EnglishTorres, CE: "We have received Romania"s request and we have already begun working together with the authorities in Bucharest and with the IMF experts on a memorandum of understanding for a financial package"
Romanian authorities have notified the European Commission their intention to access medium term foreign funding, according to a communiqué by the Ministry of Public Finance (MFP).
This is the first step that Romanian officials should take in order to receive a foreign loan from any international financial institution such as the International Monetary Fund, the European Investment Bank, the European Bank for Reconstruction and Development.
Amid the current financial crisis, a cautious approach of the Romanian authorities is looking to avoid a tardy intervention that could affect the macroeconomic balance even further, and also to provide a short term umbrella against any possible weaknesses, according to the press release from the Ministry of Public Finance.
The latter, together with the Central Bank, initiated preliminary talks with the representatives of the European Commission, of the IMF and of other international financial institutions, concerning the evaluation of the macroeconomic environment and of Romania"s possible needs for outside funding.
The outside financial aid and the proactive steps of the Romanian authorities represent a guarantee for the medium term financial stability, thus encouraging the recovery of the business environment and getting back investors" confidence in Romania"s economic potential. In the long run, this will provide the needed conditions to capitalize on the opportunities for economic growth when the world economy will recover, says the Ministry of Public Finances.
In order to reduce the negative effects the financial crisis had on the real economy and on the level of employment, the Government has made a full commitment to implement an economic stimulus package and to defend the population"s best interest, as well as expedite economic reforms, the Ministry"s communiqué states.
Apart from the talks on securing foreign funding, the Government stands by its decision to rush structural reforms in order to modernize Romania, to ensure economic efficiency and the sustainability of public finances. "To this end, we are considering ensuring a spending framework for the medium term, and the continuation of reforms in the public sector through decentralization steps, the simplification of the fiscal system, a reduction in bureaucracy, the increase of administrative capacity, and of the country"s ability to absorb European funds", says the Ministry of Economy and Finance.
The European Commission has already begun working together with the experts of the Monetary International Fund and with the Romanian authorities on an agreement similar with those signed by Hungary and Latvia, according to Amelia Torres, spokesperson for the Commissioner for Economic and Monetary Affairs, as quoted by NewsIn.
"We have received Romania"s request and we have already begun working together with the authorities in Bucharest and with the IMF experts on a memorandum of understanding for a financial package", Torres said.
When asked if Romania"s situation - with a private sector debt of 24 billion Euros - will allow imposing other terms than the ones forced upon Latvia and Hungary, where the great issue was government debt, Torres answered: "I don"t know whether the situation is different. In any case, the mechanisms used are the same", she maintained.
As seen in the memorandums of understanding signed last year by the governments in Riga and Budapest, the loan installments will be disbursed by the EU subject to reducing the budget deficit and imposing restrictive tax policies. Compliance with these conditions is monitored both by the IMF and the EU.
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