The business opinion survey conducted here in the West Midlands earlier this year by the Institute of Chartered Accountants and the IOD - which had over 85% of respondents agreeing that red tape and bureaucracy are stifling business - suggests that some of you have noticed! But for the most part such regulation doesn't tell us what activities we can and cannot undertake, rather it sets the criteria we must meet and the standards we must observe in doing whatever it is we choose to do. It leaves more room for both consumer and producer choice, and more room, and more incentive, therefore for competition and innovation. Our experience in the UK is, of course, just part of a very much broader and continuing evolution internationally - often associated with increasing political democracy - from varying degree of centralised administration to an increasingly open, market-based, approach in all parts of the world reflected also in increasingly free international trade and investment. At the macro-economic level the economic advantages of freer market competition are familiar. No one could claim that it's perfect - especially in the light of the current volatility! But profitability is the best means that we have so far discovered for directing resources - whether human or material or financial resources - into those activities in which they can be most productively employed.
While the leu was strengthening, up until the summer of 2007, the issue of adopting the euro was not on the agenda of economic agents. The crisis highlighted the fact that the leu was overappreciated and the market made the necessary correction. Over a relatively short period – from July 2007 to date – the leu weakened by around 35 percent. Over the same period, the prospects of economic growth changed dramatically: from an almost 9.4 percent growth rate in 2008 Q3 to a most likely significant decline in 2009 Q1. The monetary and fiscal policies will be resorted to with a view to adjusting to the new environment. In face of the crisis, the relatively large stock of private foreign debt and the increased market volatility made some economic agents believe that the early adoption of the euro could supersede the need for economic policy adjustments. Yet this is not a viable option, as adopting the euro prior to having achieved the main stages of convergence with the EU might pose serious threats in the future. The adoption of the euro today would mean to relinquish monetary policy before having ensured convergence sustainability, namely before removing all the imbalances we are facing today. The outcome would consist in monetary policy being designed by the European Central Bank (ECB). But the ECB policy might prove inadequate from the standpoint of the specific problems facing the Romanian economy.