3.1 C
December 4, 2022

Tanasescu, IMF: Giving up on the euro is impossible

In his turn, Misu Negritoiu, General Manager of ING Romania, considers the target of adopting the euro in 2015 at least naive.

Mihai Tanasescu, Romania’s Representative at the International Monetary Fund (IMF), is convinced that the future of the euro and of the euro zone is beyond doubt, with the maturity of politicians, and of European peoples as well, being the condition for getting out of the crisis. He made the statement in an interview granted to “Adevarul” daily newspaper. “It is an ordered and disciplined zone and we must get in line with this discipline,’ he explained.

Tanasescu believes that giving up on the euro is nearly impossible, and when Romania will join the euro zone, whether in 2015, a target date about which Romania’s official to the IMF is rather doubtful, in 2017 or 2019, it must do it both dignified and prepared, unlike other countries, such as Greece, did, which wished to join no matter how, with consequences that are plain to see today.

During a television show Saturday, a rather more straightforward Misu Negritoiu, General Manager ING Ro­mania, and somehow at odds  with Mr. Tanasescu, said that Romania should renounce for now the euro-joining project, given its lacking credibility considering that the euro zone is redefining itself and no country is speaking of accession, and sees the 2015 target as at least naive. The ING Romania general manager flatly rejects 2015 as a realistic accession target proposed by Romanian authorities, even saying he finds the euro joining schedule groundless, although he could understand the authorities’ reason for it. He reminded that it was no later than last Monday that Premier Emil Boc was saying that Romania maintains year 2015 as the time target for joining the euro zone.

Budgetary spending going adrift, the main danger for the economy

An economist by training, Mihai Tanasescu upholds the notion of social insurance contributions being cut down. “Nonetheless, we must see what other revenues, or diminished spending, could offset them. When building a budget, priorities are important,” he explained.

For his part, Negritoiu sees the state budget relying on a broader deficit range as normal, given market uncertainty, yet, Romania must take steps toward transparency and truth, and not repeat Greece’s story, and to release internal resources. Negritoiu also stresses that budgetary spending going adrift is the main danger for the economy next year, with the other risks a lot less significant.

Also, when Romania concluded the IMF agreement, a new agreement was struck with the banks, the Vienna Accord, with Tanasescu holding the view that this is a good opportunity for capitalizing on the official EU document. Romania’s Representative to the IMF also touched on the privatisation issue, saying that energy investments alone come to EUR 15 bln in order to bring the system to an at least acceptable level of efficiency. “Where this money could come from” The state budget? Impossible,” he concluded. Also in an interview for Adevarul daily, BNR Vicegovernor, Bogdan Olteanu, said that Romania is not far from the brink, considering that there is serious threat to Romania’s economic stability due to adverse developments in the euro area, but he estimates that the country will not come out very wrinkled in crisis.

Negritoiu: economic growth will be 2-2.5 pc in 2012

Romania has an economic growth potential of 2-2.5  pc next year, given it has considerably improved on the basics over the past two-three years, with industry, services and agriculture remaining the growth engines, despite the last sector’s volatilities, Misu Negritoiu said, in whose view, Romania continues having elements of economic growth and being the second-largest market in the Central and Eastern Europe, given the country’s population of 22 M.

The ING Romania general manager expects the RON to appreciate slightly next year and RON loans to become cheaper, even if resources in general become increasingly more expensive, yet euro interest won’t get lower.

Asked about the trend of the RON-euro exchange rate, businessman Ion Tiriac, on a television programme Sunday, said the home currency has been overvalued over the past three-four years, and sees the parity of  RON 4.2-4.3/euro within a normal range.

ECB advises BNR to improve the bridge-bank project

The European Central Bank (ECB) is rather unhappy about the Bridge-Bank project on which the National Bank of Romania is working, Hotnews reports. Jean-Claude Trichet, the ECB Governor until three days ago, sent a letter, on his last working day at the bank, in which he counselled the BNR on how to improve on the project. The BNR confirms working on the functioning regulations of a new financial institution to deal with the commercial banks experiencing difficulties. Adrian Vasilescu, an adviser to the BNR governor, made the point that the details over the new bank are yet to be put the finishing touches. Furthermore, he assured that such rapid intervention mechanisms have been in place worldwide for quite some time.

In an interview to ziare.com, Democrat-Liberal MP Theodor Stolojan cautioned about the biggest risks Romania is facing being different from those often referred to. In his view, Romania’s foreign debt of EUR 97 bln poses a huge risk to the country, followed by the situation in the banking sector, according to ziare.com.

G20: 29 banks must hold higher capital reserves

International regulation authorities have identified a number of 29 banks, of which 17 in Europe, thought to have systemic importance for the global financial system and which must hold capital reserves 1-2.5 pc higher than those of other credit institutions, BBC reports.

Among the banks mentioned at the G20 meeting in Cannes, 17 are from Europe, 8, from the United States, and 4 from Asia, according to the Financial Stability Fund (FSF) release. According to estimates by the European Banking Authority, those banks will need an additional capital of 106 bln euro.

Among such systemic importance banks, some of which are also present in Romania, BNP Paribas, Credit Agricole, Societe Generale and BPCE, Deutsche Bank and Commerzbank. HSBC Holdings and the Royal Bank of Scotland Group. Also on the list, from Europe, Banco Santander, UniCredit and UBS. Goldman Sachs, JP Morgan and Citigroup are among the US banks included on the list, and credit institutions from Asia include Bank of China.

Also, G20 leaders passed an action plan aimed at spurring growth and balancing the global economy and pledged in the final communiqué at Cannes to make available to the IMF additional funds, if necessary.

Related posts

Ludwik Sobolewski, incoming BVB CEO

Nine O' Clock

Gov’t to collect RON 186 M dividends from Romtelecom

Nine O' Clock

IWG secures first franchise partner in Romania to open new locations to meet the growing demand for hybrid work solutions