New government brings changes to policy

The sustained political and war problems in Ukraine and the weak recovery in the EU still pose potential threats for the economies in the region, and implicitly for Romania, via the impact on exports. Nevertheless, the severity is rather low, as Romania’s dependence on exports for economic growth is expected to decline. The new internal political setting, brought with the election of the president Klaus Iohannis, on the 16th November, will bring more pragmatic and useful policies. The government is set to fight against corruption and crime and fortify the rule of law. Already at the beginning of the term, a draft bill that was intended to liberate convicted criminals, including high level politicians accused for corruption has been retrieved, followed by the withdrawal of the immunity of several MPs suspected for corruption. In terms of the economic policies, the government’s main task will be to tackle the budget deficit and maintain low public spending as a condition for IMF’s precautionary loan granted to Romania in 2013.

Sources: The Economist