While stressing that he is not considering a loan from the IMF, because this would draw Romania back to the 1990s, Basescu said the country needs a supervisory agreement with the fund, because the EU lacks such a tool to check how funds lent to member states are spent.
However, Basescu indicated that an agreement with the IMF should not include conditions for Romania, and that the EU must fulfill its commitments to member states, also granting loans to countries outside the euro-zone.
Basescu denied that the authorities are discussing loans from the European Bank for Reconstruction and Development (EBRD) or the European Investment Bank (EIB). Both an IMF and EC missions are currently in Romania to examine the country’s macroeconomic situation and its outlook. A new commission is set to come to Bucharest to discuss a possible loan. Sources close to the discussions between IMF representatives and Romanian officials said that a loan from the EC and supervised by the fund is not possible. “The required funds can only be attracted through collaboration between the two institutions, which would also carry out the supervision together. The EC would not grant such a large amount, and lacks technical experience for such a loan,” sources said. They added that, as happened in the case of Latvia and Hungary, the funds would be lent by both institutions. “The EC would grant funds for a certain financing need, while those from the IMF would be for another financing need,” sources said.
The EC representative in Bucharest, Nicolae Idu, told Business Standard that the European Commission would lend funds to a certain country depending on their destination - such as macroeconomic deficits or the banking system.
Finance Ministry representatives were not available for comment before the closing of this edition.
Romania needs some €5-9 billion worth of financing, according to Prime Minister Emil Boc. Part of the funds will be attracted through bonds. Authorities and analysts have been discussing the possibility of a loan from an international institution. However, the top priority of Romania’s government must be a credible budget, and not the possibility of an external loan, according to the Representative of the International Monetary Fund (IMF) in Romania and Bulgaria, Juan Fernandez-Ansola. Finance Minister Gheorghe Pogea recently said that Romania could ask for an IMF or EU loan. Former Finance Minister Daniel Daianu agrees: “We need a financial assistance package, not from the IMF alone. We must also call on other institutions, such as the European Central Bank, the Bank for International Settlements, the European Investment Bank, and the European Commission.” However, President Basescu repeatedly ruled out this possibility, on the grounds that Romania would be drawn back to the situation it faced in the 1990s, when the country was borrowing funds from the IMF based on very strict conditions.
‘I categorically rule out the option of Romania going to the IMF now to say: We need 10 billion. And I can tell you that Romania needs this to finance its current debt. Traian Basescu Romania’s President
