Cristian Păun, warning about recession: 'Romania lives on credit'

Romania is currently in a technical recession, marked by a noticeable contraction in consumption, according to economics professor Cristian Păun. He described the country's economic behavior as operating under a "tab logic," akin to a village where individuals take goods from a store on credit without immediate payment.

"Romania functions today in a logic of the 'tab' from the village... They don't have money at home, they go to the village shop and buy things on credit, a tab that belongs to the village, not to me individually. Since it belongs to everyone and no one, each tries to put down as much as possible, that's Romania," Păun explained during an interview with Adevărul.

He noted that the government has made efforts to reduce this mechanism gradually, recognizing that the current approach is unsustainable. Păun believes a complete elimination of this system is not yet feasible, as it would create a major shock. He advocates for a gradual adjustment process, deeming it healthier for a country like Romania, but emphasizes that the process must continue.

Păun warned that a prolonged gradual approach could foster opposition to change and potentially lead to crises, citing examples like the "Orban" or "Trump" types who could create significant problems. He suggested that accelerating the adjustments, despite the immediate hardship, might be beneficial for re-establishing public finances and the Romanian economy on more realistic and healthy foundations, thereby limiting the "life on credit."

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Da, este în recesiune tehnică. Se vede în date, mai ales prin contracția consumului. România funcționează astăzi într-o logică a ‘caietului’ din sat (...) Ei nu au bani acasă, se duc la magazinul mixt din sat și își cumpără pe caiet una, alta, caiet care e al satului, nu e caietul meu, adică poziția acolo nu se scrie individual. Fiind al tuturor și al nimănui, fiecare încearcă să pună cât mai multe, cam asta e România