The danger of the contagion from the Greek crisis hasn"t disappeared for Romania, but negative effects could come from other countries as well, which the markets see as having fiscal troubles, says Lucian Croitoru, advisor to the Governor of the National Central Bank. Still, because of the adjustments made in 2009 and 2010, Romania is better equipped to handle a new outburst of the crisis than it was in 2008, he said in an interview.
Mr. Lucian Croitoru explained that the keeping of the debt ceiling of the United States in place would mean a slowdown of economic growth, which in the case of Romania would result in a slowdown of exports, at a time when consumption and investments have no traction. He added that the insufficient raise of the debt ceiling would only amount to putting off the solution to the problem, instead of actually solving it.
* (Interview with Lucian Croitoru, governor to the Governor of the NBR)
Reporter: Is the current Greek crisis worse than the one of 1929-1930?
Lucian Croitoru: No, but it could become so. It isn"t yet because there are instruments that the crisis can be treated with. Timbergen showed that if the number of instruments is at least equal to the number of goals, than the latter can be reached. The European Union has not yet run out of instruments to use against the crisis, including the one in Greece. Because of this, the recession was not as deep as the one of the "29-33 period. The situation over the world, as well as in Europe, could only be compared to the period of the Great Depression if the problems were to worsen to such a degree that they would exceed the capacity of the instruments available for dealing with them, like it happened then. For instance, in the European Union, just like in the US, the states have responded to the recession by growing their budget deficits. This was refle
