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December 5, 2020

EBRD official urges Romania to form a government, say crisis pick over

Forming a government is one of the immediate tasks that Romania has to accomplish in its efforts to answer the economic crisis and in order to avoid delays in the decision-making process, in the implementation of reforms and in the application of the agreement reached with the International Monetary Fund and the European Commission, Erik Berglof, chief economist of the European Bank for Reconstruction and Development (EBRD) said according to Realitatea.net.

‘The political crisis, overlapping the economic crisis, has complicated things. It is very important for the period of uncertainty at governmental level to end as soon as possible. There are decisions that have to be taken without delay. Romania needs a government that would implement reforms,’ Berglof stated. ‘The governmental uncertainty does not help the efforts exerted in order to fall within the budget deficit, the inflation rate and the exchange rate targets,’ Berglof added.

According to ‘Business Standard,’ the EBRD estimated for Romania in 2009 a GDP contraction of 8 per cent, an inflation rate of 5.3 per cent and a budget deficit of 7.3 per cent of GDP. Among the challenges, the EBRD economists have listed: drawing in new capital, business registration and the application of laws.

Twenty years after the fall of communism the Transition Report 2009 analysis recently presented by Erik Berglof in Bucharest has kept an eye on the progress registered in transitioning from a centralized economy to a market economy by the states in which the EBRD is active.

On the other hand, Romania has been through the worst part in term of economy contraction, a stabilisation and even a return to growth next year, nonetheless with a still growing rate of bad loans and unemployment, according to Berglof’s forecast, ‘Ziarul financiar’ informs. He said Romania’s decision to go after the IMF’s money in good time was ‘wise’, as, in his opinion, it had had a stabilizing effect. In what regards the funds from the IMF and from the European Commission being a few weeks or months late, Berglof said the delay would not be a ‘critical one.

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