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What the newspapers say: October 29, 2010 

de A.C.     HotNews.ro
Vineri, 29 octombrie 2010, 10:26 English | Press Review

​All newspapers on Friday focus on finances, either wondering what it will cost us to give up the IMF or the IMF threatening not to release any money if the ordinance on credits is not changed. Another newspaper tackles the consequences of changing the ordinance. Elsewhere in the news, Hungary is accused by UN human rights experts of discriminating against gypsies. 

Romania libera proposes an analysis of the costs incurred if Romania would give up the IMF. For economic freedom, Romania should pay an extra interest rate of 1-2 billion euro/year and if the government will not be more credible than under the IMF umbrella, a decision to give up the agreement would lead to major economic problems. 

As tensions increase between the IMF and the executive because the IMF imposes measures that Romanian officials have problems accepting and vice versa, the new agreement due to be signed in April does not seem to be such a good idea. 

However, without a new agreement, Romania will have to pay extra: for next year, it will have to pay 13.2 billion euro of which a tenth f the sum are interest rates. Plus, the government will also have to finance the budgetary deficit. 

Theoretically, the state would have to get a loan to pay its dues. If it did, the situation would become worse. If it will have to pay just interest rates of 2 billion euro, the decision to give up the new agreement would double the interest rates. 
If the financial burden could be overcome, some other dangerous consequences might appear, economists consulted by the newspaper concluded. Experts agree that a new agreement would be favorable for the country. 

Aurelian Dochia considers that the risk of giving up a new agreement would be, among others: instability of the currency, access on international markets, and credibility for investors. He declared however, that if economic policies will be correct, the decision would not be that dramatic. 

An agreement implies access to money, finances and correct economic policies and responsibility for macroeconomic indicators. Another analyst, Ilie Serbanescu declared that the country is in no position to wonder what will happen if it does not sign a new agreement. He said that the 2011 deficit will have to be covered somehow and the country will have to take up a loan anyway and interest rates are higher than those practiced by the IMF. 


Romania could win from the new agreement the credibility on the international markets, analyst Bogdan Baltazar explained. Without an agreement Romania loses credibility. 

Meanwhile, the IMF urges the government to change the ordinance 50/2010, on credits, to modify the two laws on 5% VAT for food products and no taxes for pensions below 2,000 lei. Evenimentul Zilei reads that the IMF urged authorities to implement the ordinance only for credits contracted in the present, not for those already signed. 

The deadline for this is December 15 and the new installment of 850 million euro is conditioned by these measures. IMF Romania chief of mission Jeffrey Franks declared that under European law, the ordinance should be applied to new contracts not for old ones as well. 

The current regulation could be very costly and authorities should make sure that banks do not incur too many costs and customers are protected, Franks explained. Banks will lose somewhere between 300 to 900 million euro which will have a negative influence on a fragile economy. 

In the same vein, Gandul reads that if the government gives in to the IMF pressure and modifies the ordinance so that it does not apply to old credits; clients could be called again by banks to sign new additional acts to replace the old ones just signed. 

Lawyers claim that if the government accepts to modify the ordinance, clients and bankers will suffer as well: those who already had credits will lose advantages brought by the new ordinance and banks will have to modify contracts again. Thus, banks will have to send over 5 million notifications through sms, email or post to clients. 

Evenimentul Zilei reads that UN human rights experts accused Hungary of discriminating against gypsies. The Rroma community is receiving continuous bad treatments, the 18 UN experts conclude. 

According to experts, the community is the number one target of generalized declarations coming from public personalities, mass media. In Hungary, there are 700,000 Rroma. Starting January 1st, Hungary will take over the EU presidency and it announced that Rroma integration will be one of the three priorities.

























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