2nd Fiscal Effectiveness and Growth DPL

closed

Closed

The development objective of the Second Fiscal Effectiveness and Growth Development Policy Project for Romania is supports government reforms to: (a) strengthen fiscal management and the performance of state‐owned enterprises (SOEs) (b) improve the functioning of energy, property, and capital markets. This Fiscal Effectiveness and Growth Development Policy Loan (FEG‐DPL_ series was designed in close collaboration with the government, the European Commission (EC), and the International Monetary Fund (IMF) to complement the 2013–2015 precautionary programs of the European Union (EU) and the IMF. It supports key structural reforms to strengthen fiscal management and performance of state‐owned enterprises (SOEs), and to improve the functioning of the energy, property, and capital markets. It builds upon previous World Bank (WB) policy lending operations in Romania and is aligned with Romania’s Country Partnership Strategy (CPS) for 2014–2017. Romania has achieved the highest growth in the EU over the last fifteen years, but further progress with structural reforms is needed to sustain it. Poverty in Romania remains the highest in the EU and progress in poverty reduction has been limited. This DPL contributes significantly to poverty reduction in Romania.At the same time, this DPL supports key structural reforms that help boost Romania’s growth potential and accelerate convergence with the EU. This operation supports a new corporate governance framework for public enterprises; one IPO12; and the restructuring of a large SOE. This DPL improves public sector outcomes through the following prior actions: (i) extending the use of centralized procurement in health will lead to importantprice reductions for medicines and generate savings which can be channeled to underfunded programs inthe health sector; (ii) the prioritization of public investments will lead to a better allocation of the scarcepublic money towards priority projects and accelerate the implementation of infrastructure projects; (iii)the law on the MSIP will consolidate social assistance programs, reduce administrative costs and channelmore resources to the poor; and (iv) the new law on corporate governance of SOEs is an important milestone in strengthening the performance of Romania’s large SOE sector.

FY17 - Energy and Extractives,FY17 - Financial Sector,FY17 - Health,FY17 - Public Administration,FY17 - Social Protection

World Bank Group

Project

Power Generation (CCGT), Natural Gas, Government