Governor Mugur Isărescu admits that the enormous private debt was what prompted the state to seek assistance from the European Union and the International Monetary Fund, but believes the decision to become indebted was a “democratic” one and that behind it are more than 4 million Romanians, with banks only acting as go-betweens, and bringing money from abroad.
The overall foreign debt is now close to 90 billion euros, and has come to account for 75% of a 120 billion-euro Gross Domestic Product.
In previous years, the debt swelled as a result of the amounts absorbed by private companies, which ended up with 40 billion-euro loans, as well as by commercial banks, which attracted 22 billion euros from abroad.
“Banks are to blame – I am using strong words in order to provoke bankers – for 22 billion euros of the 90 billion euros, because they granted us loans. 4.5 million people took out loans, who make up 50% of the economically active population. So I think we should not overlook this quite significant aspect, when it comes to “who got Romania into debt”. The decision was clearly a democratic one, it wasn’t made by someone in particular,” said Isărescu at the Romanian Banking Forum, organised by Finmedia in partnership with the NBR (National Bank of Romania).

Subiecte #debt#lending#mugur isarescu#Romanian banks