Financial press review, November 15

The first page headline of the daily Ziarul Financiar reads ‘In the entire EU only Romania and Greece are still in recession.’ ‘The National Institute of Statistics announced a 2.3% GDP fall in the third quarter over the same period last year, despite the agriculture and exports recovery.’

Mugur Isărescu, the Governor of the National Bank of Romania (NBR), explained in a tree day seminar with financial journalists that “economic recovery is delayed by the ‘slow rhythm’ with with fiscal adjustments are being made. He also said that state arrears are one of the causes of the apparently paradoxical situation, high inflation in a time of economic recession,’ the daily prints.

With the headline ‘NBR officials on the possibility of overcoming the crisis: Budget adjustment is just the beginning of reforms,’ Ziarul Financiar prints in an article: “Facing the possibility of the third year in a row of economic decline in 2011, Romania is still working on both state and current account deficit adjustments, but has done close to nothing for a more competitive economy.’ ‘We need both money and reforms, and not just fiscal reforms.

(…) Reform in Romania doesn’t mean only salaries and pensions,’ the daily Ziarul Financiar quotes advisor to the NBR governor, Lucian Croitoru.

One of the welcomed reforms is that of work legislation, a subject with complex articles both in the daily Săptămâna Financiară and in the magazine Capital.

‘The shock of the economic meltdown has surfaced the rigidity of the Romanian work market.’ The Ministry of Labor finds itself between a rock and a hard place, being pressured by the business environment, which pushes for a more flexible market, and threatened by unions, which defend the old Code.’

With the headline ‘Arrear snowball has us recession-ridden’, the daily Curierul Naţional remembers Mugur Isărescu’s comparing state debts to companies to ‘a contagious disease which spreads and maims the market economy base.’

Not paying your taxes is a ‘national sport’ in Romania and the state should set a good example and pay its debts, the daily prints, quoting the NBR governor.

‘Romania will request a sixth waiver from the signing of the stand-by arrangement concerning target attainment on arrears,’ the daily Curierul Naţional reveals.

The front page of the same daily opens with the headline ‘Foreign investors farther and farther.’ The article claims that direct foreign investment has fallen by almost 40% in the last nine months over the same period last year.

German investment has decreased by two thirds this year, and the Romanian state owes German companies 140 million dollars, the newspaper quotes Andreas von Mettenheim, German Ambassador: Romania’s reputation as a trustworthy partner that pays its debts is at risk if it doesn’t pay investors its arrears. ‘Germany is the most important trade partner and the third biggest investor in Romania, after Holland and Austria,’ the daily Ziarul Financiar prints.

‘How come Germany is growing unexpectedly fast (3.9% over the same period last year), but German investment rates in Romania are falling? Investors are waiting for signs that Romania is on the rebound.’ A similar reasoning has been presented by Valentin Lazea, chief economist for the NBR, in the case of banks, according to the daily Bursa.

‘Commercial banks will start to give out credits again when they see the economy is on the rebound.’ The same daily dedicates its first five pages to the exposing of a complex network of money laundering on various continents, employed by business men and politicians from Eastern Europe, including Romania.

The daily Economistul dedicates its first three pages to the Bank Fair currently open in Bucharest under aegis of the NBR meant to find practical financing solutions to substantially increase European fund absorption.


Translated by Gabriela Lungu
MA Student, MTTLC, University of Bucharest