On Thursday, March 31st, the participants to the Eurozone Crisis Econosofia Conference had the chance to debate, together with Nicolae Chidesciuc (Chief Economist at ING Bank), the effects that the falling apart of the Euro area would generate, both economically and socio-politically.

Taking into account a series of macroeconomic indicators, such as the real exchange rate, productivity and real wages, we discussed the discrepancies between the development in different Euro zone countries, as well as the special situation of states like Italy, Spain and Portugal.

Starting with the Greek crisis and its government’s efforts to restore confidence in a high deficit and high public debt economy, we analysed the measures taken in Romania in this unstable period. The main proposition was that from the point of monetary policy the National Bank of Romania (BNR) should adopt much more aggressive stances in order to minimise the deviation of the inflation rate from the levels imposed by the European Central Bank (ECB).

Towards the end of the conference, a long-run crisis solution pervaded, on that implied a federal type of fiscal policy, which could improve the operation of the monetary policy and would facilitate intra-community transfers in times of cyclical divergence, with the ultimate goal of stabilising the level of aggregate demand.

Advertisement