The 10 weeks of huge political strain put by the fight between the new power – Ponta and Antonescu (USL) – and the new opposition – Basescu and PDL – led to a rapid deterioration of the economic situation and, especially, of the economic growth prospects, and the next 6 months will be very tense. In a column with the title ‘The worst-case scenario: 10 things that will affect the Romanian economy,’ Ziarul Financiar warns that the current conflict will have effects this autumn, but also on a long term, for the years to come.According to the source, the 10 elements that will have a negative impact on the economy are: the pressure upon the exchange rate; the reduction of the sums in RON available for consumption, investment and money saving; the problems encountered by the Finance Ministry with financing the deficit; the worsening of the economic gridlock, with the consequence of lower payments made by companies to the state budget; the decline of the business of companies, which will revise their investment plans and operate layoffs; banks will reduce their financing and will press customers to repay their debts; the devaluation of Romanian assets, with the result of diminishing guarantees; the collapse of European funds; Romania remains prisoner of the IMF; the middle class will be destroyed, while state employees, while pensioners will remain prey to electoral schemes.Out of these, the collapse of European funds – the cheapest resource – will be the most serious loss, the newspaper estimates.As for the exchange rate, the newspaper mentions that “the intervention capacity of BNR in support of the Romanian currency, though still existing, is reduced.” “Knowing that BNR is under pressure and with a reduced possibility to react because it cannot increase once again the interest on the RON to defend the exchange rate, as it happened in 2008-2009 – because it would hit the Ministry of Finance, by increasing the costs at which it borrows money – speculative financial investors will see their strength increase and will stage even stronger attacks on the exchange rate. In these conditions, we might witness wider increases of the exchange rate, followed by recoveries, which will put more pressure on the foreign exchange market. This pressure will have an immediate impact on economy,” writes the newspaper.With regard to the problems encountered by the Ministry of Finance – financing the debt and rolling the existing debts – Ziarul Financiar reveals the fact that the Ministry currently has a reserve of EUR 3 bln in order to finance the deficit, then it will have to return to the market controlled by investors.
