IMF Says Flexible On New Romania Loan Agreement

Franks told MEDIAFAX that a two-year deal would "make sense", but nothing was yet decided.

Besides, the new arrangement depends very much on the recovery pace of the Romanian economy, Franks added.

The IMF official said he was puzzled that the Romanian economy is still ailing, despite a significant growth in exports reported in 2010.

Romanian gross domestic product is estimated to grow 1.5% in 2011, after a contraction of around 2% predicted for last year.

In May 2009, Romania and the IMF signed a EUR13 billion two-year standby loan, part of a larger EUR20 billion package that includes funds from the World Bank, the EU and other foreign lenders, meant to cushion the effects of the recession and help with the economic recovery.

The Romanian authorities said recently the country would enter a follow-up agreement once the existing one expires in the coming months.

Peter Harrold, Country Director for Central Europe and the Baltic Countries at the World Bank, said earlier Tuesday that the new deal will most likely be signed for two years, but the exact duration will be set after discussions with the authorities in Bucharest.

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