Romania closes 2 more chapters for EU entry

BUCHAREST (Reuters) – EU aspirant Romania yesterday closed two more negotiating chapters – on taxation and free movement of goods – as part of its drive to join the bloc as early as 2007. Romania, the only candidate that has failed so far to win the EU’s «functional market economy» tag, is keen to close talks on the remaining 11 out of 30 chapters, or areas of negotiation, by the end of next year. «Finalizing two negotiation chapters… is an important step toward building a functioning market economy,» Romania’s EU chief negotiator Vasile Puscas said in a statement. Romania and Bulgaria must complete their accession negotiations with the EU by next year if they hope to join the bloc by 2007. Romania has closed 19 chapters, while its faster-moving southern neighbour has closed 24. Puscas said closure of the free movement of goods chapter showed that Romanian institutions were capable of checking that goods met EU standards, although more upgradings were needed to meet EU quality demands. Bucharest will abolish all unchecked imports as of 2004. It also pledged to eliminate trade barriers and set up the Authority for Food Security but did not give a target date. The taxation chapter was also provisionally closed although Romania won some waivers on VAT payments. Some of Romania’s taxes are among the highest in the region and foreign investors often cite the frequent changes of legislation as among the factors that have hindered capital inflows into the country in the post-communist period. «The closure of the taxation chapter is vital for fiscal stability and investors’ interest,» said Puscas. Romania won some waivers, including making companies with annual turnover of under 35,000 euros pay value added tax for some more years. It also obtained a three-year extension after the accession date, or by end-2009, to raising cigarette duties to the minimum EU level, as well as lower excise duties on fruit-spirit drinks used by farmers for their own consumption.

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