Stolojan: In default of external finance, Romania would experience a rerun of �97-2000 crisis

The former prime minister said PSD knew perfectly well that Romania was in need of external finance, suggesting that in fact, this solution could be avoided only with high costs. “PSD and PDL are aware that Romania needs external finance and that the FDI level has probably cut to half from 2008, so the option is in our attention for a long time. Do we actually want a sharp adjustment as we experienced in 1997-2000? Should I remind you that leu-dollar exchange rates rallied from 4,000 to 16,000? This is will be the outcome if we do not resort to external finance”, said Stolojan.

He admitted there was the option to avoid a loan, but in this scenario the consumption would be drastically cut. “Romania has two options: to avoid an external loan and to reduce severely the productive and non productive consumption, because in a failure to finance the high deficit you have to reduce imports, and the other solution is to obtain the loan and gain time to make the required structural reforms”, the EP member concluded.

The minister of Transportation, Radu Berceanu said the PSD leaders have no reason to be bothered by the fact that they had not been informed on the official visit to IMF. “I wasn’t informed on the visit or on the loan negotiation. It was assigned a delegation made up of a representative from Ministry of Finance and one from BNR for first round of talks, to examine the environment, and not necessarily to negotiate or to conclude anything. The delegation had no mandate; I don’t think there is the need for so much agitation over this”, said the leader of PDL.

As for the statements of PDL leaders at the end of last week on PSD not being treated as equal partner in the coalition, Berceanu said “We don’t have to take all the statements for granted. These are only ‘previews’ of the election campaign to come, as many candidates get ready for the race”.

President Traian Basescu will deliver a speech to the Parliament on Monday, at 16:00 on CA deficit and external finance.