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[00:00:37] Good afternoon, everyone, I'm Cătălin Deacu and I'm presenting the economic analysis show
[00:00:41] "Money Today". While the governmental crisis is still far from
[00:00:45] being resolved, the state has come to borrow on the domestic market at high interest rates
[00:00:48] of over 7%, to cover current expenses.
[00:00:52] The leu, increasingly weaker against the euro and dollar, could bring us even higher prices
[00:00:55] for a wide range of products and services, in a context where Romania
[00:00:59] has come to rely... more and more on imports. And in energy
[00:01:02] we have come to import to cover consumption even during the day, because the weather has
[00:01:05] turned bad, and solar panels no longer have the efficiency of the summer
[00:01:09] months. Employees at IAR Gimbav have started protests, dissatisfied with
[00:01:13] the reduced level of activity and the fact that salaries have not been indexed with
[00:01:16] inflation, while artificial intelligence tends to become a new
[00:01:32] To start, we discuss our standard of living. The end of the year could bring
[00:01:36] even higher prices for a wide range of goods and services, and that's because we have
[00:01:39] a weaker leu against the euro and against the American dollar, the main
[00:01:43] currencies in which imports are made. And imports in the country are increasing,
[00:01:47] according to the latest data from the
[00:01:49] into account and at the same time National Institute of Statistics. Let's find out what
[00:01:51] products Romania has bought the most from other states.
[00:01:55] And we have the figures on the screen. These are data that, as I was telling you, appeared this
[00:01:59] morning at the National Institute of Statistics. If we look at what
[00:02:02] happened in the first eight months of the year, we are talking about large
[00:02:06] imports, especially in the component of machinery and transport equipment. Here
[00:02:09] imports exceeded 30 billion euros. More
[00:02:13] than that, we are talking about industrial goods, as you can see,
[00:02:16] manufactured goods, chemical products. And here we are talking
[00:02:20] about imports of over 13 billion euros. Last but not
[00:02:23] least, fuels, diesel, you see, large imports, 8 billion
[00:02:27] euros. And at the top of the most important
[00:02:30] products, we also have those that interest us perhaps the most,
[00:02:33] food, and here, if we talk about food, we reached imports of
[00:02:37] 7.6 billion
[00:02:40] reduce the deficit from euros only in the first months of this year. Of course, it's a lot and what's worrying, if we look at the
[00:02:44] dynamic, how imports evolved, in total, compared to
[00:02:47] exports, we will see that a large difference appeared in terms of
[00:02:50] the trade deficit. We reached, ladies and gentlemen, in the first eight
[00:02:54] months of the year, that's why I was telling you that our country imports more and more, with total
[00:02:58] imports of almost 9000. billion euros, if we look at
[00:03:01] exports, these are somewhere around 66 billion
[00:03:05] euros, and thus we have a trade deficit of approximately
[00:03:09] 22 billion euros, and what should be emphasized here, we are talking about a
[00:03:12] trade deficit that increased compared to the same period last
[00:03:16] year by 1.4%, approximately 300 million
[00:03:19] euros. Now, let's see how much the Leu has fallen against the main currencies
[00:03:23] recently. The euro is of particular interest to us because
[00:03:26] imports from the European Union are made in the single European currency, and
[00:03:30] the American dollar because imports from Asian markets, for example from China,
[00:03:33] depend on the American currency. When the leu falls against these, we are essentially forced to
[00:03:37] pay more for the same volume of products. Let's see what our analysis
[00:03:41] shows because there is very interesting data. If we look in comparison
[00:03:44] with the dollar American. We see with the euro for
[00:03:48] a start, we have the euro data. Look where it reached today, 533 bani
[00:03:52] for 1 € under conditions where on October 1st, 1 € was
[00:03:55] quoted at 5.27 bani. In such a short
[00:03:58] time. we are talking about a difference of six
[00:04:01] bani between if in terms of the leu-euro
[00:04:04] reference rate, with the American dollar the situation is even more
[00:04:08] complicated, because in the same interval today a dollar that
[00:04:11] is worth 4 R77 bani compared to
[00:04:15] 4.67 bani it was worth a week ago. What does
[00:04:18] that mean? It's 10 bani in such a short time and as I was
[00:04:22] telling you, when the leu depreciates against these
[00:04:25] currencies, and we buy, we bring imported goods, we will essentially be forced
[00:04:29] to pay more. This is a very interesting topic that could
[00:04:33] hit us directly in the coming period and that is why I propose that we
[00:04:36] discuss it with my guests in the studio. Joining us is economic analyst Mr. Dragoș
[00:04:40] Huru, university professor, doctor at the Academy of Economic Studies in
[00:05:00] I will start with you. Please explain to us, given what is happening
[00:05:04] with the national currency, how high is the risk of inflation increasing by the end of
[00:05:07] the year, due to the fact that we are importing more and more, and the leu is weaker
[00:05:11] against the euro and against the American dollar.
[00:05:14] Uh, regarding strictly the terms of your
[00:05:17] question, it is clear that this apparent process of
[00:05:21] disinflation, due to the fact that we have included the base effect of the tax
[00:05:24] increase in statistical calculations,
[00:05:27] is accentuated by the increase in the exchange rate,
[00:05:31] because between the two they function largely, so as not to go
[00:05:35] into details that would take up too much time, they function like the principle of
[00:05:38] communicating vessels, at the moment when you import a lot at prices
[00:05:42] that are getting higher and higher, this fuels your inflation, but in fact it
[00:05:45] dampens the possibility of prices increasing in the end,
[00:05:49] because this transmission
[00:05:52] effect appears towards the end. It is clear
[00:05:56] that it takes a few months until the shock that
[00:06:00] we are experiencing today manifests itself, it
[00:06:03] could have been foreseen since May,
[00:06:06] March, why? Because we have at least three steps,
[00:06:09] we have the import. in
[00:06:13] which we have term contracts and then certain exchange rates,
[00:06:17] purchases, economic agents have planned purchases at a
[00:06:20] lower exchange rate, they had currency, they arrive in
[00:06:23] warehouses, stocks are consumed, so you still have the old
[00:06:26] prices, we adjust to the new price,
[00:06:29] through the new exchange rate in this second step, stocks
[00:06:33] again create a time gap, we are talking about
[00:06:36] the slowdown of certain products that you have hidden there in the large
[00:06:40] details of the class of products. for a few months over the
[00:06:43] summer they were not consumed and the third step follows in which
[00:06:47] economic agents will increase prices, but I draw your
[00:06:50] attention to the fact that even though the exchange rate evolves episodically, with
[00:06:54] large bursts of increase, the adjustment of prices
[00:06:57] is made gradually over time, taking
[00:07:01] a very large decrease in consumption, so
[00:07:05] perhaps we are dealing with an economic effect in which economic
[00:07:08] agents also accept to have a slightly
[00:07:11] lower profit. In total, I believe that
[00:07:14] inflation will no longer remain just what is announced now,
[00:07:18] but once with
[00:07:20] the desire, the fulfillment of the desire to have a government and with the budget
[00:07:24] rectification, we will actually have an increase in
[00:07:27] inflation, Mr. Florin Constantin, we see that Romania, that
[00:07:30] Romania imported only in the first eight months of the year food and live animals worth
[00:07:34] 7.6 billion euros, what should we expect in the coming
[00:07:37] period regarding shelf prices, especially for this component
[00:07:41] of agri-food goods.
[00:07:44] Well, we look very much at agricultural
[00:07:47] commodities, for example
[00:07:50] wheat,
[00:07:53] wheat has seen an appreciation of prices due to the logistical
[00:07:57] crisis in the port of Constanța, local prices have increased,
[00:08:01] but Romanian mills must also remain
[00:08:04] competitive with the price that the farmer receives for a
[00:08:08] throttled export, and
[00:08:10] then we see a possibility of it being transmitted to the price of
[00:08:14] bread, some tariff increases, but
[00:08:17] at a lower level, even if wheat has seen an appreciation of around
[00:08:21] 25-27%, we see somewhere around 5%
[00:08:25] in the next quarter, potential to be passed
[00:08:28] on to the price of bread because wheat is not
[00:08:32] 100% of the base price of bread.
[00:08:35] For dairy, again a
[00:08:38] very interesting situation, if globally.
[00:08:44] The FAO index shows a calming of dairy prices,
[00:08:47] Romania has a schizophrenic situation,
[00:08:51] it exports a little and imports a lot,
[00:08:54] in fact the main actors in the market do both,
[00:08:58] and then we import especially from
[00:09:01] the EU area, we import in euros, with a weaker
[00:09:04] leu, and again we see
[00:09:07] such a crisis, a risk of
[00:09:10] transmission. of an inflationary impulse, especially
[00:09:14] since fruits
[00:09:16] and vegetables produced locally during
[00:09:20] the summer, are now in a phase of diminishing supply on the
[00:09:24] market, we are going back to imports, and
[00:09:27] if these account for somewhere between 10
[00:09:31] and 20% of the Romanians' food basket,
[00:09:34] here too we can see a negative impact on
[00:09:37] purchasing power and an increase in prices,
[00:09:41] so the end of the year we do not see
[00:09:44] any positive elements that would enthuse us from
[00:09:48] the perspective of food prices on the Romanian market, the main problem of
[00:09:51] Romania remains the fact
[00:09:55] that we import
[00:09:56] approximately
[00:09:59] 25%
[00:10:03] of food consumption and export much less somewhere
[00:10:07] below 20, we are in a permanent deficit of the commercial
[00:10:11] balance with food products, even though we consider ourselves a country
[00:10:14] exporting food products and this
[00:10:17] puts us in a permanent
[00:10:21] danger of inflation and prices. It's
[00:10:25] basically about the lack of an industrial development
[00:10:28] model, because I notice here too, we export
[00:10:32] basic products, think that in a show we discussed together the
[00:10:35] crisis of farmers, well as long as you export live animals without
[00:10:39] any processing, it is clear that you also import all products that
[00:10:43] imply a degree of processing, starting with wheat with the price of wheat,
[00:10:47] your guest and it made me think
[00:10:50] if we could calculate how much of the total bread consumed in Romania
[00:10:54] is frozen dough, meaning imported, Romanian
[00:10:57] wheat is worthless even if it has a good price, worthless even if it has good quality,
[00:11:00] high calorific value if you import it and
[00:11:04] you see, we import not only from the European Union, you said vegetables, we import from
[00:11:07] Turkey, we import with inflation, we import from Spain, which is already an
[00:11:11] economic model with a high degree of uncertainty, Spain has gone
[00:11:15] to anticipate, there we might have to pay more and so
[00:11:18] on, in fact the lack of industrial policy in the long
[00:11:22] term, the economy. reacts freely,
[00:11:26] but it also needs to be coordinated, coordinated in
[00:11:29] the sense of adjusted, not planned as before '89, but
[00:11:32] the term must exist and not by chance, thus we have reached a situation
[00:11:36] where we produce, weakly, low
[00:11:40] productivity, we sell cheaply and buy back very, very
[00:11:44] expensively, it is a model that could accentuate inflation
[00:11:48] and I'll skip over that, I would point it out very clearly, think that we have
[00:11:51] a very well-developed industry of sub-assemblies, in the
[00:11:55] automotive industry for Dacia Ford and not only the
[00:11:59] German industry which at the moment is struggling terribly in the face of
[00:12:02] Chinese offers. What will we do then? Because yes,
[00:12:06] it was good to be integrated into a production chain of value in which
[00:12:09] productivity and return were linked to the
[00:12:12] idea of a general value chain in Germany, but at the
[00:12:15] moment, honestly, we are not
[00:12:19] happy at all. Mr. Florin Constantin, you mentioned a very interesting aspect
[00:12:23] that even these raw materials that we... we import out of necessity because we don't produce
[00:12:27] enough in the country, they are also more expensive, why? What are the
[00:12:30] main explanations? Are we talking about drought globally, this
[00:12:34] energy crisis, do pump prices affect
[00:12:37] others quite a lot
[00:12:38] too?
[00:12:41] First of all, Western Europe is experiencing an extremely
[00:12:44] dry season, I was looking at the figures from France
[00:12:48] which has the worst corn season, being the largest corn producer in
[00:12:52] Europe, the worst season in the last 20
[00:12:55] years,
[00:12:57] of course, since we import everything from Western Europe,
[00:13:01] our processed food, imported from
[00:13:04] abroad, has to travel several thousand kilometers from west
[00:13:08] to east, to reach us, and this is done especially
[00:13:12] by road transport, which consumes a lot of
[00:13:15] fuel, diesel, and here we have a lot of
[00:13:19] pressure on the transport price,
[00:13:23] so again - similarly, the drought in
[00:13:26] the west also weighed on the major producing
[00:13:29] countries, as your guest said, Spain, Italy, from
[00:13:33] where we import vegetables, apart from Turkey, even
[00:13:37] Turkey didn't have an extraordinary season
[00:13:39] this year, a lot of drought, even Romania is suffering from
[00:13:43] drought now, even though today is a rainy day in Bucharest, until now we have been watching the sky, and
[00:13:47] this autumn
[00:13:51] drought also puts a lot of pressure on next year's
[00:13:54] harvests. So we already have some negative
[00:13:57] premises, autumn crops, wheat, rapeseed are also
[00:14:01] under question in Romania. In addition, let's look at the
[00:14:04] crisis in Iran, which is a reality, consider that in
[00:14:07] Romania we almost no longer produce chemical fertilizers, for example, because
[00:14:11] we imported from the Gulf area where we have a crisis, we imported because
[00:14:15] Ukraine produced based on Russia paying its debt for
[00:14:19] the surrender of the nuclear arsenal, and at
[00:14:22] the moment we have a price increase.
[00:14:25] an enormous increase from one day to the next on fertilizer and
[00:14:29] fuel prices, the price of fuel enters, enters
[00:14:32] all these things, and next year is a very good prediction,
[00:14:36] this year we are doing well, next year I think that things will
[00:14:40] not be as good as this year. And because you mentioned,
[00:14:43] dear guests, what the situation is in France, even in France, one
[00:14:47] of the largest European economies, there are problems and the French crisis is becoming a
[00:14:59] day, welcome back, what's happening is that we are in a major
[00:15:03] social, political, economic crisis and behold
[00:15:07] Prime Minister Sebastian Leocornu, placed in the situation
[00:15:10] of finding the best solutions and options
[00:15:14] for the budget for next year. How did he get into this
[00:15:17] situation from the health crisis from the pandemic, when
[00:15:20] France we know granted a lot of social aid, then followed
[00:15:24] the war in. Ukraine, then followed the war in the Middle
[00:15:27] East. All these overlapped with
[00:15:29] various reforms and here I would refer especially to the pension
[00:15:33] reform and last but not least to the large-scale
[00:15:36] protest of farmers, which we know
[00:15:39] paralyzed France for several good months, arriving in this
[00:15:43] situation of protests initiated by high school students who are now entering
[00:15:47] a new week with other protests, blocked schools,
[00:15:50] closed universities, teachers who solidarize with
[00:15:54] students and last but not least parents, who also
[00:15:57] support the students. It's good to say that France currently has
[00:16:01] a public debt of 3600 billion
[00:16:04] euros, that 56% of the
[00:16:07] gross domestic product represents public sector expenditures,
[00:16:11] and Prime Minister Sebastianu is facing
[00:16:14] the following situation: first of all, a political landscape in
[00:16:17] which he does not have a majority, secondly,
[00:16:20] he cannot make any major reforms, because,
[00:16:24] thirdly, the presidential elections in
[00:16:27] France are next year, an electoral campaign that has started de
[00:16:31] facto, but not de jure, and then what will he do, he is forced
[00:16:35] to reduce these public expenditures even more,
[00:16:38] announcing drastic reductions of 54 billion
[00:16:42] euros from the public sector. How will he do this? What measures
[00:16:46] are there to calm the international financial markets?
[00:16:49] First of all, the indexing of pensions will be abandoned, or
[00:16:53] there will be purely symbolic indexations for the lowest
[00:16:56] pensions. The Prime Minister is still considering whether
[00:17:00] to propose an indexation for the minimum wage next year or
[00:17:03] not, products based on sugar will be taxed even more. And
[00:17:07] here I am referring to carbonated drinks and
[00:17:10] to sweets that are
[00:17:14] sold in France and are overprocessed, he is also
[00:17:17] considering cutting more from revenues, increasing
[00:17:21] taxes, this means fewer public
[00:17:24] servants, fewer teachers, since we are currently talking
[00:17:28] about teachers' protests, and last but not
[00:17:32] least, in hospitals, there isn't much money here either, it's a conflict,
[00:17:36] a zone of conflict that intersects economically,
[00:17:39] socially, politically.
[00:17:42] France next year commits to having a deficit
[00:17:46] of five, approximately 5% under
[00:17:48] conditions where we know the European average is 3%. But I would like
[00:17:52] to say in the end that in any case, France is
[00:17:56] one of the important pillars of the European area, a founding
[00:18:00] member of the euro zone, that together with Germany
[00:18:03] it represents an engine that, even if it has stalled in recent years,
[00:18:07] has always managed to find a solution, and we are being offered
[00:18:11] more and more in France the Italian model, which under
[00:18:15] Giorgia Meloni managed to
[00:18:18] approximately 7% to 3
[00:18:21] 3.1%. All this information, Luca Niculescu is making
[00:18:54] was, the discussion was very open, with
[00:18:58] Prime Minister Ilie Boloșan, did you have any other discussions today, will he give
[00:19:01] any sign, there is information according to which the liberals would be inclined
[00:19:04] to support this six-month truce for
[00:19:22] every day with the leaders of the main political parties,
[00:19:26] so the dialogue continues. What major economic
[00:19:29] recovery plan did you propose? There is an economic
[00:19:32] recovery plan that has already been approved and will
[00:19:36] come into
[00:19:45] a conference today,
[00:19:47] Mr. Niculescu? Luca Niculescu, behold, statements from parliament, following
[00:19:51] the consultations he had with those from the Peace Group, Luca Niculescu says,
[00:19:54] the dialogue continues for
[00:20:04] fact that, behold, we all see what is happening politically, we don't have a... how much
[00:20:08] does this whole situation affect, including what is happening
[00:20:11] in agriculture on this part of the trade deficit, the fact that
[00:20:14] we are unable to cover the consumption
[00:20:17] needs from internal resources.
[00:20:21] Romania does not have a strategy for integrating the agri-food
[00:20:24] chain, unfortunately, even though a lot of money has been pumped in, almost 500 million
[00:20:28] euros in recent years, for
[00:20:31] this famous processing, the processing
[00:20:34] of food products in Romania is a beautiful
[00:20:38] myth, it stops at the shelf where the shelves
[00:20:41] of supermarkets in modern trade, which currently represent
[00:20:44] 80% of food distribution in Romania or perhaps
[00:20:48] even more, these shelves are already occupied by
[00:20:51] foreign producers and to get in there you don't
[00:20:54] necessarily need to have just a local factory,
[00:20:58] but you also need to have a good price and the right
[00:21:02] marketing strategy and it's very difficult to beat international giants
[00:21:06] who are extremely attentive and extremely good at sensing
[00:21:10] consumer needs and addressing these needs
[00:21:13] addressing these needs in real time.
[00:21:17] so this local processing would be done. it would be much
[00:21:20] easier if there wasn't import competition, this is extremely
[00:21:24] fierce, extremely harsh, with
[00:21:26] local producers and often, it puts them offside, because local
[00:21:30] producers also don't have a culture of
[00:21:33] marketing agri-food products,
[00:21:36] that's why I don't see an extraordinary brilliant
[00:21:40] future
[00:21:48] is making statements, the minister.
[00:21:53] At the same time we discussed the economic recovery
[00:21:57] program, about
[00:22:00] social protection measures for vulnerable categories,
[00:22:03] but at the same time also about
[00:22:07] supporting Romanian entrepreneurs. Many of
[00:22:11] our ideas, I understand, are already included in the government program,
[00:22:14] I gave the designated
[00:22:17] prime minister also...
[00:22:21] points from our program presented to
[00:22:23] President Nicuș Iordan, as you know at the first
[00:22:27] consultation, the designated prime minister said that after
[00:22:30] he finishes all discussions with the other political parties and
[00:22:34] parliamentary groups, but after he will also have discussions with
[00:22:38] those from PSD, PNL or PNL, the Conservative Wing and
[00:22:41] UDMR, he will come up with a government
[00:22:45] proposal, I told the prime minister clearly that he has our support,
[00:22:48] as long as. "social protection measures will
[00:22:52] be effective and in the interest of citizens, economic
[00:22:55] recovery measures will lead to an increase in
[00:22:59] the economy and much
[00:23:02] higher revenues to the state budget, especially since at this
[00:23:06] moment it seems that over 10 billion euros are stolen from the state
[00:23:10] budget just from the VAT gap. Everyone probably knows who
[00:23:13] steals, that is, the very, very, very large ones, who
[00:23:16] have large law firms behind them.
[00:23:20] and public officials cannot fight with them because they sue them or file
[00:23:24] criminal complaints against them. From our point of view, we believe that
[00:23:27] public officials, especially those from ANAF, deserve to
[00:23:30] be assisted and protected by lawyers, when
[00:23:34] they fight or control the multinational slave
[00:23:38] masters in Romania with state money, because they don't have money to
[00:23:41] pay lawyers. Thirdly, Mr. Luca Niculescu was
[00:23:44] very open to reducing certain
[00:23:48] types of taxes,
[00:23:51] especially for young people, married or
[00:23:55] not, who can no longer afford to buy a home with 9%
[00:23:58] VAT, this thing, in fact, the increase to
[00:24:01] 21% of the VAT for
[00:24:04] homes up to 10,000 euros led to a blockage in the
[00:24:08] real estate market, but also to the loss of over 3,000 jobs
[00:24:11] in the horizontal industries, from production, construction
[00:24:15] materials, works and so on. We believe that we have
[00:24:19] an exceptional. open dialogue and if the designated
[00:24:22] Prime Minister Luca Niculescu comes with a political government
[00:24:26] because only politicians answer to citizens
[00:24:29] in elections through votes, he has not said until now, until this hour, what governing formula is
[00:24:33] taking shape and with what parliamentary majority? He
[00:24:36] said he had discussions with everyone, he cannot say, he cannot tell
[00:24:40] the press that he has the necessary support, but he is very
[00:24:44] confident that he will receive the number of votes and we told him that we are very
[00:24:47] confident that he will also receive our votes if he...
[00:25:20] loyalism and implements social protection measures and
[00:25:23] economic recovery, you would enter this government, you would cast
[00:25:27] a vote if, of course, they are not Bolshevists, but Mr. Niculescu gave you to understand
[00:25:31] that those from USR will not enter the government or that you seemed so
[00:25:34] optimistic that you could vote for the government. He gave to understand, but a technocratic
[00:25:37] government, in which case I do not agree with a technocratic government. I was
[00:25:41] a deputy in the Romanian Parliament and secretary of the legal committee, and especially
[00:25:45] when the Cioloș government was put in place. Have you ever
[00:25:48] seen government members answer to anyone
[00:25:52] for the disasters they have caused in the country? No, they
[00:25:56] come as if to work, they take their salary and leave, and the people
[00:25:59] suffer. Politicians answer at the polls, yes. that
[00:26:02] this government will not pass, are you thinking of perhaps
[00:26:05] snap elections? as the president of the Republic, Nicușor Dan, said,
[00:26:09] and I also told you in the press briefings
[00:26:12] that there will never be snap elections
[00:26:16] as long as he is prime minister. I would like to leave it to Senator
[00:26:19] Clement Sava, the secretary of the foreign policy committee, because he also discussed
[00:26:23] foreign policy, a lot, Mr. Sava, please, in line with what
[00:26:27] my colleague Ninnel Peia presented, I want to tell you that we discussed
[00:26:31] the defense portfolios. and foreign affairs which are very
[00:26:34] important and about which he communicated to us that they will not be of
[00:26:38] the same low caliber as the one in the current government and in general
[00:26:41] we are optimistic because Ninel Peia declared in parliament after
[00:26:45] the meeting with Luca Nicolescu, what is important to remember
[00:26:49] is that those from the Pace group will support a political government, measures
[00:26:52] with a program that includes economic recovery measures and I quote
[00:26:56] a government that will not include, again I quote, USRists and
[00:27:00] Bolshevists.
[00:27:02] while, politicians do not seem to agree
[00:27:06] among themselves, the state has come to borrow at interest rates of over
[00:27:09] 7%, and in the interest rate market, the quotations of the
[00:27:12] Robor indices remained today at over 6.10% for
[00:27:16] all maturities. Here's what the latest figures show? If
[00:27:20] we look at the 3-month Robor indices, we have a
[00:27:23] Robor at 6.10%, a 6-month Robor at
[00:27:26] 6.15%, a 12-month Robor at
[00:27:29] 6.22% and an IRCC at 5.5.
[00:27:33] 36% and what interests us in particular, ladies and gentlemen, look at these quotations if you go
[00:27:37] to the bank to take out a loan, only if we take, for example, the IRCC,
[00:27:41] 5.56%, the current value, to which is added
[00:27:44] a bank margin of 2.5%, maybe even
[00:27:47] 3, see how we reach interest rates of over 8% for us,
[00:27:58] and how it ultimately affects, Professor, what
[00:28:02] is happening with the leu at the current time, does it put pressure on the
[00:28:05] interest rate market, can a weaker leu also put pressure on interest rates here
[00:28:09] in the country? Categorically yes,
[00:28:12] but let me suggest that we start the explanation with an issue that you have not
[00:28:16] heard before in Romania, because we have a preference for
[00:28:20] local, for scandal, for invented terms, for political
[00:28:23] breakups, arguing over the fence in parliament,
[00:28:27] meaning you see you finished
[00:28:31] something earlier with the problems in France, we look at
[00:28:34] Spain, we see Italy,
[00:28:37] you should know that next year, if you still invite me to the show, I guarantee that we will
[00:28:41] discuss it in slightly different terms, because everything that is happening in
[00:28:44] Europe shows the failure of the common policy of the European Union, and
[00:28:48] not in that sense of
[00:28:51] an overly exalted politician who says: That's it, we're leaving
[00:28:54] the European Union, no, we will talk about a readjustment of the common policy, because we have not
[00:28:58] responded to the signals that the European economy gave, not
[00:29:02] even when Draghi's famous report
[00:29:05] showed our lack of competitiveness.
[00:29:08] We are talking about the similarity of problems in Romania, in France, in
[00:29:12] Spain, in Italy, precisely in those segments in
[00:29:16] which in Romania today we suffer, salaries, age,
[00:29:19] pensions, hospitals, teachers. It is clear that somewhere
[00:29:22] the European development policy has suffered and in these conditions
[00:29:26] the developments of the exchange rate of the RON
[00:29:30] will be extremely curious, because
[00:29:34] we are the last major European economy that does
[00:29:37] not
[00:29:43] we made a news item, those from CFA Romania warn that we could reach
[00:29:47] 5 RON 50 bani in Europe, I believe that we can even reach
[00:29:51] more and not only can we, but I believe that we will reach 5.5-5.6 by the end of the year, but
[00:29:54] why? The leu
[00:29:58] is a very weak currency, it is not backed by anything, neither by
[00:30:02] production, nor by activity, nor by
[00:30:05] production, and what do you know, we cannot even imagine how we could form a
[00:30:08] government, we do not even imagine through snap elections, and then
[00:30:12] the leu loses ground, in conditions where the leu
[00:30:15] remains the currency of a large
[00:30:18] economy, located outside the euro zone, it
[00:30:22] will not benefit from the same support and the same
[00:30:25] help that the economies that have the euro
[00:30:29] will give to the currencies in a certain area for.
[00:30:32] not to depreciate. So, from this point of view, the reactions
[00:30:36] are hard to anticipate to what is happening at the
[00:30:39] moment in Europe. It
[00:30:42] maintained a somewhat stable exchange rate, having a
[00:30:45] preference for the entry of external liquidity
[00:30:49] into the banking market, we had the largest inflows of speculative
[00:30:52] funds, being a happy policy at that time of the
[00:30:56] BNR. Why do I say at that time? Because...