Conference: "Global Crisis: where does Romania fit?"

Financial consultants, market experts and officials participated on Wednesday in the „Global Crisis: where does Romania fit?” conference. HotNews.ro notes in brief the most important questions and problems discussed during the meeting.

Lucian Croitoru, counselor of the Central Bank Governor, Mugur Isarescu:

– „If I were the Finance Minister, I would start by a public expenditure review. The budget deficit must be significantly reduced, and this may be done through a combination of increasing the capital spending to create jobs and then by seeing which taxes can be raised and by how much.

– The first scenario: reducing the current account deficit by 2.5% and the budgetary deficit from 3.5 to 2%. In this scenario, the Romanian currency, leu, will depreciate and the economic growth will be reduced to 3%, the risk is to lose credibility. In this case, agreements with the international financial institutions are required;

– The second scenario: reducing the current account deficit by 4%. In this case, the budgetary deficit is cut down to 1%, representing a better program credibility and a higher economic growth rate;

– The measures in the existing governmental anti-crisis plan will increase the budget deficit by 2.5%, while the budget for 2009 considers a 6% economic growth;

– The conclusion is that the significant reducing of the current account deficit by 4% is absolutely necessary, in order to sweeten the way foreign investors will approach Romania’s financing.

Speranta Munteanu, senior director with PriceWaterhouse Coopers: messages for companies

– We don’t know yet how much the value of properties decreased. Luckily, Romania’s constructions market isn’t saturated yet;

– A realistic approach indicates that we’re in the middle of a financial crisis, a crisis that will translate in the economy in 2009;

– Companies must run analysis, but must not become paralyzed in the process. The system already does that;

– We must focus on cash. The „Cash is King” saying has never been so contemporary;

– There is a trend in delaying payments. We must not judge strategically the way we use the cash. Payment delays are the killer of the real economy;

– The analysis must go beyond the lack of cash, which is the tip of the iceberg;

– Most managers haven’t lived a global crisis until now;

– From our point of view, the value of properties is critical, because it affects the value of warranties;

– Those who still have cash will be interested in market opportunities;

– Company managers must keep an eye on their best employees. They are the first to leave in times of crisis.