Balcerowicz: First analyze risks, then resume lending!Updated: 16-09-2009 |

"Banks should lend in such a way as not to go bust. If they lend too much and carelessly, they will have problems, and these problems could affect the rest of the economy," said Leszek Balcerowicz, the man who implemented the radical program for Poland's economic transformation.

The problems that some countries are facing are partly due to the fact that lenders that had too much cash due to their loose monetary policy were not cautious in their strategies, Balcerowicz said. "I would not recommend banks to resume lending all of a sudden, without analyzing the risks," the economist added. However, he indicated that blaming only bankers for the economic crisis would not be fair, because the downturn is more likely the result of errors in public policies.

Regarding Romania's joining the euro zone, Balcerowicz said that this step cannot be taken without fiscal reforms to narrow deficits in a sustainable manner. "The euro is good, but it does not replace adequate policies," he said. Balcerowicz, former President of the National Bank of Poland, was initially criticized for the shock therapy applied to the Polish economy in the 1990s. But the Balcerowicz Plan is now considered an example, and Poland is the only country in the region whose economy continued to grow in spite of the global crisis.

"It is true that Poland avoided recession, but we too suffered a sharp slowdown, of some five percentage points, to one percent, but this is better than minus 20 percent or minus 10 percent, as will be the case of some Central and Eastern European economies," Balcerowicz indicated. What are the reasons for this difference? Firstly, the size of the economy.

"We suffer less because exports have a more limited role," the economist said. The second reason is related to policies, considering that the increase in real estate lending was rapid in Poland, but not as fast as in other countries in Eastern Europe. "I preferred a conservative monetary policy, and tried to slow an excessive increase in foreign currency lending," the former President of the National Bank of Poland added.

standard.money.ro