Accord with IMF has nothing worrisome in its reading, president Basescu says
The agreement Romania inks with the International Monetary Fund (IMF) and other financial institutions does not include any conditions to question the country’s solvency and is nothing but a preventive move to fight the effects of the economic crisis, president Traian Basescu said.
The president is in Vienna on an official visit, returning the past visit of the Austrian president Heinz Fischer.
“We are not discussing with the IMF on an aid,” the president said reiterating the accord’s reading has nothing worrisome in it.
He added that both big banks in Romania and their Austrian mother banks are solid. Also, the Austrian president pledged that mother banks headquartered in Austria will not withdraw financing lines from Romania. Austria rolls investments of 12 billion euros in Romania.
Recently officials in Romania admitted the need of an external financing, not so much to help cover holes in the economy, but to support the foreign exchange rate, the budget deficit and the investments.
Some voices familiar with the negotiations say that the loan will stand at 18-19 billion euros and be a two-year accord. No official sum was announced yet.
The leader of the ruling Social Democrat Party (PSD) Mircea Geoana said 13 billion euros, out of the 18 billion most likely to be borrowed, will be spent to stabilize the exchange rate while 5 million euros coming the European Union will be used to finance the deficit and prop up investments.