WHEN THE US SNEEZES ROMANIA IS VERY ILL. ECONOMIC CRISIS IN ROMANIA
WHEN THE US SNEEZES ROMANIA IS VERY ILL. ECONOMIC CRISIS IN ROMANIA

Summary/Abstract: In summer 2007, US and global financial markets found themselves facing a potential financial crisis, and the US Federal Reserve found itself in a difficult situation. It was becoming clear that banks and other financial institutions would ultimately lose tens or even hundreds of billions of dollars from their exposure to subprime mortgage market loans. On December 1, 2008, the National Bureau of Economic Research (NBER) declared that the United States entered a recession in December 2007. But after a period of protracted adjustment, the US economy, and the world economy more generally, is able to get back to business. Countries of Central and Eastern Europe have been extremely affected by the crisis, not only because they have suffered a decline in domestic demand and exports, but many of them suffering from the effects of depreciation relative to their foreign currency loans. In addition, access to external credit has been restricted and the costs rose. Finally, capacitive their exit from the crisis on account of public expenditures is extremely limited. Unfortunately, as seen fairly quickly in early 2009, Romania is not so simple as Western. Romania entered the global slowdown at the end of 2008, about three months after the economic contraction had begun to bite in the West. 2009 was certainly a painful year, with the Romanian economy shrinking by 4%. International Monetary Fund has estimated that the Romanian economy will register a decline of 1.9 percent this year and an increase of 1.5 percent in 2011, says the latest IMF forecast. Lower wages and pensions, increasing unemployment rate and people unable to pay their maintenance costs and their credits to the banks, this is the picture of Romania after 1st of August 2010, when the austerity measures announced by the government are applied. Under existing circumstances, in this paper we want to make an analysis of the current economy in Romania and debate the possible settlement to solve this.

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