Press review (Jan 21)

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The Romanian daily papers on Wednesday carry reports on U.S. President Barack Obama's inaugural ceremony, the depreciation suffered by the national currency and the adoption of measures meant to halt such development; other items focus on the shadow economy.
 
"Global-scale Obamania", headlines the Cotidianul. "The popularity of Barack Obama, the first African-American president in the United States' history, surged days ahead of his inauguration. It is not only about the enthusiasm of the American people, that creates itself icons very easily, but about the hopes of an entire planet for a world economic relaunch received from the U.S." The daily stresses that "Barack Obama's administration is made up of young, energetic persons, who are much more familiar with the new technologies than their predecessors".
 
"Obama: America is ready to lead again", headlines the Romania libera. "The first black president taking office at the White House is taking over the United States from predecessor George W. Bush at a difficult moment. The deepening effects of the crisis on the U.S. economy combine with two wars – in Iraq and Afghanistan – with the Israeli-Palestinian conflict getting more severe, a bumpy relation with Russia and with the nuclear ambitions of Iran", the daily writes.
 
"The leu hits an historic low. The bankers start speaking of losses", headlines the Business Standard economic daily. The national leu currency "broke the historic record of depreciation to the European currency, reaching 4.3025 lei to the euro and it threatens to hit the threshold on which bankers fear their businesses would become loss-making. In the three weeks of this year alone, the leu lost 7%, so that the analysts' predictions that the euro might trade at more than 4.5 lei no longer seem so far-fetched."
 
"An agreement with the IMF would stem the leu's depreciation", the Cotidianul believes. "The negative projections of the European Commission added to Romania's having been recently downgraded by the rating agencies and force the foreign exchange to flee the domestic market. The central bank's intervention would halt the depreciation of the national currency on a short-term only, at forex reserve losses. The scenario of a crash landing of the Romanian economy turns into dramatic reality.
 
The budget deficit combined with the current account gap and the downturn seen by the euro zone countries leave no hope for the easy funding of the national economy, while the state expenditure risks slipping uncontrollably. The social impact of the devaluation is heavier since more than half the loans taken by the Romanians and companies are in foreign exchange. Romania needs institutional support if it wants to avoid an economic disaster with deep social effects", the daily writes.
 
"(Finance Minister Gheorghe) Pogea can choose the anti-crisis measures to be included in the budget from a list of 174 proposals", says the Ziarul financiar in a headline. "The finance minister is to decide tomorrow which of 174 anti-crisis measures put forward by the authorities, employers' associations and trade unions will be included in the 2009 budget".
 
According to the daily, "the three working commissions made up from representatives of the authorities, trade unions and employers drafted a range of measures meant to combat the financial crisis that have been gathered in a 36-page document titled "Common platform of crisis measures".
 
The groups are operational at the Ministry of Labour and Social Protection, Ministry of Economy and Public Finance Ministry. "The crisis groups want the government to immediately issue an emergency ordinance saying that reinvested profit should no longer be taxed. At present, there is 16% tax on reinvested profit", the daily reports.
 
The analysis groups argue that another measure that should be implemented by the government without delay and that should be included in the 2009 budget is the allotment of funds for the export promotion at a level similar to the money earmarked last year, namely 100 million euros.
 
The anti-crisis groups also proposed suspending the privatisation of the fully-or majority state-owned economic units until the crisis ends; the state's guaranteeing the inter-banking lending during the crisis; enforcing previously adopted measures on farming taxation; amending the gambling law; including the revenues made by institutions and agencies into the general consolidated budget; and dramatically limiting the public acquisition of goods.
 
"Romanians can have real income rises", the Financiarul quotes Erste Bank Financial Manager Manfred Wimmer as saying. Erste Bank controls the Romanian Commercial Bank (BCR). According to Wimmer, the Romanian economy will keep on growing, while the salaries are low when also compared to other Central and Eastern European states. There have been big productivity gains and an increased productivity is even sustainable, he said. Wimmer believes that an agreement with the International Monetary Fund would be the best solution the government might adopt.
 
"Romanians have lost their optimism", the Cotidianul says in a headline. "The Romanians" positive attitude plunged in six months to 29% from 44%, according to figures centralised by the European Commission's public opinion Eurobarometer in 2008", it explains. Nevertheless, Romanians keep on being some of the most optimistic Europeans, ranking third after Swedes and Danes.
 
"How much of the shadow economy can be highlighted in the budget", says a headline to an item carried by the Business Standard. "The shadow economy can be an important source of revenues to the Romanian budget if the illegal businesses are pushed up to the surface, the more so under the current circumstances, when the financial crisis increasingly takes control of the Romanian economy, according to the consultants participating in the Private Government project initiated by the Business Standard".
 
According to managing director at the National Institute of Statistics' National Accounts Directorate, Adriana Ciuchea "in 2007, the shadow economy accounted for 21% of GDP. While the 2008 figures are yet to be completed, we can say they are close to the figures of the previous year".
 
"Must we do everything?" says the headline of an article by author Andrei Plesu carried by the Adevarul. "I cannot argue (for the moment) that the current government means well. But I notice that it has already taken to a maximizing trend, less than a month in governance.
 
It wants to resolve everything there is, with an impetus fit for the end of the race, rather than for its start – it wants a thrifty budget, but also the increase in some salaries and pensions, new measures to the mothers' benefit, emergency ordinances that should set right the inequities of combined pay; then there is the big problem of infrastructure, the complicated problem of the administrative re-distribution of the territory (i.e. a smaller number of counties), to say nothing of the grand project of re-writing the Constitution", the author of the article says.
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