Why I am skeptical about Romania

Often enough people mistake my skepticism for pessimism. Especially those that are activating in the political arena and with whom I happen to disagree. Most of the time my reply is that I try to be as realistic as possible and assess the situation based on their policies. Last time I was called a pessimist last night on a TV show.

Deal for Greece still not sustainable

The second Greek bailout does not bring the needed adjustments to ensure that we will not deal with this issue in the following months again. Here is the official communique from the Eurogroup.

NBR could do with a bit more transparency

No one questions today the role of central banks’ against independence political influence. Experience has shown that an independent central bank monetary policy is a more credible one and it has more success in implementing monetary policy. Central bank independence, de jure and de facto, is observed since the beginning of this institution.
Versiunea in Rommana aaparut in Finantistii

The output gap is the trojan horse of the fiscal compact

Romania, via its president, has adhered wholeheartedly to the euro area fiscal compact. To sell the story the Romanian officials are presenting this version of the rules based fiscal policy as a panacea to the chronic fiscal policy problems of this country. And to make the story stick “friendly” economists are presenting only the benefits of such a policy. Thus, it gives me great pleasure to show you the dangers of such a policy especially for the private sector.

End of EURO is not the end of the world

I have always said that either one or two countries leaving the euro or even the euro disappearance will not be the “end of the world”. It will be a negative shock to which economic polices will have to respond. In the same time I also said that by focusing on the negative effects of euro disappearance we forget about the benefits of flexible exchange rates.

Below is a very nice report presenting both.

Aici sunt de acord cu Guvernatorul BNR

Domnul Guvernator a avut cateva mesaje foarte intersante prezentate in cotidianul ZF.ro.

Pe scurt:

-nu va creste scadenta de 7 zile pentru operatiunile REPO prin care BNR injecteaza lichiditate in sistemul bancar.

-nu va reduce rezervele minime obligatorii

-nu va accepta colateral contracte cu ipoteca din partea bancilor pentru lichiditate.

The surprise in the already well known 2011 GDP figure

Activity expanded by 2.5% in 2011, confirming what the Romanian president made public a month ago. I still wonder what is the point of Romanian Statistics Institute as Mr President has made it a habit of “front-running” it when it comes to positive news. This is also an important distinction as only the positive news get the “early release”. But I digress. Today should be about the GDP release not about the politics around it.