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Abstract
How has the Great Recession changed what we know about dependent market economies (DME) in Eastern Europe? To answer that question this paper looks at the case of Romania’s version of the DME and captures both understudied forms of dependence and emerging interdependence dynamics that the existing literature on dependence has hitherto neglected. Specifically, the literature does not analyse the role of transnational banks in forging a politicised public–private form of sovereign debt crisis governance. Second, the inattention of the literature to the supply side of the labour market leads to the neglect of migration as a critical factor shaping state, multinational corporation and corporate strategies. Third, the analysis highlights the centrality of industrial policy in a Janus-faced process in which neoliberal competition state has to cohabit with an incipient, wobbly but nevertheless real neo-developmentalist entrepreneurial state.
Acknowledgements
I would like to thank Stefan Guga, Laszlo Bruszt, Gabriel Badescu and Dorothee Bohle for valuable feedback.
Disclosure statement
No potential conflict of interest was reported by the author.
Figure 1. GDP growth.
Source: Author’s calculations based on Eurostat.
Figure 2. Export growth rate.
Source: Author’s calculations based on Eurostat.
Notes on contributor
Cornel Ban is a Reader at City, University of London. Prior to this he was an assistant professor at Boston University and research fellow at Brown University, USA. He has written two books and a dozen articles and book chapters on the politics of economic expertise and income distribution, macroeconomic policy shifts and organisational shifts in international financial institutions and capitalist diversity in Brazil, Spain and Romania. He is currently working on the political economy of the international economic organisations involved in the management of the European financial and sovereign debt crises. Ban takes up a new post at Copenhagen Business School in December 2018. [[email protected]]
Notes
2 National Institute of Statistics (INS).
3 There are no reliable statistics on the share of each of these sources so any conclusions should be treated with caution.
4 Author interview with Sorin Mandrutescu, AmCham Romania, 2012; interview with Andrei Radulescu, stockbroker, 2012.
5 Ziarul Financiar, 7 April 2008.
6 Author interviews with Florin Georgescu, BNR board member, 2010; 2015.
7 Author interview with Andrei Radulescu, Bucharest stockbroker, 2012
8 ‘CEE: bearing the brunt of the storm’, Financial Times, 14 May 2012.
9 ‘Honey, I shrunk emerging Europe’, Financial Times, 4 November 2011.
10 Stefan Wagstyl, ‘Austria clarifies plan to curb eastward lending’, Financial Times, 17 January 2012.
11 ‘Romania: junked by S&P’, cited in Financial Times, 29 November 2011.
12 Austrian Ministry of Finance, ‘The Vienna Initiative: assessment and outlook’, working paper 4/2010: 10–11.
13 Ibid.: 11.
14 In reality as a result of Troika pressures the Austrian ministry was unable to exercise any moral suasion towards the agenda favoured by Austrian banks. The moral suasion part seemed to have been the exclusive preserve of the Troika. Author correspondence with Rachel Epstein.
15 Ziarul Financiar, 21 November 2012.
16 The in-house report of the RBA explicitly acknowledged the role of the IMF and the central bank in limiting court jurisdiction and regulatory moves deriving from court jurisprudence. Ziarul Financiar, 21 November 2012.
17 ANAF (Revenue Service) statements for Bursa at http://m.bursa.ro/anaf-a-transmis-catre-erste-bank-rezultatele-controlului-efectuat-la-bcr-andreas-treichl-enervat-de-fiscalitatea-noastra-43658237
18 Author interview with Eximbank official, 2017.
19 Statement by Postu Leonte & Asociații SCA.
20 Author interview with Romanian government officials, 2017.
22 Author interview with Vincenzo Calla, BNP Paribas, 2012; Cristian Socol, government economic advisor, 2017.
23 Author interview with Irina Anghel-Ionescu, European Venture Capital Association, 2012.
24 Conversation with Banca Transilvania chief economist, 2017.
26 Daniela Gabor (Citation2010b) showed that in addition to sultanism, it was the neoliberal transformations of the 1990s that further weakened state capacity in managing the economy to the point that billions of EU structural funds are left unspent every year.
27 The ‘Policy Mix’ Project: Country Review Romania, United Nations University, UNU-MERIT, March.
28 Author interviews with Romanian government officials, 2014; June 2017.
29 Ministry of Finance, Lista agenţilor economici care au primit acorduri de finanţare emise de MFP în anul 2012 http://www.mfinante.gov.ro/hg807.html?pagina=domenii, see also a 10-year report put together by the financial media: http://cursdeguvernare.ro/lista-ajutatilor-cat-si-cui-din-mediul-privat-acorda-statul-roman-ajutoare-de-stat.html
30 Author interview with Oracle CEU, October 2012.
31 ANIS, Software & IT Services in Romania – 2016 edition.
32 Capital, 27 September 2011, http://www.capital.ro/detalii-articole/stiri/renault-urmeaza-sa-primeasca-ultima-transa-de-ajutor-de-stat-pentru-centrul-de-la-titu-153620.html
33 Renault Technologie Roumanie, https://www.gruprenault.ro/tags/renault-technologie-roumanie
34 Author interview with Dacia-Renault management, 2017.
35 HG 753, 1680 (in 2008) and 797 in 2012.
36 Author interview with central bank and Eximbank officials, 2017.
37 American Chamber of Commerce, Priorities for Romania, Bucharest, 2012. https://www.amcham.ro/event/amcham-launch-of-priorities-for-romania
38 ‘German vocational school prepares students for foreign firms’, Income Magazine, 2012.
39 Interview with the director of the National Center for the Development of Vocational and Technical Education, 2015.
40 Interview with KPMG consultant, 2017.
41 UN International Migration Report, 2016.
42 Interview with BNR economist, 2015.
43 Author interviews with officials from the central bank, Labor Ministry and employer organisations, 2017.
45 Author interview with vocational school educators in Sibiu and Bistrita, 2018.
46 As elsewhere in the region, the increase in the collection of EU structural funds facilitated by the fact that since the crisis the Council and the Commission have broadened the scope and increased the flexibility of structural funds, have also acted as a ‘Keynesian’ fiscal stimulus that buffered the contraction in demand, as hypothesised by Jacoby (Citation2014) and demonstrated by Bohle (Citation2016).
47 In 2015 Romania was the most unequal EU member state. Two years later, it became less unequal than Latvia and Bulgaria using the Eurostat S20/S80 inequality metric. Thus, if in 2015 the wealthiest 20 percent earned 8 times more than the bottom 20 percent, in 2017 the former earned 7 times more than the latter).
48 Statements by FIC representative, 2016 https://www.cotidianul.ro/ce-cred-investitorii-straini-despre-cresterea-salariului-minim-in-romania/
49 Statement by AOAR representative, 2017; by SME association representative http://www.patronat-imm.ro/pozitia-cnipmmr-referitoare-la-salariul-minim-garantat-in-plata; http://www.mediafax.ro/economic/exclusiv-patronatele-si-sindicatele-consens-pentru-majorarea-salariului-minim-la-1-450-lei-dar-cu-anumite-conditii-16051137
50 For example, Romania had the highest VAT evasion in the EU and out of 720,000 for-profit entities registered in 2013, only 252,000 operated on net profit, with the largest operators in banking and oil fitting into this category. Its considerable oil and gas reserves provide little in tax revenue due to regulations favourable to energy companies. Author interview with ANAF officials (2015).