The Countries Romania Depends on – How Are They Doing?

Only one thing is as important, or even more important, as the manner in which the Romanian government runs the country.

It is the state of the economy in the most important nations in the world, namely the USA and the powerful countries in the EU. Those are the places where we sell our products, where our investors come from and where Romanian day workers earn the money that they send back home.

Our country will never be able to overcome the crisis if Western economies do not start growing in a solid and sustainable way. Whether we like it or not, globalization brings worldwide economic prosperity in good times and economic crises in bad times. We are dependent on other nations.

“The Engine” was Slow to Start

The good news is that the American economy, the most important economy on the planet, has started growing again. It has been doing so since September 2009, when it registered a 0.7 percent growth rate. During the first months of this year, the U.S. seemed to experience an even more accelerated recovery, with monthly growth rates ranging between 3.3 and 4 percent.

One of the rules that economists all over the globe are following is that the healthiest growth rate for the U.S. after the recession is 3 percent, and it looks like the Americans will reach that threshold. Moreover, estimates indicate that they will reach it this year. One should bear in mind that 3 percent is a substantial figure in an economy as large as the American one, whereas the same rate would not mean as much in a country like Romania.

The bad news is that most U.S. citizens are only now, after many months of crisis, beginning to experience the positive effects of the economic growth. It will be a while until Western Europe begins to experience these effects, and even longer until the growth of the U.S. economy will have a positive influence on us.

Nevertheless, things are definitely starting to look better. The stimulus package passed by the Obama administration and the economic measures adopted afterwards have been doing their job so far. Almost all economic indicators have improved, the massive foreclosures on properties has ended and, since January, the rate of unemployment has not increased significantly, remaining somewhere around the figure of 9.7 percent, with 162,000 new jobs added in March.

In reality, the economy will not recover very quickly, which means that our rate of unemployment will increase to 9.3 percent by the end of the year. However, there is progress, and that is great news for us as well. If everything goes according to plan, we will also experience some progress later on, unless the crisis in the fragile European economies widens to the point where it drags down the American economy.

Mixed Results in Europe

In the European Union, the forecast is good for the strongest economies, and not so good for Mediterranean countries. On the bright side, the most important economic power on the continent, Germany, has been growing for four consecutive quarters.

Although the economy grew by only 0.2 percent during the first three months of 2010, it was still above the initial estimate of zero percent. The yearly estimate for economic recovery is around 1 percent. Most importantly, Germany’s exports have increased in April by an impressive 10 percent in comparison to the previous month.

Great Britain and France have also registered fragile improvements during the first quarter, with rates of 0.2 and 0.1 percent, respectively, marking an average economic growth rate for the European Union of 0.2 percent.

The E.U. is on the right track, although progress is very slow. Economic recovery is, however, threatened by problems in Mediterranean countries, which could have a negative impact even on the greatest economies on the continent.

The most severe problems are in Greece, whose disastrous predicament is well-known. Greece is followed by Spain, a country that has registered an all-time low rate of unemployment of 22 percent, while Portugal and Italy are also lagging and causing concern. Should the situation in Greece expand to Spain and Italy, the European Union would receive a catastrophic blow, since these nations are two of the world’s largest economies.

Their problems would have an even more severe impact on Romania. Even if the economic difficulties in these countries lasted only for a short while, they would still take their toll on the finances of the millions Romanian citizens who live and work there.

At this time, no one knows what will happen, and we must pray for the well-being of the other nations. We are too thin and fragile to think that we can manage all by ourselves.