The European Integration came with new challenges for the Romanian enterprises especially for the SMEs, the opportunities arising from operating on the European Single Market and the possibility for accession of European Regional Development Funds. The maEuropean financing, large enterprises, small and medium enterprises, POS CCE, SOP IEC, structural funds

Droj Laurentiu

English

Research Papers in Economics

195 
 
INCREASING THE MANAGEMENT AND PRODUCTIVE CAPACITY OF ROMANIAN 
SMES AND LARGE ENTERPRISES BY ACCESION OF STRUCTURAL FUNDS – SOP 
IEC 
 
Droj Lauren iu  
University of Oradea, Faculty of Economics, Universită ii Street 1, ldroj@yahoo.com 
 
The European Integration came with new challenges for the Romanian enterprises especially for the SMEs, 
the opportunities arising from operating on the European Single Market and the possibility for accession 
of  European  Regional  Development  Funds.  The  main  programme  designed  to  offer  access  for  small, 
medium and large Romanian enterprises to European funding is the Sectorial Operational Programme 
“Increase  of  Economic  Competitiveness”-  SOP  IEC.  The  area  of  intervension“D1.1.  Productive  and 
environment friendly investments and preparation for market competition, especially of SMEs”a) with a 
financial allocation of 430 million lei in the period 2007-2013, supports strengthening and upgrading of 
the productive sector by tangible and intangible investments for small and medium enterprises (excluding 
micro enterprises) and also for large enterprises. 
Key words: European financing, large enterprises, small and medium enterprises, POS CCE, SOP IEC, 
structural funds 
The article’s JEL codes: G38, O19 
 
1. Introduction 
The European Integration came with new challenges for the Romanian enterprises especially for 
the SMEs, the opportunities arising from operating on the European Single Market and the areas 
eligible for the European Regional Development Funds. The Sectorial Operational Programme 
“Increase of Economic Competitiveness” (further referred to as SOP IEC) is one of the seven 
instruments (Operational Programs), which offer the financial support for the consolidation and 
modernization of productive sector through investments. The SOP IEC aims to strengthen the 
strategic focus of the Economic and Social Cohesion policies across Romania, and to make the 
correct and appropriate linkages to the European policies and the Lisbon Strategy for growth and 
job creation.  
The  general  objective  of  SOP  is  the  increase  of  Romanian  companies’  productivity,  in 
compliance with the principle of sustainable development, and to reduce the disparities compared 
to the average productivity of the European Union. The target is an average annual growth of 
GDP per employed person by about 5.5%. This will allow Romania to reach an approximate of 
55% of the EU average productivity by 2015. 
The specific objectives of the SOP “Increase of Economic Competitiveness” are: 
  -Consolidation  and  environment-friendly  development  of  the  Romanian  productive 
  sector, 
  -Establishment of a favorable environment for sustainable enterprises’ development, 
  -Increase of the R&D capacity, stimulation of the cooperation between RDI institutions 
  and enterprises, and increase of enterprises’ access to RDI 
  -Valorization of the IC&T potential and its application in the public (administration) and 
  private sector (enterprises, citizens) 
  -Increased energy efficiency and sustainable development of the energy sector 196 
 
 
Figure 1. SOP Increase of Economic Competitiveness  
(Extracted and adapted from the Framework Document - Sectorial Operational Programme “Increase of Economic 
Competitiveness”) 
Taking into account both the identified possibilities for improvement of the competitive position 
of Romanian companies and the areas eligible for the European Regional Development Funds 
support, the following Priority axes have been identified in the SOP IEC: 
  -Priority Axis 1: An innovative and eco-efficient productive system 
  -Priority  Axis  2:  Research,  Technological  Development  and  Innovation  for 
  competitiveness 
  -Priority Axis 3: ICT for private and public sectors 
  -Priority Axis 4: Increasing energy efficiency and security of supply, in the context of 
  combating climate change 
  -Priority Axis 5: Technical Assistance 
 
2. Presentation of the Area of Intervention SOP IEC “D1.1. Productive and environment 
friendly investments and preparation for market competition, especially of SMEs.” 
The  Priority  Axis  1:  An  innovative  and  eco-efficient  productive  system  of  the  Sectorial 
Operational  Programme  “Increase  of  Economic  Competitiveness”  refers  to  the  efforts  of 
supporting  enterprises,  especially  SMEs,  and  will  concentrate  both  on  improving  the  market 
conditions  linked  to  the  development  of  the  industrial  base,  in  order  to  revive  the  business 
environment and generate new innovative enterprises, as well as on developing of the business 
sector, improving the access to capital and fostering technological development. The objectives 
which are set to be fulfilled by this priority axis are: 
  -Consolidation and sustainable growth of the Romanian productive sector 
  -Establishment of a favorable environment for enterprises’ development. 
The main key areas of intervention, divided in subprograms, are: 
  -D1.1.Productive  and  environment  friendly  investments  and  preparation  for  market 
  competition, especially of SMEs 
  -D 1.2. Access to finance for SMEs 
  -D 1.3. Sustainable entrepreneurship development 
From the above mentioned areas of intervention the main instrument of the SOP IEC in order to 
support and finance quality improvement of the production processes of the Romanian companies 197 
 
is  the  area  of  intervention  “D1.1.  Productive  and  environment  friendly  investments  and 
preparation for market competition, especially of SMEs.” 
The specific objective of this key area is represented by the consolidation and sustainable growth 
of the Romanian productive sector can be accomplished through: 
  -The  revival  of  the  productive  sector  based  on  extension  and  modernization,  by 
  investments in new technology, equipment, machineries and by acquisition of patents, 
  trademarks, licenses and know-how, 
  -Innovation of production both concerning the production processes and the products, 
  -Adaptation to European and International Standards and certification of management 
  systems, 
  -Access of the Romanian companies to new markets 
  -Promotion  of  sustainable  development,  decreasing  of  the  negative  impact  on  the 
  environment and growing the international competitiveness. 
The following indicative operations are established: 
  a)Support  for  strengthening  and  upgrading  the  productive  sector  by  tangible  and 
  intangible investments 
  b)Support for the implementation of international standards 
  c)Support to access to new markets and internationalization 
 
3. Criteria of eligibility for applicants 
For the first indicative operation mentioned above: “D1.1. Productive and environment friendly 
investments  and  preparation  for  market  competition,  especially  of  SMEs.”  a),  two  state  aid 
schemes are designed, for large enterprises (over 250 employees) and for SMEs with more than 9 
employees: small and medium enterprises (micro enterprises will be supported under a similar 
operational programme in the Regional Operational Programme).  
In order to check if an entity is an SME the first step is to verify if it is an enterprise. Further it 
must be established the data of the analyzed enterprise according to the following three criteria: 
staff headcount, annual turnover and annual balance sheet. 
Comparing the data of the analyzed company with the thresholds for the three criteria will allow 
determining whether the company is a micro, small or medium-sized enterprise. It is necessary to 
note that while it is compulsory to respect the staff headcount thresholds, an SME may choose to 
meet either the turnover or balance sheet ceiling. It does not need to satisfy both and may exceed 
one of them without losing its status.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 198 
 
Figure 2. Categories of SMEs according to the new thresholds  
(Extract from “The New SME Definition – User Guide and Model Declaration”, p. 14) 
The  new  definition  offers  this  choice  since,  by  their  nature,  enterprises  in  the  trade  and 
distribution sectors have higher turnover figures than those in manufacturing. Providing an option 
between  this  criterion  and  the  balance  sheet  total,  which  reflects  the  overall  wealth  of  an 
enterprise, ensures that SMEs engaged in different types of economic activity are treated fairly. 
The distribution of the companies in the micro, small or medium-sized enterprises categories is 
presented in the figure no. 2 above. 
For this operation, the financial support will be paid, through economic and financial appraisal of 
the applications for funding and in accordance with the provision of art. 57 of Council Regulation 
No. 1083/2006129, in order to avoid any financial support for: 
  -Public funding which would lead to deadweight; 
  -Investment  deriving  from  delocalization  from  other  member  States  in  order  not  to 
  involve the Structural funds in such public funding; 
  -Enterprises in financial difficulties. 
Also are not eligible for financial support companies in the fields of activities (CAEN codes): B - 
extractive industry, codes 051,052, 061, 062, 0721, 0892, 091, 099, C- processing industry codes 
101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 120, 191, 192, 2051, 206, 242, 243, 2452, 254, 
2591, 301, 304, 331, 332, E- water alimentation, waste treatment codes 360, 370, 381, 382, 390 
and F – Building construction codes 411, 4399. 
The operation D1.1.a), presented above, supports strengthening and upgrading of the productive 
sector by tangible and intangible investments for small and medium enterprises (excluding micro 
enterprises) and also for large enterprises. The operation has a financial allocation of 430 billions 
lei, in the period 2007-2013, divided between regions as following: 
Nr.  Regions  Financial allocation 
1  Bucharest- Ilfov  43 billions lei 
2  Regions: Center, North-West, West, South East  172 billions lei 
3  Regions: North – East, South Muntenia, South West Oltenia  215 billions lei 
Figure 3. Financial allocation within the SOP IEC D1.1 a) operation  
(Extract from “Ghidul Solicitantului POS CCE Axa 1 Domeniul 1.1 – Sprijin Financiar în 
valoare de până la 1.075.000 lei acordat pentru investi ii în IMM”, 2009) 
 
The  financial  support for this  operation is  60%  grant for  small  enterprises in  the  Region  of 
Bucharest Ilfov, 70% grant for the small enterprises in other regions of Romania. In case of the 
middle enterprises they benefit of 50% grant for those located in the region Bucharest-Ilfov and 
60% grant for the middle enterprises located in other regions of Romania.  
 
4. Eligibility of activities proposed for financing 
Considering the specificity of the SOP IEC programme and especially of the area of intervention 
“D1.1. Productive and environment friendly investments and preparation for market competition, 
especially of SMEs” the projects proposed for financing within this operation, are aiming to 
increase  the  economic  development  of  the  enterprises  and  the  competitiveness  of  Romanian 
companies on the European Single Market. In order to fulfill this aims, the following activities 
are supported within the programme and are considered eligible: 
  -Creation of new production units, 
  -Extension of an existent production unit in order to increase capacity of production, 
                                                       
129 COUNCIL REGULATION (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European 
Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 
1260/1999, published in the Official Journal L210, p. 25-78,  199 
 
  -Diversification of production on an existent site, as a result of initiation new products 
  and services, 
  -Modernization of the company, including changes of the production technology, 
  -Acquisition of intangible goods like patents, trademarks, licenses and know-how, 
  -Consultancies and training services linked with the activities above.  
As seen above these activities are mostly encouraging new investments especially in the field of 
high-tech industry and highly productive industry support services.  
The main criteria of selection for financing a project under this field of activity are: 
  -Relevance  of  the  project  for  the  realization  of  the  objectives  of  the  SOP  IEC  and 
  especially  the contribution  brought  by  the  project to  the fulfillment  of  the  SOP  IEC 
  objectives and especially of the D1.1a) field of intervention.  
  -Quality  and  coherence of  the  project  and  especially  by  justification for the need  of 
  public financing, by the quality of the technical-financial proposal and by presenting of 
  the correlation between the objectives of the project and the obtained results. 
  -Maturity of the project and especially the level of preparation of the activities within the 
  project, availability of the land, existence of the technical studies and permits, etc. 
  -Sustainability of the project which is concerning mainly the capacity of the applicant to 
  ensure the financial and technical maintenance and operation of the investment for at 
  least three years after the end of the project. 
  -Capacity of the beneficiary for implementing the project: management capacity, ISO 
  certification, qualification of the management and of the personnel of the applicant. 
If these criteria will be met the project will be selected for financing under the framework of SOP 
IEC programme and especially of the area of intervention “D1.1. Productive and environment 
friendly  investments  and  preparation  for  market  competition,  especially  of  SMEs”.  The 
implementation period for a project developed within this area of intervention is at most 24 
months. 
 
5. Conclusions  
The European Integration came with new challenges for the Romanian enterprises especially for 
the  SMEs,  the  opportunities  arising  from  operating  on  the  European  Single  Market  and  the 
possibility of accessing European Regional Development Funds. The main programme designed 
to offer access for small, medium and large Romanian enterprises to European funding is the 
Sectorial Operational Programme “Increase of Economic Competitiveness”- SOP IEC. The area 
of intervention “D1.1 a). Productive and environment friendly investments and preparation for 
market  competition,  especially  of  SMEs”  is  financing  projects  which  aim  to  increase  the 
economic  development  of  the  production  enterprises  and  to  increase  the  technical  and 
management  competitiveness  of  Romanian  companies  on  the  European  Single  Market.  The 
operation  D1.1.a),  mentioned  above,  supports  strengthening  and  upgrading  of  the  productive 
sector by tangible and intangible investments for small and medium enterprises (excluding micro 
enterprises) and also for large enterprises. The operation has a financial allocation of 430 billions 
lei, in the period 2007-2013, divided between regions. The main criteria of selection for financing 
a  project  under  this  field  of  activity  are:  relevance  of  the  project  for  the  realization  of  the 
objectives of the SOP IEC, quality and coherence of the project, maturity and sustainability of the 
project and capacity of the beneficiary for implementing the project. The implementation period 
for a project developed within this area of intervention is at most 24 months. 
 
   200 
 
Bibliography 
1. European Commission, Council Directive 78/660/EEC of 25 July 1978, based on Article 54 
(3) (g) of the Treaty on the annual accounts of certain types of companies, Official Journal L 222, 
p. 11-31, of 14 August 1978 
2. European Commission, Commission Recommendation 96/280/EC of 3 April 1996 concerning 
the definition of small and medium-sized enterprises (Text with EEA relevance), published in 
Official Journal L 107, p. 4-9, of 30 April 1996 
3.  European  Commission,  Commission  Recommendation  2003/361/EC  of  6  May  2003 
concerning  the  definition  of  micro,  small  and  medium-sized  enterprises  (Text  with  EEA 
relevance), published in Official Journal L 124, p. 36-41, of 20 May 2003. 
4. European Commission, “The New SME Definition – User Guide and Model Declaration”, 
Enterprise and Industry Publications, Brussels, 2005 
5. European Commission, Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down 
general provisions on the European Regional Development Fund, the European Social Fund and 
the  Cohesion  Fund  and  repealing  Regulation  (EC)  No  1260/1999,  published  in  the  Official 
Journal L210, p. 25-78, Brussels, 2006 
6. Romanian Government - Ministry of Economy and Finance, Framework Document - Sectorial 
Operational Programme “Increase of Economic Competitiveness”, Bucureşti, 2007 
7. Guvernul României – Ministerul Întreprinderilor Mici şi Mijlocii, “Ghidul Solicitantului POS 
CCE Axa 1 Domeniul 1.1 – Sprijin Financiar în valoare de până la 1.075.000 lei acordat pentru 
investi ii în IMM”, Bucureşti, 2009  

Commission Recommendation 2003/361/EC of 6

Commission Recommendation 96/280/EC of 3

Council Directive 78/660/EEC of 25

Council Regulation (EC) No

Guvernul României – Ministerul Întreprinderilor Mici şi Mijlocii, “Ghidul Solicitantului

Romanian Government - Ministry of Economy and Finance, Framework Document -

The New SME Definition – User Guide and Model Declaration”, Enterprise and Industry Publications,

INCREASING THE MANAGEMENT AND PRODUCTIVE CAPACITY OF ROMANIAN SMES AND LARGE ENTERPRISES BY ACCESION OF STRUCTURAL FUNDS a€“ SOP IEC

http://steconomice.uoradea.ro/anale/volume/2009/v3-finances-banks-and-accountancy/32.pdf

INCREASING THE MANAGEMENT AND PRODUCTIVE CAPACITY OF ROMANIAN SMES AND LARGE ENTERPRISES BY ACCESION OF STRUCTURAL FUNDS a€“ SOP IEC

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