Radio România Internațional

Tag: Central

  • Central and Eastern European support for Ukraine

    Central and Eastern European support for Ukraine

    Russia’s announced
    annexation of 4 regions in the east of neighbouring Ukraine-Donetsk, Luhansk,
    Kherson and Zaporizhzhia-following sham referendums has been firmly criticised
    and condemned by Western countries.


    After Russia’s president
    Vladimir Putin organised a ceremony in Moscow, proclaiming the 4
    partly-occupied regions Russian territory, the president of Ukraine Volodymyr Zelenskyy
    responded with an application for fast-track NATO membership.


    Alongside the presidents of
    other Central and Eastern European NATO member states, including the Czech
    Republic, North Macedonia, Poland, Montenegro, Slovakia, Estonia, Latvia and
    Lithuania, the president of Romania Klaus Iohannis signed a joint
    declaration reiterating support for Ukraine’s sovereignty and territorial
    integrity.


    We, Presidents of states
    in Central and Eastern Europe, countries whose leaders have visited Kyiv during
    the war and witnessed with their own eyes the effects of Russian aggression,
    cannot stay silent in the face of the blatant violation of international law by
    the Russian Federation, and therefore are issuing the following statement: We
    reiterate our support for the sovereignty and territorial integrity of Ukraine.
    We do not recognize and will never recognize Russian attempts to annex any
    Ukrainian territory,ˮ reads the joint statement.


    The signatories say they
    firmly support the decision made at the 2008 NATO Summit in Bucharest regarding
    Ukraine’s future accession to the organisation. They also call on Moscow to
    immediately pull out of all the occupied territories.


    We support Ukraine in
    its defence against Russia’s invasion, demand Russia to immediately withdraw
    from all the occupied territories and encourage all Allies to substantially
    increase their military aid to Ukraine. All those who commit crimes of
    aggression must be held accountable and brought to justice, the document also
    reads.


    Ukraine’s presidential
    adviser Mykhailo Podolyak thanked the countries that back Ukraine’s NATO
    accession. We are grateful for the leadership and responsibility. History is
    being made today,ˮ he posted on Twitter.


    In turn, the NATO
    secretary general Jens Stoltenberg said a decision on Kyiv’s accession
    application must be taken by all the 30 member countries, and reiterated the
    alliance’s open-door policy. Any nation, including, of course, Ukraine, has the
    right to choose its own path, including the security arrangements it wants to
    join, Jens Stoltenberg also pointed out. He added that at present the main
    priority for the Allies and their partners is to support Ukraine.


    The US and Canada have
    also backed Ukraine’s NATO accession, but without making any reference to the
    fast-track procedure requested by Kyiv. (A.M.P.)

  • New inflation forecasts

    New inflation forecasts


    The inflation presently affecting the entire world is seriously diminishing the already small incomes of the Romanians whose purchasing power lowers by the day. Experts estimate that a more difficult period is to come. Inflation shot up to 8.5% in Romania in February this year. However, the rise is relatively low as compared to the previous month and significantly lower than in other countries like the Baltic states for instance. Although in the Eurozone, the Baltic states have an inflation rate between 11% and 14%, while Poland and Bulgaria have already exceeded 9%.


    Together with Hungary and Belgium, Romania is at the middle of an EU ranking. In a post on OpiniiBNR.ro blog, the spokesman for Romanias Central Bank (BNR), Dan Suciu, said that Romania had the highest inflation rate in the EU last year. However, the Central Bank believes that inflation will exceed the previous midyear forecast of 11% due to price hikes in fuel, energy and cereals caused by the war in Ukraine, as Cristian Popa, member in the Central Banks board of directors explains.


    Cristian Popa: “On one hand we are seeing measures aimed at subsidizing and capping energy prices as they have a major impact on the inflation rate. These measures would lower the inflation rate, but after its publication, the war in Ukraine broke out and we are actually seeing higher prices in oil, gas and various issues in the production line. We are also seeing higher prices in cereals and they have a major impact on basic inflation. We must redo the arithmetic as we are actually witnessing an economic slowdown though the growth rate remains positive, and there is a certain pressure upward.”


    According to Cristian Popa, the Central Bank is fighting inflation but also the panic and unrest in this period full of uncertainties, adding that the bank has this situation, which isnt an easy one, under control.


    As for the interest rate, the BNR representative says it presently is at the level before the pandemic. BNR is expected to again raise the reference rate in an attempt to keep things under control. On the other hand, Romanias economic growth this year has been estimated around 2-2.5% as compared to 4% before the beginning of the conflict in Ukraine.


    (bill)




  • The Central Bank of Romania, 140 years of history

    The Central Bank of Romania, 140 years of history


    The two
    principalities inhabited by Romanians, Moldova and Wallachia united
    in 1859. The young Romanian state gained its independence following a
    war in 1877-1878, and added Dobrogea to its territory. The third move
    was to set up a central bank, a crucial element in building a
    sovereign country. The institution came to being back in 1880 and in
    the following year Romania became a kingdom, which meant that the
    fresh state got legal personality on the world’s map.


    The central bank,
    also known as the National Bank of Romania, appeared after the
    promulgation of a law on setting up a bank for accounts and
    circulation, published in the Official Gazette on April 17th
    1880. It had an initial capital of 30 million lei, out of which a
    third was state capital while the other two thirds were private
    capital. Its most important mission was to issue banknotes accepted
    in various transactions and deals.





    The first banknotes
    issued were of 20, 50, 100, 500 and 1000 lei and its first director
    was economist Eugeniu Carada, who linked his name to the
    institution’s early days, its expansion all over the country and
    the first issues of banknotes and coins.


    The bank’s premises were located in
    downtown Bucharest, the old city center and works on these premises
    commenced in 1884 under the guidance of two architects from France,
    Albert Galleron and Charles Garnier.


    Since its birth until the First World
    War, Romania’s Central Bank offered credits and a lower discount
    rate. Between 1890 and 1892 the bank shifted from the silver-gold
    monetary standard to only gold.





    The First World War threw the Romanian
    society in turmoil as it happened with the entire continent. The bank
    supported the war efforts just like the entire Romanian society but
    the latest developments on the battlefield forced the bank’s
    relocation to Iasi, in northern Romania, together with the other
    state institutions. Romania’s treasure was transferred to Moscow
    for safekeeping during the gloomy days of the war but was never
    returned by the Russians. After the end of the Great War, the central
    bank got the mission to integrate the economy of the Romanian state,
    which had taken back its provinces until then occupied by the former
    Russian Empire and Austria Hungary.



    After the loss of
    its treasure to Russia and the devastating WWI, Romania’s Central
    Bank got a new mission, to stabilize the national currency and make
    it convertible. The bank also fought to stabilize the currency and
    credit system during the big economic crisis between 1929 and 1933.


    Just like in the previous war, the
    bank supported the country’s efforts in the Second World War.
    During the war, the bank was forced to hide the country’s treasure
    at the Tismana Monastery in western Romania, a lesson learnt from the
    first world war.


    Ioan Lesenciuc curator with the
    Treasure Museum of the National Bank of Romania gave us a brief
    history of the treasure odyssey in mid-1940s.

    Ioan Lesenciuc:
    Romania
    managed to recover its gold resources between the two world wars but
    1944 proved to be another bad year. After the battle of Stalingrad,
    the German troops had to fall back and the Soviet advance was
    threatening the treasure housed by the bank. In April 1944, the heavy
    allied bombing of the oil fields in Ploiesti and Campina, southern
    Romania, as well as the capital Bucharest proved to be another threat
    for the bank. The authorities decided to move the treasure to safer
    places and talks were held with representatives of two countries,
    Turkey and Switzerland. Turkey announced that its laws didn’t allow
    for the transfer whereas Switzerland voiced readiness to host the
    treasure adding that the passing of the convoy through Central
    Europe, under German control at that time, wouldn’t be a good idea.
    General Antonescu who was ruling Romania at that time said, the
    treasure must remain on the Romanian territory and not be divided. He
    gave the bank the green-light to hide the treasure wherever it
    considered safe.





    After the end of the war, Romania
    entered a new era, communism, and its political regime brought major
    changes to the national economy, which was being controlled by the
    state. The national bank became state-owned and the credit system was
    reformed after the Soviet model. Until 1970, the taxes and interests
    were controlled by the state but after 1970 the bank was allowed to
    make its own decisions. Construction works on the new premises of the
    country’s central bank started in 1940 and the new building was
    inaugurated ten years later.


    After the fall of the communist regime
    in 1989, Romania’s Central Bank resumed the prerogatives it was
    stripped off between 1945 and 1989.





    (translated by bill)

  • The Central Bank’s yearly report

    The Central Bank’s yearly report

    The European
    Commission has revised its forecasts on Romania’s economic growth rate this
    year up to 4% pointing out to a rise in its GDP of up to 3.3%. However, there
    is a significant difference between the European Commission forecasts and those
    made by the authorities in Bucharest who drew up the country’s budget based on
    a 5.5% growth.






    According to the
    EU Executive’s summer estimates, the growth rate is going to slow down next
    year to 3.7%. Public consumption remains the economy’s main engine, spurred by
    the latest pay rises. Investment is also on the rise chiefly thanks to the
    recovery experienced by the construction sector, stimulated by fiscal measures.






    The Commission believes
    inflation will stay around 4.2% this year and at 3.7% next year. Romania has a
    robust economic growth though it remains chiefly based on consumption, the
    country’s central bank governor Mugur Isarescu says. During the presentation of
    the bank’s annual report, Isarescu has explained how the economic growth is
    backed less by investment whereas the export’s negative contribution has been
    significantly higher than in 2007.








    Mugur Isarescu: We have an economic growth or domestic absorption to be more correct,
    beyond what the economy can provide. Consumption has been boosted more than
    what the economy can provide and part of this growing demand, coming from pay
    rises, from stimulated consumption, could not be covered from the domestic
    output and was covered from imports instead. The consolidated budget was being kept
    under 3% but it’s been the last time since 2015 when we are able to meet our
    structural deficit budget around the limit of 3%. Budget, salary and investment
    expenses are going in opposite directions.






    Mugur Isarescu
    has declared himself satisfied with the low fluctuation of the national
    currency and also with the public debt, which remained at the same debt-to-GDP
    ratio, around 35%, being among Europe’s lowest.








    Mugur Isarescu: In spite of negativistic forecasts, the debt rate didn’t rise as against
    the GDP. Of course, the GDP’s rapid growth has largely contributed to that.
    Public debt stands around 35% of GDP, one of the lowest in Europe and we’d
    better keep it at this ratio.






    This performance
    has also been noticed by the rating agencies, and that could allow us to get bigger
    loans from the international market at relatively low costs, Mugur Isarescu has
    explained. The problem is how we use money and why we see this deficit increase.
    Referring to the inflation rate, the central bank governor said that after an
    increase in the first half of last year, towards the end of the year, it
    reached the level of 2017.








    With a mandate
    of almost 30 years at the helm of the country’s central bank governor, Mugur
    Isarescu says that Romania boasts a credible central bank stable at international
    level, which has obtained good financial results.




    (translated by
    bill)