Financiarul

The new Board of Directors of the National Bank of Romania on Thursday got the approval in the Parliament, with 251 votes having been cast for and 42 against. The new team will stay in office for the next 5 years. BNR governor Mugur Isarescu presented himself before the Parliament with the new team to operate the National Bank for the next five years, with the Deputies and the Senators validating the 9 members of the BNR Board of Directors.

The formula of the Board changed, following the political algorithm resulted after the parliamentary elections early in the year. Mugur Isarescu and Vice-Governor Cristian Popa were the only members of the new team having been validated in unanimity by the specialized committees of the Parliament. Prime Vice Governor Florin Georgescu saw one single abstention, while Bogdan Olteanu, who is a new member of the Board and who was proposed for Vice Governor, saw 27 votes for, 14 against and 1 abstention.

Lucian Croitoru, currently adviser of Governor Mugur Isarescu, did not get the approval to become Vice Governor, for he obtained 24 votes against, 14 for and 3 abstentions. Daniel Daianu and Silviu Cerna were also facing fewer votes than needed to get the approval. In the end, the new team at the BNR will be made up of: Mugur Isarescu (Governor), Florin Georgescu (Prime Vice Governor), Bogdan Olteanu (Vice Governor), Cristian Popa (Vice Governor), Nicolae Danila, Maria Dinu, Agnes Nagy, Napoleon Pop and Virgiliu Stoenescu (the latest five to be members without holding an executive position too).

The incumbent team, to end office on October 10, is made up of: Mugur Isarescu (Governor), Florin Georgescu (Prime Vice Governor), Eugen Dijmarescu (Vice Governor), Cristian Popa (Vice Governor), Silviu Cerna, Maria Ene, Agnes Nagy, Napoleon Pop and Virgiliu Stoenescu. Following the voting process, the Social Democratic Party (PSD) got three seats in the Board, the Democratic Liberal Party (PD-L) and the National Liberal Party (PNL) got 2 seats each and the Democratic Union of Hungarians in Romania (UDMR) got 1 seat.

The main responsibility of the new BNR Board will be represented by the process of switching from the national to the European currency, with the final stage and the most difficult to be represented by the obtaining of a good value of the exchange rate at the moment of the actual conversion, the Central Bank Governor Mugur Isarescu explained on the occasion of the hearings in Parliament:

“I see no other challenge to be more important in the next five years than the switching to euro, which is to include first of all obtaining the stability of the prices and the stability of the exchange rate, while in the same time ensuring sustainability. But the vital stage, the final and the most difficult stage, will be represented by the obtaining of a good value of the exchange rate at the moment of the conversion,” Isarescu said. He also reminded that the main problem, in the present, related to the switching to euro process is represented by the cutting of the budget deficit, and not of the inflation or of the interests.

The Central Bank and the Government are working to have Romania ready to change to euro in 2014, which means to have it in the ERM-2 area (the antechamber of the euro area) no later than in 2012. According to the BNR Vice Governor Cristian Popa, the actual access to the euro area will be obtained on January 1, 2005, on condition Romania gets a favorable decision in 2014.

The new term in office of the BNR Board will begin on October 11, 2009, and will end in 2014. According to the criteria stipulated by the Treaty of Maastricht, the adoption of the European currency requires first of all a level of the inflation not to be higher than 2 percentage points over the average inflation of the countries with the lowest such levels, with the public deficit to reach 3 percent of the Gross Domestic Product (GDP), at the most, and with the public debt not to exceed 60 percent of the GDP.

The Governor also remarked a maintaining at high levels of the interests in credits, although the interests in deposits went down. “We expect a correction of 2-3-4 percent of the GDP in the case of the current account deficit. We are now talking about a drop by almost 8 percentage points of the GDP. And I want to remind you that I had operated an adjustment before, when I was a Prime Minister. Back then, the adjustment represented 4,5 percent of the GDP and was extremely painful, coming also on the background of a new recession, after three years of falling down and deep poverty in the country, over 1999-2000,” Isarescu said.

On the other hand, he underlined that, based on the GDP contraction this year, the Romanian economy will practically return to the level back in 2007, in the context last year the GDP advanced by 7.1 percent in Romania.

Mugur Isarescu was born on August 1st 1949 in Dragasani, Valcea County. He graduated from the Academy of Economic Studies, based in Bucharest, specializing in international economic relations, in 1971. In 1989, he took his Ph.D. in Economics at the Academy of Economic Studies, Bucharest, with the thesis “Policies of Exchange Rates”.

He was, over 1971-1990, Senior Researcher and Head of research team with the World Economy Institute in Bucharest. He was Assistant Lecturer at the Academy of Economic Studies (finance and foreign currency, international economic relations), over 1975-1989, Professor at the Western University in Timisoara (1994-1996) and Lecturer at the Academy of Economic Studies, Bucharest (1980-1989).

In February, 1990, he became a diplomat with the Romanian Ministry of Foreign Affairs, working with the Romanian Embassy in the Washington (March-September 1990). His job was to take care of the relations with the World Bank and the International Monetary Fund.

After being appointed Governor and Chairman of the BNR (on September 4, 1990) he was also designated Governor for Romania in the IMF Council of Governors, Vice Governor for Romania in the World bank”s Council of Governors and in the European bank for Reconstruction and Development Council of Governors. He was Chairman of the “Costin Murgescu” World Economy Institute of the Romanian Academy.

He was Prime-Minister of Romania over 1999 (December) – 2000. He run, as an independent candidate, in the presidential elections on November 26, 200, ranking 4th after the first round, with 9.54 percent of the votes, after Ion Iliescu, Corneliu Vadim Tudor and Theodor Stolojan. He introduced the new leu (Romanian currency) after the liberalization of the capital account. He was very active supporting such policies related to the interests granted for credits and the banks”s safety.

He published more than 21 works and studies. As Governor of the BNR he is the single Romanian politician member of the Trilateral Commission (founded by David Rockefeller). He is vice-chairman of the Club of the Governors of the Central Banks in the Balkans, Black Sea area and Central Asia (since 1998). He was re-elected in 1999 Chairman of the Romanian Association of the Rome Club.

He is, since 1996, Chairman of the Romanian Chess Association. He is (since 1998, September) honorary member of the Club of the dealers in the monetary and currency markets in Romania, the Forex Club. He is founding member of the Romanian Economic Society (SOREC). He is the head of the Department of Economy, Sociology and Legal Sciences with the Romanian Academy. He was awarded “The Order of the South Cross” in Brazil (1999,2000),

“The Romanian Star National Order” (2000) for “the Best Governor of a Central Bank in 2001″, a titled granted by the British magazine “The Banker” etc. He was made Doctor Honoris Causa of the University of Craiova (October 2003), of the University in Pitesti (2006), of the “George Bacovia” University in Bacau (2007), of the Babes-Bolyai University in Cluj-Napoca (2009) and of the “Al. I. Cuza” University in Iasi (May, 2009). He became “citizen of honour” of the central city of Sibiu.

Romanian President Traian Basescu bestowed him, on February 2, 2007, “the Order of Industrial and Commercial merit in the Rank of Officer” for “the most spectacular growth interval after the World War II”, occasion on which the entire BNR Board was awarded. He is full member of the Romanian Academy since 2006. In July this year, Mugur Isarescu was designated by the World Records Academy the Governor with the longest term in office at a Central bank. He is currently in its 19 year at the BNR.

Although he was a Prime Minister, for only one year, he was considered the one who launched the reform process in Romania, increasing the national reserves of gold and euro, tempering inflation and introducing, on July 1, 2005, the new leu, after the liberalization of the capital account.

Moreover, in 1999, Israescu, in his capacity as Prime Minister, opened the negotiations with the European Union, a process concluded in 2004.