Eurasia Press & News
EU Finance Ministers, on May 5, will discuss a proposed €5 billion loan in financial assistance for Romania to help the Balkan country deal with the effects of the financial crisis, the EU said on Tuesday.
“The proposed European Union loan is part of a multilateral package which will total up to 20 billion euros ($25.81 billion) and is conditional upon the implementation of a comprehensive economic programme to which the Romanian authorities committed … to put the Romanian economy on a sound and sustainable footing,” the EU executive said in a statement quoted by the Reuters agency.
In late March, Romania reached an agreement with major international lenders for a €20 billion loan designed to finance the country’s budget and current-account deficits.
According to the agreement, the International Monetary Fund (IMF) is to lend €12.95 billion, the European Union – €5 billion, while the rest will come from the World Bank, European Bank for Reconstruction and Development and other organisations.
Local economists and investors hailed the agreement, saying that without sufficient foreign investment and cash floating into Romania’s largely foreign-owned banks to finance lending, the country risks running out of money to pay debts and keep the economy functioning.
Romania is following the example of some other European countries, including Hungary, Ukraine, Belarus, Latvia and Serbia, which have already sought rescue loans to prevent defaults, and aid banks.
