Grexit may endanger Romanian economy. BNR spokesman assures – Greek banks on local market will not be affected

A messy exit from the currency union could endanger the former-Communist countries bordering Greece and this includes also Romania.

As doubts mount over Greece’s future in the euro zone, Capital Economics said that the so-called frontier markets – countries that are too small in economic terms to be part of the emerging markets mainstream – bordering the country to the north were at risk.

“The growing threat of a Greek exit from the eurozone has cast a shadow over the outlook for European frontier markets,” said John Ashbourne, Gareth Leather and Jason Tuvey in the Capital Economics report, quoted by cnbc.com.

Romania, along with Bulgaria, Serbia (formerly part of Yugoslavia) are among the most at risk from a Grexit. As months of negotiations between Greece and its creditors have failed to see a much-needed debt-for reforms deal and the country must shortly make a key repayment to the International Monetary Fund, a Grexit is viewed by markets as an increasingly likely possibility.

Furthermore, bank subsidiaries in Macedonia, Romania and Bulgaria retain direct financial links with Greece, as well as the rest of the euro zone.

Greek investments in Romania through banks and companies, amounts to nearly EUR 13.5 billion. On the Romanian market, the four largest Greek banks, Eurobank, NBG, Alpha Bank and Piraeus Bank, had last fall a total exposure of EUR 12 billion, down by an equivalent of EUR 2.5 billion compared to 2011, according to the European Banking Authority.

Greece’s situation was an expected event and there have been taken all the measures to not exist problems and any decision from banks in Greece does not target the banks in Romania, central bank (BNR) spokesman Dan Suciu assures at B1 TV.

“The effects on the Romanian market are secondary. We are not the subject to these problems, we are not in the eurozone, we can look calmly but with interest,” Suciu said.

On the other hand, PSD MEP Victor Negrescu, member of the Budget Commission in the European Parliament, wants the convening of the country’s highest defense body CSAT, to assess the effects of the Greek crisis over Romania, saying that the Greek default would also affect the Romanian economy.

He mentions in a statement that Greece is the 6th investor in Romania, with investments of almost 13.5 billion euros, representing 4.5% of total foreign capital brought into the local economy, and believes that the entry of Greece in default will affect Romania’s economic development prospects, affecting the national currency and banking system.

Alpha Bankbank subsidiariesbanking systemCapital EconomicscrisisCSATDan Suciu BNR spokesmanEurobankEuropean Banking AuthorityEurozoneforeign capitalGreek banksGreek defaultGrexitINVESTMENTSinvestornational currencyNBGpiraeus bankPSD MEP Victor NegrescuriskRomanian economy
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