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Lucian Croitoru(Central Bank ): Romania's economic growth will be 8 to 12 months behind powerful countries

Romania will resume its economic growth within 8 to 12 months after the powerful states. This is due to Romania entering the crisis one year - one year and a half later, the Romanian Central Bank (BNR) governor's councilor Lucian Croitoru stated on Wednesday, according to Romanian press agency Mediafax.

"The crisis emerged through four channels, namely commerce, confidence, currency exchange, but also finance, and these coordinates will act just as symmetrically on recovering", the BNR official said. "The first lesson is that capitalism is not to be blamed for the crisis, but the ones administrating it, and here I mean politicians, central banks and supervisors", he claimed, adding that, in his opinion, a stronger state involvement in economy would represent "a step in the wrong direction". Lucian Croitoru explained that resorting to such measures led to the loosing of confidence after the Second World War and to the increase in inflation during the '70s. According to him, the economy's prosperity of the last three decades is owned to free markets. "The conclusion is that we will have a new crisis because it is human nature to believe that prosperous periods last forever", Lucian Croitoru concluded.

Euro adoption in 2015 - difficult if economy fails to recover Euro adoption by Romania in 2015 will be very difficult, if the economy fails to recover during the period 2010-2011, stated on Wednesday Lucian Croitoru, adviser of Romania's National Bank (BNR) Governor, present in a conference on financial topics.

'The euro adoption in 2015 will not be an easy feat, a significant effort will be needed, Romania must enter in 2012 in the European Exchange Rage mechanism - ERM II and it has to lower the budget deficit from 7.3 percent in 2009 to below 3 percent in 2010-2011. A lot of political will is needed and a policy coordination, as well', said Croitoru.

He underlined that 2010 and 2011 will be very difficult from this point of view and, in case economy fails to recover, the adoption of euro in 2015 will not be an easy feat.Croitoru said that there are chances that in 2009 the budget deficit climbs down to the programmed level, of 7.3 percent of the GDP, despite having climbed to 4.4 percent after the first eight months, with an increase of more than a percentage point in August because budget spending is not linear throughout the year.

As regards the economic growth forecast for 2010-2011, BNR representative appreciated it is difficult to estimate the economic evolution because prognosis is made based on past models and data and a crisis represents a 'breaking with the past'.

2010 will be more favourable to promotion of reforms under arrangement with IMF The year 2010 is going to be more favourable to promotion of the reforms stipulated under the Stand-By Arrangement between Romania and the International Monetary Fund (IMF) compared with the year 2009, which is an electoral year, a fact making the development of the structural reforms much more difficult, Lucian Croitoru, adviser of the governor of the Romanian National Bank (BNR, on Wednesday told a press conference on financial issues.

He also mentioned how difficult it was this year to promote the single law pay in the public system and appreciated that in 2010 structural measures would be easier to carry out. According to the Arrangement with the IMF, the authorities in Bucharest would have to draw up also a fiscal responsibility and a pension system reform law.In Croitoru's opinion, even if 2009 is an electoral year, with the political parties attacking each other, the risk to go off track from the provisions under the arrangement remains very small.

'The political class in Romania proved it was able to get along when the country needs help to survive economic crises. The risk of going off track exists and nobody want this to happen, for it will endanger the exchange rate and it will 'confiscate' the savings in lei. The population itself will end in attacking the national currency and switching to economies in foreign currency,' the BNR adviser said, quoted by Agerpres.

Sursa: http://www.actmedia.eu

Tags: romania crisis bnr difficult lucian months croitoru growth central economic euro

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