Ceausescu, zero debt and the myth being revived in Romania

Ceausescu, zero debt and the economic myth being revived

Romania reached zero external debt under Ceausescu. It is the figure that underpins the Romanian dictator's vindication, and also the one used to explain why he was taken down. From there, the debate splits in two: those who see in the Conducător a leader who defended national interests against international institutions, and those who recall that the price of that zero debt was an impoverished country, with a corner grocery store as its shop window and a population waiting years to buy a car.

The figure is not in dispute. What is debated is what it means. A country without debt is, for one side of the analysis, a country that makes the IMF uncomfortable; for the other, simply a country that had exhausted its margin and impoverished its people to pay what it owed.

What peine to Romania's external debt

The most repeated story in the conversation is that Ceausescu paid off the debts the country had previously taken on with the IMF and other creditors, and that by the time the regime fell, Romania was at zero. That effort, according to this reading, came at the cost of brutal impoverishment: images of a late-1980s ration shop look like a Spanish corner supermarket from the 1960s, at a time when hypermarkets in Western Europe already had their current structure.

Some argue that this extreme austerity was a sovereign decision and that the regime styled itself as independent from the USSR, in the Yugoslav manner. Against this weighs the argument that the country already had serious economic and debt problems before that adjustment, and that the zero figure was not a victory but the result of having stretched credit to the limit.

The rushed trial and suspicion of the IMF

The suspicion circulates widely: a country without debt is a dangerous country for the IMF, which is why the unrest and the overthrow would have been encouraged from abroad. It is a hypothesis, not a proven fact, and should be treated as such. What is in the record is the summary trial and execution of the Ceausescus, which for part of the conversation was a way of closing the matter just in case.

The contrast with today's Romania is the other axis. It is argued that the country is now at Western European levels and that the industry of the time, which manufactured everything, no longer exists. Some also say that the Romanians they know speak well of the dictator and repeat the zero-debt line. That is testimony, not statistics.

The comparison with Franco and Yugoslavia

The most repeated parallel is a Franco in a Romanian version, or a Tito. The thesis: if Romania had stayed outside the Soviet bloc, like Yugoslavia or Spain under their respective strongmen, it would have been a prosperous country. The problem with that reasoning is that it mixes regimes with very different economies and assumes that geopolitics was the only relevant variable.

The other objection is more fundamental: comparing a totalitarian communist regime with an authoritarian military government with a great deal of freedom in practice is comparing apples with oranges, and those who do so usually have an interest in the comparison coming out in their favour.

The speech impediment and the man

The conversation gets down to physical detail: the Conducător's speech impediment, the comparison with a nerd who can't roll his Rs, the resemblance to Fernando Romay. It is the kind of anecdote that adds nothing to the economic analysis but explains why the figure generates sympathy in certain quarters: the leader who stood up to his counterparts face to face at summits and who, seen from afar, seems more authentic than today's managers.

There lies the core of the matter. The nostalgia is not for Romanian communism, but for the figure of the leader who defends his own. It is a nostalgia for times never lived, and that should make us distrust any conclusion drawn from it.

What can be concluded

Zero debt is real as a figure and misleading as an argument: it says a lot about fiscal discipline and nothing about how people lived. The country that achieved it was a country of queues, with a ration shop as its shop window and a population waiting years to buy a car. That is debt too; it was just paid by others.

With this material, the vindication of the Conducător will keep growing in forums and dinner-table conversations. The myth will most likely consolidate among those who only know the figure and not the price. What is less clear is that anyone will want to pay it again.