I am writing the blog today on the second day of spring according to the Romanian historical calendar. Those of you familiar with the date will realise that it is Martsisor when men give small tokens to women and bring a smile to their faces. Not Valentine’s Day but a more Romanian festival.
Today has also seen a number of articles about the Romanian economy and the steps being taken to move everything forward. Despite what you may read in the popular press I do believe that the Government in the main means to do good things for Romania. The only question is who will benefit and how soon. Rather than concentrate on a specific area of law I felt today it was worth commenting on what I see as the possible future on this second day of spring.
If you visit any of the capital cities of the various Judets (Counties) in Romania you will see a change. Roads are being resurfaces; pathways are being cleaned and in many cases levelled so the populace can walk without spraining an ankle. I was reflecting on this work today to Bucharest and comparing it to the previous 25 years. The saying Rome was not built in a day is certainly worth remembering; now however, you can see evidence in the streets of works which are being done which turn Bucharest and other towns into better places to live.
In business there are also indicators that things are becoming more normal in an economic way. Whilst there is still much talk about corruption and every other day a “name” appears to be arrested or imprisoned there is in my view at the same time a different atmosphere in the business community. There is an air of confidence which his beginning to permeate through all levels of business. The recent survey of managers and investors shows an upturn in optimism. Fitch in its latest report has upheld Romania’s rating. All these are the good signs of spring and maybe a new beginning.
The recently launched new investment market to replace the Romanian Rasdaq is in itself a good sign. The new Aero market which is intended for SME’s and small businesses should encourage others to go to the exchanges to raise funds. Whilst the illiquidity of the market will be a hindrance and hold the market back you have to start somewhere.
As the head of the Stock Exchange recently said “in Poland” we did it the normal way. Here in Romania we are trying to build from the bottom up. There are suggestions that over 200 companies will be coming to the market in the next few months. The constraint will be the lack of investors both individual and institutional. If the market does develop I am sure that the investors will come. It will not be a flood but a slow trickle. Better that than a bubble which will destroy confidence in the market.
Will ordinary Romanians invest direct into the market? In reality only slowly. We have to remember where the country was in 1989. In terms of stock markets nothing. Since then there have been various attempts to stimulate the capital markets but this has often been done with institutional monies.
Romanians are still coming to grips with being a property owning society. More and more young people are buying property. More interestingly the market in second hand residential property is beginning to develop. This may not be good news for the speculators but it does mean that people who buy property now can see in the future that the apartment or house will be an investment for them and their children.
It was only after the 1950’s in England that the building of houses for the private individuals really took off after the War as money became available. The population from the 1960’s onward began to want have what their parents had in terms of accommodation and stability. But it had to be at an affordable price .Romania will get this over a period of time.
We all have to remember that Rome was not built in a day and if we look at the influence that Rome has even today in the world we can see that it takes a long time. Not that I am comparing Romania to Rome but the Romanians must learn to be patient and build if they are to have the economy and financial stability which they deserve and crave for. The indicators are there and so with the spring there is new start as always. As a Romanian law firm I am pleased to say that we see the first shoots of spring and the economy is expanding.