Swift resolution of political crisis is essential
Overview:
Once again, Romania’s economic development has been put on hold by a political crisis. The PD-L/PSD government had been performing pretty well with respect to implementing its IMF program until the approaching presidential election encouraged political grand-standing instead of economic policy co-operation. As a result the government collapsed. This is unfortunate given the extent of the recession that Romania is undergoing. Nevertheless, while political noise may still take some months to resolve - as the election is concluded and a new government put in place – there is still a reasonable chance that the IMF program can be put back on track fairly swiftly if the key parties reach agreement about the approval of an appropriate budget for 2010 and other key structural reforms measures required by the IMF.