THE "EUROPEAN FUNDS" CONFERENCE - 6TH EDITION / RAMONA IVAN, CEC BANK: "Combining subsidies and loans, one of the solutions for improving absorption"

Banks are striving to identify the solutions that would lead to a better absorption of European funds, said Ramona Ivan, head of the Department of Foreign Relations and Structural Financing of CEC Bank.

She said: "CEC Bank has several proposals for the 2014-2020 programming period. We can have better absorption by developing public-private partnerships (PPP) in order to support durable development, by combining subsidies with loans, introducing < revolving > grant schemes, with a refundable component, for certain financing programs, as well as by outsourcing the management and implementation of these programs to commercial banks through auctions.

Thus, we could have a multiplier effect on the European grants initially allocated for a specific program, thus giving a higher number of private companies the ability to benefit from financing, as well as a quicker and more rigorous selection of the applicants, as well as ensuring, from the moment the project is selected, the complete banking financing structure needed for the implementation of the project using European financing in order to avoid delays or deadlocks due to the lack or inability of securing bank financing".

The CEC Bank official has also presented as options for the reformation of the absorption system preserving the requirement to present a binding Letter of Comfort upon submitting the projects and passing stricter measures for the monitoring of contracts concerning grants.

The primary objectives of CEC Bank concerning funding in the sector are, according to Mrs. Ivan, lending predominantly to SMEs, agriculture, local public administrations, providing further support to customers that develop projects for accessing European funds, the cooperation with the competent forums in Romania for improving the absorption process in the current programming period and the participation in the working groups set up for creating the framework needed for the implementation of the 2014-2020 programming period.

Ramona Ivan also said that the decision to only grant the role of Management Authority to three ministries - (MFE, MDRAP and MADR) solves the multiple issues raised during the previous programming period, concerning the guarantee of a unified manner of working, on several levels, starting with the stage of project submission, and going through the selection or honoring of the repayment requests within the established deadlines.

Mrs. Ivan, who is also a president of the Commission for European Funds of the Romanian Banking Association (ARB), also said that many European projects are not bankable and that just as many projects contracted using European financing between 2007-2013 have not been implemented.

She went on to say that it would be best if the banks were involved in the analysis of the bankability of the projects involving European funds from the very beginning and in order to simplify things, the authorities would not repeat this analysis.

Some of the problems uncovered by CEC Bank in the mechanism for the implementation of European grants between 2007-2013 are the delayed launch of the calls for projects, delays in the payment of the claims, awkward evaluation procedures, the slow termination of the contracts that were not implemented, delays in the analysis and selection of the projects.