Some of the PHARE projects have been stalled due to the difficulties of implementing the legal provisions following the adoption of new legislation that foresees two different exchange rates of the Euro. The situation has created difficulties for beneficiaries.
Following Romania’s accession to the EU, the financial legislation has undergone some changes in order to be harmonized with the European norms. The projects reimbursed from European funds are no longer VAT exempted, hence the legislation regarding the European financing has been completed with provisions approaching this aspect.
Currently, the financial legislation provides two exchange rates, one set by the European Commission (InforEuro rate) and another one by the National Bank of Romania (BNR rate) for European reimbursed projects expenses and for the VAT, respectively.
The management of the Ministry of Development, Public Works and Housing has notified the Ministry of Finances (MF) about the legal confusion, but no clarification has yet been provided by the MF. The minister of Development, Public Works and Housing Laszlo Borbely is to meet with officials from the Ministry of Finance to straight the current situation on April 25.