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The European Commission is facing a major problem: 25 European countries, including Romania, are concerned by the infringement procedure. The European Commission recently announced the opening of infringement proceedings against 25 of the 27 EU Member States, including Romania, for failure to fully transpose key provisions of the revised Directive EU/2024/1711. This Directive, which was adopted last year, aims to optimize the organization of the electricity market at EU level. As a result, the Commission has sent formal letters of formal notice of delay to the 25 Member States, the first procedural step in the process of sanctioning non-compliance with EU rules.
A Europe-wide problem
The fact that 25 EU Member States have missed the deadline for transposing key provisions of the revised Directive EU/2024/171 indicates a widespread EU-wide difficulty, not just a one-off problem. The only exception is Denmark, which managed to fully implement the Directive’s provisions ahead of the deadline. The new regulation was designed to bring stability to electricity prices and reduce their dependence on fluctuations in international fossil fuel prices. The measures also aim to protect European consumers by ensuring they have access to fairer and more predictable tariffs based on the lower costs of renewable energy.
What are the stages of the infringement procedure?
For those less familiar, the infringement procedure is an instrument of the European Commission designed to ensure that EU law is applied in the Member States. This procedure involves several successive stages:
The first procedure is to identify non-compliance. The Commission examines whether the Directive has been properly implemented in each Member State’s national legislation. The second stage is formal notification, whereby the Member State concerned receives a letter of formal notice and has two months to respond and take the necessary measures to comply. The third procedure is a reasoned opinion. Thus, if the response given by the notified State in the second stage is not satisfactory, the Commission may issue a reasoned opinion requiring immediate action. The penultimate procedure is a referral to the Court of Justice of the European Union (CJEU). In the absence of appropriate action, the Commission may refer the case to the CJEU, where the Member State risks substantial financial penalties. The last procedure is the application of sanctions. This procedure is implemented if non-compliance persists, the Member State concerned may be obliged to pay a fixed fine or progressive penalties.
Incomplete transposition of the Directive
Member States had to communicate the full implementation of Directive EU/2024/1711 by January 17, 2025, with the exception of the provisions on energy supplier choice and energy sharing, for which the deadline is July 17, 2026. This regulation aims to give consumers greater control over the energy sources they use and reduce their exposure to price fluctuations. However, the states concerned, including Romania, failed to complete the process in time, prompting the European Commission to intervene. EU officials stress that without the new rules in place, EU consumers will not be able to reap the promised benefits, such as lower costs and more stable electricity prices.
Consequences for Romania and the other countries concerned
The list of Member States subject to the procedure includes: Belgium, Bulgaria, the Czech Republic, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden. These countries now have two months, according to the procedures, to respond to the Commission’s notification and to implement the necessary compliance measures. If the Romanian authorities fail to complete the transposition and notify the Commission of the progress made, there is a risk of receiving a reasoned opinion, which would be a critical step towards possible financial sanctions. This could affect both the national budget and Romania’s reputation in the EU.
Postponement of the plan to eliminate energy imports from the Russian Federation
In another significant decision on EU energy policy, the European Commission postponed for the second time the announcement of the plan to phase out energy imports from the Russian Federation. Originally scheduled for March 26, the plan does not yet have a confirmed date for publication. Commission officials have not clarified the new timetable. EU energy commissioner Dan Jorgensen previously said the plan would be unveiled within his first 100 days in office, but the deadlines have already been far exceeded. The first announcement was expected in February and the new delay raises questions about the EU’s ability to reduce its energy dependence on the Russian Federation. It is well known that the European Union has set a target of eliminating Russian gas imports by 2027, but progress is uneven among member states. Some countries have made limited efforts to diversify sources of supply, with data showing Russian gas imports rising in 2023.
Challenges for EU energy security
The European Union has to manage a delicate balance between ensuring energy security and keeping prices to the population competitive. High energy costs in Europe are putting pressure on its industries, especially compared with economic rivals in China and the United States, where energy prices are significantly lower. The European Commission is due to announce the extension of gas storage targets, but critics warn that this could lead to a further rise in prices, hurting the European economy. Flexibility and adaptability of energy policies will be key to ensuring long-term stability. The delay in transposing Directive EU/2024/1711 and the postponement of the announcement on the elimination of energy imports from Russia are two issues putting pressure on EU countries. While there are concrete steps towards energy reform, challenges remain. Member States need to accelerate their efforts towards energy compliance and diversification, thus ensuring a more stable and sustainable future for the whole European Union.
The European Union has partially blocked NRRP funds for Romania
The European Commission has decided to partially suspend payments for the second tranche of Romania’s National Recovery and Resilience Plan (NRRP). The amount blocked is €2 billion. The main reason for this decision is the failure to implement key reforms, including special pensions.
In addition to the main reason for the suspension of payments on special pensions, there are other reasons for the interruption of funding through the NRRP. The European executive has activated the mechanism of suspension of financing for part of the funds requested by the second payment request, noting that six of the 74 milestones foreseen in the plan have not been completed by the Romanian state. These include the reform of special pension expenditure, covered by milestone 215. Other outstanding reforms concern the modernization of railway infrastructure, the extension of metro networks in Romania’s capital, Bucharest and Cluj-Napoca, the improvement of performance-based management in the transport sector and the optimization of corporate governance for state-owned energy companies. Romania will only get part of the money. In line with the Recovery and Resilience Mechanism Regulation, Brussels has triggered the partial blocking procedure. Thus, of the total of €2 billion of the second tranche, only part will be transferred to the Romanian state treasury, the rest being temporarily withheld until the identified deficiencies are corrected. Romania has 30 days to comment on the unfavorable assessment of milestone 215 in order to correct the deficiencies. In parallel, the European Union’s Economic and Financial Committee will examine the situation for four weeks before the final decision is taken by the Commission. If the situation is not remedied, the funds related to the outstanding milestones will remain blocked and Romania will have six months to implement the necessary measures. After this period, the Commission will reassess the progress made and, in case of satisfactory compliance, will release the outstanding amounts.
Most milestones have been met. Although some funds remain suspended, the European Commission has given a positive assessment for 68 of the 74 milestones included in the payment request. Among the reforms and investments approved by the Commission are changes to the tax regime for micro-enterprises to simplify the tax system and phase out existing facilities; reform of the electricity market, including a new legislative framework for energy efficiency and the introduction of green financial instruments; renovation projects for public and residential buildings to improve energy efficiency. Romania benefits from a total budget of €28.5 billion through the NRRP, composed of €13.6 billion in grants and €14.9 billion in loans. Access to these funds is conditional on the implementation of structural reforms and strategic investments with a major impact on the Romanian economy.