Hungary could afford to drop the IMF agreement because theHungarian state retained a strong position in the banking system,mainly through the OTP group, which has expanded regionally, andthe local capital was protected for the MOL group to be able toremain independent, while the Romanian state has settled for theyes-man position, without any proactive strategy to reboot theeconomy even now, says former banker Nicolae Danila.
He ran the biggest Romanian bank, BCR, for seven years, which hewould have seen developed as a " national champion" withinternational operations, as well.
"I still believe that a banking system controlled by domesticcapital to a significant extent is the key element that can givestrength and autonomy to a country and allows it to consolidateinside and look at expanding the operations of national companiesabroad. It is one of the competitive edges retained and increasedby most countries, Hungary included," Danila says.
Over the past decade, as repeatedly asked by the IMF and theEuropean Union, the Romanian authorities have taken steps toincrease the share of foreign capital in the banking system, sothat it currently accounts for 80% of the market.
Danila believes the Hungarian authorities did their homeworkwell and parting with the IMF is not a superficial or populistdecision. "Background elements encouraged them and made them makethe current decisions, which actually are not about short-termeffects, but contribute to implementing a strategy to exit thecrisis and to restart the economy with medium and long-termimpact."
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