November 13 (SeeNews) - Romania needs to make further reforms to strengthen the independence of its judiciary, tackle corruption and sell more state-owned enterprises (SOEs) in 2019, the European Bank for Reconstruction and Development (EBRD) said on Tuesday.
Moreover, Romania needs to prioritise business environment reforms and address difficulties in accessing skilled labour, the inadequate transport infrastructure and its inefficient government bureaucracy, the EBRD said in its Transition Report 2018-2019.
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In particular, growing labour shortages need to be addressed by retaining and attracting qualified workers.
"Further reforms to strengthen judicial independence and transparency should be undertaken. Progress in this area would help alleviate concerns surrounding the independence of the judiciary and the government’s anti-corruption commitment," the EBRD said.
Also, the EBRD noted, progress under the Cooperation and Verification Mechanism (CVM) remains uneven, as the ruling coalition’s ongoing attempts to pass amendments to several justice laws are a cause for concern.
EBRD points to the dismissal of the head of Romania's anti-corruption agency DNA, Laura Codruta Kovesi, in July, which it sees as an attempt to weaken the fight against corruption.
The Romanian government also needs to address red tape, legal uncertainty and judicial inefficiency, which inhibit corporate investment, the bank added.
Moreover, the privatisation of state-owned enterprises (SOEs) needs to be prioritised.
"SOEs remain dominant in some sectors such as energy and transport. Privatisation of these enterprises through initial public offerings (IPOs) would attract investors and increase market capitalisation, thereby helping upgrade Romania from frontier market to emerging market status," EBRD said.
At the end of August 2017 Romania's finance ministry announced its plans to set up a sovereign development and investment fund, FSDI, by pooling 27 of the most profitable companies in which the government owns stakes. The emergency draft law for the fund's creation is expected to be adopted in two or three weeks, prime minister Viorica Dancila said in early November.
On November 1, EBRD said it has lowered its forecasts for Romania's economic growth to 4.2% in 2018 and 3.6% in 2019, from 4.6% and 4.2% respectively predicted in May.