If the IMF agreement “derails” commercial banks will step in

“I am convinced that banks have liquidity, and that they are willing to finance. I do not feel that it is now a question of Romania losing the money from the IMF. But, regardless of what government Romania will have, unless certain steps are taken, it will come to this,” van Groningen said.
If the pessimistic scenario does come true, namely if the IMF stops financing granted to Romania, the price of money the state could obtain from commercial banks would be higher.

This would be due to a significantly higher risk which banks would take in such a situation, which would require the application of a corresponding risk margin. Eight commercial banks lent €1 billion to the state this summer, at an interest rate of five percent.

The amount was four times higher than the value of financing attracted by the authorities through various bond issues in the first seven months of this year. According to official data, banks acquired state bonds worth RON 48 billion in this period.

According to van Groningen, Romania should switch from the economic growth model based on loan financed consumption to one based on investments, even if these would also depend on loans.