Ömer Tetik, CEO of Banca Transilvania, gave an interview to Financial Intelligence about Romania’s current macroeconomic context, as well as the important role banks play in creating economic value and supporting long-term development.

How do you see Romania’s macroeconomic outlook for this year, given the war in Ukraine and the war in the Middle East, as well as the political crisis in Romania? How vulnerable is the Romanian economy to external shocks (energy, geopolitics)? When do you think a recession will be declared in Romania?

We are going through a period in which the economy is influenced by both external and internal factors—the war in Ukraine, tensions in the Middle East, volatility in the energy markets, as well as challenges stemming from fiscal consolidation and political stability. Given this context, I believe the most appropriate approach is to strike a balance: to acknowledge the risks without ignoring the strengths of the Romanian economy.

Romania is vulnerable to external shocks, but the greatest challenges come from within. If we look at the rising public debt and, above all, the interest rates we as a country are paying, that is the area we need to strengthen. Investors and the business community need, above all, predictability. In times of uncertainty, trust becomes an economic resource just as important as financing. And right now, we are also going through a crisis of confidence and seeing a conservative mindset among people and companies.

The good news is that our economy is more resilient and far more complex than in the past; Romania has made enormous progress in recent years, which is why I believe our vulnerability stems from our ability to respond quickly and coherently to these challenges.

As for a possible recession, I would avoid making predictions. The economy cannot be reduced to a single quarter or a single indicator. For our country, the priority must be to maintain investment and accelerate projects with a major economic impact—infrastructure, energy, digitalization, education, and support for entrepreneurship. These are the elements that distinguish an economy that merely reacts to crises from one that emerges stronger from them. I do hope, however, and I believe we have a good chance of avoiding a severe recession that would significantly impact the economy in the long term.

How do you assess the current situation—still-high inflation, falling consumption, and a technical recession? What would be the solutions for overcoming this difficult situation? Is there a possibility that Romania could enter a more severe economic downturn?

This is a complex period for the economy, marked by a confluence of challenges: inflation, declining consumption, fiscal pressures, political uncertainty, and an unpredictable international environment. It is natural for this to raise concerns, but we must understand that a period of economic moderation following periods of growth is not necessarily a cause for alarm. Economies need to adjust in order to return to equilibrium. The challenge is to manage this intelligently, without undermining investment and confidence in the business environment.

The solution does not lie in a single measure, but in a combination of actions. We need stability, predictability, an acceleration of public and private investment, the efficient absorption of European funds, and, of course, support for entrepreneurship.

Regarding the risk of a more severe economic correction, I believe that Romania today has advantages it did not have during other difficult periods: a more diversified economy, a solid banking sector, stronger companies, and access to resources for investment. Of course, we cannot rule out external risks or the effects of internal imbalances, but I believe the central scenario is a rebalancing of the economy.

Romania is still “catching up” with the West—at what realistic pace can we continue to do so? What should be done to accelerate real investment in the economy?

Romania has closed a significant portion of the gap with Europe’s developed economies, especially over the past 10 to 15 years. We can see this progress in living standards, digitalization, and the development of the business environment. However, economic convergence is a marathon. If we manage to maintain economic stability and a sustained pace of investment, we can continue to narrow the gap with the West.

To accelerate growth, we must shift the focus from consumption to investment and productivity growth. The economies that are recovering the fastest are those that consistently invest in infrastructure, technology, education, and the ability of companies to expand and compete in international markets. Private investment plays a crucial role. Romania needs more companies that have the courage to grow, export, and innovate. This requires access to financing, as well as legislative predictability and an environment that rewards initiative and performance. We must also make better use of local capital. Savings, investments, and the capital market can become drivers of economic development. In recent years, we have made major progress in all these areas, and capital—and indeed the capital market itself—has grown strongly and rapidly, including through the contribution of the private pension system; we must do everything possible to ensure that the development of the capital market continues.

The difference between an economy that closes gaps and one that creates prosperity lies in its ability to accumulate capital and transform it into investment and innovation.


The Role of Banks in Creating Economic Value, in the Context of Surtaxes

You said that the banking system is already overburdened. Where is the “red line” beyond which lending begins to decline significantly? 

I don’t think there is a red line expressed as a single percentage or a single tax. It’s a simple economic principle: the more the additional costs imposed on the banking system increase, the more the banks’ ability to finance the economy at the same pace decreases. The role of a bank, as we know, is to transform capital into loans for individuals and businesses.

When an increasing share of resources is directed toward additional taxes and levies, the resources available for investment, digitization, capital buildup, and—in the long term—lending are inevitably reduced. We are concerned about both the immediate impact and the long-term outlook. The economy needs a strong banking sector capable of financing large projects. If the tax burden significantly reduces banks’ ability to generate capital and support the growth of their loan portfolios, the effects will be felt throughout the entire economy, not just in the financial system.

At the same time, I believe the discussion should not be about how much the banking sector can withstand, but about how we can create the conditions for a growing economy. Banks do not finance from profits, but from capital and trust; however, profits play a decisive role in capital accumulation.

Does Romania risk losing its competitiveness in the region due to bank taxation?

Banks are one of the main sources of financing for the economy, not just a contributor to the state budget. When comparing Romania to other countries in the region, investors analyze the entire system—regulatory stability, fiscal predictability, the cost of capital, and access to financing. If these factors become less attractive than in other countries, there is a risk that investments will be directed toward markets considered more competitive.

So, I think this is already happening. To be competitive, we need financing and large companies that can compete with rivals from other countries and continents. To have large companies, we must be able to finance them. For that, we need large banks. Higher taxation of the banking system is already reducing the economy’s competitiveness.