eu economy – lessons learned by a newcomer: romania wednesday, 28 september 2011
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EU Economy – Lessons Learned by a Newcomer: Romania Wednesday, 28 September 2011. Romanian economic developments in the European context London, September 28, 2011. Radu Şerban. Romania and UK – strategic partners. In July 2011 only 4.7 %. Minimum wages. Romania 268. - PowerPoint PPT PresentationTRANSCRIPT
EU Economy – Lessons Learned by a Newcomer:
Romania
Wednesday, 28 September 2011
Romanian economic developments
in the European context
London, September 28, 2011
Radu Şerban
Romania and UK – strategic partners
Romania, the 7th largest EU Member State, in terms of population
82.3
63.8
60.9
60.1
46.9
38.2
21.5
16.4
11.2
10.6
10.6
10.5
10 9.1
8.3
7.6
5.5
5.4
5.3
4.4
3.4
2.3
2 1.3
0.8
0.5
0.4
0
1020
3040
5060
7080
90
Ger
man
yF
ranc
eU
KIt
aly
Spa
inP
olan
dR
oman
iaN
ethe
rlaG
reec
eB
elgi
umP
ortu
gal
Cze
chH
unga
ryS
wed
enA
ustr
iaB
ulga
riaD
enm
ark
Slo
vaki
aF
inla
ndIr
elan
dLi
thua
nia
Latv
iaS
love
nia
Est
onia
Cyp
rus
Luxe
mbo
Mal
ta
Pop
ulat
ion,
milli
ons
Romania 7th 21.5 mil
Romania, the 9th Member State, in terms of area64
3.5
504.
845
035
731
2.7
337
301.
324
4.8
238.
413
1.9
110.
993 92
.983
.978
.970
.365
.264
.648
.845
.243
.141
.530
.520
.39.
32.
60.
3
0100200300400500600700
Fra
nce
Spa
inS
wed
enG
erm
anP
olan
dF
inla
ndIt
aly
UK
Rom
ania
Gre
ece
Bul
garia
Hun
gary
Por
tuga
lA
ustr
iaC
zech
Irel
and
Lith
uani
aLa
tvia
Slo
vaki
aE
ston
iaD
enm
ark
Net
herla
Bel
gium
Slo
veni
aC
ypru
sLu
xem
bM
alta
th s
q k
m
Romania 9th 238.400 sq km
Romania, the 17th largest EU Member State, in terms of GDP
2,40
91,
907
1,56
71,
521
1,05
157
031
033
729
327
723
722
316
417
116
813
711
693 63 36 4.4
3.4
2.3
2 1.3
0.8
0.4
0
500
1,000
1,500
2,000
2,500
3,000G
erm
any
Fra
nce
UK
Italy
Spa
inN
ethe
rland
sP
olan
dB
elgi
umS
wed
enA
ustr
iaG
reec
eD
enm
ark
Irel
and
Fin
land
Por
tuga
lC
zech
Rep
Rom
ania
Hun
gary
Slo
vaki
aB
ulga
riaLu
xem
bour
gLi
thua
nia
Latv
iaS
love
nia
Est
onia
Cyp
rus
Mal
ta
Bn
€ Romania 17th
Public debt
8085.1
30.8
0102030405060708090
EU 27 Euro zone Romania
% o
f G
DP
Budget deficit
-6.4 -6.4-7
-6
-5
-4
-3
-2
-1
0
EU 27 Romania
% o
f G
DP
Unemployment
9.7 10.2
7.4
0
2
4
6
8
10
12
EU 27 Euro area Romania
%
In July 2011 only 4.7 %
Minimum wages
Romania268
Greenfield investments attracted January-April 2011
5.2
3.13 2.8 2.2 1.8 1.2
7.25.8
012345678
Ro
ma
nia
Pol
and
Slo
vaki
a
Bul
gari
a
Cze
ch R
ep
Hu
ngar
y
UK
Ger
man
y
bn
.$
Source: UNCTAD Report July 2011
50,5
28
0
20
40
60
EU Romania
Energy dependence
Share of imports in total energy consumption, %
BP plans a new gas pipeline:SOUTH –EAST EUROPE PIPELINE,
a possible alternative to Nabucco
September 26, 2011
Optimism about the future of EU - Eurobarometer 2011
59
68
545658606264666870
EU 27 Romania
% o
f po
sitiv
e an
swer
s
If you want to find enthusiastic Europeans come to Bucharest!
BBC4, 19 Sept. 2011
Citizens in favour of the accession of Turkey to EU - Eurobarometer 2011
6152 52
4841
0
10
20
30
40
50
60
70
Romania Hungary Sweden Slovenia Lithuania
% o
f po
sitiv
e an
sww
ers
Ease of doing business
7255 62 64
74 78
109
020406080
100120
Rom
ania
Spa
in
Luxe
mbo
urg
Pol
and
Cze
ch R
ep
Ital
y
Gre
eceG
loba
l ran
king
in 2
010
Wor
ld B
ank
Rep
ort
Corporate tax
10%
16% 16%19% 19% 19%
21%
0%
5%
10%
15%
20%
25%
-32
3.5
-40
-30
-20
-10
0
10
Total EU funds 2007-2013
Absorbed
bn
.€
EU Funds
Available EU funds for 2011-2013
-3.5
28.5
-10
-5
0
5
10
15
20
25
30
35
Absorbed Available
bn
. €
Most visited zones in Romania
Others
Transylvania
Moldova
Carpathian Mountains
Maramures
Seaside
Bucharest
Bucovina
TOURISM – huge potential
Convergence criteria for eurozone
Inflation rate
Government finances
ERM II membership
Interest rate
annual government deficit to
GDP
gross government
debt to GDP
Reference
value
No more than 1.5 percentage points higher than the average of the three best performing member states of the EUmax 3.0%
max. 3% max. 60% min. 2 years
not more than 2 percentage points higher than in the three lowest inflation member statesmax 6.4%
8% in 2010,3% target 2011
6.4%, 3 % in 2012
30.8%0 years, but
constant X rate in the last 2 years
6.4%
Target: to meet criteria in 2015
Exchange rate in Euro
National Bank of Romania, estimates
Annual rate of inflation – red line
Current account balance
% of GDP
Including reinvested profit NCP prognosis
Total Risk Index: credit trends, loan/deposit ratios, debt levels,` current account balances, exports, and FX reserves
Source: UBS, December 2010
Romania, between Switzerland and Germany
Romania’s sovereign rating by CRAs
Fitch Moody’s Standard & Poor’s
Investment grade
July 2011: upgraded from
BBB- to BB+Baa3 BB+
FT July 5: Stefan Wagstyl
Romania: National Reforms Program 2011 – 2013 (published April 2011)
Main objectives:
Resuming the growth and creating new jobs
Resuming the growth and creating new jobs
Sustainable public finances
Protecting the vulnerable categories of population etc.
Major targets
GDP growth 1.5% in 2011, EBRD: 1.9%; 3.8%/2012
Inflation 4.8 % in 2011 and ≤ 3 % next year
C/A deficit -4.3%
Budget deficit -3% in 2012
Government debt/ GDP 30.8%
Qualitative elements:
A factor driven economy
An innovation driven economyFrom To
Romania and UK – strategic partners
FT, Sept 15, 2011