Stolojan: Taking Romania out of crisis will be more difficult than imaginedPublish date: 27-04-2010
Taking Romania out of the ongoing crisis will be difficult, because the country went into crisis 'fully disarmed,' Romanian MEP Theodor Stolojan told a conference on Friday in Bucharest on the European Union's Europe 2020 strategy.
'Taking Romania out of the current crisis will be harder than we imagined because the country was caught fully disarmed in terms of monetary policy and in terms of fiscal policy,' said Stolojan.He mentioned that over the past two decades Romania has twice reached vulnerable positions because of foreign balance mismanagement.
'In late 2008, Romania was put in a special vulnerability spot because its short-term debt was larger than the reserves of the National Bank of Romania (BNR), which were depleted of the statutory reserves the commercial banks had to set aside with BNR. Romania got out of this predicament by a massive loan of 20 billion euros. Getting out of the 1996-2000 crisis was made with internal resources, but escaping the predicament of the late 2008 required means that generate new risks for the years to come,' said Stolojan, quoted by Agerpres.
He warned that an increase by one percent in the interest rate on the international markets would mean 1 billion euro in additional payments for Romania on interest rates alone.'This time, Romania has no more chances of preventing other risks than by doing what is right in terms of productivity and competitiveness,' Stolojan pointed out.
He also warned that Romania has no more time to delay essential reforms, adding that an extra difficulty to Romania is the fact that Romanians are focused on a culture of rent extraction, and what is happening today with pension reform and uniform pay in the public sector and what will happen with the reform of the social security system reflect this spirit, including at the level of the Romanian Academy.
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