Romania to request money from the EC within 10 days

First Vice President of the Democratic-Liberal Party (PDL) Theodor Stolojan, told Business Standard that the Romanian state will submit an official request to the European Commission for a loan within ten days.

"We cannot wait too long because resources are limited," stressed former Prime Minister Stolojan. He added that "we are talking about several billion euro, at least €5 billion, depending on how much of the value of the short-term private debt the authorities estimate will roll over in 2009. A macroeconomic stability program is needed for such an amount, which would be conducted by the Fund [the International Monetary Fund (IMF)]."

According to Stolojan, the European Commission (EC) will discuss any loan Romania solicits with the IMF. "All roads lead to the European Commission," added Stolojan. The National Bank of Romania (BNR) is analyzing, together with government representatives, the optimal amount to be borrowed from abroad, considering costs and a reasonable payback schedule, according to the Governor of Romania's central bank, Mugur Isarescu, on Monday. He added that Romania, as a member of the European Union (EU), must consider European funds, and that an evaluation of the country's absorption capacity is currently being conducted.

Also, BNR is taking into consideration the possibility of obtaining financing from the IMF, the World Bank, and the European Bank for Reconstruction and Development (EBRD). Last week, Isarescu said that a possible agreement with the IMF should be included in a deal package with European institutions. BNR's Governor indicated that an IMF loan represents a swap operation to protect foreign currency reserves and is not reflected in the economy but rather through possible BNR interventions.

Business Standard