President Basescu: I am convinced Romania can finance itself

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Romania can finance itself, both by drawing in European funds, and by raising money on international markets, and there are prospects for an economic growth in the second quarter of 2012, President Traian Basescu told Realitatea TV commercial television channel on Sunday.

‘We are convinced that Romania can finance itself; we are convinced that Romania can draw in more European funds in 2012 than it did in 2011, because there is a larger number of projects approved, including by the European Commission, which will allow us to insist on jobs creation. Romania has reached a CDS of 340 points, which means a credit insurance price equal to that of before the breakout of the Greek crisis.

Maybe we could do better with some fewer points for ten-year loans. The point is that Romania has become credible on the market. We should no longer be as worried as we were in 2009-201 and even in the first part of 2011, when we could not borrow off the market. I would venture a conclusion: Romania can finance itself. It also has some prospects for economic growth in the second quarter of 2012,’ said Basescu.

About the risk of Romania falling back to technical recession as the Romanian finance minister warned some days ago, Basescu said he is optimistic.

‘I do not want to criticise the specialists who released such words on the Romanian market, but the way in which the results of the fourth quarter of 2011 were grossly misrepresented in the mass-media left the impression of recession looming ahead. This is not true.

The third quarter of the last year witnessed a boom generated by agricultural yields and the fourth quarter virtually confirmed the trends in industrial output and services. Moreover, services to the population recorded a consistent growth, a consistent growth was also recorded in construction, which is construction overall generated by the Government’s investments.

So, there should be no worries about real recession. If you compared Q4, 2011 with Q4 2010, you could see consistent growth. So how come we should be scared about recession taking us over? It is true that the first quarter of 2012 will be weaker because of the bad weather, but investments and service to the population will recover in the second quarter,’ said Basescu.

He also said that an increase in consumption could be useful if public wages are restored to their level of before the 2010 25-percennt cuts.

‘Although I am no partisan of economic growth through excessive consumption stimulation, I could see what happened in 2007-2008, and it is clear that restoring the public wages means the Government stimulating consumption, which is likely to help us increase Government revenue, contributions to the public pension system – where the deficit is quite huge. On the other hand, a boost in consumption could generate benefits in the Value-Added Tax collected for the national budget,’ Basescu concluded.

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