Page last updated at 12:38 GMT, Wednesday, 25 March 2009

Romania gets IMF emergency loan

IMF headquarters, Washington
The IMF has already provided loans to Latvia and Hungary

The International Monetary Fund (IMF) and other lenders have agreed in principle to provide Romania 20bn euros (£18.4bn; $27bn) in aid.

The IMF will lend 12.95bn euros, the European Union will provide 5bn euros and the World Bank will lend 1bn euros.

The European Bank for Reconstruction and Development (EBRD) is to invest up to 1bn euros in Romania over two years.

Romania is the third EU nation to be given IMF aid recently, after loans were given to Latvia and Hungary.

The latest IMF economic program has been agreed by its staff mission, but needs approval from the executive board and management.

Similarly the World Bank needs to agree its part of the deal and the European Commission must approve its contribution.


The IMF said core measures under the plan are aimed at "strengthening fiscal policy further to reduce the government's financing needs and improve long term sustainability, thus preparing Romania for eventual entry into the eurozone".

BBC correspondent Oana Lungescu said: "In just a few months, Romania's economic fate has turned.

"From a country which last year registered the EU's highest growth rate, it is now shedding thousands of jobs mainly in the car and steel sectors, and facing the collapse of a property boom."

Following the IMF announcement, Ionut Dumitru of Raiffeisen Bank said: "This is very good news for Romania because the sum covers entirely the financing gap."

"I expect the first impact of it would be an improvement of foreign investors' perception towards the country."

The EBRD said about half of its loan would be dedicated to the financial sector, with the remainder invested across the broader economy, including in the corporate, energy and energy efficiency and national and municipal infrastructure sectors.

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Telegraph IMF rescues Romania with 20bn aid - 25 hrs ago
Deutsche Welle Romania Secures Financial Lifeline from IMF, World Bank and EU - 26 hrs ago
New York Times I.M.F. Announces Financial Rescue Plan for Romania - 32 hrs ago
Reuters UPDATE 4-Romania secures 20 bln euro IMF-led rescue - 38 hrs ago
Guardian Unlimited Third eastern European nation bailed out - 42 hrs ago

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