The European Commission’s report on Tuesday signaled that Romania has made limited progress in public administration, budget revenues are still quite low and the privatization process is slow.

Below are the strong and weak points that the EC pointed out in the report, according to the website of the EC Delegation in Romania.

AREAS OF PROGRESS

Political: Significant progress has been made in implementing the reform of the justice. The administrative capacity of the courts has steadily increased. The legislative framework to fight corruption has been reinforced and is being implemented. The National Anti-Corruption Directorate is working effectively and the quantity and quality of investigations into allegations of high-level corruption has increased. Romania has undertaken a serious decentralization process, whereby competences are decentralized along with budgets and ownership of policies. Substantial progress has been made in the area of child protection and the screening of the pending cases for international adoptions has been finalized according to schedule.

Economy: The Romanian government’s fiscal policy became more prudent, ensuring that the general government deficit declined. Some progress was made in improving tax collection rates. Economic growth remains strong. Some energy prices were adjusted to meet costs, albeit slower than foreseen. The court enforcement of contracts and bankruptcy procedures have improved.

Chapter 1: The overall legislative reform of the public procurement system is close to adoption. The newly established National Public Procurement Authority is functioning well with sufficient, competent and well trained staff in place.

Chapter 5: The national strategy on Intellectual and Industrial Property Rights and a related clear action plan aiming at improving administrative structures and enforcement are being implemented according to schedule. The administrative capacity of the enforcement agencies has been significantly reinforced.

Chapter 6: The overall situation has continued to improve and Romania has fulfilled its obligations under Annex IX point II of the Accession treaty. In particular, the enforcement rate as regards state aids is now close to reaching a satisfactory level.

Chapter 7: Overall situation in the veterinary sector has improved. The database for the identification and registration of animals is operational. Tenders were successfully concluded for all Border Inspection Posts and construction works have started. The number of noncompliant agri- food establishments has been significantly reduced.

Chapter 21: The designation of bodies for the management of structural instruments has been finalized. Administrative structures are being strengthened and cooperation mechanisms enhanced. As regards financial management and control, administrative capacity has been reinforced and EDIS application submitted.

Chapter 22: Legislation on industrial pollution (IPPC directive) is fully transposed. Institutional structures are in place. The number of issued permits of adequate quality is increasing.

Chapter 24: Implementation of the Schengen Action Plan has continued on schedule. The framework for financing border management needs has been clarified and the single multiannual investment plan has been revised. Recruitment of Border Police staff has continued on schedule. There has also been a significant increase in the administrative capacity of the data protection authority.

AREAS WHERE EFFORTS ARE NEEDED

Political: Limited progress has been made in the reform of the public administration and the statute of civil servants. Some further legislative amendments reforming court procedures would increase the efficiency of the justice system. Corruption remains a serious and widespread problem and the legislative framework remains to be completed as regards the financing of political parties, verification of wealth declarations or conflicts of interest by public officials and the introduction of liability for legal persons. Parliament must demonstrate there is clear political will to engaging in a long-term fight against high-level corruption in which no one is above the law. Current investigations into high- level corruption should now lead to criminal trials, final convictions and dissuasive sentences in cases of highlevel corruption in a reasonable timeframe. As regards mental health, measures need to be taken urgently to manage excess occupancy and to improve sanitary facilities in the psychiatric institutions, to reduce institutionalization by improving care in community and to improve access to pharmaceuticals. Further attention is needed to ensure full implementation of the new strategy for the disabled, including children, and further efforts are necessary to create alternative services for disabled and to improve the quality of residential institutions. Attention is needed to further improve Roma''s living conditions on the ground and to combat discrimination.

Economy: Government revenue (in terms of proportion of GDP) remains low, as a consequence of tax reforms and tax collection rates which remain unacceptably short. Whilst there has been a slowdown in debt write-offs and accumulation of new arrears, these remain high. Public sector wages slipped. The decline in inflation has slowed. Privatization is progressing at a low pace, with companies bouncing back into state ownership.

Chapter 1: Alignment with the acquis on foodstuffs as well as the requirements in terms of control activities including labeling and traceability of GMO cultivations must be ensured. It must be ensured by Romania that non authorized Genetically Modified seeds will not be used by farmers after accession.

Chapter 3: as regards motor vehicle insurance, most of the institutions required by the Motor Insurance acquis are not yet operational. The Guarantee Fund and the Compensation Body have not been appointed and no proper financial means have been allocated to them. There is no staff appointed to handle queries and the database of the information centre is not yet accurate. This situation leads to persistent concerns for the signing by Romania of the Multilateral Agreement prior to accession. As regards the banking sector, Romania must ensure that the capital adequacy rules are applied in a coherent way to both banks and investment firms.

Chapter 7: Preparations for the paying agencies, the integrated administration and control system (IACS) must be dramatically accelerated. Romania does not yet have appropriate rendering collection and treatment facilities for high risk animal by-product material. The tendering contracts for the eight rendering centers that should become operational by end 2006 have not yet signed.

Chapter 10: The overall administrative and management capacity of the Romanian tax administration should be reinforced as tax collection rates are still too low. The pace of implementation of the tax IT interoperability systems (which has suffered strong delays for many years) should be urgently accelerated to ensure redistribution of VAT and excise duties between Member States, and to prevent fraud when, upon accession there will no longer be any more controls at borders.

Chapter 18: Implementation of the YOUTH program was suspended further to mismanagement of funds.

Chapter 21: The overall administrative capacity to manage EU funds including specialist training, monitoring and evaluation and operation of financial management and control systems should be considerably strengthened. Due attention should be given to project pipeline and preparation of final beneficiaries.

Chapter 22: Increased efforts are still needed in the areas of horizontal legislation, waste management and water quality in order to complete transposition and ensure full implementation. Preparations in the field of IPPC (integrated pollution prevention and control) have to be maintained with the current level of pace and quality. Nature protection requires increased efforts both in terms of administrative capacity and the designation of special nature protection areas.

Chapter 24: There are still substantial efforts needed as regards Romania''s ability to sustain the current pace of the fight against corruption. Current investigations into high-level corruption should now lead to criminal trials, final convictions and dissuasive sentences in cases of high- level corruption in a reasonable timeframe.

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