Romania is a key market for Erste, and Treichl expects the country to recover from the crisis.
“The country is doing a lot of good things and has done a lot of good things and the country will recover and actually it’s on the way to do so,” Treichl told investors in a conference call.
Furthermore, the measures taken by Romania against the economic crisis are seen by Treichl as brutal.
“Can you imagine in Germany or in France that the Government goes out and says: we have to cut public sector wages by 25% and at the same time raise the only tax that really hits everybody, the VAT?” Treichl said.
He added that despite the brutality of the measures, people in the Eastern Europe have shown they are well equipped to cope with the crisis.
“(The austerity measures) happened without a day of strike. It has been a pretty brutal measure. But isn’t it one of the big differences between the East and the West … the East is a region where people have learned to live with brutality and can cope with a crisis substantially better than in the West?” Treichl added.
In the summer of 2010, the Romanian government cut public sector salaries by 25% and increased the value added tax to 24% from 19%. In addition, the bulk of welfare was cut by 15%, in order to reduce the budget deficit to levels agreed with the International Monetary Fund and the European Commission.
Other measures enacted by local authorities included an increase in the taxes collected from certain professional categories, an increase in the taxation of stock market gains and an increase of the tax on property.
Since the beginning of 2011, public sector wages have been increased by a total 15%.