IMF, EC and the World Bank announce conditions for Romania's loan

The government approved on Wednesday morning a letter of intent which will be sent to the European Commission and the IMF, PM Emil Boc declared. Here are the main points of the agreement:

Jeffrey Francks – delegation chief

• We have successfully ended negotiations with Romania for the financial pack of approximately 20 billion euro for Romania. The letter of intent will be sent in Washington and will be analyzed by IMF experts.

• the financial pack contains 12.9 billion euro from the IMF, some 5 billion from the EC and 1.5 from the World Bank and 1 billion from other international institutions

• 500 billion euro – a support estimated by the European Bank for Reconstruction and Development

• A 2 year pack is most suited for Romania and authorities agreed

• Authorities took up the loan to prevent economic problems

• Romania registered in the last year  2 major problems: one is the commercial balance of exports – imports. The international support will support finance this deficit

• The second problem: the budgetary deficit that grew significantly in the last years

• The financial aid will allow a gradual adjustment of the deficit, in time, and thus Romania will be able to adopt all necessary conditions to join the euro zone

• Romania has a healthy capitalized financial sector

• It is very important to take measures now so that the system to remain well capitalized and banks to take up their credit activity

• Tomorrow we will have a meeting with major banks operating in Romania to sustain the financial pack for the country

• We confirm the support for Romania’s Central Bank commitment to maintain inflation under control

Filip Keereman – European Commission, Head of Unit

• The Commission will send a recommendation for the Council who will set up an agreement for May

• It is important to mention the budget condition: this year we need to have a smaller deficit than last year’s

• Until 2011, Romania should exit the excessive deficit zone

• The mentioned deficit will register 5.1 in our release but it regards the same 4.6 deficit – it is computed after a different method.