Isărescu: Stimulating consumer spending is a bad idea

Entrepreneurs, company managers and bankers who see stimulating consumer spending as a solution to bring the economy out of the crisis had a “bad idea”, says Mugur Isărescu, governor of the NBR (National Bank of Romania).

After two years of declining GDP, he says Romanians should not start spending, as Prime Minister Emil Boc was suggesting recently, but work.
“Stimulating consumption to have economic growth can only be deemed a bad idea. But we cannot put it into practice. (…) Romanians have to be encouraged to work,” the head of the NBR said yesterday.
Nobody wants reckless consumption that will lead once again to booming imports. Nobody wants consumption induced by the increase in public sector salaries and in pensions. What would then be the healthy solutions? Foreign investments, but they should not go into building malls, and European funds. Investments stopped coming at the onset of the crisis, and Romania is proving totally unable to attract money from the EU. Does this mean it is condemned not to come out of the crisis in a healthy manner?
“In 2010 we were not able to stimulate investments or attract European funds, but I think now we have reached a limit and become aware this is the only way. First produce, then consume,” says Sebastian Vlădescu, former finance minister.