Romania’s economy
The Economist: 
A tight budget and a credit squeeze will make 2012 a tough year
Dec 10th 2011 | BUCHAREST | from the print edition
AFTER two years of recession and austerity, Romanians could do with good news. So this week’s announcement that the economy grew by 4.4% year-on-year in the third quarter of 2011 was greeted warmly. But the cheer is unlikely to last, thanks to knock-on effects from the euro-zone crisis, a banking squeeze and loan repayments to the IMF due next year. Gheorghe Ialomitianu, the finance minister, describes as “prudent” a 2012 budget that is working its way through parliament. Its measures include a freeze on public-sector wages and pensions, a levy on health care and privatisation of some state assets.
Such moves, the government hopes, will trim its budget deficit to just 1.9% of GDP next year, from 4.4% this year. But this depends on some rosy assumptions, including growth of around 2% and more cash from the EU. The European Bank for Reconstruction and Development recently cut its growth forecast for Romania in 2012 from 3.8% to 1.1%. Yet the banks may present the greatest difficulties. Some 16% of Romania’s banking sector is in the hands of Greek institutions. Most of the rest, including some of the largest banks, are owned by Austrian banks, which have been advised by regulators in Vienna to limit lending to their subsidiaries in order to meet EU capital requirements.
This has not gone down well in Bucharest. Traian Basescu, the president, thundered against banks that had made “huge profits” in Romania getting cold feet during a crisis. Austrian banks have since given reassurances that their Romanian operations are solid and will not be affected. But, just in case, Romania’s central bank is preparing a “bridge bank” that would take over any big local institution threatened by insolvency.
To add to the squeeze “social contributions” will continue to be levied on all revenues, including pensions and rents, and an increase in value-added tax passed last year will stay despite calls from foreign investors to lower it again. Red tape and corruption are still a plague, and court procedures are lengthy and inconsistent. One of the country’s most senior judges, Gabriela Birsan, is under investigation for allegedly accepting bribes in exchange for issuing favourable verdicts.
Almost half of Romanians tell pollsters they believe the economic crisis will last for more than three years. Two-thirds say they have been affected by redundancies or wage cuts. Only 7% approve of the government’s handling of the crisis. Bracing for stormy times ahead seems sensible.
from the print edition | Europe
A tight budget and a credit squeeze will make 2012 a tough year
Dec 10th 2011 | BUCHAREST | from the print edition
AFTER two years of recession and austerity, Romanians could do with good news. So this week’s announcement that the economy grew by 4.4% year-on-year in the third quarter of 2011 was greeted warmly. But the cheer is unlikely to last, thanks to knock-on effects from the euro-zone crisis, a banking squeeze and loan repayments to the IMF due next year. Gheorghe Ialomitianu, the finance minister, describes as “prudent” a 2012 budget that is working its way through parliament. Its measures include a freeze on public-sector wages and pensions, a levy on health care and privatisation of some state assets.
Such moves, the government hopes, will trim its budget deficit to just 1.9% of GDP next year, from 4.4% this year. But this depends on some rosy assumptions, including growth of around 2% and more cash from the EU. The European Bank for Reconstruction and Development recently cut its growth forecast for Romania in 2012 from 3.8% to 1.1%. Yet the banks may present the greatest difficulties. Some 16% of Romania’s banking sector is in the hands of Greek institutions. Most of the rest, including some of the largest banks, are owned by Austrian banks, which have been advised by regulators in Vienna to limit lending to their subsidiaries in order to meet EU capital requirements.
This has not gone down well in Bucharest. Traian Basescu, the president, thundered against banks that had made “huge profits” in Romania getting cold feet during a crisis. Austrian banks have since given reassurances that their Romanian operations are solid and will not be affected. But, just in case, Romania’s central bank is preparing a “bridge bank” that would take over any big local institution threatened by insolvency.
The health-care system is another headache. Overworked and underpaid doctors have threatened to emulate their counterparts in Slovakia, who resigned en masse earlier this month. The Romanian government’s proposed levy, which will oblige patients to pay for a portion of their treatment, has been welcomed by financiers. Part of a drive to privatise the strained post-Communist health-care system, the fee aims to bring in 378m lei ($116m), money that hospitals can then spend on better equipment or salaries. But medical professionals don’t like it. “This fee will hit the most vulnerable and increase inequalities,” says Vasile Astarastoae, head of the country’s medical council.
To add to the squeeze “social contributions” will continue to be levied on all revenues, including pensions and rents, and an increase in value-added tax passed last year will stay despite calls from foreign investors to lower it again. Red tape and corruption are still a plague, and court procedures are lengthy and inconsistent. One of the country’s most senior judges, Gabriela Birsan, is under investigation for allegedly accepting bribes in exchange for issuing favourable verdicts.
Almost half of Romanians tell pollsters they believe the economic crisis will last for more than three years. Two-thirds say they have been affected by redundancies or wage cuts. Only 7% approve of the government’s handling of the crisis. Bracing for stormy times ahead seems sensible.
from the print edition | Europe
13 December 2011 la 8:29 PM
Un buget mic si un nou credit vor face din 2012 un an greu pentru Romania
După doi ani de recesiune si austeritate, românilor le-ar prinde bine câteva veşti bune. Aşa că anunţul din această săptămână potrivit căruia economia a crescut cu 4,4% în al treilea trimestru al acestui an comparativ cu anul anterior a fost primit cu căldură. Însă bucuria nu va dura datorită problemelor cu care se confruntă zona euro, crizei bancare şi rambursărilor de împrumuturi către FMI care vor începe anul viitor. Gheorghe Ialomiţeanu, ministrul de Finanţe descrie drept „prudent” proiectul de buget pe 2012, aflat în Parlament. Măsurile sale includ o îngheţare a salariilor din sectorul public şi a pensiilor, taxe în sistemul sanitar şi privatizarea unor active ale statului.
Prin intermediul unor asemenea măsuri, Guvernul român speră că va scădea deficitul bugetar la 1,9% anul viitor, de la 4,4% în acest an. Dar acest lucru depinde de unele ipoteze optimiste, inclusiv o creştere economică de aproximativ 2% şi mai mult numerar din Uniunea Europeană. Banca Europeană pentru Reconstrucţie şi Dezvoltare şi-a redus recent prognoza de creştere pentru România în 2012 de la 3,8% la 1,1%. Băncile ar putea întâmpina mari dificultăţi. Aproximativ 16% din sectorul bancar din România aparţine instituţiilor financiare greceşti. Cea mai mare parte din celelalte, inclusiv unele din cele mai mari bănci, sunt deţinute de bănci austriece, care au fost sfătuite de autorităţile de reglementare din Viena să îşi limiteze împrumutul către subsidiarele lor pentru a îndeplini cerinţele de capital ale UE.
Acest lucru nu a fost bine primit la Bucureşti. Traian Băsescu, preşedintele României, a tunat împotriva băncilor care fac „profituri uriaşe” în România. De atunci, băncile austriece au dat reasigurări că operaţiunile lor în România sunt solide şi nu vor fi afectate.
Sistemul sanitar reprezintă o altă mare bătaie de cap. Suprasolicitaţi şi plătiţi foarte prost, medicii ameninţă că vor prelua modelul de la colegii slovaci, care au demisionat în masă la începulul acestei luni. Guvernul român a propus o taxă care va obliga pacienţii să plătească o parte din tratamentul lor, măsură primită bine de către economişti. O parte din unităţile sanitare vor fi privatizate, taxele vor aduce bani în plus la buget, bani pe care spitalele îi pot cheltui pe echipamente medicale sau salarii. Dar medicii nu sunt de acord cu aceste lucruri. „Aceasta taxă va afecta cele mai vulnerabile persoane şi ca creşte inecgalităţile”, spune Vasile Astărăstoae, preşedintele Colegiului Medicilor din România.
Pentru a stoarce mai mulţi bani din „contribuţiile sociale” va continua impozitarea tuturor veniturilor, inclusiv pensiile şi chiriile şi va fi menţinută actuala taxă pe valoare adăugată, majorată în cursul anului trecut în ciuda numeroaselor cereri ale investitorilor străini de a fi scăzută. Birocraţia şi corupţia continuă să fie o ciumă, iar procedurile instanţelor de judecată sunt lente şi inconsistente. Una dintre judecătoarele de la Curtea Supremă, Gabriela Bîrsan este investigată pentru că ar fi acceptat mită în schimbul unor verdicte favorabile.
Aproape jumătate din români cred că actuala criză economică va dura mai mult de trei ani. Două treimi spun că au fost afectaţi de criză sau de tăierile de salarii. Doar 7% aprobă măsurile guvernului luate împotriva crizei