“Romania doesn’t afford to allot much fiscal space for massive public investments, particularly given the current situation when many investments are managed through small and medium-sized enterprises. Its deficient economic structure is another obstacle to a quantitative easing, as the measure could endanger financial stability,” said Claudiu Cercel, BRD deputy general manager.
“The only solution would be that Romania become friendlier toward markets,” Cercel told a seminar organized by the central bank.
Adrian Vasilescu, adviser to Romania’s central bank governor, said in turn that the country couldn’t finance substantial investments from the state budget.
“I don’t think that Romania can support the investment it needs from the state budget, regardless of the size of the deficit or of the fiscal situation,” Vasilescu told the seminar.
Cercel said local banks are unable to support SME financing because of the stricter legal framework. Also, bankers are cautious about SME lending due to a lack of contractual discipline from their part.
The BRD official said the non-performing loans ratio in the SMEs segment usually ranges from 25% to 40%.