No positive consequence for Romania in case Greece leaves the Euro Area. Romanian authorities should pay close attention to budget indicators, European Affairs Minister Leonard Orban stated.
European Affairs Minister Leonard Orban stated yesterday that the scenario of a controlled exit from the Euro Area in the case of Greece will be taken into account for the first time by the European Council during its informal meeting on May 23 in Brussels, Mediafax informs. “It’s clearly not an issue concerning Finance Ministers, it’s an issue that has to be discussed by the leaders. I don’t expect a decision, I expect a consolidation of opinions concerning the way in which Greece should be tackled. The political message is that Greece has to be kept within the EU but I can confirm that an ever increasing number of officials in EU countries are also taking into account different scenarios concerning Greece,” Orban stated during a meeting with the members of the Romanian-British Chamber of Commerce. Likewise, he underlined that he personally supports maintaining Greece in the Euro Area and added that although Greece leaving and reverting to the Drachma has become “an option,” “the consequences of such a decision are very hard to fully anticipate” not only for Greece, which will be significantly affected, but for the whole European economy, including for Romania. At the same time, Orban pointed out that there are estimates referring to a 40 per cent overnight drop in the Greeks’ living standards following a return to the Drachma, which is “enormously,” however some studies authored in Great Britain point even to a 75 per cent drop. The European Affairs Minister stated that holding elections after Greece leaves the Euro Area would lead to an even greater rise in extremist parties. At the same time, Orban underlined that he sees no positive consequences for Romania in case Greece leaves the Euro Area, the consequences being on the contrary “only negative.” “BNR is very cautious and has taken some measures to protect the RON from negative developments in Greece. It’s clear we will be affected, not just directly because of the Greek banks that hold an important share in the banking sector, but also indirectly, through the fact that we are in the same region with Greece,” Orban explained. The minister added that even now Romania has a lot of difficulties stemming from a drop in FDI, the latter falling significantly compared to their level two or three years ago. He underlined that in these conditions Romanian authorities have to pay close attention to budget indicators. “We have to be very careful with what we’re doing in Romania in budget terms, to what we promise the population, because we will face significant budgetary difficulties if Greece leaves the Euro,” Orban said.
Romania’s goal of joining euro area in 2015, maintained
At the same time, Minister Orban pointed out that Romania maintains its goal of joining the Euro Area in 2015, but efforts have to be made to hike the Romanian economy’s competitiveness and its convergence with European economies. On the other hand, he pointed out that the existence of problems in the Euro Area cannot be denied and he would like necessary corrections for improving the governance mechanism of the Euro Area to be already made at the time Romania accedes to the Euro Area.