Intl Fin Crisis Affects Sectors In Romania, Particularly Real Estate - Businessmen

Global financial market turmoil will affect Romanian economy, particularly sectors with high debts, and the most exposed are the construction and real estate development sectors, which could hinder economic growth, officials of the Romanian business environment said.

"In the heat of global crisis, we must launch a public debate on sectors affected and find ways to save them. Real estate developers, construction companies and all sectors where debts are high," Florin Pogonaru, head of the Association of Businessmen in Romania (AOAR), said during a press conference Monday.

He said the government should seek solutions to support these sectors instead of just thinking of measures backing the stock market.

"Instead of solution for these sectors, we see silly reactions, to back the stock market, when the capital market is a marginal solution in Romania," Pogonaru said.

In his opinion, real estate developers are faced with several problems, including higher costs for raw materials, higher workforce costs and, most recently, more expensive loans.

"There are developers who self-fund only 20% of their projects, the register delays in selling homes and go from bank to bank for money," Pogonaru said, adding that other sectors affected by the worldwide liquidity crisis are textiles and, generally, sectors working on low profit margins.

In turn, Monica Tatoiu, member of the association and general manager of cosmetics company Oriflame Romania, said that apart from developers and builders, all companies in supporting industries have problems.

"Construction material makers, interior decorators and all companies related to the construction sector have registered lower turnovers," Tatoiu said.