"Your Majesty, our country's exports are currently down by 18%. Many factories are under operation and many workers have been laid off. There is currently a panic in the market about the economy. The previous government's intervention could not appease the public's emotions, so the government would like to ask Your Majesty
Stand up and support Romania’s economy.”
In the palace, Prime Minister Karaturi was worryingly reporting to Eder the current domestic economic trends.
"Will it work if I stand up?"
Edel stood up and answered His Excellency 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. Currently, the number of people withdrawing deposits in Romania's major banks is twice as high as before. Fortunately, under His Majesty's prompting, the banks have prepared sufficient funds.
Only cash can cope with this situation."
The Prime Minister's words left Edel speechless. In fact, in order to deal with the wave of bank runs this time, Edel quietly gave the Prime Minister a trick. That was to print an additional batch of banknotes, as long as it gave people a feeling that the bank was trustworthy.
Okay. The Prime Minister was a little reluctant at first, but after seeing the run on bankrupt banks in the United States, he immediately agreed.
Although Romania's banking industry is mainly supported by the government and its scale is relatively large, it is better to let the bank prepare more banknotes just in case. Anyone who knows the banking industry knows that there will not be too much cash in the bank.
The savings absorbed are basically resold and loaned out, or various financial products are purchased to maintain value.
The outbreak of the U.S. 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 enough to withstand the impact.
Although the banking industry withstood the impact of this time, Romania's external exports suffered setbacks due to the economic problems encountered by other countries. Exports to European and American countries fell across the board, which made the Prime Minister feel bad, so he approached Eder to discuss the next step.
How to face this economic crisis affecting the world.
"What happened to the infrastructure construction plan I asked you to do last time?"
Edel seemed to be asking about the plan that he had not asked about for a long time.
"Your Majesty is ready. This time we have learned from previous lessons and prepared an infrastructure construction plan of up to 8 billion lei. It will mainly be used for the construction of railways, highways, docks, etc."
When the Prime Minister revealed the plan, Edel frowned.
"It's still too little, not enough."
Edel's words made Prime Minister Karaturi almost fall down.
"Your Majesty, this is already the maximum plan based on government finances."
Karaturi's understanding of the economy is now common in Europe, so Edel decided to educate him on the power of deficit finance. "I know this, but we can invest more money to increase the scale of infrastructure construction."
“I think RON 20 billion in infrastructure funding is reasonable.”
Faced with such a big surprise from Eder, Prime Minister Karaturi said with some horror. "Your Majesty, our country does not have that much money, unless it is invested in funds brought back from the United States. But didn't we say that other uses of these funds have been decided before?
?”
Faced with Karaturi's words, Edel replied, "Yes, I plan to invest these funds for other purposes, but it does not mean that the government cannot use those funds. The right to issue banknotes is in the hands of the government."
Edel's words clearly meant that he was manipulating the issuance of banknotes, which was a bit 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 a great impact on our country's economy."
The Prime Minister's words are also very reasonable. At present, all countries are implementing the gold standard, and countries that do not have enough capital issue their own currencies based on US dollars or pounds. However, the current gold reserves of various countries are far from meeting economic needs.
, so over-issuance of currencies is very common among countries. Generally, the over-issuance of gold reserves is 3-6 times, and Romania currently maintains this level.
Edel's words clearly intend to depreciate the lei. Although this is good for exports, it will also increase the living burden of residents. The depreciation of the money in the hands of residents will cause some problems in society.
"I know this, but at present we must first ensure the sustainable development of the economy. If there is an economic crisis, it will cause greater losses to the people."
Edel didn't know that this would cause some problems, but Romania was not the Soviet Union and was independent of the world economy. The impact of the Great Depression was destined to come. If he did not prepare early, he would inevitably have social consequences like other European countries.
of turmoil.
In fact, overissuance of currency is more like sucking wealth from the people, and there must be some dissatisfaction. But this can at least allow the government to raise a fund to forcefully pull up the economy and prevent Romania from falling into the situation of other countries.
This is also the reason why Romania has insufficient population and resources. Insufficient population cannot form a sufficient domestic market, and insufficient resources require many raw materials to be imported. These raw materials are basically affected by the economy. If there were as many people and raw materials as the Soviet Union, Egypt would be
Del also dared to play by himself behind closed doors.
At present, he only has the 900 million US dollars brought back from the United States, and he plans to use these funds to hunt for bargains. Of course, he cannot invest them in domestic construction.
So we can only aggrieve the Prime Minister and others. Anyway, this is the decision made by the government. Being scolded by the people is also the government's problem. Edel is just a monarch who was deceived by the government. In the next parliamentary election, changing the prime minister can appease the people's emotions.
.
As for the hard-working Prime Minister, he has served as Prime Minister for two terms anyway. He is destined to step down in the future, so it is better to make a final contribution in the position of Prime Minister.
This is not Edel's cold-bloodedness, but this is politics. The Prime Minister has also been silent in politics for many years, and he should understand this.
What does Edel mean? Karaturi doesn't understand anything. He has never seen His Majesty's efforts to expand deficits and boost the economy before. But that doesn't mean he doesn't understand its role. Investing money in infrastructure will always be useful.
And can he go against Edel's wishes? If not, then he can only do what His Majesty asks.
"Your Majesty, I will go back and follow your instructions. I will ask the government to come up with a construction plan as soon as possible."
At the end of 1929, when the government was facing people's concerns about the future economy, it came up with an infrastructure plan of up to 20 billion lei. In this plan, several major transportation arteries would be built in the country. The first one was to benefit from
The railway from Wolf to Odessa will start construction next year, and the second, the double line from Constanta to Bekeschouba via Bucharest will also start construction. The third, Bekeschouba passes through Transkarpa.
The construction of the railway from the Qian Mountains to Lviv began. The construction of the fourth railway from the capital Bucharest to Odessa via Galati began.
These four railways are also called two vertical and two horizontal trunk lines, and their role cannot be underestimated whether it is economic improvement or military transfer.
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-speed highways. A high-speed road from Bucharest to Lviv will pass through Buzeu Bacau and other domestic highlights. A high-speed road from Galati to Odessa will pass through the
People on both sides of the road benefit,
There is also a ring highway from Bucharest to Constanta to Varna, and then back to Bucharest through Giuligiu, which will also drive the economic development of the region.
These highways are asphalt roads with two-way four-lanes, and the design speed reaches 65 highways per hour. It can be said that they are currently the best road facilities in Romania.
The other is to expand and dredge the two most important ports in Romania, Odessa and Constanta, in order to shorten the detention time of goods at the port. Then for Romania's still important river transport, Giuligiu, Kolelasi, Ga.
River transport ports such as Latz will be upgraded, and the dredging of the Danube River will also be increased. This investment in river transport will also increase its transport volume.
In addition, the government has not spared water conservancy facilities. Romania will build a hydropower station on the Danube River with a total installed capacity of 2.8 million kilowatts. This will not only facilitate irrigation but also reduce the harm of floods to downstream. The power station is selected in a location similar to Yugoslavia.
In neighboring Mehdinz County, the terrain here is suitable for the construction of hydropower stations.
