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TMCNet:  Romanian lawmakers appoint new c-bank board of directors, carrying out major replacements [IntelliNews - Weekly Reports]

[June 22, 2014]

Romanian lawmakers appoint new c-bank board of directors, carrying out major replacements [IntelliNews - Weekly Reports]

(IntelliNews - Weekly Reports Via Acquire Media NewsEdge) Romania's lawmakers have voted in the new central bank's board of directors, appointing governor Mugur Isarescu for another five-year term, yet operating important replacements in his team.   First deputy-governor Florin Georgescu – informal but influential member of leftist PSD at rule, was also reappointed for another term. The replacements, even though operated at lower levels, reflect visibly the stronger grip that the leftist PSD holds in parliament. They increase the political dimension of the central bank's management.


REPLACEMENTS. In essence, deputy governor Cristian Popa [49] – with no political orientation and supported in the past by parties with opposed orientations, was replaced by the politically active Liviu Voinea [39] – formerly budget minister. Popa has held three consecutive mandates as deputy governor and enjoys very robust credibility thanks to his professional achievements. Voinea became politically involved on the side of the leftist PSD/PC parties before his professional career reached a certain level of credibility and this impairs his activity at the central bank's board unless he demonstrates political neutrality in the future. Among Voinea's debatable projects there are i. the subsidy programme for low-income bank debtors, ii. skin-deep reforms as budget minister that failed to result in better revenue collections and iii. a failure to prioritise budget spending, other than large projects that account for only 20% of total.

Voinea is followed at the central bank by Gheorghe Gherghina – an expert in accounting, rather known for his expertise in preparing budget projections for the past two decades irrespective of the government's political orientations. The third new member of the central bank's board is Daniel Daianu – an expert that has enjoyed a robust professional credibility at international level, but involved only marginally in domestic economic policy matters. Daianu resigned from the post of deputy head of the non-bank financial supervisory authority ASF to join the central bank. Given his experience, Daianu could replace Popa as a central bank representative in expert international conferences. Liviu Voinea has also been active in this regard over past year, but he lacks the experience and broader expertise in the monetary area. Daianu on the upside has enjoyed the support of opposing political parties and is not particularly politically biased.

Voinea, Gherghina and Daianu are replacing Cristian Popa and two regular members of the board – Nicolae Danila and Napoleon Pop. All other members of the board - including governor Isarescu, deputy governor Bogdan Olteanu, prime-deputy governor Florin Georgescu and thee regular members [Marin Dinu, Virgiliu Stoenescu and Agnes Nagy] kept their seats.

NEW CHALLENGES. No changes in the monetary authority's rather conservative policies are expected in the short run. Nonetheless, the challenges that lie ahead of the new board are essentially different from the ones the previous boards have had to deal with and losing one key expert weakens the board's professional expertise. While the previous boards of directors have focused on price stabilisation, the new central bank's targets are: the country's membership into the European banking union, ii. single currency adoption as of January 2019 and iii. monetary policies/interest rates management under low inflation.

NOTE: The nine-strong board includes four executives - the governor and the three deputy governors (of whom one is first deputy governor), and five members that are not on the payroll of the central bank. Pursuant to the law, board members shall not be MPs, members of a political party, court officials or public servants.

(c) 2014 Emerging Markets Direct Media Holdings LLC Provided by SyndiGate Media Inc. (Syndigate.info).

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