Financiarul

The Government is the sole guarantor that the economic crisis will be overcome, Deputy Governor of the National Bank of Romania (BNR) Eugen Dijmarescu told a debate on Friday in Bucharest on the Romanian capital market at the crossroads.

‘We are finding ourselves attempting to reconcile democracy and markets. The Governments have to boost consumption and production.

Until then, I do not know any confidence provider than the Government,’ said Dijmarescu.

He pointed out that the Government has to do its best for the market to function again. ‘This is not a solution invented in Romania; it is what is being followed at a European level,’ said Dijmarescu.

Chairman of the Economic Committee of the Romanian Senate Varujan Vosganian said in reply that he disagrees with the idea of the Government being a confidence provider.

‘The confidence provider Mr. D ijmarescu was talking about should not be the Government. I disagree with this idea.

I believe that this can only happen in a mature capitalism, in developed market economies. Yet, there is nothing like that in Romania,’ said Vosganian.

Vosganian, a former economy minister, argued that mutual funds and pension funds should be considered as viable solutions.

‘The only help the Government has extended during all this time of crisis was to hike taxes, which says much about its capability of keeping crisis in check,’ said V osganian.

In relation to the future developments of the economic crisis in Romania, Dijmarescu said they will be felt more acutely in the third quarter of 2009.

‘The economic crisis will be felt more strongly in the third quarter of the year, although earlier this year I used to be more optimistic,’ he explained.

He added that there are currently no viable plans in Romania for economic recovery.

‘The local capital market is facing a big issue regarding the destination of funds, and also the issue of confidence,’ said Dijmarescu.

He added that a worrying thing is the fact that the outflows of capital to the parent markets reached 282 billion euros in the fourth quarter of 2008, which he said was an important sign of the impact of the economic crisis at a European level.

‘The year 2010 is the year when economic recovery is expected to happen globally. Personally, I do not believe that the capital market alone can solve the economic crisis problem in Romania,’ Dijmarescu concluded.

The debate on the Romanian capital market at the crossroads was organised at the World Trade Center of Bucharest by the Bucharest Stock Exchange (BVB), the Brokers’ Association and the ‘Finante si Afaceri’ (Business and Finance) publication.