Romania is launching the most ambitious industrial policy package in recent years – 9 state aid schemes, with an estimated budget of EUR 5 billion by 2032, including an instrument dedicated to projects exceeding EUR 200 million, a significant shortcoming so far in the toolkit for attracting strategic investments.
An analysis by Sebastian Popescu, Partner, Head of Grants and Incentives Advisory, EY Romania
In recent years, overlapping crises – the pandemic, geopolitical tensions, the energy transition and global technological competition – have prompted governments to rethink the role of the state in directing investments. In Central and Eastern Europe, countries are actively competing to attract investments in strategic value chains such as electric vehicle batteries, semiconductors, renewable energy equipment or advanced digital technologies.
Against this background, as well as in light of Romania’s macroeconomic situation, the Romanian Government has launched a new extensive package of state aid schemes, estimated at approximately EUR 5 billion by 2032. This represents one of the most ambitious industrial policy initiatives in recent years and comes at a time when the Romanian economy is simultaneously facing structural challenges and opportunities to reposition itself within the European industrial architecture.
The new package of state aid schemes: structure and objectives
The package put forward by the Romanian Government includes 9 distinct state aid schemes, mainly handled by the Ministry of Finance, the Ministry of Economy, with the involvement of the Investment and Development Bank. They target a wide range of areas – from advanced technologies and research and development to strategic industries, regional convergence, and support for Romanian entrepreneurship in the diaspora. The total budget of the schemes with clearly defined allocations amounts to EUR 3.95 billion, and estimates suggest that the total amount could reach approximately EUR 5 billion, if the instrument dedicated to large-scale strategic investments is also included.
One of the most relevant novelty features of the economic recovery measures package is the establishment of a framework dedicated to funding investments with significant impact on the economy, targeting projects exceeding EUR 200 million. This instrument, long awaited by the investment community, addresses a gap in Romania’s industrial policy: the absence of a sufficiently robust mechanism to attract “anchor” projects capable to generate high added value, develop locally integrated value chains and produce multiplier effects across the economy. The importance of such a framework is all the greater as investors’ decisions are influenced not only by the level of financial support, but also by the predictability of the regulatory framework, the speed of administrative processes and the government’s ability to offer integrated solutions – from infrastructure and utilities to permitting and cross-agency coordination.
Beyond this central pillar, the governmental package includes a number of sectoral schemes targeting clear objectives: develop industrial clusters and stimulate production in sectors with marked trade deficits; leverage strategic and critical mineral resources; accelerate investments in net-zero technologies and low-carbon industries; strengthen research and development and innovation capacities through combinations of grants and extended tax incentives; as well as support the defense industry in a geopolitical context that emphasizes the importance of industrial self-sufficiency and economic security.
Additionally, the package proposes financial instruments aimed at regional convergence and enhancing the competitiveness of local economies, as well as programs dedicated to Romanian entrepreneurship in the diaspora, with the role of mobilizing capital, know-how and entrepreneurial initiative toward the national economy. This diversification of instruments reflects a mature approach to the investment policy, recognizing the need for differentiated solutions tailored to project types and recipient profiles.
EY opinion: how these instruments could be honed
In EY’s point of view, the package of support schemes proposed by the Government represents one of the most ambitious industrial and investment policy efforts in recent years. Romania already has robust experience in designing and implementing state aid schemes, and the Ministry of Finance has demonstrated, over the past 10–20 years, a very strong institutional capacity to manage complex programs, in compliance with European state aid rules and with measurable results in attracting productive investments. According to official data for the past decade, the funding schemes managed by the Ministry of Finance have granted state aid totaling over EUR 1.8 billion to more than 230 companies, supporting total investments of approximately EUR 4.4 billion and helping create more than 36,000 jobs.
In this context, the new package does not represent a change of direction, but rather a significant expansion of the scope of intervention, both in terms of financial volume and the diversity of instruments and strategic objectives.
In the case of the framework dedicated to investments with significant impact on the economy (over EUR 200 million), international practice confirms that strategic investors do not choose a location solely based on the level of the grant. The decision is decisively influenced by the speed of the administrative process, the predictability of the regulatory framework and the state’s ability to deliver the necessary infrastructure on time. In this regard, the scheme could be strengthened by introducing real administrative fast-tracking mechanisms, with clearly defined timelines for obtaining permits and endorsements, as well as by integrating essential infrastructure components as early as the planning stage: access to energy, utilities, logistical and digital connectivity.
At the same time, an explicit prioritization of investments with anchor effects – those that are able to generate local industrial ecosystems – could enhance the long-term impact. Relevant examples include batteries and electric mobility, semiconductors and advanced electronics, advanced materials or the green chemical industry. A simplified framework, pre-notified to the European Commission for priority sectors, would bring additional flexibility and predictability in the relationship with the investors.
Concurrently, developing a dedicated platform for strategic investors, with a role in cross-ministry coordination and acting as a single interface with central and local authorities, would help reduce administrative fragmentation – one of the main risks perceived by large-scale investors.
As regards the scheme dedicated to the manufacturing industry, the stated goal – reduce trade deficit and increase domestic production – could be supported more effectively by focusing on specific value chains, rather than exclusively on general NACE codes. The list of eligible activities may remain broad, but prioritization could target those segments where gaps are structural and the potential economic impact is high: electronic equipment and components, chemical and pharmaceutical products, machinery and transport equipment, or technologically complex automotive sub‑segments.
Correlating the intensity of state aid with the net impact on the trade balance, as well as introducing additional incentives for the integration of local suppliers could more effectively direct public resources toward high-value-added projects. At the same time, including a mandatory technological modernization component – e.g. a minimum level of automation – as an eligibility criterion, rather than merely a scoring factor, would help avoid funding low-cost investments and steer support toward genuine industrial transformation.
Simplifying the assessment process by reducing scoring criteria to a limited set that is clearly correlated with the economic and fiscal impact could accelerate the administrative process and increase the decision-making transparency. Establishing recurrent application windows, in the same periods of the year, as well as shortening analysis and payment timelines, would strengthen predictability for the private sector.
Last but not least, the scale of this economic recovery package naturally raises operational challenges. Given the volume of potential projects, the diversity of instruments and the complexity of assessments, it is reasonable to anticipate that effective implementation will require the allocation of additional human resources, beyond the current capacity of the teams involved. This does not diminish the performance demonstrated by the authorities in managing state aid schemes in the recent years, but reflects an objective reality: the success of such an ambitious package depends not only on the legislative structure, but also on the administrative capacity to deliver quickly, consistently and predictably.
For Romania, the new package of state aid schemes represents a very good opportunity to change its economic development model. If implemented effectively, these instruments can help attract strategic investments capable of generating industrial ecosystems, stimulating innovation and reducing dependence on imports in key sectors.
At a time when regional competition for investments is becoming increasingly intense, Romania has the opportunity to position itself as a relevant player in the new European industrial value chains. However, this opportunity depends on our capacity, as a country, to transform an ambitious public policy package into a functional and credible instrument for the business environment.