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Jurnalul.ro Vechiul site Old site English Version NEED FOR MONEY / The decision of a loan in two weeks time

NEED FOR MONEY / The decision of a loan in two weeks time

de Daniela Ivan    |    17 Feb 2009   •   00:00

The decision regarding a possible loan that Romania would get from the European Commission or the IMF is to be taken in two weeks, announced PM Emil Boc.

The PM explained that any agreement with the International Monetary Fund (IMF) must pass through the European Commission because Romania is an EU member state, but the IMF must agree any deal with the EC as well. "We have been discussing over the past two weeks and we will have an answer regarding an agreement with the EU or with the EU and the IMF or with any other banking institution. We are discussing at this time with the banking stability committee, a committee established by law, which makes these assessments as well as the proposals to the Government. We will also discuss with the NBR governor to take a decision in this regard", said Emil Boc. President Traian Băsescu stated that he would prefer European money rather than the IMF money and said he had already announced the European Commission on Romania's intention to contract a loan of 6-7 billion Euros, under the supervision of the Fund.

The Government wants the banks in Romania to keep their access to the money from their mother companies. "The government does not want to nationalize the banks; this is not the right direction. However, the Government will make a very serious analysis together with the NBR and the banks in Romania, in order for the funds to be maintained. Our desire is that the banks that participated in the privatization process in Romania will abide by the terms of the agreement with the state. Here, I think we can find common solutions, so that the funds won't disappear", said Boc at the launch of the analysis, synthesis and prognosis report of the Romanian Academic Society. "Romania in 2009, the economic crisis and the state". He added that the Government does not intend to take over shares from the banking institutions in exchange for support measures, which would imply nationalization. President Basescu said the parent banks that are the main shareholders of the banks in Romania are required to continue providing the necessary resources to finance the economic activities.

The economic crisis has created serious problems to the parent banks in Austria, Greece, Belgium, which have invested in Eastern Europe. After the tour of the Austrian Finance Minister, Josef Pröll, in Romania, Croatia, Bulgaria and Ukraine, the press in this country is concerned that the Austrian banks would not be able to support by themselves the losses of the subsidiaries, and the state could be asked to intervene. The Austrian banks have loans worth 230 billion euros, which is 70% of Austria's GDP. Six European banks (UniCredit, Societe Generale, Raiffeisen, Intesa SanPaolo amd KBC Groep) have asked EU to come up with a program for Eastern Europe, which should provide that European financial institutions such as the EBRD would provide loans and guarantees to banks in the region.

The IMF Head says that a "second wave" of countries is to become victim of the financial crisis and will ask for help from the IMF. Strauss-Kahn believes that the next victim of the financial crisis could be Poland, but Romania is also considered a country with one of the most hazardous economies in the EU, Telegraph notes. Most economic analysts consider that Romania's vulnerability lies in the dependence on foreign capital for development and the high level of loans and expenditure on the domestic market, encouraged by the budget policy.

  • Transalated by Sorin Bălan

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