Romania Has No Problem Paying EUR20 Bn Loan In Five Years - President

Publish date: 02-11-2009
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Romanian President Traian Basescu said Saturday that Romania has no problem paying the EUR20 billion loan in five years, but that a higher loan would have been a severe burden.

Basescu met Saturday with Iasi County Council president Constantin Simirad, Democrat Liberal mayors in the county, heads of decentralized institutions and academia officials.

The President said Romania has no problem paying the EUR20 billion loan in five years, but that borrowing more would have been a burden for the population and would have rendered the country unable to capitalize on its economic recovery, which Basescu said would happen in the second quarter of 2010.

Basescu said Romania's economy is dependant on the markets in Germany, France, the United Kingdom, Spain and Italy. The severe contraction of exports to these markets has led to lower production and unemployment in Romania, Basescu said.

The Romanian head of state said the country's anti-crisis program is tied to the loan from the IMF and European Union.

"There are two important pillars - financing the Central Bank's reserve, in order to maintain an acceptable exchange rate, and covering the budget deficit, to continue investments and the payment of salaries," Basescu said. The President added that, in his opinion, the anti-crisis program managed to avoid massive layoffs in the public sector, by supporting the state budget.

Romania and the IMF signed in spring a two-year standby arrangement for EUR12.95 billion, as part of a wider EUR19.95 billion aid package the country took from the EU, the World Bank and other foreign lenders to cope with the recession.

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