Romania forms governmental committee for restructuring of state businesses
The Romanian Government, in a bid to enhance performance, transparency, and governance in public enterprises, has established a working group led by Deputy Prime Minister Dragoș Anastasiu. This group aims to attract private investment and align with EU standards.
The working group's objectives are multifaceted:
- Evaluation and Streamlining of Public Enterprises: The group will evaluate the performance of public enterprises, with a focus on closing or merging underperforming entities, particularly those posting losses for three consecutive years. The aim is to create a leaner and more efficient sector.
- Improvement of Corporate Governance: The reforms seek to bring governance in line with international standards. This includes amending legislation to reduce the size of boards, impose caps on executive and board member remuneration, and enforce performance-based evaluation systems.
- Increased Transparency and Accountability: The Agency for Monitoring the Performance of Public Enterprises (AMEPIP) will publish detailed datasets, disclosing the identities, remuneration, performance indicators, and financial data of SOE managers. This transparency effort aims to foster accountability without stigmatizing management earnings justified by performance.
- Reorganization of Monitoring Authority: The reform includes strengthening AMEPIP to improve its monitoring capabilities of public enterprises, enhancing oversight on their financial and operational performance.
- Privatization and Public-Private Partnerships (PPPs): The government is pushing for privatization to reduce the size of the public enterprise sector and attract private investment. This includes the potential listing of certain public companies on the stock exchange and fostering PPPs in critical sectors such as energy, transportation, and digital infrastructure.
- Legislative Amendments: The reforms will begin with adopting a government memorandum to amend corporate governance laws governing public enterprises by the end of July 2025. This legal framework revision targets board size reduction, earnings caps, and enhanced performance metrics.
The working group is distinct from an expert advisory body yet to be formed, consisting of private sector professionals serving as external consultants. The Authority for the Management of State Holdings in Public Enterprises (AMEPIP) will be reorganized to strengthen its monitoring capacity. The group is also considering the closure, merger, or divestment of state enterprises with consistent losses.
The Romanian Government approved the creation of this working group on July 24. The group will implement performance-based evaluation systems, enhance transparency through the publication of allowances, indicators, and key financial data, and revise management compensation. The number of eligible firms assisting ministries in selecting public enterprise leadership roles may also be expanded.
These reforms form part of a broader government agenda that also includes local administration restructuring and fiscal consolidation measures aimed at improving efficiency and financial sustainability across the public sector.
- The working group, led by Deputy Prime Minister Dragoș Anastasiu, is focusing on attracting private investment and aligning public enterprises with EU standards, which is a crucial aspect of the business and finance sector in Romania.
- The reorganization of the Authority for Monitoring the Performance of Public Enterprises (AMEPIP) is aimed at improving their monitoring capabilities of public enterprises' financial and operational performance, a move that can enhance transparency and governance in the business sector.
