Romanians sceptical about 'heavy leu'

The days when almost everyone in Romania was a millionaire are numbered, starting on Tuesday when sceptical Romanians were greeted with old and new prices as the country takes the first steps to introducing the “heavy leu”.

The 22-month process will see four zeros zapped from the national currency, weakened after 15 years of high inflation.

National Bank Governor Mugur Isarescu said the denomination of Romania’s national currency, which means “lion” in Romanian, will see an end to rampant inflation and mark a period of price stability.

Inflation was 9% last year, the first time it has been a single digit since communism ended in 1989.

Isarescu said the new leu also will simplify the transition to the euro expected from 2012 to 2014, denying that it will spark inflation caused by vendors rounding up prices.

Many Romanians, however, are sceptical.

“There is no use in being a millionaire now, because anyway we are dirt poor, and the poorest people ... still don’t manage to cover their costs,” said Constantin Bota (47), a haberdasher.

A leu millionaire has just more than $36 (about R208) in pocket.

Iuliana Seche, a 31-year-old technician who is emigrating this year to Australia, said she does not like the changes.

“It is harder on me because I don’t dare to sell my apartment until I see what will happen with the money.”

Bota sees widespread poverty continuing in Romania, where the average monthly salary is 6,875-million lei (R1 450), saying that a “heavy leu” will not mean greater purchasing power.

“What’s the point of having a heavy leu if we remain poor?” He recalled 30 years ago when he used to earn 700 lei a month “and I could party all night for just 100 lei”.

As a retailer of a shop in a working-class district in the city of Cluj, he predicts commerce will be marked by “chaos until we have just one currency”, he said from behind the counter in his shop, which sells ribbons, needles, wool and towels for funerals.

The new leu will enter circulation on July 1 and both currencies will be used concurrently until January 1 2007, when the old leu will become obsolete.

The date coincides with the day Romania hopes to join the European Union.

The highest bill will be 500 lei, which is worth just more than R980.
The bills for the new leu will be the same size as the euro to ease the eventual transition to the euro.

In a fishmonger’s in downtown Bucharest, shark’s fin and smoked Romanian trout were advertised in both prices on Tuesday and vendors were confident that after a period of “craziness” customers would get used to the new leu.

“It will be difficult at the beginning and I bet I will be here until 9pm at night giving change to customers, but after that it will get easier,” said Maria Marin (42).

However, at the Piata Amzei vegetable market, vendors had defied the new law and were posting prices only in the current currency.

“What is this heavy leu? Are we going back to [former dictator Nicolae] Ceausescu’s time?” said Ana Maria Stanescu (23), tying up a bunch of dill. “A heavy leu means heavy work for us.”—Sapa-AP

Client Media Releases

Fedgroup drives industry reform in unclaimed benefits sector
Hardworking students win big at architecture awards
VUT presents 2019 registration introduction
Vocational training: good start to great career