Romania

REFERENCES

Commission Opinion [COM(97) 2003 final - Not published in the Official Journal]

Commission Report [COM(98) 702 final - Not published in the Official Journal]

Commission Report [COM(1999) 510 final - Not published in the Official Journal]

Commission Report [COM(2000) 710 final - Not published in the Official Journal]

Commission Report [COM(2001) 700 final - SEC(2001) 1753 - Not published in the Official Journal]

Commission Report [COM(2002) 700 final - SEC(2002) 1409 - Not published in the Official Journal]

Commission Report [COM(2003) 676 final - SEC(2003) 1211 - Not published in the Official Journal]

Commission Report[COM(2004) 657 final - SEC(2004) 1200 - Not published in the Official Journal]

Commission Report [COM(2005) 534 final - SEC(2005) 1354 - Not published in the Official Journal]

Treaty of Accession to the European Union [Official Journal L 157 of 21.06.05]

SUMMARY

In its July 1997 Opinion the European Commission found that Romania had made notable progress in bringing its legislation on restrictive agreements into line with that of the Community. The Commission asked Romania to continue its efforts to enforce the new legislation and provide suitable training for the two monitoring bodies. As for State aid, the Commission felt that not much progress had been achieved and that a considerable effort would be needed to meet the requirements for the control of such aid, in particular with a view to drawing up a reliable State aid inventory and adopting rules for a monitoring system that is effective and comparable with those operating in the European Union.

The November 1998 Report considered that Romania had made some progress towards the adoption of antitrust legislation, but enforcement needed to be further strengthened. The absence of a legal framework for State aid made it essential to adopt a law on State aid and to complete the first State aid inventory.

In its October 1999 Report the Commission highlighted the progress made in the field of State aid with the adoption of a comprehensive law in line with the acquis, a first report about State aid activities and progress made with regard to State monopolies. Nevertheless the Commission felt that attention should be given to proper implementation of the law on State aid and to the break-up of former State monopolies.

The November 2000 Report found that Romanian legislation on restrictive agreements was largely in line with the acquis but that more remained to be done with regard to vertical restrictions. In addition, it pointed out that a new law on State aid had come into force in January.

The November 2001 Report stated that progress had been consolidated by the activities of the Competition Council, which processed 437 antitrust cases and 72 State aid cases in 2000.

The October 2002 Report noted that Romania had made some progress but that further efforts were needed, notably with a view to institutional strengthening and aligning State aid on Community legislation.

The November 2003 Report found that Romanian competition legislation was broadly in line with EC antitrust rules, although in the area of State aid controls were still insufficient.

The December 2004 Report emphasised that, while its competition policy is broadly in line with Community acquis, Romania must nevertheless pursue its efforts with a view to accession.

The October 2005 report notes that Romania meets the requirements of the accession negotiations as regards restrictive agreements and that it should therefore be in a position to implement the corresponding legislation when it joins the European Union. However, further efforts are needed to ensure that it meets its state aid obligations.

The Treaty of Accession was signed on 25 April 2005 and accession took place on 1 January 2007.

COMMUNITY ACQUIS

The European Community's competition rules are based on Article 3(g) of the EC Treaty, which states that the activities of the Community must include "a system ensuring that competition in the internal market is not distorted." The main areas of application are restrictive agreements and checks on state aid. Community competition law consists of a body of rules and procedures that seek to combat anti-competitive behaviour by companies (restrictive practices and abuse of dominant positions) and to prevent authorities from granting state aid that could distort competition.

The Europe Agreement with Romania, which entered into force on 1 February 1995, provides for a competition regime to be applied in trade relations between the Community and Romania based on the requirements set out in Articles 81, 82 and 87 of the EC Treaty concerning agreements between undertakings, abuses of dominant positions and state aid, and for implementing rules in these fields to be adopted within three years of the entry into force of the Agreement.

The Agreement also requires Romania to bring its legislation into line with Community competition law.

The White Paper refers to the progressive application of the above-mentioned provisions, the provisions contained in the Merger Regulation and Articles 31 and 86 of the EC Treaty concerning monopolies and special rights.

EVALUATION

Romanian antitrust legislation, which was adopted in 1999 and amended in 2004, is broadly in line with Community law. It incorporates the most important principles of the Community antitrust rules relating to restrictive practices, abuse of dominant positions and merger control. With a view to ending overlapping powers in the competition field, it set up a single body, the Competition Council, which has produced satisfactory results. The number of its decisions has increased and its sanctions policy now represents a more effective deterrent, thanks mainly to an increasing number of fines. In addition, the Competition Council's administrative capacity has been further reinforced.

Romania has now aligned its antitrust legislation with Community law. It must now focus on maintaining its track record on enforcement of this legislation. Accordingly, the Competition Council should play an active role in both applying the law and defending competition.

The Romanian state aid law, which was adopted in 2000 and amended at end-2003 and the beginning of 2004, lays the foundations for appropriate controls in this area. By 2003 Romania had already adopted multisectoral regulations as well as regulations on guarantees, risk capital and transparency of public companies. The legislation has also been amended to clarify the definition of state aid and to reinforce provisions on the obligation to recover unlawful aid. New measures have also been adopted to improve compliance with the prior notification requirement. Romania has now aligned its state aid legislation with Community law. As regards enforcement, the pre-consultation mechanism established in September 2004 has significantly improved the quality of decisions. Romania has continued to increase its administrative capacity, in particular, as stated above, by setting up a single body responsible for competition, the Competition Council. With regard to the steel industry, a national iron and steel restructuring strategy has been adopted. Romania has made significant progress in this area and is meeting its commitments.

Although Romania has now brought its state aid legislation into line with Community law, it must continue to focus on enforcement activities with a view to completing preparations for accession. Accordingly, it should improve the quality of state aid decisions, monitor enforcement of decisions and continue evaluating existing aid. Romania must ensure that all state aid schemes are subjected to scrutiny by the Competition Council. Particular attention should be taken to ensure prior notification of all new aid measures. Romania must also continue to focus its efforts on the steel industry.

When the October 2004 Report was submitted, negotiations on this chapter were still under way and Romania was drafting the necessary proposals to complete alignment of its state aid legislation. The Chapter was provisionally closed in December 2004, subject to the addition of a new safeguard clause that provides that the Council could decide to suspend accession by Romania if it were to emerge that it had failed to fulfil its obligations in connection with competition, in particular state aid. The clause requires only a qualified majority and is thus more rigorous than the general safeguard clause that specifies that any decision to postpone accession to 2008 should be taken unanimously. The October 2005 Report does not raise the possibility of implementing the safeguard clause.

Last updated: 13.01.2006