Romania’s president effort to maintain the level cash flow to the country

Eastern European countries were very vulnerable in 2008 due to very large current account deficits and Romania was no exception to it. These have sharply narrowed due to the decrease in trade deficit and the increase in current transfers surplus (by 11.6% and 20.1% respectively in January to August 2011 compared to the same period in 2010).

The structure of balance of payments is therefore more comfortable for the current situation, however Romania would be faced with difficulties if parent-banks reduced cash flows due to restructuring of Greek debt. Reasonably, as the Romanian president Traian Basescu stated, Romania’s target during EC meeting this week was to ensure the European banks’ cash flows to non-euro zone countries would be maintained.

Source: Nineoclock, Financial Times, Romania insider