site.bta8.2 Million Romanian Taxpayers Lose EUR 50 Each in Week after Presidential Elections First Round

The Romanian stock market has been going down since the first round of voting in the country’s presidential elections on November 24, when far-right, pro-Russia candidate Calin Georgescu took a surprise lead. A second round is due on December 8.

Business investors are not the only ones affected. About 8.2 million employees investing in stocks under the second pillar of the Romanian pension system have lost RON 2 billion (EUR 400 million) in a week due to the political instability. This means that the Romanian taxpayer now has RON 250 (EUR 50) less on their account than what they had on the eve of the elections, Digi24 television estimated.

Radu Craciun, President of the Romanian Private Pensions Managers Association, said that Romania is currently perceived as a riskier country and the financial markets are responding negatively to the political uncertainty.

The financial daily Ziarul Financiar commented: “The uncertainty on the political scene, the powerholders’ confusion after the surprise shock of the first round of the elections, the unprecedented decision of the Constitutional Court and the rise in the ratings of extremist parties caused considerable share-price falls on the Bucharest Stock Exchange in the last week of November. Investors hate uncertainty, particularly if a presidential candidate who was not even among the top five in the opinion polls wins the first round with anti-EU and anti-West rhetoric. They have begun to sell in order to guard themselves against future damage.”

Banca Transilvania, the biggest bank in Romania, has lost RON 1.7 billion in a week, according to Ziarul Financiar. Petrom, the largest oil and gas producer in Southeastern Europe, has reported a week’s loss of RON 1.4 billion. Romgaz, the largest natural gas producer in the country, has shed ROM 1.2 billion.

Economic analyst Adrian Negrescu noted that Georgescu’s rhetoric alienates business investors. “We are talking about losses of over RON 10 billion on the stock exchange. Romania will be perceived as a high-risk economy. Why would anyone put their money in an economy where there is talk of massive nationalization?” Negrescu said. He insists that the new government should take harsh austerity measures, regardless of who forms it.

The analyst went on to argue: “More than ever before, we need professionals in the government rather than the kind of know-it-alls and would-be experts that we have had over the last few years.”

The fact that Georgescu has reached the second round of the presidential elections has also affected the currency rates. The National Bank of Romania intervened with money from the currency reserve to keep the euro under the RON 5 mark, Economedia.ro said.