{"id":468,"date":"2008-03-03T23:46:12","date_gmt":"2008-03-03T20:46:12","guid":{"rendered":"http:\/\/http:\/\/www.iliaspapageorgiadis.ro\/en\/?p=468"},"modified":"2014-03-12T16:41:27","modified_gmt":"2014-03-12T14:41:27","slug":"the-worries-for-the-huge-deficit-for-me-just-an-exaggeration","status":"publish","type":"post","link":"http:\/\/www.iliaspapageorgiadis.ro\/english\/2008\/03\/03\/the-worries-for-the-huge-deficit-for-me-just-an-exaggeration\/","title":{"rendered":"The worries for the huge deficit: For me just an exaggeration"},"content":{"rendered":"<p><strong>You know\u2026 being a Greek can be sometimes a serious advantage.<\/strong> Why? For example because we are almost immune to the threats of the ones who \u201cworry for economy\u201d. <strong>Having one of the worst economies of Europe the last 25 years, we have heard many times people shouting and predicting \u201cthe end of the world\u201d, but so far it never came.<\/strong> Since 1987 I read the financial news every day and since I\u2026 remember myself, I always hear about a \u201ccritical budget\u201d and \u201cthe sacrifices that people must do, so as to save our economy\u201d. Between you and me, the budget was always in deficit and the economy was not saved\u2026<br \/>\nSo, as you may guess, <strong>I feel exactly the same now, when I hear that some people are paniced because of the big trade deficit that Romanian economy has.<\/strong> More or less, the exports were some 30 billion euros last year, while the imports were around 50, so the deficit was around 20 billion euros. Most of analysts, without to search deeper, start predicting the end of the world\u2026 But is it like this?<br \/>\nWe will talk much more about this issue, but I decided to write few words these days, as there are so many voices who predict the worst, without any reason. <strong>So, why was the deficit so big? <\/strong><\/p>\n<ul>\n<li><strong> Last year the Romanian currency (RON) was stronger than ever<\/strong>, that it helped the imports and caused serious problems to the exports.<\/li>\n<li><strong>The weather of 2007 destroyed almost the biggest part of the agricultural production<\/strong> of Romania. Thus the exporting character of the economy in this field was turned to importing.<\/li>\n<li><strong>2007 was the first year that a very big part of the Romanian society was able to\u00a0 consume much more than the past.<\/strong> This consumption was addressed more to imported products, cars etc.<\/li>\n<li>When an economy is expanding so aggressively as the Romanian one does, it is normal to need more and more imports.<\/li>\n<li><strong>The explosion of the construction sector required also more imports.<\/strong><\/li>\n<li>There are many more reasons that an expert can analyse to you, but the main idea is this.<\/li>\n<\/ul>\n<p>On the other hand, <strong>I don\u2019t really think that the situation is THAT dramatic.<\/strong> Ok, the government and the National Bank of Romania will act, but we should not forget the following important parameters:<\/p>\n<ul>\n<li><strong>Half of the deficit was covered by the Foreign Direct Investments in the country<\/strong>, which had a figure that no country with the size of Romania has. <strong>This money<\/strong>, which is invested in the real economy of the country, is the healthiest money entering in an economy, it creates a stable future, strengthens the economy and creates thousands of new jobs.<\/li>\n<li><strong>All the countries which are in major development and have entered E.U. the last years have the same problem.<\/strong> Esthonia, Bulgaria, Hungary and many more suffer from the same syndrome, the big deficit, especially comparing the Gross Domestic Product. <strong>But Romania is the only country between all the others that saw its currency last year becoming very strong, which caused many problems.<br \/>\n<\/strong>\u2022\u00a0Guys, relax! <strong>Romania has 3 main sources of income that you can not find in such figures in any other country in the area.<\/strong> These are the <strong>Foreign Direct Investments, the billions invested in Real Estate and the billions sent by the 4 (or more) million emigrants. <\/strong><\/li>\n<li>In the same time, <strong>the income coming from tourism is rising every year<\/strong> (and we talk about business tourism, business people spend 3 times more than a common tourist). I also remind you that the European funds for \u201cagricultural tourism\u201d will be absorbed really fast, I hear that thousands of people will apply for these programmes.<\/li>\n<li>Last but not least. <strong>An economy which has almost 0% unemployment (in all major cities) is a healthy economy which does not allow to anyone to be afraid of its future for the next 2 \u2013 3 years.<\/strong> The problem of the trade deficits becomes important when it is combined with many other factors and the unemployment rate is an important one indeed.<\/li>\n<\/ul>\n<p><strong>So, I think that we should be a little more conservative when we predict the\u2026 \u201cend of the world\u201d just because Romania expands and some numbers became negative for a period.<\/strong> In the same time we have many positive signs (only in December we had 3,6 billion euros entering the country) and the most important of all: Due to E.U. orders, the government and the National Bank of Romania have the situation under control. You will realize this in the next months, when the deficit will be either not increased anymore, or decreased.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You know\u2026 being a Greek can be sometimes a serious advantage. Why? For example because we are almost immune to the threats of the ones who \u201cworry for economy\u201d. Having one of the worst economies of Europe the last 25 years, we have heard many times people shouting and predicting \u201cthe end of the world\u201d, [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":59454,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[216],"tags":[],"_links":{"self":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/468"}],"collection":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/comments?post=468"}],"version-history":[{"count":0,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/468\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media\/59454"}],"wp:attachment":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media?parent=468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/categories?post=468"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/tags?post=468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}