Improving Administrative Capacity in European Funds Absorbtion for Region South-West Oltenia

The absorption of European funds is a process influenced predominantly by the managerial capacity of local and regional authorities and by the ability of Member States to provide the necessary co-financing. Thus, the managerial capability of the local authority in a Member State is the key to a high absorption rate of structural funds. This paper aims at revealing the poor situation of Romania’s European fund absorption rate and brings to light the situation in Romania, Region South-West Oltenia, in context of the Regional Policy applied by the European Union, which targets all regions of the EU, stimulating economic growth and improving life quality by strategic investment efforts. This policy of EU (European Union), is also a form of support which orientates the efforts towards all less developed regions, as South-West Oltenia. Most studies on the administrative capacity for absorption of structural funds focused on the analysis of national and regional administrations from a financial and macroeconomic perspective, and less on the administrative capacity of local authorities.  The paper focuses on identifying the main factors of local authorities in absorbing structural funds, at the level of Region South-West Oltenia, Gorj and Valcea counties from Romania and finding solutions for increasing the level of absorbtion.