Romania Near To €19B IMF Rescue As Crunch Spreads

Discussion in 'Economics' started by ASusilovic, Mar 24, 2009.

  1. Romania is poised to join the International Monetary Fund's growing list of European clients.

    The IMF and local government officials have scheduled a Wednesday press conference in Bucharest together with local officials and counterparts from the European Commission, the World bank and the European Investment Bank to outline a financial-aid package worth around EUR19 billion. Two-thirds of the sum will come from the IMF in the form of a standby loan.

    The IMF funds will go to bolster the central bank's reserves and its ability to manage local liquidity, while the other funds will be used to cover public financing and other needs, Mircea Geoana, head of the Social Democrat party, said Tuesday. His party is part of the coalition government and has until recently been opposed to the rescue scheme.

    The actual letter of intent for the IMF loan is ready to be signed, according to President Traian Basescu's office.

    However, the IMF plans to meet with executives from the parent companies of Romania's 10 largest foreign banks in Vienna on Thursday, so the actual signing may be put off for several days, they said.

    Data Tuesday showed that Romanian private-sector lending contracted in real terms on the month in February, a sharp reversal of years of 50% annual growth rates. The speed of that slowdown underscores the need to lock in external funding guarantees as quickly as possible.

    The IMF is showing an apparent willingness to tolerate a fairly high budget deficit of 4.6% of gross domestic product, according to Romanian officials.

    The IMF is also assuming Romania's GDP will shrink by as much as 4% this year. Because the government's 2009 budget was built on a 2.5% growth forecast, fiscal action will be required.
  2. telozo


    The Romanian economy does not need that money. It is not facing a crisis like Hungary or the Baltic states. It's just the corrupt political/banker class that want some billion dollars into their pockets. Once approved, the loan will disappear fast and the population will be left paying the bill. Like it always is.
  3. Germans will bail out Romania and all of their friends, including Hungary, Croatia, Baltic states...... Don't forget how many hundreds of thousands soldiers of these countries died fighting russians on eastern front during ww2.
    Germans will never betray their friends...
    No problem for eastern europe...
  4. Heh, probably true. I'm originally romanian and all I hear is corrupt politicians.
  5. Talk about partying like it's 1999.,1518,614960,00.html

    After joining the EU, the Baltic countries in particular made enormous progress in catching up with their Western neighbors, sometimes growing at double-digit rates. Romania, a latecomer to the EU, recorded the largest number of new registrations of Porsche Cayennes worldwide in 2008.
  6. dewton


    the elite use the same tactics day in and day out to destroy a nation and make every person in that nation impoverished and a slave to them: 1) bribe officials to accept a large loan the country can't possibly repay, 2) destroy the country's currency and make it default on its loans, 3) capture the country's natural resources and assets as repayment on the defaulted loan (this usually does not result in the loan being paid off), and 4) have the bribed officials tax the citizens in order to secure the payments on the loan. the net result? global poverty, slavery.

    check out "Confessions of an Economic Hitman" on Scribd for additional details: