Analysts Prefer Croitoru Over Johannis

Economic analysts believe that the nomination of Lucian Croitoru for Prime Minister is a solution to the ongoing political and economic crisis confronting Romania and therefore salute it.

"Lucian Croitoru is clearly a better option than Klaus Johannis," said Laurian Lungu, the Managing Partner of Macroanalitica, who believes that the arguments for nominating Klaus Johannis as Prime Minister are very populist, focusing on the false need for "a good caretaker" while the country actually needs a much broader vision.

"Croitoru is more fit for the job. He better understands both the domestic and the international context and can also be a very good communicator," Lungu explained. Nevertheless, he pointed out that Lucian Croitoru would need a strong team and the Parliament"s support, based on full understanding of the exceptional situation of the country. Croitoru has ten days to assemble a team and a programme to present to the Parliament for investment.

If the Parliament refuses to give him a confidence vote, the procedure will be reset, and the President will nominate another candidate for Prime Minister.

Lucian Croitoru seems like the good choice also to Dragos Cabat, President of CFA Romania. "Lucian Croitoru as Prime Minister can help us not to lose the agreement with the IMF and the other international institutions," he said.

Economist Calin Rechea points out that, despite the good impression that the IMF might have of the prospective Prime Minister Croitoru, the IMF"s money will still not help Romania out of the crisis.

"What Romania needs is a Government to deliver on the commitments that the country has already made," said ING Bank Senior Economist Nicolae Alexandru Chidesciuc. In his opinion, Croitoru is a specialist who knows well what to do in order to make that happen.

• IMF is waiting for the new Government

A Mission of the International Monetary Fund (IMF) will arrive in Romania immediately after the investment of the new Cabinet to start the second progress review within the stand-by agreement, IMF representatives said shortly after President Traian Basescu had nominated Lucian Croitoru as Prime Minister.

The mission tasked to review the implementation of the commitments stipulated in the stand-by agreement, which was scheduled to arrive in Bucharest next week, will only come after the new Government is in place.

The IMF programmes support the healthy economic policies of the partners countries, and not a particular government or political party, the IMF indicated in a press release.

Meanwhile, President Traian Basescu yesterday signed the nomination for Prime Minister, explaining that Lucian Croitoru had given him the impression of a "profound professionalism" and that the nomination was in line with the intention to have an economist for Prime Minister.

• National currency stagnates

Romania"s national currency remained stable against the euro yesterday, with only several minor fluctuations throughout the day. Analysts believe that yesterday"s performance of the national currency was not influenced by the nomination of Lucian Croitoru for Prime Minister, but rather by yet another intervention of the National Bank to maintain the leu below 4.3 RON/EUR.

The National Bank of Romania released a reference exchange rate of 4.2937 RON/EUR yesterday, insignificantly down from the 4.2940 RON/EUR logged on Wednesday. The RON has lost approximately 2 per cent since former Minister of Interior Dan Nica was dismissed, thus countering the appreciation achieved in September, when the exchange rate decreased from 4.26 RON/EUR to 4.18 RON/EUR.

• President Basescu nominates Lucian Croitoru for Prime Minister

President Traian Basescu yesterday nominated Lucian Croitoru for Prime Minister, explaining that the current advisor to the Governor of the National Bank of Romania was able to defuse the economic crisis, due to his experience, and the political crisis, due to being independent and therefore compliant with the general wish of the parliamentary parties.

"My choice for Mr. Lucian Croitoru came from the fact that we needed the Prime Minister to be competent in economics, as well as in local and global macroeconomics. Mr. Lucian Croitoru is in line with the intention to have a politically independent Prime Minister, as some of the parliamentary parties have requested," President Traian Basescu said upon nominating Croitoru.

• President Basescu: We urgently need a legitimate Government

President Traian Basescu warned political parties that Romania urgently needed to have a legitimate Government, hinting that the risk existed to miss the implementation of the loan agreements with the IMF and the EU, and thus compromise the disbursement of future tranches.

In his opinion, the constitutional deadline of ten days for the assembly and validation of a new Government by the parliament was too long, as the IMF and the EU had postponed the review preceding the disbursement of the next loan tranches. "My warning to the political parties is not related to the fact that they have created a useless political crisis, but to the fact that their worsening the crisis has already started to produce economic effects distressing the Romanians," President Basescu said.

He emphasized that the IMF had postponed their review mission to Romania in the absence of a Government and added that, notwithstanding such course of events, Romania would receive 300 million USD from the World Bank the following week.

"The review mission will take place after Romania has a Government endorsed by the Parliament. This is why it is imperative that the Parliament rapidly validates a Government capable to be a negotiation counterpart to the IMF and the EU," he said.

• The game is played for 2.5 bln EUR in IMF, EU loan disbursements

President Basescu further stressed that any delay could lead to extremely serious consequences for the country, as the incoming payments scheduled for the remainder of the year comprised a 1.5 billion EUR tranche from the IMF, half of which would finance the State budget deficit, and a 1 billion EUR tranche from the EU, which would be used for the same purpose.

Traian Basescu appealed to the political parties to consider the circumstances and endorse Lucian Croitoru and his future nominations for ministers. He emphasized that the constitutional deadline of ten days for preparing a new ruling programme and presenting it to Parliament was too long, considering that it would proportionally delay the performance reviews that the EU and the IMF wanted to perform before releasing the tranches scheduled for November and December, in the total amount of 2.5 billion EUR.

President Basescu mentioned that he had worked with Lucian Croitoru within the Isarescu Government and that he had given him the impression of "profound professionalism."