EC: Romania's political instability could prelong economic crisis

EC: Romania's political instability could prelong economic crisis

European Commission warned the current political noise could delay the enforcement of the planned public spending cuts and weaken Romania's economic recovery.

The current political turmoil could delay the implementation of the announced expenditure cuts and could weaken the willingness and capacity of the authorities to control the traditional end-year surge in public spending, said EC in its autumn forecast, on Tuesday.

The Commission revised its forecast for Romania's economic growth to 0.5% in 2010, from a zero growth rate previously envisaged. For 2009, it sees a 8% GDP decline.

There are upside risks to this macroeconomic outlook. Assuming that global financial markets do not go through another round of stress, the economy may recover slightly faster than projected in this baseline, the Commission added.