Lucian Croitoru: Without the agreement with the IMF, the Euro would have climbed to 6 lei

If the government hadn"t entered the agreement with the IMF in March, the EURRON exchange rate could have gone to 6 lei, Lucian Croitoru, advisor to the governor of the Romanian National Bank, said yesterday in a EU-Cofile seminar, held in Sinaia by the NBR, the Romanian Banking Association and Alpha Bank.

"Without the agreement with the IMF, banks would have lowered their exposure, far fewer companies would have succeeded refinancing, and all the losses would have needed to be covered from the reserves of the NBR, and as those reserves diminish, so does confidence", said Lucian Croitoru.

He added that, over the last year, due to the political unrest, the Romanian government reduced its involvement in the market to a minimum: it did provide some facilities, but had its involvement been more extensive, this would have had a negative influence on inflation and the exchange rate.

"Economic growth will resume in Romania when cohesive economic policies get implemented, and this all depends on the functioning of the financial system", said Mr. Croitoru, who added that slower growth would not severely affect Romania.

"Currently, the big challenge consists of insuring the balance between regulation and market freedom", said Mr. Croitoru, who added that it is not the free market, but the bad management of capitalism that eventually lead to a deep crisis.

The Romanian state will make major changes in order to improve its international image, but ait will take Romania a long time to reach the level of other European economies: "In Romania, poverty comes from waste, and the state budget is the sector which has the largest deficit", Mr. Lucian Croitoru considers.