The European Commission considers that, as currently conceived, the legislative initiative by which the state transfers Romexpo land to the Chamber of Commerce and Industry of Romania (CCIR) is very likely to involve state aid, according to a Competition Council letter obtained by Economedia.
MEPs on the legal committee were summoned on Thursday by committee chair Laura Vicol (PSD) to vote on the Romexpo law, but the meeting was postponed for now.
The Competition Council was not invited to the meeting, according to Economedia and G4Media sources. The Competition Council, Finance Ministry, Justice Ministry and RAAPPS opposed the Romexpo law on the grounds that it is state aid granted in breach of European law and called for a tender.
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After the vote in the legal committee, the bill will be sent to the plenary. The Chamber of Deputies is the decision-making chamber, having already passed the Senate.
However, the Competition Council has sent an address to the Legal Affairs Committee, drawing attention to the fact that the European Commission is investigating the transfer of Romexpo land, and is looking into whether it constitutes state aid to the CCIR.
According to the Competition Council, following discussions with the Brussels forum, “the European Commission considers that, prima facie, as the legislative initiative is currently conceived, it is very likely to involve state aid, at the level of CCIR, taking into account the economic activity it carries out, especially in terms of activities directly related to ROMEXPO SA”.
At the same time, the Commission also draws attention to “the possible transfer of aid to private investors with whom the CCIR will be associated in order to carry out sustainable development projects, insofar as they are not selected by public tender”. The CCIR is to develop a real estate project on the land together with the developer Iulius in Iasi, according to the institution’s official announcements.
According to the Council, the European Commission has indicated to the Romanian authorities to consider other possibilities for the use of Romexpo land, namely:
A. Devising a way of transferring the land in such a way that national and European state aid rules are not affected, indicating two possible options.
1. Organisation of a competitive, open, transparent and unconditional procedure
2. Mandate the CCIR by the State to ensure the revitalization of publicly owned land
B. If the above two options are not suitable for the Romanian authorities, the measure must be designed in such a way that the transfer of the land free of charge is considered to be aid compatible with the State aid rules, i.e. to meet a social need, such as the development of cultural activities. However, if the aim is to develop real estate on a large part of the land, there can be no basis for compatibility of the measure.
The European Commission is currently waiting for a new response from the two chambers of Parliament by 24.12.2021 on a number of documents requested, after the first documents submitted did not provide a concrete response to the issues raised by the European forum. The European Commission has been asking for information since November 2020 about the law granting €300 million worth of land free of charge to Romania’s Chamber of Commerce and Industry, Libertatea wrote at the time.
The action came after the Nepi Rockastle group filed a petition in which it also expressed interest in the land, saying it wanted to pay for it without the need for a free transfer, and in which it accused the act of favoring the Iulius group. The Iulius group then conveyed that it had no involvement in Parliament’s legislative approach, as the land would be offered free of charge to the Chamber of Commerce and Industry and the group would pay a fee for the use of the land.
The SME Council also charged that the CCIR will receive the land from the state for free and will also collect new fees from companies. The Coalition for Romania’s Development complained about the lack of transparency and legislative, procedural and economic fairness in the Parliament’s decision.
Under the Romexpo bill, 46 hectares of land in one of Bucharest’s most expensive areas will go to a private entity, the Chamber of Commerce and Industry of Romania (CCIR), free of charge. This is a bill initiated in 2019 by the PMP, later voted in side by the PSD and PNL.
USR has challenged the bill at the Constitutional Court, which rejected the complaint. President Klaus Iohannis sent the bill back to Parliament earlier this year, but the changes to the bill are minimal compared to the version voted last year.
On 13 December, Cristina Prună, vice-president of USR, accused the PSD-PNL coalition of preparing the Romexpo real estate cannon just before Christmas. “While Romanians are waiting for the winter holidays, the new coalition is preparing to complete the Romexpo real estate cannon. Tomorrow, the Committee for Industries and Services of the Chamber of Deputies will debate the project that gives a private entity 46 hectares of land located in one of the most expensive areas of Bucharest for free,” Prună wrote on Facebook.