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This paper follows the already existing literature to address three main pressing concerns that Romania is currently facing with respect to sustainable development and economic growth, which has likely been impeded as a direct consequence of the ongoing sanitary crisis. The research questions of this paper were asked with the consideration of finding possible solutions to the current developments. These questions were “How will the global health crisis project on Romania’s GDP growth in 2021 and going forward?”, “To what extent can Romania face its current challenges with respect to the budgetary pressures?”. The research itself was conducted using the R programming language with quantitative data, namely quarterly GDP starting from 2005 Q1 onwards and its main objective is to simulate Romania’s GDP to answer the aforementioned questions. Therefore, this research is empirical in the sense that it derives the simulated data from real data which was taken from Eurostat. The main findings of this research were that Romania’s GDP could grow by a mean 3.2% in 2021, which is more conservative than the existing institutional forecasts made by the European Commission, the International Monetary Fund, World Bank and the Romanian National Commission for Strategy and Forecasting, implying that the majority of the simulated outcomes have been in that respective range of values. Moreover, this research also finds that consumption is expected to increase by approximately 4.2% and that the budget deficit relative to GDP could go as low as to negative 7.8%. This paper creates value for future policymaking as it proposes solutions which could help Romania going forward. Thus, this paper creates value for not only the policymakers but the society as a whole.

This study provides empirical evidence on income smoothing from the banking sector in nine South-Eastern Europe (SEE) countries for the period 2005-2014 by applying a number of methodological approaches. First, by using a sample of 321 banks this paper confirms our first hypothesis that banks in the SEE region use loan loss provisions (LLPs) to smooth their incomes. Second, by dividing the loan loss provision into its two components (discretionary and non-discretionary,) the study provides new evidence on the effects of loan loss provisions components on growth in bank lending. The results clearly prove our second hypothesis that the components of LLPs do matter on growth in bank lending. Third, this paper estimates the use of loan loss provisions for capital management by banks. The empirical results do not support the hypothesis of capital management for SEE banks. The novelty of this paper, unlike other works, is the inclusion of SEE countries.

Competitive conditions in the banking sectors in the light of transition process in the Central and Eastern Europe countries (CEE) has been subject of interest for researchers and policy-makers, especially upon entry of foreign banks and concentrated markets. In this paper the Panzar-Rosse approach is used to assess competition of banking sectors in CEE. By using General Method of Moments on the panel data for 300 banks for the period 1999-2009, empirical evidence indicates that banks operating in the CEE exert monopoly behaviour. From the methodological point of view, the findings suggest that using a price equation or controlling for total assets in a Panzar-Rosse approach produces upwards biased and invalid estimates of the H-statistic. Therefore, further support is provided for maintaining a reducedform revenue equation when estimating a Panzar-Rosse model. The findings also suggest that banks operating in the non-EU countries of the CEE region have exerted stronger market power compared to the banks operating in the EU countries of this region. Policy-makers should improve competitive conditions and general ‘enabling’ environment for the banking sectors, especially the non-EU countries of the CEE region, while balancing competition-stability trade-off.