BUCHAREST, Romania — When German de Marco’s work dried up in beleaguered Spain earlier this year, the high-powered civil engineer never imagined that Romania, the European Union’s second-poorest country, would provide his economic lifeline.
Cristian Movila for the International Herald Tribune
German de Marco, center, moved to Bucharest from Spain for an engineering project.
But after the Spanish government ran out of money and halted construction of the high-speed railway he was working on, Mr. De Marco, a 34-year-old Spaniard, found a job here supervising the building of a $90 million tramline. The rent on his apartment in an elegant neighborhood in the Romanian capital is half what it was in Barcelona, helping him save an extra $1,300 a month.
“When my boss suggested transferring me to Romania, I initially thought, ‘You must be kidding,’ ” Mr. de Marco said. Yet, after eight months here, he does not want to leave.
Mr. de Marco’s unlikely pilgrimage eastward underscores how many of the European Union’s former Communist states are proving remarkably resilient in weathering the crisis. Those newcomers to the union have been conditioned by decades of hardship under the Kremlin’s rule. But as the euro crisis has deepened, it has also helped that Romania and the others have kept their own currencies.
That has given these still-developing countries a host of advantages, while many economists believe the euro zone’s one-size-fits-all monetary policy has hampered Ireland, Greece and Spain in restarting their moribund economies. Indeed, many of the post-Communist states are having strong second thoughts about their long-running goal of joining the euro.
Mugur Isarescu, the governor of the National Bank of Romania, said in an interview that maintaining its own currency had given Romania the flexibility to set interest rates, control liquidity and allow the currency to depreciate to help rein in the deficit. In the absence of control over monetary policy, he noted, euro zone countries like Greece are forced to rely primarily on fiscal policy: taxing and spending.
“Of course there is a backlash and disappointment because E.U. accession was seen as a panacea,” he said. “The dreams were too high.”
In Romania’s case, maintaining its cheaper currency, the lei, has made its exports — two-thirds of which go to the euro zone — more competitive and given it a lower cost of living that has made the country a sudden draw for highly qualified workers from struggling euro zone countries.
Though millions of Romanians were streaming into Spain and Italy in search of economic opportunity only a few years ago, today Spanish unemployment hovers near 25 percent, while in Romania it is about 7 percent.
Seven of the 10 former Communist countries in the European Union have yet to adopt the euro. The Czech Republic, which uses the koruna, wants a referendum before joining and has cited 2020 as the earliest target date. Hungary has stuck with its currency, the forint, and said it would not adopt the euro before 2018. In Poland, Prime Minister Donald Tusk recently deemed the euro “completely unattractive.”
Romania’s previous target for joining the euro zone, in 2015, is now “out of the question,” Mr. Isarescu said. Nevertheless, he argued that trying to meet the criteria to join — including keeping budget deficits below 3 percent of gross domestic product — was good discipline.
Though buffeted by the crisis, some countries in Eastern and Central Europe are holding up better than their neighbors to the west that have been joined at the hip by the euro. Poland’s economy was the only one in the European Union to grow in 2009, the year the financial crisis exploded. The Baltic states of Latvia and Lithuania, which underwent painful austerity, are booming again. Even in growth-starved countries like the Czech Republic, the social upheaval has been tame compared with the likes of Greece, with Czechs far more likely to vent their frustrations in the pub than on the street.
“We in this region are used to living through difficult times,” said Tomas Sedlacek, a leading Czech economist who was an adviser to former President Vaclav Havel. “We still remember Communism when we were poor and miserable and far worse off than Greece.”
Resilient Romania Finds a Currency Advantage in a Crisis
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Resilient Romania Finds a Currency Advantage in a Crisis
