President Basescu: No reason to fear Romania could experience slippage after banks recapitalisation

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Romania at this moment has no reason to fear that it could experience slippage, given that now there is certainty the European banks will maintain their capital flows in the country, President Traian Basescu told the public television TVR.

He stressed there were no signals that the Euro Zone banks had withdrawn capital from the non-euro states following recapitalisation.

„There are no signals that a massive capital withdrawal had taken place. Of course, there is a certain movement of money between the Romanian-based subsidiary and the parent bank, no doubt of it, the same way that there are moments when the parent bank puts in financial resource, puts in capital. We were afraid of a possible negative development and then we wished to be reassured one way or another”, Basescu explained late on Thursday.

The President underscored that Romania ranks second in the European Union by investment level and added this is also thanks to ‘the policy the Government had’.

„Nobody says Romania ranks second in the EU by investment level. In fact, this has been the Government’s policy: to ensure growth, not necessarily by cutting taxes, but by maintaining the budget capability to make investments. Romania has 7 percent of its GDP earmarked for investments. Investments this year are being conducted 100 percent and next year we hope we’ll conduct 100 percent investment volume too. All the investments are in the construction sector, as a rule, be they roads, sewerage, motorways, environmental protection works”, Basescu said.

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