Romania Is Borrowing 55 Mio EUR Per Day

The systemic crisis which Romania has been brought to - a crisis setting in amid profound imbalances in employment and the real economy, combined with a surge in public and private debt - has reached endemic proportion and stands unprecedented in the history of the country: anomic crisis, demographic and economic crisis, social crisis, moral crisis, political crisis - SOCIETAL CRISIS!

The country"s road to default has repeatedly given me the opportunity to express my revulsion with the precariousness caused by wrong decisions in economic and social policies.

I expressed the same sentiment - whenever applicable - towards the decision-makers lack of reaction.

By the time these lines are published, one thing is as clear and as bitter-salty as a tear: without exception and in sheer contrast with the real demand for economic efficiency, social effectiveness and societal justice, the legislative measures taken or imposed by "the grangers" in their abuse of authority (in a stark contradiction with the legitimacy of their task!), as well as the economic and social measures that abound in a lack of opportunity, all justified by the thick shadow spread by sheer manipulation and all excelling in contempt for the trust invested in them by those who put them at the helm of the country, are wrong!

Although the lack of respect for the public agenda, for the long expected public policies was ascertained also by constitutional means (when analysed for constitutional compliance, 80 per cent of the last Emergency Ordinances issued by the recently dismissed Government were turned down by the Constitutional Court!!), against the broader background of the presidential patronage bestowing the bail of the "ill-hired" mentor (but not administrative and material legitimacy), it simply became boundless.

Left in power as an "acting" executive function, the Government is dancing - beyond the state of total conflict with the legislative power, the judicial power and the civil society) - "the death dance"! First of all, it is the "death of democracy" dance!

I am aware that, in the absence of substantial proof, such remarks can be regarded as an expression of prejudice, especially considering that, in fact, such remarks are the mere account of the full-fledged installation of economic depression and therefore a tragic sentence!

In a definitely not random order, here are the grounds:

a) The population of Romania is approximately 21.5 million souls.

b) The number of jobs in the Romanian economy has reached roughly 4.9 million, according to the statistics released by the recently dismissed Prime Minister.

c) Considering that 1.4 million of them are part of the public economy (public employees paid from the proceeds of the real economy!), the welfare of the entire population is ensured by roughly 3.6 million persons. To support "the reality," the IMF - which the incumbent holders of power have lured into the scheme of Romania"s collapse! - has dryly announced that Romania has entered an occupational collapse, namely that 280,000 jobs have been cut since the beginning of the year and that the effects of the crisis will boost this number by an additional 220,000 jobs before the end of the year, bringing the total unemployment headcount to 1 million (over 10 per cent of the active population).

When drawing the line, the conclusions are simply astonishing!

The national economy has become insufficient for the active population available for work, whereas one person employed in the real economy is forced to ensure, "economically speaking," the current revenues necessary for the welfare - or, better said, subsistence - of six persons!

d) The number of persons entitled to a pension is roughly 5.7 million. Of them only 2.2 million (38.6 per cent) retired upon reaching the legal age of retirement and the full length of the contribution to the public pension system. Above this line are the legal (and legalized) beneficiaries of 920,000 pensions for disability, 790,000 pensions for farming, 380,000 pensions for special categories (retired miners, railway employees, police officers, militaries, aircrew, customs officers, prosecutors, judges, dignitaries, members of Parliament etc), 650,000 pensions for the dependants of deceased pensioners and 120,000 pensions for the "early retirees" (including the last batch of railway employees!).

e) The collapse of the GDP by 11 per cent (up to 475 billion lei this year) is generating a primary deficit of the consolidated budget that has been "officially" estimated at 7.3 per cent of the GDP (above 38 million lei), which is impossible to sustain in the absence of fundamental reorganisation of the employment in the public economy and the diminution of the unemployment by creating 1.2 million jobs in the real economy!

f) The linear message coming from the real economy has from the very beginning been rejected as unacceptable by the recently dismissed Government, which - making proof of criminal irresponsibility - chose the path for disaster and decided to postpone the ending by shopping for some alternative resources to compensate for the drift.

This is (mainly!) proven by the 14.95 billion EUR loan taken by the Government from the trans-national union called the IMF (not considering interest and fees, this is some 64 billion RON) plus the loans taken via the Finance Ministry from the interbank market (discount bonds and benchmark bonds in RON and EUR, which were added to the public debt, become due after 31 December and have already reached 20 billion RON!).

Notwithstanding the loan intended to consolidate the foreign exchange reserves, which the National Bank was forced to take for unorthodox reasons (some 21 billion RON), the loans taken and carelessly placed on the shoulders of the Romanian taxpayers have already reached 85 billion RON, not considering interest and fees!

Since the beginning of 2009, Romania"s debt has been increasing by some 55 million EUR per day, without any signs of recovery in the real economy or even a slight proof of resuscitation of the current revenues.

g) The noteworthy difference between the "estimated" public deficit and the contracted public debt - the "safety belt" totalling over 10 billion in EUR equivalent - actually shows that that macro-economic "estimates" released by the authorities do not match the facts!

A hint to the magnitude of the situation comes from the National Bank"s actions. Forced to moderate from its level the reckless public policies generated by the Government, the National Bank has engaged in an endless series of direct and indirect interventions - each being more or less orthodox - to even out the liquidity fluctuations in the system (i.e. the repo operations which are in fact intended to ensure the solvency of the demand for liquidity on the market by creating currency ex-nihilo!) and to counteract the banks" lack of appetite for the securities issued by the Government of Romania via the Finance Ministry.

To cut one long story short, Romania has been delivered on the brink of disaster and is making haste towards a catastrophe of a proportion probably unparalleled since the Great Depression of the 1929s!

The cause consists of the small inconvenience that Romania no longer has a real economy to sustain the society"s need for welfare.

That this inconvenience merges with emerging political infantilism, the non-expertise defining the entire political environment and the chronic discontent for the real needs of the people, it is quite clear.

It is equally clear that to this we add a full lot of attempts to conceal reality by calling an array of highly unimportant events (such as the talk-shows dedicated to splitting hairs, the governmental crisis, the aggressive institutionalisation of religiousness and the presidential elections, to give just a few examples!), which are insinuated day after day into our lives and have become "goods" of the entire people. And the fact that the "goods" are not good to eat is quite obvious to everyone.

The welfare economy has quite a different set of coordinates, in terms of principle and value! A first step would be show proper respect to the real public agenda, the public money and the restoration fundamental principles and values within the rule of law, starting with the right to employment. Is that clear enough?