Romanian government agrees EUR 4 bln precautionary loan with IMF, EC

Newsroom 31/07/2013 | 11:02

The government and the joint mission of the IMF, European Commission (EC) have reached a “technical agreement” on a new precautionary loan worth EUR 4 billion that aims to keep Romania’s reform program on track.  

Andrea Schaechter, head of the IMF mission in Romania, said the government doesn’t intend to draw under the two-year loan, in which the IMF and the EC are set to contribute each EUR 2 billion. She said the stand-by agreement has to be approved by the IMF board this autumn.

“We are not using this money, they will serve as a buffer under exceptional circumstances of a financial crisis, at a European or international level,” said PM Ponta, quoted by Agerpres newswire.

Schaechter commented the government aims to implement reforms in the healthcare sectors to improve services and spend money more efficiently.

“Other structural reforms address the reform of inefficient state-owned enterprises and stimulate the investments and efficiency in energy and transport, which are key sectors for enhancing Romania’s competitiveness and for supporting long term growth,” said the IMF representative.

She urged the government to step meddling in the management of state-owned companies, allowing the private managers to do their job.

She added the policy decision in the financial sector aim to consolidate the balance sheets of banks, to support lending and economic recovery. Schaechter said the new agreement aims to remove the arrears that have an impact on the private sector.

The IMF has revised upwards Romania’s economic growth estimate to 2 percent this year, based on a better agricultural output, stronger exports and a “relatively” stable domestic demand in the first quarter.

Ovidiu Posirca

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