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July 31, 2021

Officials claim Romania can withstand new global economic crisis

“Caution” and “moderation” are the topical words.

If the world economy faces a new crisis Romania will be better prepared than it was in 2008 and will withstand it provided it maintains caution and moderation in what concerns its fiscal and governmental policies.

The statement was made by Premier Emil Boc yesterday morning ahead of the PDL’s Permanent National Bureau (BPN).
“International markets are not calm and the situation in America and Europe is not yet stable from an economic standpoint. We have the advantage of slight macro-economic stability stemming from the measures taken last year, but we are not allowed to make any excesses that would compromise this stability and obviously we have to pay attention to what is happening on the international markets we clearly depend on,” Emil Boc pointed out. The Premier stated that “things are under control in the country” and that no steps back should be taken when it comes to reforms.
“That means we have to carry on with a 3 per cent deficit for next year, to fall within the personnel limits, to continue the process of restructuring the public sector and, last but not least, to carry on reforming state-owned companies, a reform process that already started as part of the agreement with the European Commission,” the Prime Minister added.

In his turn, Finance Minister Gheorghe Ialomitianu stated that Romania has to be a bit concerned about the world crisis, underlining nevertheless that our country finds itself in a good situation because the authorities were and remain cautious. According to PDL spokesperson Sever Voinescu, today’s Romania is far better prepared to withstand a world economic crisis than it was in 2008. Agriculture Minister Valeriu Tabara is optimistic too and believes that for Romania the crisis will not be “as ugly” as it will be for some European states that adopted “a limitless system of consumerism” and that did not implement reforms. Tabara stated that he is keeping an eye on developments on the stock markets and opined that decisions in Romania should be taken cautiously when it comes to macroeconomic stabilization measures and social expenditures.

What the Opposition and trade unions think

‘Cartel Alfa’ President Bogdan Hossu is not as optimistic as some government officials are and claims that Romania will be indirectly affected by the fact that the US was downgraded, that food prices will rise and, just like it happened in 2008, the government will take no measures to make this period any easier. He added that some employers will find a new crisis easier to weather off because the new Labour Code allows them to sack as many employees as they please regardless of the social implications of their decisions.

Former head of state Ion Iliescu believes that the global economic situation is still “fluid,” and its consequences for Romania could be made worse by the current government’s lack of professionalism. He stated that Romania is part of an international framework she cannot extract herself from.

“Were we to have a government that would adapt more easily to the fast developments at global level there would be some hope. But having a government that has proven its lack of professionalism in recent years, that drifts into the unknown, that gropes in the dark like a rudderless boat, it’s a bit difficult for me to believe that the Boc Government would be able to take measures that would somewhat protect Romania in the face of a crisis. Moreover, the exaggerated austerity measures that have been adopted have worsened the economic situation, making it even more vulnerable,” Iliescu stated for Mediafax.

Liberal leader Crin Antonescu said world economy shocks will have a negative effect on Romania as well, given that the country is still fragile because of the current government, but also because a drop in exports to contracting markets and because of the low purchasing power. “We cannot share PM Boc’s self-satisfaction that because of the brilliant idea to cut public sector wages, Romania is now very healthy economically and is like a sturdy boat (…) that can go through the storm or even hurricane of the crisis,” Antonescu said.

Former Liberal Premier Calin Popescu Tariceanu also considers that the effects of a new crisis that seems to be around the corner will have a significant impact on the Romanian economy that at this point shows far greater vulnerabilities than the solid economies of other countries.

“Romania is rendered extremely fragile after an economic crisis that was poorly managed by the Boc Government, a government that worsened the effects of the world crisis and that failed to take any kind of recovery measures,” Tariceanu explained.

PSD Vice President Constantin Nita stated in his turn that he was expecting the reemergence of global financial instability and recommended the government to show “excessive caution” in the face of the “fight for survival” between the EUR and the USD. Nita believes that the government should reconsider PSD’s proposal to set up an anti-crisis committee that would bring together the best economy and finance experts in order for them to monitor international markets and stock markets and to take measures that would protect Romania.

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