| AN ECONOMIC MODEL FOR ROMANIA 04/06/2010 |
| (2010-06-04) |
| Last updated: 2010-06-07 13:59 EET |
In Romania, the professionalism of the National Bank staff has compensated for the amateurism of successive cabinets in the last two decades. The warnings, predictions and strategies designed by the team run by governor Mugur Isarescu seem to be more credible. Isarescu's advisor Adrian Vasilescu has repeated that the reduction of pensions and state sector salaries decided by the government and fiercely disapproved by the opposition and trade unions, is ''the lesser evil''. The alternative, a potential rise in the VAT, will set the country on fire, as it would be followed by the rise in the inflation rate and tax evasion.
Vasilescu also says that the priority at the moment is obtaining the next payment of the stand-by loan from the IMF. ''We have committed ourselves to taking a number of measures by June 1st, measures which we haven’t taken yet. If the problem is not solved, Romania will miss its next IMF payment and, later, also the loans from the EU and the World Bank'', Vasilescu added. Economist-in-chief Valentin Lazea, has said that no one can ask for higher budget expenses for social protection and infrastructure, as long as taxes are generally below the EU average. Lazea also says that the current crisis should make Romanian business people to change their economic model:
''The easiest growth model is satisfying domestic consumption through imports. This is how Romania has developed until now. It must be replaced with a much tougher model for entrepreneurs, that is production for the domestic market. And the third, last and toughest step is beginning to produce for export.''
The average Romanian, Lazea adds, should learn the crisis lesson by staying away from gifts generously offered by governments in election years, as they will be paid back with interest later on. Also, in times of relative prosperity, as was the period seen by Romania until 2008, they should save money, instead of amassing huge debts. As for politicians, they should listen to experts at all times, whether the economy fares well, or is in a crisis.
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2025-04-03
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