Romania races for EU billions

Romania's parliament has until 31 August to pass six reform bills. Miss that date, or pass versions that Brussels decides no longer match what was promised, and the European Commission can freeze what remains of Romania's allocation from the Recovery and Resilience Facility, the EU's pandemic-era fund that pays grants and loans only when reforms are verified. The hard closure date applies across the Union. Romania's difficulty is that the hardest politics have been left until the end.

Money for proof

The RRF is, in effect, a contract for performance. Under Regulation 2021/241, the Commission can suspend some or all of a payment when promised milestones are "incomplete or unsatisfactory". A law passed by a national parliament is evidence, but not enough on its own. If MPs amend it so far that it no longer delivers the agreed reform, the milestone can still fail.

That is why the next few weeks matter. Two of the six bills fell in the Senate on 1 July by just three votes. On 15 July, interim prime minister Ilie Bolojan warned that even bills passed by parliament still need Commission confirmation. Passing a law gets Bucharest through one door. Passing the version Brussels recognises is what releases the money.

The six bills deal with public-sector pay, integrity rules at ANI, Romania's anti-corruption agency, urban planning, decarbonisation, civil-service careers, and tax-collection incentives (Romania Insider, RRI). None is painless. Public workers face changes to pay structures. Officials face tighter scrutiny over conflicts of interest. Energy companies face new decarbonisation demands.

Who gives something up — and who needs the money

The people being asked to carry those costs are not necessarily the people waiting for the cash. More than 5,300 contracts for local schools, hospitals and municipal infrastructure depend on continued RRF payments. Development Minister Cseke Attila has extended project deadlines to 30 August while warning there will be no further extension. Romania has already received a €2.25 billion fourth instalment, paid on 23 June. What remains now depends on parliament.

PSD, the largest party in the governing coalition, has been working with unions on amendments to soften the wage law. Domestically, the logic is clear enough: unions are there to defend public employees. The problem is that every amendment which changes the substance of the reform increases the risk of the Commission response Bolojan has already flagged.

If the grants are lost, Romania cannot easily borrow its way around the hole. The country is already under an excessive deficit procedure, the EU process used when governments breach fiscal rules. Brussels is pressing Bucharest to narrow its budget gap. Extra borrowing would worsen the same problem the EU is already telling Romania to fix.

The Commission can pay and withhold in the same decision

Spain shows the mechanism. The Commission approved Spain's sixth payment of €7.021 billion gross, released €302 million that had previously been held back, and kept €537 million suspended over three unmet targets. Conditionality is not an all-or-nothing instrument. Brussels can reward the reforms it accepts and withhold money for the ones still unfinished in the same decision.

Romania managed the early RRF years with the less contentious work: procurement rules, investment spending, project launches. The more politically expensive reforms were pushed to the back of the queue. The question now is no longer whether Bucharest can find projects for EU money. It is whether its coalition can pass reforms quickly without editing out the promises Brussels is paying for.