EC’s answer as reagrds CEC Bank recapitalization, a stupidity, says business analyst Daniel Daianu

Former MEP Daniel Daianu has labeled the European Commission’s answer as regards the CEC Bank recapitalization as a „stupidity”.
„To me, the Commission’s answer that we must privatize in order to be able to recapitalize, is a stupidity.

Why is that? When the banking system doesn’t work properly, when the appetite for taking risks is so high, saying that a state-own bank has to be privatized to be able to recapitalize…” is wrong,” Daianu said on Wednesday evening at a debate on the European funds absorption.

In his opinion, the CEC Bank has to be recapitalized, and the answer to the EC should be: „Don’t deny Romania the right of doing, under very difficult circumstances, something that you don’t even think of denying to other countries that nationalized banks.

You don’t even allow us to come up with supplementary capital from our own sources to increase the capacity of intervening in economy.”
In his turn, secretary general of the Romanian Businessmen’s Association (AOAR) Cristian Parvan said that the EU’s attitude is „a double language and a double action.”

„This is the EU’s attitude, whether we like it or not: a double language and a double action. The French banks got billions. The European Central Bank called 1,200 banks and gave them money and they did no longer need to be privatized,” Parvan argued.

CEC Bank president Radu Gratian Ghetea highlighted that the institution needs recapitalization given that, in eight months, it has been the only bank which increased the loan balance by ver 26% for SMEs and agriculture.

„26% at a difficult time like 2009. So its’ all about the Central Bank’s risk taking. It makes the policy dictated by the shareholder. And the shareholder has said: „Go towards lending to agriculture and SMEs,” Ghetea explained.

The recapitalization of the CEC Bank, owned by the Romanian state, was put on the list of the anti-crisis measures included in the program drawn up by the Tariceanu Government and taken over by the Boc Government.
Through a capital inflow of 2.5 billion lei, the state wants to consolidate CEC Bank and through it, support the Romanian business environment.

It also wants to be able to intervene on a banking market dominated by foreign commercial banks whose appetite for financing investments in the real economy is very low.

As EU member, Romania has to notify the EC on its planning to grant public money to strengthen the bank, on which the EC should have is say as to the move’s legality. But the EC says this aid breaks the stipulations of the EU Treaty, offering the CEC Bank a privileged position as compared to other competing banks especially because it is not faced with liquidity problems.

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