...and eaker groth rate and reduction of consumption. The shock therapy, that as applied to the economy in the 80s, magnified the differences beteen the economic sectors. The communist economy is a command economy an economy in hich the government determines prices and production also called a centrally planned economy. The sickness of Romanian economy as caused by the supra centralized ay to take decisions. The decisions determined the allocation of resources for production of goods and services, education, research and culture. After the 89 revolution, Romanias objective as, and still is, to became a part of Euro-Atlantic organizations European Union, and NATO. After many years of aiting to became a part of Europe, Romania sees the light at the end of the tunnel 2002 brought the admission of this East-European country in NATO. Regarding the admission in UE, The Economist rote on its September 4th, 2002 edition Because of poverty and corruption Romania ill have to ait until 2012 to be admitted. At the Bruxelles meeting September 2002, a couple ideas ere formulated. Among them, the members said that many of the ex-communist countries ill adhere to European Union in 2004 or 2005, but Romania ill have to ait until 2007 the best scenario. To make possible the admittance of Romania in E.U., Romania started to change all its standards to those of European countries. There still is ork to be done to change the percentage of people that ork in different areas of the economy. Because almost 23 of the Romanian exports are orientated toards the European community, the ne currencyEUROill bring benefits to the Romanian economy. Until the introduction of the EURO, the currency used in by Romanian firms as U.S. dollars. But, because of the fact that the rest of the European currencies fluctuate in comparison ith the dollar, Romanian firms ere losing money they ere buying products ith dollars and ere selling for European currencies. For the first fe months, Romanian firms should use EURO and U.S. dollars in transactions to get used ith the ne currency said Mihai Ionescu. EURO ill reduce the costs that Romanian firms have because of currency exchange. These costs ere estimated at 1-2 of the value of the transaction. Also, the ne currency ill save time because the firms ill not spend time analyzing hich currency is stabile and hich fluctuates.Industrial crisis After 1989, the Romanian economy changed from command economy to market economy an economy characterized by freely determined prices and the free exchange of goods and services in markets. But this change didnt occurred ithout problems. In the period immediate after the 89 revolution the production ent don. Because of the fact that the old economical structures ere demolished and ne ones ere not built, the comportment of the economic institutions changed. Many of the factories tried the feeling of nobodys child because nobody provided for them the funds necessary to function during the communists, the factories received money from the state no they ere on their on. The decrease in production that folloed the first three years after the revolution as caused by the decreased in the industrial production over 63.YEAR1990919293949596979899GDP -5.6-12.9-8.81.53.9-6.65.4-3.2YEAR1990919293949596
97IND. PROD -19-22.8-21.91.33.39.49.9-5.9 In the old system, the structure of industry shoed a tendency toards the creation of giant factories, neglecting the small businesses. At the beginning of 1989, a number of 336 factories 16 of all existing factories ith 3000 employees 53 of the industrys orkers, ere producing over 50 of all industrial production. The factories that employed beteen 1000 and 3000 employees in number of 739 meaning 35 from the total number of factories ere producing a little over 35 of industrial production. At the other end ere small businesses ith little than 500 orkers that ere producing just 6 of the industrial production. Unemployment rate ent up, and is expected to increase in the next years because of the reduction of the number of jobs in the state oned companies, especially in oil processing industry. In 1999, the rate as 11.5 compared ith 10.4 in 1998, 8.9 in 1997 and 6.5 in 1996. The unemployment rate goes up so fast because many firms go out of business. The reason is that they dont have the money to pay their debts, or they cant compete costs are too big. At the end of 1998 there ere 2,250,000 orkers, a reduction ith 56 of the number of orkers that orked in 1990. Ceausescus objective to create a trade-surplus and a balanced budget money in money out as achieved at a high human cost everything that as produced as exported. Folloing the December 1989 revolution, the subsequent governments erent able to maintain this sound financial situation. Romania steered beteen rapid privatization, fiscal stabilization, and price and exchange liberalization on the one hand, and giving the vested interests of the still entrenched Communist bureaucracy, management and labor unions on the other. The budget balance as in surplus by 3.3 of GDP in 1991 inheritance from communists, but plunged in deficit by 4.6 of GDP in 1992. Because of UN trade sanctions on Serbia, Romanias main trading partner, countrys trade performances ere affected. Prices ere liberalized from May 1993 and TVA tax on the added valuethe value of firms production minus the value of the intermediate goods used in production as introduced. The GDP shrinkage as reversed and gre by 1.3 in 1993 to 7.1 in 1995. The economic recovery did not last. The fiscal year 1997 sa a decline in GDP of 6.6 the first quarter of 1998 as hardly any change GDP fell by another 5.7. In 1995, inflation the percentage increase in the overall price level over a given period of time as 32.3. During 1996, inflation as 18.8, but during 1997 the government lost control and inflation climbed to 154.8. The rate of inflation fell in 1998 in December as 40.6. The government plans to reduce inflation to an annual average of 25-30. The orst decline as in the processing industry of durable goods, hich shrank by 43.8 in comparison ith the year before In spite of an ambitious program, introduced in 1994, privatization the process of converting a government enterprise into a privately oned enterprise proceeded sloly. The privatization from 1999, brought 740 million to state revenues. In 1998 a number of 1,650 companies ere privatized. The government also sold big companies, like oil refinery PETROMIDIA, plane maker ROMAERO and ROMANIAN BANK for DEVELOPMENT BRD. Foreign direct investment increased considerably from 417 million in 1995 and 415 million in 1996 to 1,267 in 1997 and 2,079 in 1998. Hoever, Romanias external debt steadily increased during the last years from 24.5 of GDP in 1996, 26.9 in 1997, to 23.9 in 1998 and 25.7 of GDP in 1999 about 9 billion.Agriculture crisis During Ceaus...
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