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May 26, 2022

The Isarescu enigma

The governor of the central bank is a self-restrained person. For years, the gentleman has managed to keep himself detached from the tumultuous political realities. Over time, he has been the subject of speculations on his prospective candidacy for president. He must have been deeply marked by his 2000 failure, as, although he is being courted by parties who would like to support his candidacy, he still appears to be reluctant. Mr. Isarescu had been keeping a silence that was difficult to understand. And yet, these past few weeks, we have been witnessing his ‘come-back’ to the economic and political stage.

Mr. Isarescu is telling us he is not interested to run for president again. The gentleman apparently shows more interest in the winery he owns somewhere in the countryside and his latest statements point in that direction.

However, mentioning a possible change of government even in the following four months, Isarescu claims it wouldn’t affect macro-economic stability as long as the in-coming Executive is ‘reliable’ and carried on the inevitable adjustment programme.

There are politicians who wonder if perhaps that was not a signal of availability on the part of the current BNR governor to join the political battle.

‘It all depends on what government will come. If the new government is a reliable one, if it is capable of ensuring continuity… The problem is not here, we are not supporting any kind of government because we are not supposed to become engaged in politics, but we do endorse a programme that is inevitable from the point of view of adjustments. Options will be identified with regard to the manner and tools to be used in the performance of such adjustment’, Isarescu said in an interview with Radio Romania News and Current Affairs.

Are we to understand from what the BNR governor is telling us that a change of government is inevitable?
That wouldn’t come as a surprise, given UDMR’s recent pressures following the Boc Government’s failed attempt to push the education bill by requesting a vote of confidence in parliament.

Mr. Isarescu is becoming increasingly critical of the government headed by Emil Boc. ‘The type of taxation that we have is relatively low when it comes to major taxes, except VAT, for now we have one of the highest VAT rates in Europe’, Isarescu stated in an interview with Pro TV. Asked whether or not the current (VAT) rate was there to stay, Isarescu answered: ‘At least for another few years, otherwise it would only mean that we have seeded total fiscal instability in this country…’

Naturally, the criticism is veiled, however the BNR governor has never really hesitated to voice his views on the approaches being taken to various economic issues. On the other hand, there are quite a few analysts who are unavoidably wondering as to what it is that makes Mr. Isarescu more combative these days. A possible answer could be that we are soon celebrating 21 years since the fall of the communist regime, a good opportunity for Isarescu to grant a number of interviews. Nonetheless, people are speculating on his drive for possibly standing as a candidate for election as president, reportedly endorsed by the National Liberal Party. The ‘inclination’ – same sources claim – would come from his discontentment with the current government’s policy in respect of recent economic developments.

But BNR Governor Mugur Isarescu states he is not interested in running for president again in order to help improve business environment conditions, pointing out that dealing with such issues does not fall under the competence of the head of state anyway.

Isarescu continues to be an enigma. Could it be a problem of his relations with the current government or an existential issue, one that has to do with the inherent shortcomings of any executive…? Setting aside official statements, 2011 does not appear to be an easy year at all. Next year, Romania will start repaying the IMF loan, with the first instalment amounting to one and a half billions euros. IMF mission chief Jeffrey Franks admitted to the Romanian state having to borrow more money in order to repay its debt towards the Fund. Hundreds of thousands of Romanians will be jobless, as authorities anticipate a high unemployment rate of 7.6 pe cent even in 2012.

It is still to be seen if Mr. Isarescu is up for joining the electoral race on a strong footing. He seems reticent for now. However, there are still enough dreamers who believe Isarescu would stand a chance to become Romania’s next president. From that point of view, Isarescu continues to be an enigma.

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