The European Union has achieved a small, surprising success in helping Central and Eastern Europe to avoid a savage banking crisis this year. We should give it credit for that. Bank regulation is not an area where the EU has generally distinguished itself in clarity or consistency. It has usually failed to rise above national interests, or even those of individual banks.

But in this case, the European Commission did move untypically fast. The big banks of Austria, Belgium, Germany, Italy and Sweden had taken over almost the entire banking sector of Central and Eastern Europe. There was a risk that they would choke off credit as confidence fell. Together with the International Monetary Fund and the European Bank for Reconstruction and Development — institutions that have rediscovered a purpose through the crisis — the EU dissuaded the banks from pulling out capital. The EBRD even claims, in its latest Transition Report, that countries with the greatest foreign bank ownership fared better in the crisis than those relying mainly on local finance. However, as Katinka Barysch, of the Centre for European Reform, observes more soberly, the report also shows that foreign banks helped to fuel unsustainable booms in the first place.

Romania is now a test of whether the EU, the IMF and the EBRD can improve on that narrow success in banking, and keep up pressure for reform. Romania has been badly hit in the past year. Economic output fell by 7.6 per cent in the first half of this year. The process of electing the president, which began on Sunday, will show whether Romanians still have stamina for the changes that the EU and financiers are demanding.

Last month the centre-left coalition Government collapsed, and the IMF said that it would withhold the third tranche (of about €1.5 billion) of a two-year, €20 billion package of international financial help, probably until a new government was in place. That may take time. The president picks the prime minister, who then assembles the government, but the current presidential contest is proving a tight race. With most votes counted from Sunday’s first round, President Traian Basescu, a centrist, narrowly led Mircea Geoana, the socialist former Foreign Minister. Each has some Western support — Basescu because he talks the language of markets; Geoana partly from his stint as Ambassador to the US. But many find Basescu abrasive, and investors fear that if he wins in the run-off on December 6, it will be by only a slim margin, and he will not help much in forming a coalition.

Delay matters. Despite Romania’s accession to the EU in January 2007, it has remained ravaged by corruption. Caustic reports from Brussels have not had much effect. The IMF is now sceptical that Romania can cut spending or public employment in recession.

Barysch, who warns that much of the region is failing to reform enough to compete globally for capital and trade, argues that governments may now promise to shield their voters from reform, and not pursue change. That would endanger the economic success of the past 20 years of transition.

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