Romania to endorse IMF-led loan conditions on Sat-PM

BUCHAREST – Romania is expected to approve conditionalities of a 20-billion euros IMF-led financial package for the new European Union member on Saturday, Prime Minister Emil Boc said on Thursday.

On Thursday, Boc met leaders of the centre-left ruling coalition to discuss the loan and an upcoming budget revision that would be designed to adjust economic indicators following weeks of negotiations with the Fund in March.

The package made Romania the bloc’s third member to be bailed out after eastern European contemporaries Hungary and Latvia, as world turmoil wipes out sources of funding for an economy heavily reliant on foreign cash.

The package gives Boc’s cabinet some breathing room by allowing it to run a budget deficit barely below last year’s 5.2 percent of gross domestic product (GDP).
It envisages cutting spending by roughly 1 percent of GDP.

The package includes 12.9 billion euros of IMF money and 5 billion euros from the EU as well as funds from the World Bank and the European Bank for Reconstruction and Development.

Romania would be able to draw 5 billion euros after the approval of the 2-year standby agreement in the board in early May.