Brussels, 25/03/2009 (Agence Europe) - On Wednesday 25 March, the European Union decided to provide €5 billion in aid to Romania, the European Commission and the Presidency of the Ecofin Council said in a joint press release. The aid, awarded under the Community facility for balance of payments assistance, is part of a €20 billion international macro-economic aid package which involves the International Monetary Fund (€13 billion), the World Bank (€1 billion), and the European Bank for Reconstruction and Development and other multilateral creditors (jointly €1 billion). The aid package will gradually become available over the period to the first quarter of 2011. The loans will be made available to Romania on the same conditions as those obtained by the Commission and the financial institutions when they raise the money on the markets.
The international support is designed to enable the economy to withstand short-term liquidity pressures and help support the country's economy in the medium term. In the financial sector, the programme will seek to ensure adequate capitalisation of banks, bolster the deposit guarantee scheme and strengthen financial sector supervision. It is conditional on the implementation by Romanian authorities of an economic adjustment programme, which involves the rapid return to consolidation of public finances. The country will have to limit its deficit to 5.1% of GDP in 2009 and take the necessary steps to come back below 3% by the end of 2011. The press release also calls on financial institutions operating in Romania to continue to provide appropriate financing of the economy and asks foreign banks with branches in Romania to confirm their long-term commitment to the country.
With this aid to Romania, following assistance already granted to Hungary (€6.5 billion) and Latvia (€3.1 billion), there is a total of €10.4 billion left “in the pot” for balance-of-payments assistance to non-euro area member states. The Council has, however, already indicated its willingness to raise the facility ceiling from the €25 billion where it stands today, to €50 billion (see EUROPE 9866). A Commission proposal is expected in the coming weeks, a spokesman said. (A.B./transl.rt)