Because of the financial-banking implications of the bankruptcy at the National Investments Fund, officials of the International Monetary Fund have decided – at the demand of the Romanian side (smokescreens!) – to put off the extension of the stand-by loan accord with Romania. An approval that seemed a mere formality with the signals given away by the IMF director general himself and the US Department of State, the largest IMF shareholder, during the Romanian Prime Minister’s recent visit to America.
The IMF decision – because whether at the Romanian demand or not, it is still their decision – is understandable, but deplorable.
It is understandable because the scandalous FNI bankruptcy has direct and indirect psychological implications on the banking system and, therefore, on the currency market, which can alter the parameters the stand-by loan accord was established in, with the consequence of a possible consideration of updated inflation and exchange rate targets.
It is also understandable because, for an institution like the IMF, an accord with a country is not only a matter of financial commitment, but one of trust, of credibility. Perhaps we ourselves would be equally wary of doing business with a country like Romania, at the very moment when not only a scandal shattered the financial-banking system, but the country’s foremost savings institution (CEC) was dragged into the scandal, without the necessary clarifications, because, out of ignorance or client interests, the up-until-recently leader of this state institution, after engaging it into inadmissible backing of private interests, is not grabbed by the collar and tossed to justice for the simple reason that he enjoys protection from his party, the main ruling party.
But it is especially understandable because, in these very moments of destabilisation, although only potential in the financial-banking system, another major party in the ruling coalition is thinking about unleashing a furious and deadly attack on the prime minister of the government it is a part of. On the very person to whom, or rather, to whose credibility the IMF was this close to approving the stand-by arrangement with Romania. What could the IMF believe under these circumstances? Mr. Roman and Mr. Basescu are assuming a tough responsibility for the attempts to derail Premier Isarescu and the economic programme he assumed in such a delicate moment for Romania. If they have a master other than the Romanian people, then obviously they could not care less about this responsibility, but then, so much more will be explained. The only good fortune is that the Romanian people has “read through them” and the vertiginous plunge in the polls should give them food for thought, provided they are allowed to think.
Although understandable, the IMF decision is still a deplorable one. Because it is exactly the kind that complicates matters instead of solving them. Instead of approving what was agreed with the Isarescu Government and issuing the indirect, but clarifying message of support to financial order in Romania and thus settle the tempers, the IMF decision agitates them, fuels questions, uncertainties, confused searches for a standpoint, and invites, also indirectly, the people to believe in nothing, not in money, in banks, in Government, even in the premier that most executive factors believed in, who is suddenly attacked by the coalition and deserted even by the IMF. We should not insist on this point. The matter is simple. People have no time for nuances. They can only interpret IMF hesitations in one way: “things are really fishy if these people are running away, too.”
Premier Isarescu wondered rhetorically whether the current financial-banking crisis was not orchestrated on the eve of discussions over the new IMF accord, specifically to block the approval. And in any case, if the financial-banking crisis was staged – and there are so many hints to confirm it! – then those who staged it have achieved their goal. But, surprise! They did it with the help of the IMF decision.
Therefore, mild words aside, the IMF decision is pathetic. Especially since there were not only much more elegant but more efficient ways to get the Romanian authorities to promise the steps needed in the financial-banking context will be applied firmly and urgently: simply by accompanying the approval of the accord with the decision to adopt and apply these measures, which, with the IMF approval behind them had greater chances of reaching their goals.
With all the regrets, the IMF has rather helped those in Romania who let the boulder roll downhill and not those who try desperately and in vain because of the former to push the boulder uphill, which makes Romania one of the practical present-day instances of the eternal Sisyphus myth.