Businesspeople pessimistic about economic rebound

The depreciation of the Leu up to as much as RON 5/€1, over one million unemployed, and total paralysis of Romania's economy are but a few of the forecasts made by employer unions, if the government does not take immediate steps to counter the economic crisis.

The cabinet has already issued a crisis plan, but few solutions have been applied and further necessary measures have not been considered. The Employers Confederation of the Romanian Industry (UGIR-1903) has recommended an emergency measure involving massive investments worth €10 billion allocated for this purpose in 2009 and state aid granted to large companies which, by resuming production, will also boost the operations of small and medium-sized enterprises.

UGIR-1903 also suggested that the state help mediate the relation between companies and banks, by establishing an inter-ministerial committee that can intervene when banks impose too many conditions for loans. The Chairman of UGIR-1903, Cezar Coraci, said that Romania is far from overcoming the crisis, in spite of optimistic statements made recently by government and central bank officials. "Basic fields of the economy - IT, machinery construction, metallurgy - are all plunging. We do not understand the optimism of the authorities, when we all have access to the same worrisome data from the National Institute of Statistics (INS)," he said. "Romania cannot afford six more months of electoral campaigning. We hear daily populist promises based on funds that do not exist," he added. Elections for the European Parliament are to be held this summer and a new president is to be elected this fall.

UGIR-1903 General Manager, Mihai Pasculescu, said that the main dangers for Romania are exchange rate volatility and unemployment. "In the second half of the year, the financial crisis will turn into an economic and social crisis, which will led to street protests," he warned. The number of unemployed people could reach one million, of which half will not benefit from social security, he added.

Business Standard