Romanian administration forms a special team to oversee the transformation of publicly-owned companies
The Romanian Government, led by Prime Minister Ilie Bolojan and Deputy Prime Minister Dragoș Anastasiu, has announced a far-reaching overhaul of state-owned enterprises (SOEs) with the primary objective of increasing transparency, improving corporate governance, and streamlining management structures.
The reforms, approved by the Government on July 24, are part of a broader effort to enhance fiscal sustainability and efficiency in SOEs. Key specific objectives and reforms include:
- Increasing Transparency: The Agency for Monitoring the Performance of Public Enterprises (AMEPIP) will publish detailed datasets, disclosing the identity of SOE managers, their remuneration, company financials, and performance indicators. This move aims to provide full visibility into SOE management and operations.
- Corporate Governance Reform: The government will adopt a memorandum to begin legislative amendments on corporate governance in SOEs. These amendments aim to set clear performance indicators for boards and management, improve accountability, and are aligned with Romania’s National Recovery and Resilience Plan (PNRR).
- Streamlining SOE Management: Measures include reducing the size of boards, capping board members' earnings through legislation, and applying new performance evaluation criteria for boards and managers.
- Fiscal Sustainability: The reforms are part of a broader effort to complement fiscal consolidation measures, intending to make SOEs more efficient and financially sustainable, which is key to Romania’s fiscal consolidation strategy.
The reforms will also target SOEs that have been posting losses for over three consecutive years, which may face closure, merger, or divestment. The number of eligible firms assisting ministries in drawing up selection criteria for public enterprise leadership roles may be expanded.
The group overseeing these reforms will include representatives from the ministries of Finance, Economy, Transport, Energy, Environment, Health, Justice, Digitalization, and the Secretary-General of the Government. Deputy Prime Minister Marian Neacşu, a senior official of the Social Democratic Party (PSD), will also be part of the group. The group will be coordinated by Deputy Prime Minister Dragoş Anastasiu.
To strengthen AMEPIP's monitoring capacity, the Authority will be reorganized and will align with Romania's PNRR and OECD standards. Transparency will be enhanced through the publication of allowances, indicators, and key financial data. The reorganization of AMEPIP is intended to provide a robust framework for monitoring SOE performance and proposing structural reforms.
These efforts reflect Romania's goal to tackle structural inefficiencies in the public sector, improve management practices, and contribute to fiscal stability under EU Recovery and Resilience Facility milestones. The group's objectives also include management compensation revisions and reducing the number of directors and supervisory board members.
The working group was established by decision of the Prime Minister and is distinct from an expert advisory body still to be formed, which will consist of private sector professionals serving as external consultants. Certain public companies may be listed on the stock exchange. The group will review existing arrears as part of its mandate.
These reforms are part of a phased approach alongside local administration restructuring, aiming for long-term improvements in public enterprise efficiency and governance with legislative steps expected imminently.
The reforms aim to improve fiscal sustainability and efficiency in state-owned enterprises (SOEs) by focusing on both enhancements in business practices and finance management. Specifically, the government will streamline SOE management by reducing board sizes, capping board member earnings, and implementing new performance evaluation criteria. Additionally, efforts to increase transparency will involve publishing detailed financial data and performance indicators for SOE management, aligning with Romania’s National Recovery and Resilience Plan (PNRR) and OECD standards.
