IMF finally points to weak transmission mechanism in Romania

One of my themes regarding Romanian monetary policy is that transmission mechanism is not working.  It did not work before 2008 and it has literally stopped since then.

The recent IMF Country Report on Romania brings support to my view. This is what it says at page 21: Continue reading “IMF finally points to weak transmission mechanism in Romania”

Myth Buster: The public sector did NOT bear the cost of recession in Romania

Last week the president of Romania came out asking the parliament to increase public salaries to the 2010 level. He saw it as their duty to do it.  A week later the ruling coalition, supporting the president, decided to go ahead with the increase. Then the prime minister, “independent” supported by the ruling coalition, endorsed it. As of today on June 1st this year public sector wages will return to their 2010 level. Continue reading “Myth Buster: The public sector did NOT bear the cost of recession in Romania”

Romanian MoF should focus on lower expenditures…

..not on higher revenues

The new Minister of Finance, Bogdan Dragoi, presented yesterday his priorities for the length of his mandate. Here are the first three:

  • The number one priority is to ensure a sustainable economic growth.
  • Another priority is structural funds accession.
  •  Until now the Ministry of Finance has focused on bringing sustainability to public expenditures but from now on we will focus on increasing public revenues.

Continue reading “Romanian MoF should focus on lower expenditures…”

Three graphs Romanian policy makers will not show you

Election years are a good time to present results. A favorite comparison that I have seen these days is between Romania’s economic growth in 2011 and that of EU27. Of course this comparison is chosen for a reason as Romania is expected to have grown faster in 2011 than EU27.  But does one year matter? Not for me. That is why I will show you three graphs that paint a different picture.
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Continue reading “Three graphs Romanian policy makers will not show you”