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The effects of BREXIT are manageable for Romania

The effects of the British vote to leave the European Union are manageable for Romania, the Ministry of Public Finance asserted in a release on Friday; foreign currency reserves are available, and international borrowing can be postponed until markets stabilize. 

"The Ministry of Public Finance monitors closely the evolution of financial markets on European and international levels, and is permanently in contact with its European partners and with the international and national financial institutions. On the short term, we are witnessing volatility on the national, regional and international financial markets. Nevertheless, the Romanian state has a substantial reserve of foreign currencies, which could be used to attenuate the risks resulting from the increase of financing costs, offering the flexibility of adapting the size of sovereign bond issues in the forthcoming period, until markets are stabilized," the document reads. 

The ministry also mentions Romania's strong economic performances: 4.3 percent economic growth in the first quarter of 2016; balanced budget execution in January-May; public debt among the smallest in the EU; strong downtrend of the private debt and borrowing in foreign currencies. Consequently, it expects a moderate long-term impact of the Brexit on the main economic indicators, but warns on the need for prudent fiscal and budget policies and calls for responsibility in promoting measures that could impact the budget targets and worry the financial markets. 

On a EU level, the Brexit compels to dialogue on the practical means of managing the impact, the release adds. "Romania will actively participate in these discussions, having an important say from the perspective of all resulting implications. One of the effects taken into account is the impact on the EU budget, to which the United Kingdom contributes significantly."