The Romanian president was the guest of the season’s last edition of “After 20 years” show on Pro TV.
The Romanian currency has been through a turbulent period in the past two weeks, a time marked by the pressure of foreigners’ sale of government bonds amid the situation in Japan and the US, where the administrations are signaling they could put an end to the quantitative easing program that has been a common feature of the past few years of crisis. The leu depreciated to over RON4.5 to the euro and analysts believe depreciation risks remain and that volatility will be more significant in the months to come, even if the domestic political situation is stable. Central bank BNR has limited room to act in defense of the leu.
The president said in the Pro TV interview that the situation is not specific only to Romania.
“No. I believe there was quite a significant capital outflow from Romania, and not only from Romania, also from Poland, and from Hungary and the Czech Republic. In fact the CDS (credit default swap) has depreciated in the past week and not only for Romania, but for all the countries in the region. I think things will return to normal.”
He thinks in time banks will return in time to more relaxed conditions on lending, but their priority now is to recoup non-performing loans granted between 2007 and 2008.
At the same time the president says he is not “that pessimistic about the evolution of the Romanian economy” given the prospects of a good farming year and the creation of new jobs through state aid for direct investments in the economy.
(English version by Daniela Stoican)
“What I think will happen is that in Romania unemployment will not rise, which is a good first step. The second one is the absorption of EU funds, which would add jobs,” Basescu said.
(English version by Daniela Stoican)