Traian Basescu may return as PM, Putin-style, when his term runs out, says The Economist

Traian Basescu may return, Putin-style, as prime minister when his term runs out in 2014, says The Economist in an ample piece dedicated to Romania in which it labels Basescu as “a charming but dodgy president” whose greatest fans are abroad. “Many welcome his mended fences with neighbouring Moldova (a province of pre-war Romania in which he once promoted the issue of Romanian passports). A strong Atlanticist, he is a rare remaining ally of the Georgians, who feel bereft of most of their old friends. They would vote for him there, whatever his own people might do, concludes the piece called Disappointing Romania- Holes and Corners.

The article also mentions that the national bank is seen by Romanians as the most solid institution and the financial system is in good shape, while trust in the governments is low. “Many Romanians see the central bank as their most solid institution. Governments come and go but its boss since 1990, Mugur Isarescu, is a powerful background presence. The bank keeps the leu, Romania’s currency, fairly stable, inflation down and a watchful eye on the financial system (which is in good shape, unlike many others). But it can’t do much to stoke growth, set to be a mere 1.5 percent next year.”

Even though enjoying a three-year boom in which annual growth peaked at 8 percent, Romania still had to resort to IMF for aid. “In the excitement of joining the European Union in 2007, Romania enjoyed a three-year boom in which annual growth peaked at a stonking 8 percent. Where a prudent government would have hit the brakes, Romania’s stamped on the accelerator, running a big budget deficit. The crash in 2009 forced the country to seek a EUR 20 billion (USD 26 billion) IMF bail-out in 2009,” says the piece.

Even though exports are making a recovery, the construction sector is “still in the dumps,” as well as investments and consumer spending. Due to the “jerky decision making” of the Romanian politics, investors are not rushing to place their money here and services are underdeveloped. “Help could come from the €30 billion that the European Union has set aside to modernize Romania, the largest and poorest of its new members. But only a measly EUR 1.5 billion has been spent so far. Among many scandalous bottlenecks, Romania still lacks a proper road between Bucharest and its main port, Constanta,” says the article.

While corruption cases are slowly progressing, it is hard “to shift ignorant, incompetent or even blatantly corrupt judges.”