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Professor Mircea Coşea spoke, exclusively for DCNews, about the economic situation in Romania and what would happen at this level, based on the statements made by Prime Minister Ludovic Orban. Thus, he launched various advice to all Romanians.
Prime Minister Ludovic Orban said that rating agencies did not downgrade us based on the promises made regarding the responsible management of the country’s finances. At the same time, he said that if we are demoted, “we will borrow more and more expensively, at some point we will not be able to borrow, at some point we will not be able to meet the expenses. It can end in a situation in which we are no longer able to pay pensions, salaries, subsidies, investments or social expenses ”.
“Romania is not insolvent”
“The Prime Minister’s statements are made in a political context. The motion of censure presented by the opposition has created a certain climate through which the Government tries to defend itself by inducing a certain fear among the population and the market, of the situation that is evoking the Prime Minister is very difficult to foresee in the future This means inability to pay Inability to pay is a state in which the budget can no longer cope with any payments, regardless of their nature – salaries, pensions, investments, public administration, international obligations -, in which the State is frozen and in which the country in question enters a situation in which the international administration, in our case the EU, should intervene Greece, when the great crisis began.
The inability to pay is a rare and serious condition and Romania is not in any case at this time. The state of the economy is not good, all the optimistic announcements made by the Minister of Finance have no real basis. The economy will not rise so quickly and abruptly, but we are not in a position to become insolvent. The reality is that this huge avalanche of loans has created a certain state of attention in the international market. The international market is very attentive to what is happening in Romania, where there are loans on loans with the fastest borrowing rate, with the highest amount per second: 1000 euros / sec. I am on alert. They look and want to understand what is happening. But, being in the EU and being under the auspices of a fund of more than 80 billion that should arrive, things are not catastrophic at all ”, explained Mircea Coșea for DCNews.
“The state will enter a liquidity crisis”
“One thing is clear: the situation in Romania is as uncertain as the international situation, but Romania is more so because it has an economy that depends on other states. When France, Germany have problems, Romania will also have them. on the other hand, we have an overpopulation of the labor market due to the fact that approximately one million Romanians who do not have a job neither in Romania nor abroad have returned to Romania. In the future, probably in two or three months, Romania will enter a liquidity crisis. That is what I appreciate.
What does this mean … It means that the liquidity, the money that the population has for the sustenance of life, will decrease or even disappear for certain categories that no longer have jobs, or unemployment benefits, or job prospects.. Consumption will decrease and the remaining consumption will be oriented in a proportion higher than 90% to food products. I mean, the world will be reduced to food. There will also be situations in which certain categories will not even be able to support their lives. It is a situation that existed in 1929-1933, when previously well-paid sectors of the population ended up in such ruin that they demanded “social soup”, “collective soup”, that is, food aid from municipalities or other organizations.
This category includes those who will be eliminated from the multinationals, the corporatists because they had very high amounts as salaries, but they did not treasure them. On the contrary, they have made loans for a better house or a nicer car, and their unemployment will be a tragedy because they cannot assimilate to another place without being prepared for other activities. Romania does not have a system to recycle and reform the workforce. There will be very complicated situations. On the other hand, there will be an increase in the price of public services. City councils probably won’t be able to subsidize heating and other utilities at the level they were at because they will also run out of money. Expenses will increase during the winter, ”Mircea Coșea also said.
Tips for Romanians
“Under these conditions, what a man should do is be as careful as possible. An extraordinary precaution that I think I have not had in Romania for 30 years. Try to make a personal budget, see what can be paid or not, what can be waived. The second thing. There is a whole category of people in their prime, 35-45-50 years old, who have gone through various attempts to start a small business that has largely gone bankrupt. I think it is necessary for these people to reorient themselves towards other activities depending on the market niche. It creates very important niches in terms of computerization. Education and teleschool will also be computerized. It is an area that will require labor.
Another area that will require labor is the agri-food processing industry, the factories that will process these products. We have a deficit, but those factories will be established in the future to reduce imports. Important buildings and infrastructure will be developed. It should also move in that direction because there will be no more seats in the public bureaucratic administrative system in the future. This sector will be drastically reformed. The number of places will be reduced because there will be advances in computerization, and on the other hand this sector is oversized. Many people will have to get out of there, ”explained Mircea Coșea.
“Let each one take his destiny in his own hands, do not wait for the state to give you alms”
“I believe that, under these conditions, the second advice I give is that everyone take fate in their own hands, that they do not wait for the State to help them, give them alms or support them with social expenses because the State will not be able to do such a thing in the future. The third piece of advice I give is mainly for the diaspora who came to Romania and who, for the most part, have a rural origin: go back to farming.. Start working in Romanian agriculture. Conditions are favorable, important small and medium-sized businesses can be made and it will be a much better life than waiting to create a job in a laundry or who knows where, through Holland or France. The exit of the Romanians who have now arrived abroad will be increasingly difficult because the recession in the West will not generate employment for them either.
I believe that the era of absolute happiness, of vacations at sea, of singing on the beach will end around September 10-15.. People should come down to earth and understand that the situation we find ourselves in now, not just us, will lead them to be much more prudent, much more resourceful with the resources they have and think carefully before making significant expenses in the future, such as loans. I think you should think about it a lot before taking a loan because it is not known under what conditions they will be able to pay it back, ”Mircea Coșea also said.
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