Romania Receives Letter Approving IMF Loan

"The loan approval letter was received from IMF late yesterday evening (Wednesday – e.n.). There are no changes compared with the initial agreement. Everything is OK. The document must further be signed by Romania’s central bank governor and the finance minister and sent back to IMF, so that the institution starts the necessary procedures," Pogea said.

According to him, Romania had discussions about the foreign loan with the representatives of the IMF, the World Bank and the European Commission.

"We all agreed on the amounts of money, the deadlines and the conditions of the loan. Now, everybody will start doing their job," Pogea added.

Romania agreed late-March with the IMF, the European Union and other international institutions on a EUR19.95 billion financial package, supported by a EUR12.95 IMF loan under a two-year stand-by arrangement.

The foreign loan program is to be discussed early-May by IMF’s Executive Committee and the first tranche of the money, of EUR5 billion, will be available immediately after Romania receives the institution’s full-approval.

The European Commission agreed Tuesday to propose the European Council to provide medium-term financial assistance to Romania of up to EUR5 billion, as part of a multilateral package which will total up to EUR20 billion.

The financial assistance is conditional upon the implementation of a comprehensive economic program to which the Romanian authorities committed to and which will, ultimately, put the Romanian economy on a sound and sustainable footing, the Commission said in a statement.

IMF’s official forecasts for Romania see the gross domestic product contracting by 4.1% in 2009, the current account deficit narrowing at 7.5% of the GDP and the inflation at 5.9% at the end of the year, according to the fund’s latest World Economic Outlook.