Chapter 532： Romania's New Deal (1)

"Your Majesty, our country’s exports have fallen by 18%. Many factories are under-operated and many workers have been fired. At present, there is a panic about the economic outlook in the market. Stand up and support Romania’s economy."

Inside the palace, Prime Minister Karatuuri is reporting to Edel worryingly about the current domestic economic developments.

"Does it work if I stand up?"

Edel stood up and answered the Prime Minister.

"At least it can reduce the panic in the market. Many people are afraid of encountering the situation in the United States. At present, the number of people withdrawing deposits in the major banks in Romania is twice as high as before. Fortunately, the banks are fully prepared under the instructions of your Majesty. Only cash can deal with this situation."

The Prime Minister’s words left Edel feeling speechless. In fact, in order to cope with the wave of runs, Edel quietly gave the Prime Minister a trick. That is to print a batch of banknotes, as long as it gives people a feeling that the bank is trustworthy. At first, the Prime Minister was somewhat reluctant, but after seeing the bank run on bankruptcy in the United States, he immediately agreed.

Although Romania’s banking industry is mainly supported by the government and its scale is large, it is better to let the bank prepare more banknotes just in case. Anyone who knows the banking industry knows that there is not too much cash in the bank, and the savings it absorbs are basically transferred out and then loaned out, or it is to buy various financial products to maintain their value.

The outbreak of the US financial crisis has made Romanian banks more vigilant. Many loans have been recovered as much as possible, and there are also emergency funds provided by the government, which are sufficient to withstand the impact of this time.

Although the banking industry has resisted this impact, the economic problems encountered by other countries have caused a setback in Romania's foreign exports. Exports to European and American countries fell across the board, which made the Prime Minister feel bad, so I found Edel to discuss how to face the economic crisis that affected the world next.

"How was the infrastructure construction plan that you asked you to do last time?"

Edel seemed to be asking about the plan that he hadn't asked about for a long time.

"Your Majesty is ready. This time we have learned the lessons we have learned and prepared an infrastructure construction plan of up to 8 billion lei. It is mainly used for the construction of railways, highways, wharfs, etc."

When the Prime Minister said the plan made this time, Edel frowned.

"Still too little, not enough."

Eder's words made Prime Minister Karaturi almost fall.

"Your Majesty, this is already the maximum plan based on government finances."

Karatuuri’s knowledge of the economy is now a common phenomenon in Europe, so Edel decided to give him the power of deficit finance in popular science. "I know this, but we can invest more money to increase the scale of infrastructure construction."

"I think the 20 billion lei funding for infrastructure construction is reasonable."

Faced with such a big surprise by Edel, Prime Minister Karatuuri said with some horror. "Your Majesty, our country does not have that much money, unless it is invested in funds shipped back from the United States. But didn't these funds mean that other uses have been decided before?"

Facing Karaturi's words, Edel replied. "Yes, I intend to use these funds for other purposes, but it doesn't mean that the government can't use those funds. The right to issue banknotes is in the hands of the government."

In Edel's words, it is obvious that he has to make money in the issuance of money, which makes it difficult for the Prime Minister to accept. "Your Majesty, you must know that the current monetary policy cannot be changed easily, otherwise it will have too much impact on our economy."

The Prime Minister's words are also very reasonable. At present, all countries are implementing the gold standard, and countries that are not capitalized are issuing their currencies against the US dollar or the British pound. However, the current gold reserves of various countries are far from the economic needs, so over-issued currencies are very common in various countries. Generally, it is 3-6 times of the over-issued gold reserves, and Romania currently maintains this level.

And Eder's remarks obviously intend to devalue Lei super depreciation, which is good for exports, but it will also increase the burden of residents' lives. The devaluation of the money in the hands of residents will cause some social problems.

"I know this, but at present, we must first ensure the sustainable development of the economy. If there is an economic crisis, this will cause greater losses to the people."

Edel didn't know that this would cause some problems, but Romania is not the Soviet Union, independent of the world economy. The impact of the Great Depression is destined to come. If you don't prepare early, it will inevitably trigger social unrest just like other European countries.

In fact, super-issued currency is more like absorbing wealth from the people, and there must be dissatisfaction. However, this will at least allow the government to raise a sum of money to force the economy up and prevent Romania from falling into the situation of other countries.

This is also the reason why Romania's population and resources are insufficient. Insufficient population cannot form a sufficient domestic market, and insufficient resources make many raw materials need to be imported, and these raw materials are basically affected by the economy. If there were as many people and raw materials as the Soviet Union, Edel would dare to play by himself behind closed doors.

At present, he only has the 900 million US dollars of funds brought back from the United States, and he is still planning to use these funds for bargaining, and of course he cannot invest in domestic construction.

Therefore, I can only wrong the heads of the people. Anyway, this is a decision made by the government. Being scolded by the people is also a problem for the government, and Edel is just a monarch deceived by the government. In the next parliamentary election, a change of prime minister can soothe people's emotions.

As for the prime minister who has worked hard, he has served two terms as prime minister anyway, and he is destined to step down in the future. It is better to make the final contribution in the position of prime minister.

This is not Edel's cold-blooded ruthlessness, but this is politics. Your Excellency the Prime Minister has also been silent for many years in politics, and he should understand the truth.

What Edel meant, there is nothing in Karatu that I don't understand. His Majesty's effort to expand the deficit and boost the economy has not seen him before. But it does not mean that he is not clear about its role. It will always be useful to invest money in infrastructure. And can he reverse what Edel meant. If you can't, you can only do it according to your Majesty's requirements.

"Your Majesty, I will go back and follow your instructions. I will let the government come up with the construction plan as soon as possible."

At the end of 1929, the government was facing a moment when people were worried about the future economy. Come up with an infrastructure plan of up to 20 billion lei. In this plan, several major traffic arteries will be built in the country. The first railway from Lviv to Odessa will start next year, and the second, a double line from Constanta to Békéscsaba via Bucharest will also start construction. Third, the railway from Békéscsaba across the Transcarpathian Mountains to Lviv was started. The fourth railway from the capital Bucharest to Odessa via Galati was started.

These four railways are also called two vertical and two horizontal main lines, and they will play an important role in improving the economy or the transfer of the army.

In addition to these four railways, the railways currently owned by Romania will also be upgraded and maintained.

In addition, Romania will build three high-level highways from Bucharest to Lviv, which will pass through Buzău Bakau and other domestic elite areas. An elevated highway from Galati to Odessa will benefit people on both sides of the road,

There is also a ring high road from Bucharest to Constanta to Varna, and then back to Bucharest through Gyuliu, which will surely drive the economic development of the region.

These high-level roads are all asphalt roads with two-way four-lane lanes, with a design speed of 65 highways per hour. It can be said that it is currently the best road infrastructure in Romania.

The other is to expand and dredge the two most important ports in Romania in Constanta, Odessa, in order to shorten the detention time of goods in the port. Then for the river transportation that is still important in Romania, the river transportation ports of Giulijo, Kolerahi, Galati will be upgraded, and the dredging of the Danube will also be increased. This investment in river transportation will surely allow it There is a new increase in transportation volume.

In addition, the government of water conservancy facilities also did not let it go. Romania will build a hydropower station on the Danube with a total installed capacity of 2.8 million kilowatts, which will not only benefit irrigation but will also reduce the damage of floods downstream. The power station was selected in Mehedinz County, which is adjacent to Yugoslavia. The terrain here is suitable for the construction of hydropower stations.