NBR officials on exit from crisis: Budget adjustment is only the beginning of reforms

"Reforms" was the word most often used at a three-day seminar organised by the NBR (National Bank of Romania) and the Romanian Banking Association for economic journalists.

Facing the prospects of a third consecutive year of economic decline in 2011, Romania is still working on adjusting its deficits - both the budget deficit and the current account deficit - but has done next to nothing to make its economy more "competitive".
As far as the National Bank is concerned, the ball is now in the Government's court, with the monetary policy now confined to maintaining exchange rate stability and a working banking sector.
Governor Mugur Isărescu analysed the economic situation in a three-hour presentation before an audience of around 30 journalists, with the main identified problem being the state's inability to pay its debts on time.
"Arrears are one reason for which there is recession and high inflation. Anyway, they are a major problem for Romania because they are not like a plague, but similar to a contagious disease. It spreads around and affects the core of the market, which is monetary, fiscal, discipline, payments on time. This generates a chain of late payments that can be even worse than high deficits," Isărescu said.