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Comenius Multilateral Nr.ref. 13-PM-61-GJ-RO

This article discusses the causes and effects of the financial crisis in Romania and explores short-term emergency solutions and long-term strategies to address the crisis. It also highlights the social aspects and challenges faced by the country during this time.

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Comenius Multilateral Nr.ref. 13-PM-61-GJ-RO

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  1. Comenius Multilateral Nr.ref.13-PM-61-GJ-RO Împreună într-o Europă Unită Together in a United Europe 2013-2015

  2. Financial crisis and its impact on Romanian economy

  3. Romania in the context of financial global crisis

  4. Causes of the crisis started in October 2008 • 1.1Common, traditional causes: • The loan boom-ul ; • Increasing prices of houses; • Unlimittedand unconditioned creditation of companies(debitoriipotecari subprime).

  5. 1.2. Specific causes: • The expansion of the model of origin and distribution of the transferable risk (origine-and-distribute model); • Exagerated apetitefor profit which determined high demand for actives with high risk • Ignoration or little knowledge about value titles – budge funds, derivatives, morgages, credit operations default swop; • Unproper governing of corporations and managerial stimuli • Contribution of regulating factors and rating agencies

  6. 1.3. Causes of the crisis in Romania -Unsusteinable economic development based on internal and external economicand financial lack of balnce ; -External influence on banking market -Volatility of foreign capital -unstainable loans(given with only ID) -Desincronization between real economy and the nominal one -Distorsion on work market regarding qualification and work needs -Expansion of construction sector

  7. 2. Efects and challenges: 2.1. Contraction of demand and production stock exchange 2.2. High unemployment 2.3. Increasing value of credits 2.4. Inflation and defavorable exchange rate 2.5. Decreasing living standards

  8. 3. Short time emergency solutions:

  9. 4. Soluții pe termen lung la nivelul României -Increased prudency on financial market -Good valorification of external credits :FMI (13 mld €), UE (5mld € ), BM(1 mld € ), BERD (1 mld €); -Social Programmes; -Investitions in thepublic infrastructure; -Creditations for SMC( IMM).

  10. 6.Concluzii • A correct macroeconomic diagnosis is needed: • A correct policy mixis essential for a macroeconomic balance

  11. Advantages and disadvantages of economic crisis in România : • Advantages: • - lower level of inflation; • -elimination of badly orgnised firms ; • -those with resources ,creativity and ingeniosity take advantage of the econoomic crisis. • 2.disadvantages: • High unemployment; • - "brain-drain“effect ; • Problems in the pyramidal system of pensions .

  12. Social Aspects of the crisis

  13. Social Turbulences– poorer people reduced middle class clasei medii, with important political risks Dimension of the crisis-lower income and higher unemployment Youngsters are the most affected category Personalization associated with “excess of capitalism” – very well identified categories to blame : states, institutions , professional categories; Suspicion that things are worse than authorities say and in the binom executive – legislative; Contagious effect factor which implies chain effects determined by isolated events Xenofobia feelings (Italy, UK)

  14. Romania has the highesr level of poverty among youngsters between 18-24 (30,7% compared to 11,2% in EU EC shows that between 2007 - 2012, Romania is the member state with the highest reductions in investment in education ( 40 %), Hungary (30 %), Great Britain, Letonia, Greece, Italia and Portugalia (20 %). 1 in 7 youngsters is too educated for the requirements of work market.

  15. Mai mult, rândurileșomerilor sunt îngroșate în fiecare an de proaspeții absolvenți care nu reușesc să se angajeze. Este vorba de aproape 20% din cei 115.000 de tineri care au terminat o facultate în fiecare an. Situația este și mai dramatică în ultimii 3 ani deoarece pentru cei 125.000 de absolvenți numărul de joburi nu depasește 8.000. Asta înseamnă ca doar 6% din ei se vor angaja. Majoritatea absolvenților din ultimii ani vin din faculăți cu profil economic și juridic, medicină și farmacie, IT și inginerie. Pentru ei nu exista, însă, decât 4.000 de locuri de muncă. Cele mai mici șanse de a-si găsi un job le au cei cu studii de drept. Cei aproape 6.000 de juristi au la dispoziție doar 110 posturi. La fel se întâmplă și cu cei care termină studii economice. Proporția este cam aceeași, la peste 15.000 de tineri economiști existând doar cateva sute de locuri de muncă.

  16. Stages:1.the generation who made the transition from comunism to capitalism2.the generation who cannot find a jobbecause of economic crisis

  17. Recent tendencies among young people:-getting used to poverty and living with parents,not getting married-giving up to look for a job which leads to a lost generationof people who gotoutof the work market and lost the hope of having a job -those who kept the jobs had to accept salary cuts-1/4 youngsters live in poverty and for young women the situation is even worse.

  18. Romania –the main workforce supplier for EU Eurostat confirms that the number of residents in EU is 2 million people but the estimated number is higher. Romanians are the biggest comunity of migrants in EU. Over 70% of the Romanians who work abroad chose Spain,Italy Germany and Great Britain .Economic crisis in these countries influences the economic situation in Romania.

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