“This agreement has worked well, preventing, unlike in other countries, major exits of capital from the banking system. It’s important to note that all Romanian banks have survived the crisis with no need for state intervention. Today, the levels of Romania’s fiscal deficit and public debt are among the lowest in the European Union. The current account deficit, though still high, at European standards, is, however, at a level that allows for the stabilisation of foreign debt levels. Exports are seeing a record high and growth is above the European Union average. There are still under-performing loans in the banking system, but they have been provisioned and capitalisation is high compared to the European Union average.”

Jeffrey Franks also said that an agreement was reached with the authorities in Bucharest with regard to future policies and that the full restoration of public sector salaries would only be possible next year, because the government first wants to refund the health insurance contributions that were illegally collected from pensioners. Public sector salaries were cut by 25% in the summer of 2010 as part of an austerity package, but partially restored later. Salaries of public employees can only be raised by 8% in June. Jeffrey Franks warned that Romania should not stray off course and go ahead with its reform policies:

“Despite considerable progress and a diminution of vulnerable aspects, there are still many challenges and necessary reforms to be tackled. The new government must maintain a cautious fiscal policy due to the external threats caused by the uncertainty in the Euro zone and pre-election pressure at home”.

Romania’s brand new Prime Minister, Social Liberal Victor Ponta, gave assurances that his cabinet would support all projects meant to improve the standard of living for Romanians. He said his goal was to achieve economic recovery under the sign of solidarity, adding that austerity should be replaced by sustainable growth and the creation of new jobs.