Centrul Diplomatic/Diplomatic Center

Centrul de Studii Politice si Diplomatie/ Center for Political Science and Diplomacy

ROMANIAN ECONOMY IN 2012. ROMANIA IN DEEPENING CRISIS.

Monday 6 of February 2012 at the Institute of International Relations and Economic Cooperation headquarters was held the first conference of 2012: The evolution of Romanian economy in 2012.  The crisis will continue!

 The conference has joined economical experts from Romania and European Union, economical supervisors and personalities of political, economical and academic life of Romania.

Another example of Romanian economic success : street beggars

 2009 and 2011 – first years of economic crisis.

 The conference started with an evaluation of economic crisis impact in the period of the first years: 2009, 2010 and 2011.

In the first year of the crisis in Romania -2009- the economic crisis has affected the vital areas of economic life: the collapse has started with construction industry and construction material factories, collapse continued by the real estate market shrinking. Others affected sectors where: insurance, banking and stock exchange and in all the financial sector was strongly shaken down. The consumer confidence has fallen sharply and the Gross Domestic Product (GDP) has being reduced with 10% in 2010 and 8% in 2011.

 The decrease in our economy has being so devastating that we are below the 2000 level. Unfortunately the economic collapse of 2010 and 2011 has laid the foundation for a crisis without equivalent in Romanian history that will affect the country in 2012 and 2013.

 2011- The year of economic earthquake.

 2011 will be remembered without a doubt as the year of economic turmoil in Romania, had appreciated in one voice all the experts present at the gathering. First of all the 2011has being the year in which the Romanian economy had collected all the hard hits from all the economic collapse of the last years. The financial system has being especially hard hit and this had made the fragile Romanian economy to reach the breaking point. The inflation had resurfaced and the experts appreciate that a 10% percent yearly inflation is unavoidable.

The resurgence of inflation had put a dramatic pressure on population economy and had made any recovery unthinkable for the next 2-4 years. The collapse in economic system, the internal and external investments had being reduced to minimum, the credit on internal market has being practically suspended and all this had provoke for 2012 an economic decrease of more than 15% of GDP or even 18% of GDP after others opinions. A factor not to be neglected in amplification of the crisis is the governmental incompetence that by increasing the taxes, legislative chaos and a deliberate politics of destroying the middle class investors in the favor of big companies all did nothing ells than to aggravate the economic crisis.

 2012 – between crisis and slowing down economy.

 The 2012 will be a decisive year to slow down the economic collapse or to direct the economy in a new catastrophic decline. It must be very clear, all economic experts underlined, that the present economic decline will last for a decade at European level, so all those opinions that declared that Romania will start a new economic growth before the next 10 years; either don’t know what they are saying either is bluntly laying.

All the European statistics are speaking about the lost decade of Europe between 2010 and 2020 , term referring to the blocking of economic development at continental level and the frozen of present situation for a decade.

Those that are declaring that Romania will surpass in the period of economic crisis the France or Great Britain economy , are telling stories that are unbelievable , declared laughing Mihail Racaceanu – chief economist. What is important is to succeed that we have in 2012 a decrease in economy of less than 10% and in the interval between 2012 and 2015 to stop the decline and in 2020 to come back to pre-crisis year of 2007 and in 2050 at the pre-revolutionary level of 1989.

 In 2050 the Romanian economy will reach the level of 1989 as a historic economic reference year.

 This assessment was a strong one, keeping in mind that the pre-crisis governmental statistic declared that in 2025 Romania will succeed in recuperating the gap and reach the level of industrial activity prior to 1989 Revolution.

This perspective is no longer feasible, a new perspective is appearing after the crisis and after the lost decade and a cumulative GDP decrease of more than 60% from 2007 economy level.

This economic recession will be hard to recuperate in the context of nongovernmental involvement, the general economic climate of recession and finally the worst factor of all: the burden of external debt.

 External debt will plunge Romania into financial meltdown.

 The factor that will suffocate Romanian economy in the next period will be, after 2015, the foreign debt crisis.

The Boc government has careless accepted more than 36 billion dollars credit and in total the private and state debt of Romania is reaching the unbelievable sum of 95 billion dollars, this only if the government will no longer accept new loans.

But this perspective is an unrealistically  one as President Traian Basescu has announced new external loans for 2012 , that will surely bring Romania to being incapable to pay the foreign debt. Despite the writing on the wall in all of cases like Greece, Spain and Ireland, Romania is accepting new loan from International Monetary Fund, loans that will not be invested in developing and modernizing the economy but in pay offs for next parliamentary and presidential elections’. This consumer invested loans at extortionate interest rates will suffocate completely an ailing and failed economy as Romanian economy is.

Unemployment: with a rate of registered unemployment of more than 10% of the active population and with another 15% percent of the population already left out of the governmental unemployment aide Romania tops all the EU member countries with a real unemployment figure of more than 25% of the population. This figure must be put in perspective with more that 50% of the population below the poverty line and the full picture of the economic meltdown and social tragedy could be analyzed. Romania economy is in crises and no plans for a future development had not being adopted.

 

2012: The economic crisis is worsening.

 The conclusions of the most important economic experts of Romania where clear: the crisis is not over by far, but has entered in a more difficult faze that will affect financial and banking system and economic fundaments. The economic crisis will continue until 2015 at the earliest and a coming back cycle that will last until 2020. This decade will be without a doubt the lost decade of Romania but if the necessary measures are not rapidly taken to re-establish control on economic decline than we risk that Romania economy will not come back not even in 2020.

February 7, 2012 - Posted by | Blackseanews Agency, Danube Delta, Diplomacy, Eastern Europe, Ecology, Economia Romaniei, Economy, Environment, Foreign policy, History, Informations, Institute of International Relations and Economic Cooperation, International Relation, Islam, Leaders, Mass media, News, Open Letter, OSCE-Organisation for Security and Cooperation in Europe, Politics, Relatii Internationale, Romanian economy, Romanian Foreign Policy, Romanian Revolution, Tourism, Travel, Universities | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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