Financial and business environments of Romania have gone from total euphoria to a risk hysteria fuelled by the exaggerations of some foreign analysts and certain banking or governmental officials, states Sorin Popa, 44, deputy CEO of BRD-SocGen, the second largest bank on the market.
"In Romania, we do not have any elements justifying exaggerated states of panic, we do not have any toxic assets or products in the economy. Even the real estate area can be manageable if there is maturity from the part of developers for a major margin adjustment. Speculative demand was relatively short-lived and with a low distribution, mainly in Bucharest and several other major cities. There is a real demand that should be balanced against an accurate price offer," stated Popa in an interview with ZF.
He maintains Romania has all the premises to overcome the crisis.
"We will have a crisis, but of a size that is normal after a rapid growth cycle, and not as unfortunate as in the US or Western Europe. We will have firms scaling back operations, firms in trouble and maybe even bankruptcies and layoffs, normal consequences of a crisis. On the other hand, we also have positive signals, new investments, the strengthening of some companies, takeovers, with all these anticipating the growth period to come. The IMF supported Romania at a certain moment and may do it again."
Popa, who has been working in the Romanian banking system for over 20 years, considers the reversal of assessments regarding Romania from a high-potential economy to a dying one as abnormal.
Beside the reports of some foreign analysts lacking thorough information, he states the panic stirred in recent months about the whole region has been triggered by a series of statements by Austria's finance minister and by some Austrian bankers.
Sorin Popa adds that Société Générale, the majority shareholder in BRD, has withdrawn from the list of banks that signed the call for help that Austrian banks transmitted to the European Commission.
Popa believes "the risk hysteria and this distrust supper-bubble" are also the main cause behind the long-lasting fall of BRD stock on the Stock Exchange. Popa forecasts the distrust bubble will burst toward the end of the second half, assuming there are no major events such as Lehman Brothers internationally in the first half.
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