Well-known Romanian businessman Ion Tiriac slammed the rating agencies that ranked Romania a ‘junk country’, stressing that the decision, in his opinion, is “not only an exaggerated but also a surreal” matter.
Tiriac, in an interview with the Jurnalul National daily on November 14, said “we are not a banana nation, as rating agency Fitch says, having ranked us a ‘junk country’. Do you know who else is a junk country? Guatemala, Botswana, Congo, those who battle there. We cannot be ranked in this category, this is not possible.”
Tiriac believes that the people working in the rating agencies can be swayed.
Tiriac believes that the people working in the rating agencies can be swayed.
He says the 50% rise in the public sector staff’s salaries is the main reason why Romania’s ratings were downgraded and Prime Minister Calin Popescu-Tariceanu’s decision to be against such pay rise is an act of political suicide, although the premier “has a correct stand with respect to salaries”. The businessman cautions that not enough was made to explain that the salary rise might lead to increased inflation and reduced purchasing power by more than 50%.
Tiriac also says the Romanian Government, the National Bank governor and also the important businessmen failed to make sufficient lobby so that the Romanian economic reality may be known.
In such troubled times, he explains, those who have cash are in control almost everywhere, with the crisis bringing them business opportunities. Thus, those who have 200 million euros in cash can consider themselves privileged. “A crisis always makes some people rich. It makes rich those who have money and, unfortunately, it impoverishes those poorer”.
The Romanian businessman argues the second wave of the crisis in the United States “has not hit yet and if it isn’t stopped it may be more dramatic”. He adds that “when Lehman Brothers collapsed, if (U.S. President George W.) Bush had stepped in to rescue it, the domino effect would have not emerged and all the people would have not been frightened. Now, besides the crisis, besides the lack of liquidity there is also a lack of confidence everywhere”.
The peak of the crisis in Romania will be felt after the parliamentary elections due at the end of this month, if the political class is not able to leave wrangling behind and form a new national solidarity government, Tiriac stressed. He added the rescue might come from a strong government, which should make the decision to cut expenditure and even to nationalize the oil industry, the companies having announced they are shutting down and one that should purchase the houses that the banks will put up for sale if loans are not repaid.
It is in this way that Romania stands chances to recover in the next 3 years, Tiriac insists.
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