Tuesday, 27 July 2010


The way in which Romanian government 'deals' with the financial crisis (a still shrinking GDP, a structural rather than temporary deficit incl. pensions) is surreal.

Well, they were after the next installment of IMF loan, so they tried to show they take firm measures.

The slight problem is, there is no coherence in the messages they send out- the president says one thing, the PM the exact opposite, the government departments and ministers add further self-contradicting noises.

While this is going on, the country is dealing with interesting numerical problems. Out of almost 23 million people, only 4.5 million are officially registered as employed. Out of this, more than half are in state sector, now heavily cut.

The demographic picture is as dire as everywhere else, so even the governor of the National Bank warned: this is not a transient financial crisis, there are actual structural problems that will not go away with just a short-term plugging of a huge hole in the finances (via an IMF loan... then maybe another one... and another one... if they get it).

On a smaller scale, the effects are quite tragicomic. Whilst the VAT was hiked a few percent, the actual prices of vital goods including medicines have gone up sometimes almost by 100%. The same pills that used to cost 22 RON now cost in same pharmacy 40 RON.

So there are conservative estimates on how many pensioners will die this autumn and winter. Just in my hometown, several major central heating plants have shut down due to 'cost cuts' and tends of thousands of families were told to install their own personalised heating system.

The fact that latter costs a sum that most pensioners can't simply pay, and that the company that installed them is owned by the deputy Mayor, remains a tiny matter of detail...

The country simply does not have a solution for short-term, let alone long-term, financial and economic problems, at the same time that it is still struggling with what it inherited from the old regime: a forcibly and surreally industrialised country that is still mostly agricultural, but whose agriculture went completely bust.

Whilst unimaginable level of corruption is spanning every layer of society, there is a so-called government that tries to desperately build a facade towards the EU and IMF, whilst they truly don't care and lost the plot completely.

It is quite interesting to see the development, and how next critical autumn and winter period will play out.

The noise levels coming from the so-called government are deafening and are truly white noise, as there is no logical pattern of any kind in their disjointed communications towards the media or the masses.

Unless they at least admit the crystal clear demographic, economic and financial indicators (even a novice economist could shout: I've seen these patterns countless times in beginner's guides on macroeconomics), the surreal and schizoid situation will continue.

In that context, it will be especially interesting to see what happens once the current IMF loan runs out, no structural nor logical measures are taken, and they are stuck with the same conundrum that they think got resolved temporarily and superficially.

Wednesday, 21 July 2010


After a summer break in my homeland, it seems Ceausescu popped up in news headlines again...

His remains are being exhumed for DNA analysis - the location of his grave was for decades a mystery, and authentication of what is said to be his remains are underway now.

While Romanian ponders over the DNA of a (still by some much loved) dictator, one wonders about other deeply imprinted traits in the society that left the dictatorship behind only 20 years ago.

A Transylvanian astute sociologist recently talked about power and how that society simply needs, even craves, power... of some sort... of any sort. It is entertaining to hear that in his opinion, Romanian society simply needs the displays of power.

Even the younger generation, maybe some metaphorical DNA is truly at work here, loves to see the 'leaders' ostentatiously displaying signs of wealth and power, it is simply the norm to be a truly primitive show-off, a characteristic of the nouveau riche in the Balkans.

Maybe in a few hundreds of years these layers of Romanian society will ennoble themselves, slowly seeping through the layers of the decades and centuries, sedimenting... but for now, this is a country where any power of any form is displayed at maximum levels of (truly tragicomic) ostentatiousness.

This in itself is a common trait of post-communist societies, but whilst listening to older generation taxi drivers and street people reminiscing fondly about the Ceausescu era, and how that era didn't have these economic problems, one does get a sense of that strange imprinting... the need for whoever, whatever, having absolute power over them.

The submissive attitudes are prevalent, whilst there is rage about some excesses of power.

Sociologically the perhaps most interesting paradox of the polarised Romanian society is this co-existence of the deep rage against the current circles of ultra-corrupt power and the sub-conscious craving to be dominated. It is at the core of what made many write in the '70s and '80s about how 'the porridge doesn't explode'.

Maybe a trigger akin to the one in 1989 is needed... plus organised and opportune help from within power circles. Otherwise change, whilst talked about on a daily basis, will not happen in bottom-up fashion.

Currently the Romanian 'Government' has no actual coherent solution, not even opinion about the solutions for the financial crisis. It, at the same time, drives already poor people and the poorest layers of society into even deeper poverty, by measures that are illogical, nonsensical in any economic mind, and also serve their own interests.

Will get back to such examples, but at the moment, whilst Romania is looking for the authentic corpse of Ceausescu, it is also passively contemplating the increasingly demented and self-contradicting Governmental measures that hit the most depraved layers the hardest.

The porridge will not explode, that is certain... and one can wonder how the current misery, exacerbated by the financial crisis and haphazard 'corrective' measures, on top of the deep and surreal polarisation of Romanian society continues to fill people with deep nostalgia of the 'golden era'.

People forget the dark side of that past regime, they only remember the job security, the free housing etc. - as ever, vox populi has selective amnesia and/or severe long term memory loss.