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What the newspapers say: September 29, 2009

de C.B.
Luni, 21 septembrie 2009, 5:05 English | Press Review

Romanian banks' profit is saved... by the state. Elsewhere in the news, crisis measures: a housing agency turned into a food store, a furniture showroom turned into a restaurant, a factory turned into a tourist lodging. Last but not least, the Romanian energetic system is old, robbed and futureless.

Romanian banks' profit is saved... by the state, Gandul informs. From January until June, the Romanian state borrowed 6.59 billion euros from the banks in Romania, according to the Public Finance Ministry. So far, the state paid back 430 million euros worth of profit. The money is used to pay mostly salaries, pensions and consumption. But the banks lost appetite to borrow to people or businesses.

"It is the state who’s to blame, not the bankers", Romanian economic analyst Ilie Serbanescu says. He claims that the year 2010 will be miserable, full of redundancies and tax increases because the Government did not take the measures it had to this year, since it is an electoral year in Romania.

"If the state continues to borrow at this rate, by the end of the year the banks might cash back 730 million euros in profits, that is over half of the entire banking system profits from last year. (...) In the first seven months of crisis this year, the banks insured 38% of the 2008 profit only on the expense of the state", Serbanescu went on.  

Evenimentul Zilei reads crisis measures: a housing agency turned into a food store, a furniture showroom turned into a restaurant, a factory turned into a tourist lodging, all measures taken by Romanian entrepreneurs fighting the economic crisis. The blocking in the housing system saw many profile agencies concluding their activity. But the ones to survive are the opportunistic, with a low number of employees, minimum costs and clients with low expectations. The old, traditional housing agencies are looking for solutions to stay in business.

They leave the big spaces they once occupied and function from apartments that belong to them, where they don't have to pay rent. But old apartments dropped to half of their value and the market starts to move these days, seeing an increasing number of sales for transactions that don't go over 200.000 euros.

Some businesses have been forced to see a change in profile, for example a store selling labour-saving devices is now selling cheap products, in an "any item 5 lei". A mattresses producer saw sales dropping 30% in the beginning of the year. So every penny they got, it was invested in transforming the headquarters in a tourist lodging. But the owner of the business will not give up its passion for mattresses and he will try to hold on to his original profile for as long as possible.

The Romanian energetic system is old, robbed and futureless, one of the Romanian energy reform mentors Jean Constantin claims in an interview for Cotidianul. Despite being Romania's Eurelectric representative and running the Romanian National Institute for the Study of Energy Sources Usage and Set-up, he's not listened to by anyone in Bucharest when he predicts a crisis in the national energy system.

Jean Constantin is grounding his forecast not only on the lack of reform, but also on the "politicians' intention to deviate toward state-centralisation". He does not welcome the state's solution of creating two entities where profitable companies have to support unprofitable companies, and the small companies are left out. He talks about an attempt to sell big hydra-electric power stations built with national funds.

According to Constantin, the reform proposed and rejected in 1997 was meant to regulate the energy market mechanisms in Romania and separate producers from distributors, assuming that the state companies' management will be reformed to avoid clienteles. Romania's energy politics before 1996 had left the country at the bottom list of the countries aspiring to be an EU member.

He says that the National Agency for Energy Regulation and the Competition Council need to be in permanent guard, preventing companies uniting into monopoles. But the two entities proposed by the Government are about to "marry".

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