European Commission Suspends €869 Million Payment to Romania Over Unmet PNRR Milestones

The European Commission has suspended a substantial payment of €869 million to Romania from its National Recovery and Resilience Plan (PNRR), citing the country’s failure to fulfil three critical reform milestones. This decision serves as a significant warning to Romania, which now faces the risk of permanently losing these funds and incurring additional penalties if corrective measures are not taken promptly.

The suspended funds are tied to three major reforms that remain incomplete:

• Leadership Appointments at AMEPIP: The Agency for Monitoring and Evaluating the Performance of State-Owned Enterprises (AMEPIP) has yet to finalise the appointment of its president and vice-presidents. Two previous attempts to fill these key positions have failed, and a new selection process is currently underway.
• Board Appointments at State Energy Companies: The government has not completed the appointment of administrators for several state-owned energy companies. While the process has resumed at some entities, others—including major companies like SAPE and Electrocentrale Craiova—have seen little progress.
• Special Pension Reform: The long-debated reform of special pensions, particularly for magistrates, is still pending in the Romanian Senate. The proposed changes include raising the retirement age and adjusting the calculation base for these pensions, but the legislation has yet to be finalised.

Financial and Political Implications

If Romania fails to meet these milestones by November 28, 2025, the suspended €869 million could be lost permanently. Additionally, the country faces a minimum penalty of €660 million if it does not present a comprehensive fiscal reform as part of its fourth payment request under the PNRR. This subsequent request is particularly demanding, with the number of required milestones nearly doubling and a total value of €5.7 billion at stake.

The suspension of these funds places significant pressure on Romanian authorities to accelerate reforms in state-owned enterprise governance and the pension system. The European Commission’s decision underscores the importance of the timely and effective implementation of agreed-upon reforms to ensure continued access to vital EU recovery funds.

Romania’s ability to unlock the suspended funds and avoid further financial penalties depends on its prompt action to address the outstanding reforms. The coming months will be crucial as the government works to meet the European Commission’s requirements and safeguard the country’s access to essential EU support for its post-pandemic recovery.