Geoana Asks Government To Explain: Why Is Romania Borrowing 20 Bln EUR?

C.D.

While on an election campaign, Mircea Geoana, President of the Social Democrat Party (PSD) yesterday asked the Government to identify all conditions and constraints that Romania was going to commit to as part of the loan agreement with the European Commission. "I have made an official request, primarily to the Finance Ministry, to identify all conditions that Romania is about to commit to before the European Commission. It is well known that the Finance Ministry and the European Commission are currently negotiating the five billion euro loan. These things need to be corroborated with what has already been agreed with the IMF and, something which is less known, with the provisions of the agreement with the World Bank, including a few sensitive paragraphs," he said.

Geoana told Agerpres that he wanted the Cabinet to prepare a consolidated, coherent point of view allowing the people of Romania to understand in detail the obligations that the country was committing to in exchange for the 20 billion EUR loan from the international financial institutions.

• Ruling coalition clashes over lending policies

Mircea Geoana said a "harder discussion" on reducing interest rates had taken place a day before, during a meeting of the ruling coalition and then during a meeting of the PSD leadership. He said he had asked the Finance Ministry and the National Bank for a "predictable" calendar for revitalizing lending and lowering interest rates "without which the Romanian economy will suffocate."

"In exchange for the 13 billion euro we have borrowed for the banking system in Romania, in exchange for still vague promises of revitalizing lending and reducing interest rates - in order to make loans affordable for companies and economic activities - we are expecting a calendar," Geoana said.

• Struggle for CEC Bank control?

The Social Democrat leader also stressed that his party did not want to have a political conflict with the Democrat Liberals regarding the appointment of the president of the State-controlled CEC Bank. He emphasized that CEC Bank was an important financial institution that should not be treated as just another agency or ministry.

Geoana explained that, for the time being, PSD and PD-L did not have any divergence regarding the appointment of the new president of CEC Bank. "There are no different versions. CEC is an important financial institutions, which we are treating with the fullest responsibility. We have made proposals and we are now waiting for the Finance Ministry to make appointments to the Board of Directors, with the mandatory prior approval of the National Bank, as required by the Romanian law," he said.

"We are not turning this subject into a political dispute. After all, it is not something we want to politicize, but we believe it is important to use every means available to the Romanian State to stimulate economic recovery in this period," Geoana added.

PSD President Geoana concluded that the State-controlled CEC Bank, a sensitive institution subject to BNR control, should not be politicized precisely in order to ensure all the functional means to finance the economy.