Bucharest joins the crisis cell with world leaders

The world's leaders gathered recently in New York and Paris, at the conclusion of a week of historic lows on stock markets around the world, in an attempt to administer some "oxygen" to crisis-riddled financial markets. Bucharest was no exception, with its stock exchange dropping €7 billion, and trading suspended twice in a single week. And that was not all. In spite of messages by President Traian Basescu appealing for calm, news about local companies beginning to feel the effects of the crisis persisted.

"The Romanian banking system is solid, and all banks in Romania are in a good situation. We must be prudent and responsible, as we have a chance to be minimally affected by the financial crisis. The Romanian stock exchange makes up a mere 5 percent of the national economy, and only an emotional outcry by politicians and irresponsible measures on their part could unsettle the economic balance," said Basescu on Friday.

Nevertheless, major local market players are beginning to take precautionary measures. ArcelorMittal Galati, the largest Romanian asset of the world's biggest steelmaker, ArcelorMittal, announced it would reduce production of finished products due to the international economic crisis. Similarly, Teodor Atanasiu, President of the Authority for State Assets Recovery (AVAS), said it is unlikely that the privatization of Antibiotice Iasi drug maker will be relaunched in the near future, also due to the international crisis.

Business Standard