Florin Citu
June 2012 Bucharest Romania
F L O R I N C I T U A D V I S O R Y
The story
Until 2007 both private and public sector increased deficits. It was a race to the bottom. After 2007 only public sector increased deficits, implicitly debt, in part transferred from the private sector. The private sector was not allowed to correct due to fear of social unrest and loss of political votes. After 5 years, we are left with massive public debt and a private sector that still needs to be restructured.
F L O R I N C I T U A D V I S O R Y
-2
-4
-6
1984
2007
2009
1980
1981
1982
1983
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2008
2010
F L O R I N C I T U A D V I S O R Y
2011
European Union
4
United States
-2
-4
-6
-8
2006
F L O R I N C I T U A D V I S O R Y
2011
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2007
2008
2009
2010
-2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
F L O R I N C I T U A D V I S O R Y
F L O R I N C I T U A D V I S O R Y
Public Debt
120
60
40
20
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
F L O R I N C I T U A D V I S O R Y
Summary
World growth influenced by developed economies Inflation by emerging economies Future growth hampered by high public debt in developed economies What next for Romania?
F L O R I N C I T U A D V I S O R Y
0 2000 -2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
-4
Romania
-6
Euro area
-8
F L O R I N C I T U A D V I S O R Y
Romania
5
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
-5
-10
-15
F L O R I N C I T U A D V I S O R Y
Here is the first problem for Romania RO- exports, EU- Imports
30 25
20
15
10
2001
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
-5
-10
-15
F L O R I N C I T U A D V I S O R Y
2011
Austria
Perioda responsabila pentru criza de astazi. Tari cu economii nerestructurate au avut parte
F L O R I N C I T U A D V I S O R Y
Portugal
Germany Spain
1993Mar 1993Aug 1994Jan 1994Jun 1994Nov 1995Apr 1995Sep 1996Feb 1996Jul 1996Dec 1997May 1997Oct 1998Mar 1998Aug 1999Jan 1999Jun 1999Nov 2000Apr 2000Sep 2001Feb 2001Jul 2001Dec 2002May 2002Oct 2003Mar 2003Aug 2004Jan 2004Jun 2004Nov 2005Apr 2005Sep 2006Feb 2006Jul 2006Dec 2007May 2007Oct 2008Mar 2008Aug 2009Jan 2009Jun 2009Nov 2010Apr 2010Sep 2011Feb 2011Jul 2011Dec 2012May 0 5 10 15 20 25 30
Unemployment rate
9.5 9 8.5
80
75 8 70 7.5
7
65 6.5 60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 6
F L O R I N C I T U A D V I S O R Y
F L O R I N C I T U A D V I S O R Y
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