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Dismantling a weak state: The crisis as a pretext for even more neoliberalism in the Romanian economic policies

Cărămidariu, Dan (2012): Dismantling a weak state: The crisis as a pretext for even more neoliberalism in the Romanian economic policies. Published in: Crisis Aftermath: Economic policy changes in the EU and its Member States, Conference Proceedings, Szeged, University of Szeged , Vol. ISBN 9, (2012): pp. 196-206.

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The paper presents the evolution of Romanian economic policies shortly before and during the financial and economic crisis. It starts by pointing out key data on the Romanian economy in 2008 and focuses on the different action plans the Romanian governement has drawn and put into practice in 2009 and 2010. The paper analysizes especially the general cut-off of wages in the public sector, the raise of taxes (2010) and their influence on consumers' demand and the evolution of Romanian GDP in 2010 and 2011. At the same time, it focuses on the evolution of governement investments in 2010 and 2011, the tool officially proclaimed as Romania's magical key for getting out of the recession. The paper shows that although such a raise in public investments was a dominant element in the governement's economic discourse, in fact public investments decreased in 2011. Based on the fact that the austerity measures, combined with the raise of public investments, were - according to mainstream economists - the best possible policy mix for fighting the crisis, the paper comes to the conclusion that this policy mix has more negative than positive effects for the unreformed Romanian economy, as long as a true raise of public investments cannot be revealed. It shows that the crisis was used as a pretext for implementing Neoliberal principles in Romanian economic thought and policy as well, for pushing forward the dismantling process of the Romanian state.

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