Greek government lacks courage, Romania has no governmentUpdated: 14-12-2009 | Regional Europe

Romania and Greece need to balance their budgets, as the crisis in Dubai has put both countries in the collimator of international investors. But while Athens has a government with no courage to take necessary measures, Bucharest has no government at all.

The European Commission has asked that Athens take specific steps to reduce its budget deficit, and indicated that the Greek government is solely responsible for this. Analysts believe that Greece's position, as euro zone member , will afford it the necessary support to avoid the worst. "Ultimately we doubt that Greece will default, but allowing that greater degree of uncertainty as to whether the EU/EC/ECB [European Union/European Commission/European Central Bank] and big wealthy EU member states will step in to help Greece is part of the solution," according to declaration for Business Standard by RBS analyst Timothy Ash.

In Romania, presidential election results have widened the political problems. "Basescu has thus far failed to secure parliamentary approval for his own PDL [Democratic Liberal Party] candidates for the post of prime minister, after the minority government lost a confidence motion in October. The question is whether Basescu will look to a compromise solution, co-opting one of the various compromise candidates fielded by the opposition, or he will push on with his previous agenda of ensuring a loyal PDL candidate secures the post of prime minister. The latter strategy is likely to result in early parliamentary elections," says Ash.

Following the outbreak of the debt crisis of the quasi-sovereign Dubai World company, CNN published an analysis which shows that Romania and Greece are the most vulnerable economies in terms of public debt administration. Although the two countries are very different, the problems faced by both states have a common denominator, namely the budget balance.

The European Commission sanctioned both Greece and Romania by applying the excessive deficit procedure last year. Beyond the obligation it has to ensure that the Stability and Growth Pacts are respected, the European institution must take into account the fact that Greece is a euro zone member, and that Romania is receiving aid through the budget consolidation program approved by members of the European Union, part of the international loan coordinated by the International Monetary Fund (IMF). Lack of political will is the main problem in both countries, something that has been highlighted by CNN and various other analyses.

standard.money.ro