IMF Official: Foreign Loan To Protect Romania Of Crisis’ Worst Effects

“The Romanian economy is facing several challenges in the near term but has huge potential in the medium term," said Lybek, who will become the new IMF Resident Representative in Romania and Bulgaria after Juan Fernandez-Ansola’s term of office expires on March 31.

 

"First, Romania’s export markets, including euro zone countries, are adversely affected by the global crisis. Second, the global financial crisis has made it very difficult for investors and banks to bring new capital into Romania,” Lybek said in an e-mail interview.

 

Finally, according to Lybek, Romania has a "serious fiscal problem," as the budget deficit rose even in years with high economic growth.

 

Romanian authorities will have to implement measures to address the external and fiscal imbalances. "Fiscal measures are designed to strengthen fiscal policy further to reduce the government’s financing needs and improve long-term fiscal sustainability," he said.

 

Those measures include improvements of the budgetary procedures, reforms of the public sector wage policy to make it more transparent, pension policy to ensure that the pension system is sustainable, and better monitoring of public enterprises with a view to improve their efficiency and are introduced in Romania’s agreement with the IMF, the EC and the other financial institutions.

 

Romania agreed Wednesday with the International Monetary Fund an economic program supported by a EUR12.95 billion loan under a two-year stand-by arrangement.

 

The total value of the financial package that includes loans from the E.U., the World Bank and other financial institutions is of EUR19.95 billion.