The financial crisis, while unwelcome the world over, was particularly cruelly timed for Romania. After joining the EU in 2007 following a bumpy transition to a free-market economy, the country seemed to be speeding towards the economic development enjoyed by its new peers when its rapid ascent was abruptly halted.
The resultant two years of recession, while typically described by local economists as a “rebalancing”, were severe and resulted in a large contraction of gross domestic product (GDP) and a corresponding increase in budget deficit. In response, the government borrowed extensively, receiving a €20bn loan package from the International Monetary Fund (IMF) and others in 2009, and a subsequent €3.7bn precautionary top-up.
