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May 18, 2021

Romanian officials, between caution and optimism

In a press statement in Brussels on Wednesday evening, President Traian Basescu welcomed the EU Council’s decision on bank recapitalisation, saying that all EU member states have received the guarantee that branches of parent banks will not have problems with capital flows. The president earlier this week had called for a bank recapitalisation plan which would not require mother banks to withdraw funds from their branches on the Romanian market.

“This will allow Romania both economy financing and acquisition of financial resources to cover for state budget needs. In other words, it will help Romania maintain its current level on the market of sovereign debts,” the president said, quoted by Mediafax.

The EU summit’s deal was greeted by Romania’s representative to the IMF, Mihai Tanasescu, in comments to RFI. The agreement “is a success, even if concrete implementation deals are not yet agreed,” Tanasescu said.

He added that a coherent implementation of the plan is “vital” and technical aspects have to be decided until the G20 summit in Cannes next month. Tanasescu also voiced confidence that national currency RON will react positively on the markets, following the deal.

National Bank of Romania governor adviser Lucian Croitoru was more cautious over the deal, saying that the measures have to be “digested” by the market. The market will then decide if confidence is restored or not, but there are concerns about the resources available for the eurozone emergency assistance fund, Croitoru told Mediafax.

In turn, economics professor and ex finance minister Daniel Daianu told ‘Ziarul Financiar’ that the measures agreed by EU leaders are only “management” of the crisis, without actually solving the real problems. He added that without economic growth, the situation will become more complicated and it will not be possible to cover the public debt. Opposition Social Democrat leader Victor Ponta criticised the deal, saying that the solution found at the summit in what regards Greece was to give more money to banks, because main European leaders are facing elections in 2012 and 2013. Ponta added that Romania was neither consulted nor asked when the decision was made at the European Council.

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