A E1.5 bln foreign loan to pay state bonds

The government must pay some €4.25 billion for the state bonds that reach maturity in the last four months of 2009. Consequently, the purpose of the eurobond issue announced by the government for September increases to €1.5 bln from €500 million, because the state has lost control of the budget.

The foreign loan will lead to a temperate appreciation of the leu and a slight increase in loans, according to analysts.

The Ministry of Finance provided MONEY.ro with a list of monthly maturities that the state must honor in the last four months of this year. The largest amount, worth RON 6 bln (€1.43 bln), is due in October 2009.

"Due titles are not paid from the state budget. They are refinanced from new state loans or the obligation is terminated by using the amounts drawn from foreign currency loans," representatives of the Ministry of Finance said.

Minister of Economy Adriean Videanu, talked about a €1.5 bln eurobond issue for the first time on The Money Channel on Monday, double the amount presented by the government to date.

"We will see at the time of the first eurobond issue, for which the Ministry of Finance is prepared with a value of between €700 million and €1.5 billion," Videanu responded, when asked a question regarding the example of Hungary, which managed to attract a significant amount from the foreign market last month. The minister let this information out while trying to eliminate one of the 32 measures included in the Anti-crisis Program recently adopted by the ruling coalition - the measure referring to the increase in the share of the short-term domestic loan. The measure was not to the liking of Minister of Finance Gheorghe Pogea, and this is why it was removed from the program.

standard.money.ro