At the beginning of June 1972, the party activist came up with the not-so-new slogan “Loss before the deadline!”, and from that switched to “In four and a half years!”. since the master plan developed by the State Plan leadership and approved by the Romanian leadership for the period 1971-1975 turned out to be incompatible with the higher rates of economic investment made by the Bucharest authorities in the second half of the 1960s and at the beginning of the next decade. Party activists did not explain to the public why they used these slogans and whether they discovered errors at the level of the party and state bodies in the State Plan, which could lead to six months of changes to the implementation dates. general economic goals approved at the X Congress of the Communist Party of Romania.

As six new volumes from the National Bank of Romania Library collection recently arrived in Warsaw, we were looking for more information and data to help us understand exactly what happened in the early 1970s in the Romanian economy. Although the relevant books do not contain any research related to our topic (their general subject matter is quite different), our attention was drawn to a fragment of the preface published by the economist Valentín Lazeia in the book “Central Banks and the Calibration of Monetary Policy”, authored by the head of the National Bank of Romania Mr. Mugur Isarescu:

“Paradoxically, the problems of economic success caused by joining the European Union were more difficult to solve, given the so-called “Tosovsky’s dilemma” (in honor of the Czech governor who formulated it): an increase in foreign capital flows attracts an appreciation of the national currency and the population’s preference for lending in foreign currency (in addition, if an increase in interest rates is necessary to fight inflation, this will increase the inflow of foreign capital). Thus, the risk of a sharp devaluation of the national currency increases – especially if capital flows turn out to be temporary, speculative – and, at the same time, the creditworthiness of the banking sector, which is excessively prone to loans in foreign currency, may suffer.”

The general structure and main ideas from the corresponding fragment can be successfully used to explain the situation in the Romanian economy from 1969-1989, namely:

– Nicolae Ceaușescu’s decision, taken by Prime Minister Ion Gheorghe Maurer, to enter into long-term Western financial credit contracts starting in the second half of 1969, increased the flow of foreign capital into the Romanian economy, which materialized through the import of industrial and other products (which could change the calculations made in 1969 in the State Plan when drawing up the general national economic plan for 1971-1975);

– these imports led to an increase in the exchange rate of the national currency due to the domestic and consumer value of the corresponding products in order to increase labor productivity in Romania;

– due to the fact that the authorities in Bucharest maintained an overvalued exchange rate of the lei, in parallel with the development of a mass flow of imported consumer goods and with an increase in the purchasing power of the population (which had the opportunity to take new and better paid work), the increase in the rate of the national currency was directly noticed by the population in the form of a surplus in the market of Western goods, which could be easily purchased due to the increase in purchasing power and the very existence of these goods. to the market by importing them in significant quantities;

– the import of industrial products was conditioned in one way or another by the permission to sell Western consumer goods on the Romanian market. Romania was opened to Nicolae Ceaușescu both for external financial credits and for a number of products produced in the West and accepted by the Bucharest regime in its own market, in order to continue to have access to long-term and medium-term external credits. In practice, this was a form of lending to the population in foreign currency, but citizens were not informed that the day would come when the corresponding loans would have to be returned, and at the same time, the interest and corresponding commissions would have to be paid with loans;

– returning to the fragment of the economist Valentyn Lazei, the risk of a sharp devaluation of the national currency existed in the 70s and could manifest both due to international events that were difficult to predict (the oil crises of 1973 and 1979) and as a result of some natural cataclysms ( floods of 1970 and 1975; earthquake of March 4, 1977; drought of the late 1970s). However, the capital flows during this period were not speculative, and their temporary nature was established by Nicolae Ceaușescu after reaching the state of insolvency of Romania in November 1981, through his decisions on the early and full payment of the country’s foreign debt and the ban in April 1989, clearly by law , conclude foreign financial loans by the Romanian state;

– The regime in Bucharest signaled Romania’s excessive inclination to Western financial credits from the beginning of the 70s by the authorities in Moscow (primarily Leonid Brezhnev), but Nicolae Ceausescu followed this path also because the authorities from the Kremlin did not have enough funds to develop their economy. and they, in turn, turned to Western financial loans. Soviet politicians wanted to effectively keep Romania dependent on the small loans they could provide at the moment to the authorities in Bucharest, and the loans materialized in Romania’s case mainly through the supply of finished industrial products rather than through the supply of raw materials (oil and methane ) at prices lower than world prices (as was the case in the USSR’s relations with the GDR, Poland, Czechoslovakia, Hungary and Bulgaria);

– we can point to the hypocrisy of the authorities in Moscow, who, on the one hand, signaled to the communist regime in Bucharest that Romania should not be exposed to Western financial credits, and on the other hand, they insisted that Nicolae Ceausescu approve some imports of Western industrial products on behalf of Romania and its re-export to the Soviet Union in the form of Romanian investments in various economic goals in the USSR. In order to obtain these products, the Romanian state had to conclude financial loans from the West and pay them together with current interest on the Western market (10-15%). At the same time, the authorities in Moscow offered an interest rate of 2-3% for Romanian investments to be made in the USSR, in exchange for quantities of oil, methane, iron ore and other Soviet raw materials on several occasions. at the request of the Bucharest authorities for the normal operation of industrial production units in Romania;

– Romania’s external debt was not large on November 3, 1981, when it was one step away from officially declaring insolvency. At the time, the Bucharest government asked the country’s main external creditors to defer payment of payments and outstanding interest accrued up to that point, as well as those due in 1982 and 1983. The corresponding debt had an irregular structure with a large number of short-term payment obligations, and the accumulated indebtedness was estimated at approximately 1.2 billion dollars.

These conclusions forced us to ask ourselves why the corresponding problems arose, whether serious mistakes were made at the early stages of the development of national economic plans in the State Plan for the periods 1966-1970 and 1971-1975 (errors were corrected, for example, in November 1970 by members of the Executive Committee Central Committee of the PKR, at the proposal of the Romanian government) and whether the Bucharest authorities in the 60s discussed ways of financing the industrial projects they wanted with the help of business entities from the west. Since in the public space there are many references to cars that were produced in Colibaşi under a French license, we propose in this material to examine the origins of this project and some lesser-known proposals in the automotive industry analyzed by the Romanian authorities in 1964 and 1965.

On December 13, 1965, a document entitled “Memorandum on the possibility of production of passenger cars in the country and the development of new types of vans and vehicles with increased cross-country ability” was registered in the Administration of Affairs of the Central Committee of the NKR. The document, prepared jointly by the State Planning Committee, the Ministry of Foreign Trade and the Ministry of Machine-Building Industry and accepted by the heads of the three institutions (Roman Moldovan, Gheorghe Ciara and Mihai Marinescu, respectively), arrived on the desk of Alexander Byarladian. (first deputy chairman of the Council of Ministers), then members of the Permanent Presidium of the Central Committee of the NKR.

Although the title of the note first mentioned cars, followed by vans and SUVs, the content of the document begins in the opposite direction, laying out the arguments in favor of the production of new models of vans and SUVs. of vehicles in Romania, followed by the situation regarding cars.

Since 1964, the Bucharest authorities have been dissatisfied with the technical parameters of the TV-41 vans (built in several modifications at the Avtobuzul plant in Bucharest) and the M-461 all-terrain vehicle (produced at the Muscel mechanical plant). These vehicles were heavy considering the loads being carried and the costs of production and fuel consumption were high. For example, in 1965 the cost price of the TV-41 van was 50,000 lei, which was close to the selling prices of the Moskvici 407 (49,500 lei in 1958) and the Škoda 1000 MB (48,500 lei in 1967). Read the whole article and comment on Contributors.ro