A general loan or a pre-financing agreement with the European Union is necessary, as Romania does not have the capacity to absorb €6-7 billion through European funds, according to the Governor of the National Bank of Romania (BNR), Mugur Isarescu. He said he agrees with the calculations of President Traian Basescu, who said last month that Romania announced the European Commission (EC) that it wants a €6-7 bln loan under the supervision of the International Monetary Fund (IMF). Isarescu added that “an IMF agreement is a protection hat, not financing,” considering the stability of the exchange rate is “vital for Romania.” “It must be clear that the IMF financing lines are a swap in which the central bank offers lei and receives foreign currency, and this is just a protection of foreign currency reserves,” said the central bank’s Governor. He further added that any financing agreement would imply costs of several hundreds of millions of euro, which Romania will have to pay in the future, without knowing at the moment the financing gap which the private sector will register. At present, the interest rate at which Romania could take out a loan from IMF is about three percent according to IMF officials, compared to the 13 percent interest on loans from foreign banks. In January, IMF and EC signed a collaboration agreement to grant funds to countries in the European Union. The first draw which could be attracted by our country in case of a stand-by agreement would be one quarter of the loan’s total value.
