Valentin Lazea, (NBR): The intergovernmental agreement will bring discipline to the macroeconomic policies

Romania's joining of the fiscal pact, concluded by the European leaders at the summit which was held in Brussels at the end of last week, will have a favorable effect on the economy, and will result in more disciplined macroeconomic policies, Valentin Lazea, chief-economist at the Romanian National Bank (NBR) said on Friday, at the EU-COFILE seminar, hosted in Sinaia by the NBR, the Romanian Banking Association and Alpha Bank.

"One of the decisions which were made yesterday (ed. note: Thursday) concerned the strengthening of fiscal rules, in the sense of drawing the attention of European leaders to the budgets and penalties for countries which exceed the budget deficit and public debt targets. 17 countries and 6 more joined this pact, including Romania, which I think has a favorable effect because it will bring discipline to the macroeconomic policies".

Discussing the second decision made by the European leaders, to have the European Financial Stability Fund (EFSF) be managed jointly with the European Central Bank (ECB), Valentin Lazea said that this means the ECB can focus more on saving commercial banks and less on saving governments.

"The Fund will be managed by the ECB, but it will be the one to save the countries through bonds purchases", according to him.

Valentin Lazea also said that Romania needs to hope that there will be a "favorable solution" to the problems in the Eurozone, because it is "organically" tied to it from an economic point of view. He hopes there will be more answers provided to the other questions that the financial markets are asking, and Western European politicians will get ahead of the events rather than belatedly react to them like they used to do until now".

As to what concerns the fact that the countries outside the Eurozone, including Romania would have to contribute, through their central banks, 50 billion Euros to the loans worth 200 billion Euros which the European Union wants to grant to the International Monetary Fund (IMF) in order to fight the crisis, Valentin Lazea said that the goal behind this approach was to increase the lending ability of the fund.

He said: "I think the basic idea is to increase the lending ability of the fund. Yesterday, before this decision was made, the fund had about 285 billion Euros available for lending. I think that, through this decision, has boosted the lending capacity of the fund, which also has a higher multiplier ability, meaning it can attract funds from third party governments and lend them to the governments that need them. The fact that Romania will contribute as well (...) is a price which needs to be paid, because from now on we have to get used to the idea that the benefits come included with the cost. You can't score a free meal".

As for Romania's objective to join the Euro, Valentin Lazea said that it represents a political decision. The accession is hard from a technical point of view, but the road to the Euro is at least as important as getting into the Eurozone or living within it, as revealed at the end of last week, he said.

At the end of last week, European leaders agreed to sign an intergovernmental agreement which requires EU member states to apply a stricter fiscal and financial discipline in their future budgets. The efforts to achieve the unanimity among the 27 members of the European Union failed, because Great Britain and Hungary have refused to join the plan. Still, the 17 members of the EU agreed to the new treaty, together with six other states that want to adopt the Euro in the future.