Since joining the European Union (EU) in 2007, Romania’s economy has made remarkable progress. In 2015, the country achieved one of the highest growth rates of all EU Member States, at 3.7%. This growth is supported by exports, mainly to the EU and strong domestic demand. Local consumption has been significantly strengthened by rising wages, low interest rates, low fuel prices and VAT reductions on food items. Meanwhile, the deficit reduction is contributing to greater macroeconomic stability.

The OECD was asked by the Romanian government to carry out an independent policy assessment to identify rules and regulations that may hinder the competitive and efficient functioning of markets in three sectors: construction (including public procurement and building materials), freight transport and food processing.

This assessment identifies distortions to competition in Romanian legislation and proposes recommendations for the removal of regulatory barriers to competition in three key areas of the Romanian economy: construction, freight transport and food processing. The 227 potential regulatory restrictions that were identified were analysed, and the report makes 152 specific recommendations. Among the benefits from increased competition will be lower prices and greater choice and variety for consumers as a result of entry of new, more efficient firms or from new forms of production in existing firms. This report identifies the sources of those benefits and, where possible, provides quantitative estimates. If the particular restrictions that have been quantified are lifted and the expected effects are realised, the OECD has calculated a positive effect for the Romanian economy of around EUR 434 million.

The Construction sector is important, both as the creator of infrastructure for other sectors and as a great source of employment (over 1.1 million people in 2014). It is also a major contributor of GVA (EUR 9.4 billion in 2014). Among its major constraints are unclear procurement practices with unguided discretion by public authorities, caps on prices for major components such as gravel and sand and constraints on specific types of business such as market stalls and tourist constructions. Potential conflict of interest with public authorities, obsolete legislation and laws that have not kept up with recent EU legislation, such as those governing the environment have also led to wide discretion granted to authorities.

The various types of transport (road, rail and maritime) together generate a turnover of about 5.08% of Romania’s GDP and employs about 133 100 people. Although Romania’s road transport is among the most regulated in the European Union, its rail transport is one of the most liberalised rail transport markets. Road transport is constrained by unnecessary documentation, such as authorisations for vehicle repair, complicated payment of local taxes, display of vehicle plates and copies of transport licences. Rail transport suffers from unclear provisions relating to private and public railway infrastructure and the ambiguous position of Romania’s state-owned rail freight operator in regard to private operators. Inland waterway and maritime transport is constrained by the lack of transparency in tariff calculation, a lack of open competition for pilotage and towage services and undue discretion given to the Romanian Naval Authority (ANR) regarding compliance of market participants with state regulations.

The food processing sector generated EUR 1.4 billion of GVA in 2013, representing approximately 10% of total GVA generated by manufacturing and 1% of Romania’s total economy. Although food prices are relatively low in Romania, regulatory reforms could bring efficiency gains that would benefit Romanian households. Constraints that could be addressed are over-training of staff that do not pose a threat to food safety, reducing the separate areas for sale of baked goods in shops, excessive requirements for licences and control measures for food market operators, discrimination against importers and undue competitor collaboration (as in the milk industry) and ambiguous and outdated legislation.