Romania should spend about 40 billion lei a year in order to reach the deadlines for the absorption of European funds, said in an interview Otilia Frolu, head of the Public Sector Division of Bancpost. She considers that an increase in the absorption rate is highly unlikely if the system will continue to exist in its current form, without undergoing significant changes. Otilia Frolu also said that banks evaluate whether investors have prior expertise in the field in which they are proposing investment projects, as well as their ability to complete the project.

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Reporter: What do you think are the main issues that obstruct the absorption of European funds?

Otilia Frolu: European grants are the first sizeable public funds that the Romanian administration was tasked with allocating in exchange for meeting well established performance criteria. Overall, the expertise of the public administration consists of being able to allocate the public budget on the basis of a program which is still created annually, while allowing for major and sudden changes of the so-called "government priorities". As a result, the task of the allocation of European grants is not an easy one. The success of such a policy depends not only on the actions of the authorities, but also on the quality of the consultancy, of the entrepreneurship and on the banks, but first and foremost depends on the interaction between all these partners.

It may seem surprising that investment projects which had their grants approved would not be considered bankable. However, this has become quite usual and many financing contracts which received grants can"t get implemented because the banks refuse to provide funding. The eligibility filters differ: whereas the authorities are looking for and approve projects that reflect the commitment of the investors to a maximum o