The economic crisis and loans

After the historic loan of 20 billion Euros granted by the IMF, EU and other international bodies, thanks to which Romania managed to overcome the first effects of the crisis, rumours have it that a new loan agreement will be signed. The new loan is smaller than the previous one, but is critical to preserving the country's credibility in the international financial market. Analysts say Bucharest cannot obtain long-term loans because of the imbalances in its economy. Under these circumstances, it needs, above all, a loan able to act as a guarantee to the international financial market that Romania will carry on structural reforms designed to reduce the impact of public spending on investments.

The announcement on the new IMF loan was made by president Traian Basescu. The head of state said in September that this month consultations would be held in Bucharest with IMF officials. The president's statements were received with reluctance by the central bank governor Mugur Isarescu, who said that Romania does not really need a new IMF agreement, and by some of the Opposition MPs. The Emil Boc government followed president Basescu's suggestion: a new, “precautionary” agreement with the IMF, whose funds will be accessed next year, only if all else fails.

Romania's representative at the IMF, Mihai Tanasescu, believes that a new 24-month agreement would be enough to strengthen Bucharest's position, and enable the government to implement its projects. He denied the opinion that this year Romania will see the worst economic performance in Europe. In turn, the Romanian finance minister, Gheorghe Ialomitianu, said the government would not take new austerity measures in the ensuing period. Reducing public spending, fiscal consolidation and encouraging the private business sector remain on the list of targets suggested by the IMF as part of the efforts to overcome the domestic economic and financial crisis.