago. One can see it's not a question of money, but of the existence of managerial capacity, of less bureaucracy and a sufficiently low level of corruption," said Isarescu during the "The trajectory of European money, from idea to success" workshop organised by Mediafax and the NBR.
The governor showed that economic growth has allowed for higher budgetary sums to be earmarked for infrastructure, with these sums standing at 3bn euros at present, from only 1bn euros in 2000.
Isarescu cautioned that the "euphoria" of absorbing European funds may lead to macroeconomic slippages, which would be dangerous. He states, however, that the NBR will struggle to ensure sustainable economic growth.
The governor's warning comes after Sebastian Vladescu, a former Finance minister, revealed in an interview with ZF that Romania needs to earmark at least 4bn euros for infrastructure projects as soon as next year and assume a breaching of the 3% budgetary deficit cap imposed by the EU in order to provide financing in this field. He underscored that should it not invest in highway construction, railway modernisation and hospitals, Romania risks experiencing a "blockage" until 2014 and could lose significant foreign investments.
In fact, Mercedes explains its recent decision to build a plant in Hungary, instead of Romania, was caused by the very lack of road infrastructure.
Isarescu considers, however, that the cause for which earmarked funds have not been used so far must be identified first, before speaking of the need of some bigger budgetary deficits.
Excessive bureaucracy, beneficiaries' incapacity to get co-financing and the lack of transparency in project assessment and selection are the main difficulties in accessing European funds, showed a survey conducted by Structural Consulting Group.
On the other hand, those who apply for European funds make a lot of mistakes when drawing up financing projects, such as an inaccurate estimation of budgets and the implementation period.
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