October 28, 2008 – discussion on the impact of the financial crisis in and on Romania at a BC event

With some 20 invitees for the wine tasting event organized by the Belgian Connection on October 28, the atmosphere was intimate both during the wine tasting, presented by prof. Boboc with wines generously sponsored by Metro, and afterwards during the dinner assembled by Novotel.

At the initiative of our new ambassador in Romania, His Excellency Mr. D’aes, the winetasting was preceded by a half hour roundtable discussion on the impact of the financial crisis on the business of the attendees.  Interesting ideas were shared by prominent representatives from different economical sectors, e.g. Metro, Quintus TPA Horvath, Volvo, ING, Romtelecom, Jan De Nul, DGM, Romstal Leasing, Flanders Investment and Trade, Fortis, KBC Securities, Extensa.

A clear consensus could be detected about the fact that the current crisis would definitely impact the economical situation in Romania.  Such impact would consist of positive consequences, but mostly negative items were mentioned:

1) Positive
The market of food products will remain good;
Turn-over of personnel will decrease, i.e. less job hopping;
Possible amendments to legislation regarding pensions, increasing tax benefits;
Decreasing energy prices;
Cascade effect, i.e. problems in 1 sector will reflect in other sectors sustaining the first (e.g. transportation).

2) Negative
The market of non-food products will decline significantly, resulting in stock problems;
Real estate market will face major problems;
Decrease in buying power;
Sharp decrease in financing possibilities;
Romanians returning from Italy, Spain resulting in reduced money flow originating from Romanian workers abroad;
Increased unemployment;
Banks will need to innovate in products range as deposits are scarce in Romania.

Further, several attendees were of the opinion that Belgian enterprises, often SMEs (small and medium sized enterprises), (might) face problems in Belgium, but their investments in Romania would be continued.  Within the group of Flemish companies, there seems to be increased interest for Romania (quote: “financial crisis is no theme”.).

In respect of Romania’s situation as a country, someone mentioned that this crisis would be a reality check for the country, possibly resulting in modifications in prices for goods and real estate and a correction in salary levels.  On the other hand, Romania is in a rather favourable position in order to deal with the crisis as the country does not have too many debts and there is a major need for infrastructure, which means that the Romanian government could create a buffer by increasing infrastructure projects.