PM Tariceanu and President Traian Basescu call for banking prudence

Even if financial crisis is not hurting Romania directly, the economic recession that hit Europe is affecting the country, President Traian Basescu together with Prime Minister Calin Popescu Tariceanu said in their speech held at European summit on the financial crisis.

“The forecasts on an economic crisis are very serious. The crisis already started to affect Romania. Austrian press agency informed on Voestalpine’s plan to postpone investment in Romania for 2009,” Tariceanu stated.

According to Die Press, Austrian concern announced it will put off for 2009 the construction of a steel plant in Romania, Bulgaria, Turkey or Ukraine due to the critical condition of the financial markets and the resulting uncertainty on the further development of the global economy.

Prime Minister’s warnings on the possibility of an economic crisis were confirmed by President Traian Basescu. “Economic crisis is not in the hands of the government or financial system. It is pure reality that we are facing”, Basescu pointed out, NewsIn informs.

“This is why the existing financial resources, that can be drawn, must be directed towards production, and investments, and not towards consumption – if we actually want to downsize the effects of the second phase of the financial crisis, which turned into economic crisis,” President said.

“Economic crisis is not backing down if we are not prudent. There is major risks of downturn for economy, as the banks are no longer granting interbanking loans”, Basescu stressed.

The same message of prudence in Romania’s economic policies was uttered by the prime minister, who explained banks are reluctant in lending each other due to possible “toxic financial products” that the other bank may have, therefore is likely to compromise loan reimbursement.

Basescu reminded on the previous experience Romania had with distressed assets, saying that until a rescue facility will buy non-performing assets of the banks, a bailout plan to pump money in financial system which will remain rotted, is doomed to fail.

Translated by Camelia Oancea

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