Romania suffers from its dependence on the German economy

By Constantin Radut
For over 20 years, Romania’s economy has become dependent on that of Germany. By 2020, almost 25% of Romania’s foreign trade was closely linked to imports and exports to and from Germany. For many years, the governments of Bucharest believed that if Berlin or other local governments in Germany agreed to set up a German subsidiary in Romania, then the industry in our country would flourish. Wrong, totally wrong. Germany’s interest was to destroy Romania’s industrial structure in order to transform our domestic market as one of its export outlets.
Now, in the year of the Covid-19 pandemic, we realize that Germany has set up companies with German capital in Romania only and only because the labor force is well qualified and with a very low labor cost. The winner was Germany and not Romania.
The proof is that in 2020 several thousand Romanian workers went into unemployment due to the abolition of some German companies installed in Romania or the decrease of their activity.
The lack of sustainability of Romanian-German economic relations is reflected in bilateral trade.
According to figures published by the Federal Institute of Statistics (Destatis), the volume of trade between Romania and Germany has fallen sharply amid the current crisis caused by coronavrius. The minimums were reached in April, German exports to Romania falling by 36.5% compared to the same month of the previous year; imports decreased even more strongly (-53%). In total, exports to Romania amounted to EUR 11.5 billion (-8.8%) in the first nine months of this year, while imports were only EUR 9.8 billion, up 18% less than in the same period last year.
The figures come from AHK Romania, a German subsidiary run by a restaurant manager, proof of the importance of the economic relationship between Romania and Germany.
Also from AHK Romania we find out that after the decrease of the trade exchanges in April and May, a significant recovery of the trade exchanges started in September. Exports increased, being 6.52% higher than the same month of the previous year, while imports from Romania decreased “only” by 7.7%.
Loser: Romania.
Overall, the volume of bilateral trade decreased by 13.4% between January and September 2020 compared to the same period last year to EUR 21.3 billion. “We expect a decrease in bilateral trade by the same percentage for the whole year 2020, which means that instead of EUR 33 billion as in 2019, the volume of bilateral trade will be EUR 28 billion this year. . A large part of the future evolution of the Romanian-German trade relations will depend on the way and, especially, on how quickly the German economy will recover “, shows AHK.
Romania is among the few EU countries dependent on the German economy. At the same time, the current government in Bucharest has stopped any action to diversify foreign markets outside the EU. North Africa, one of Romania’s most profitable export markets, disappeared from the map of interest in Bucharest 30 years ago. It’s not even about South America. In Asia, Romania is blindly listening to the US ambassador’s instructions in Bucharest and has frozen any cooperation actions with China, India and other dynamic economies in this part of the world.