Preliminary assessment of the second payment request of Romania

subjected to the endorsement process by the Ministry of Finance. According to Chapter IV of the Methodology, although the General Secretariat of the Government and the Ministry of Finance monitors the drafting and implementation of the planning and the budgetary components of the ISP separately, coherence is ensured because for each ISP the initiator has to use the same set of strategic objectives, programs, measures, and actions, together with their expected results and identical indicators of performance. Moreover, the General Secretariat of the Government and the Ministry of Finance co-lead the assessment of the ISP and its components. Related to Government Decision No. 427/2022, Romania adopted Government Emergency Ordinance (“GEO”) No. 187/2022, which entered into force on 28 December 2022 and amends Law No. 500/2022 on public finances. Article 32 of the revised Law on public finances requires the Ministry of Public Finance to submit to the Government on a yearly basis expenditure limits for the

following budget year, as well as estimates for the following three years – as established by chief authorising officers of each public institutions. Article 31 of the Law on public finance, as amended by the new GEO No. 187/2022, requires the expenditure limits to take into account recommendations set out in the Public Expenditure Review Reports (3) a Government Decision on updating the methodology for ex-ante impact assessment of the draft regulation. The focus of the updated methodology shall be on introducing innovation and “digital by default” principles as well as specific procedures for strengthened implementation and annual reporting. Government Decision No. 443/2022 (the “Better Regulation Government Decision”) which, according to national legislation entered into force on 5 April 2022 regulates the scope and implementation of ex-ante regulatory impact assessment (also referred to as “presentation and motivation tools”).

The Government Decision, together with the relevant Annexes, updates the 2015 impact assessment methodology. As mentioned in Annex No.2 of the Government Decision, the methodology is an update of the Preliminary Impact Assessment Methodology developed in 2015 with the support of the World Bank under project Building the capacity of the central public administration to carry out impact assessments, SIPOCA 25. Source: https://sgg.gov.ro/1/politici- publice-si-programe/documente/evaluarea-preliminara-a-impactului/. Any institution preparing a draft regulation is required to conduct an impact assessment specified in Annex 1 (a templated impact assessment) using the methodology described in Annex 2. In line with the Council Implementing Decision, the methodology introduces innovation and “digital by default” principles to ensure that new draft regulations favour the digital transformation in their targeted policy area. Initiators of draft regulations are required to describe ex-ante how the new legislation intends to (i) encourage digitalisation and promote digital solutions; (ii) stimulate

investment in research, development and innovation; (iii) facilitate the spreading of new production methods, technologies and products; (iv) facilitate application for, and access to, intellectual property rights; (v) promote academic or industrial research, as well as productivity and resource efficiency (Annex 1, section 3.7). Moreover, they must explain how the new legislation simplifies processes and access to digital tools, reduces digital gaps, interfaces with digital policies and ecosystems already in place, and regulates data exchanges between stakeholders involved. The Better Regulation Government Decision introduces specific procedures strengthening implementation and annual reporting of ex-ante impact assessments. According to Article 5.2 the list of legislative proposals subject to an ex-ante impact assessment is drawn up by the General Secretariat based on the Government’s priorities, upon consultation of the relevant public authorities, and in compliance with the criteria set out in the methodology outlined in Annex No. 2 and in the Government Decision. The list is then submitted to the Government for approval.

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