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Romania secure from financial point of view


Romania is one of the most stable countries in EU from the macroeconomic point of view and is now financially secure, says Cristian Socol, the premier’s councillor. “In an uncertain, unstable regional context Romania will continue to manifest prudence from the macroeconomic point of view.


At present, Romania is financially secure - it has buffers in Treasury covering more than 6 months from the current financing necessary, over 4 months which is the comfort threshold, and the overall BNR international reserves are double the short term foreign debt. Although it seems strange, we could say that Romania lends EU with credibility, our country’s reputation being explained by macro economy of 1%(Romania has low budget deficit of 1.8% of GDP, next year it will have a structural deficit of 1% of GDP, it has a current account deficit less than 1%, therefore we no longer depend on foreign capitals and an inflation of 1.3%), Socol explained.


According to him Romania fulfils all criteria of nominal convergence about joining the euro area, has the third lowest public debt in EU and the highest economic growth in the third quarter of 2014 of EU countries.


Socol pointed out that there have been signs of rising uncertainty in international financial markets of late, while the main economic areas of the world give signs of slow recovery (USA), economic slowing down (China), possible return to recession (euro zone) or the downfall of economy (Russia and Ukraine).


“The global context is worrying from macro economic point of view and there are signs which may bring back to discussion the so-called perfect storm. The US economy gives signs of slow recovery (the best growth rate of industrial output in the last 4 years), the euro zone risks to return to recession (estimates of economic growth are reduced, public debts grow, budget deficit are high), while the Chinese economy has a smaller performance for the first time after 15 years, the authorities having to bring down growth estimates,” Socol said.


He added that “close to us the Russian economy collapses” on the background of sanctions imposed and cheap prices of oil ( the rouble lost 50% against the US dollar, the Bank of Russia announced on Monday the increase of reference interest rate from 10.5% to 17%, the authorities asked ministries to cut down expenses by 10-15%).


“The economy of Ukraine needs immediate financing of 15 billion dollars but nobody dares do it because of the country’s economic downfall of 7%”Socol added.