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Mitrache, Leumi: Lack of orders from state is apparent

26.04.2010, 19:52 12

Orders from the state would be the only way for privatecompanies to resume operations amid continued low consumption asfar as the population is concerned, says Laurentiu Mitrache, CEO ofBank Leumi, a small bank held by the largest Israeli financialgroup.

"Only state consumption has got the ability to encourage privateconsumption, even at the risk of higher inflation. We have fiveclients with vehicle fleets of over 120 lorries that have not movedin a year," Mitrache says. Under the circumstances, it is obviousthat the non-payment of loan instalments has nothing to do with illwill, but to firms genuinely not having the money any more. Evenwhen the state does place orders, payment is late, whichcontributes even further to the arrearage. In the first two monthsof the year, the state's capital spending amounted to a mere 1.59billion RON (nearly 390 million euros), down 34% against thesimilar period of 2009. Mitrache believes the population is alreadyoverindebted, so a rebound is unlikely to be encouraged by privateconsumption.

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