Friday, November 25, 2011

AP: Romania's President slams banks' greed

BUCHAREST, Romania—Romania's President Traian Basescu criticized European banks Thursday, saying he hopes his country will not pay for their "greed."

Basescu said European banks made huge profits in Romania and it would be "a lack of fair play" to leave the country's economy unfinanced during the crisis.

He said he hopes European Union new member states, including Romania, will not be asked to pay for the banks' "greed, imprudence and lack of responsibility."

Basescu's statement comes after Austria's Central Bank presented a set of measures to prevent Austrian subsidiaries in Central and Eastern Europe from lending more than 1.1 times the local deposits raised by subsidiaries. News agency Mediafax said three banks -- Erste Group Bank AG, Raiffeisen Bank International AG and UniCredit SpA's Bank Austria -- have already accepted the measures.

Basescu said he would like to think that the decision was "either an error, or a misunderstanding of effects."

In 2006 Erste Group Bank bought 61.88 percent of Romania's Commercial Bankfrom Romania's government.

"I wouldn't like to (...) remind our European friends how much they conditioned Romania's European Union accession on the privatization of its banks", Basescu said.

He urged the banks to not "strangle" Romania's economy, by reducing the flows of capital.

Romania joined the European Union in 2007. The economic boom from 2004-2008 turned to a sharp downfall in 2009, when the economy shrank by 7.1 percent and the country was forced to get a euro20 billion ($26.77 billion) bailout from the International Monetary Fund, the European Union and the World Bank.

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