Romania must come up with a long-term, sustainable strategy that can deliver sustained economic growth over decades, IMF‘s Jeffrey Franks warned at a Bucharest event. Franks is Director of the IMF Europe Office and Senior Resident Representative to the European Union and has served as head of the IMF mission to Romania between 2009 and 2013.
“Romania must take measures to ensure economic growth over several decades, instead of only considering one year at the time,” Franks told the audience at a debate organized in Bucharest by the Ministry of Public Finance. “I would prefer to see Romania growing by 3.5 percent every year for ten years, rather than seeing it grow by 4.5 percent for five years and then witnessing an economic crisis,” Franks said. “This is the danger the country is facing right now,” he warned.
According to the IMF representative, the Romanian state should ensure a sustainable economic growth by stimulating investment, raising the absorption rate of EU funds and solving the problems that state companies are currently facing, either by finding ways to attract private capital or by privatization.
Jeffrey Franks also cautioned Romania against repeating past mistakes. “Romania’s economic growth is not as big as it was before the crisis. But we do not want it to be as big, because back then it proved to be unsustainable,” the IMF representative warned. The question Romania is facing now is whether some of the steps taken in the areas of taxes and wages in the past year are supporting stability or are undermining it, Franks said in reference to measures aimed at stimulating economic growth as an alternative to making reserves for difficult periods.