Tuesday, February 8, 2011

::IMF Loan Rate Romanian Rp61, 2 Trillion>>

Go Finance Reporting Bucharest - Romania soon get a new loan worth 5 billion euros ($ 6, 8 billion, or Rp61, 2 trillion) of the International Monetary Fund (IMF) and the European Union. Proceeds will be used to prevent a debt crisis.

Romanian President Traian Băsescu said, the contribution of the IMF and the European Union is an emergency loan that will help the country out of financial crisis. He said the agreement as a preventative measure that will be agreed upon during the past two years.

"Based on this, the IMF and the EU will provide 5 billion euros ($ 6, 8 billion) in Romania that can only be withdrawn in an emergency," Basescu said in a statement quoted by AFP.

Basescu emphasized that the ongoing debt crisis in Europe is not known when it will expire. Thus, this situation encourages other countries to prevent it because the crisis could continue. He stressed, this time the agreement is a continuation agreement two years ago that well done and Romania is considered capable of overcoming the crisis.

Known, in May 2009, long before countries like Greece and Ireland received a bailout, Romania hit by the crisis earlier and get help for two years at 20 billion euros from the IMF, the European Union and World Bank. After a severe recession in 2009 and 2010, Romania's economy forecast to grow 1.5 percent in 2011.

Public deficit reached 7.1 percent of gross domestic product (GDP) of Romania in 2009, has been trimmed to 6.6 percent last year and is expected to 4.5 percent this year. "The economy has stabilized and the necessary steps have been taken out of the crisis. The conditions for return to economic growth have been created. Romania's economy is out of the crisis, "said Basescu.

Romanian Government to cut public sector wages by 25 percent in July 2010 and raise value added tax (VAT) on goods and services from 19 percent to 24 percent. The number of civil servants was also reduced as much as 100,000 people, become 1.27 million workers.

"It was a painful act that forced us to implement. But, they help us keep the economy on track, "said Basescu.

However, new agreements on loans that the IMF should be given the green light from the board of directors of international financial institutions on 23 March. If approved, the deal would take effect in April. Under this agreement, Romania pledge to strengthen the economy by developing key sectors such as energy and transportation. Countries bordering with Hungary has also promised to use loans from the European Union and the IMF as possible until 2013.

"Romania will also move forward with education and health reform, consolidating the implementation of public sector wage and pension bill adopted last year and continue to fight against corruption," said Basescu.

Prior to this new agreement, the Fund has been visiting Romania on 25 January. Both sides discussed the latest economic reforms, economic performance, and the possibility of a new agreement. Last week Germany and France said it would urge the countries in the euro zone to adopt a balance budget for the region's economy more stable.

Among the programs that should be adopted are the rules of pension, health costs, and other social programs that support the economy better. German officials said the detailed policy is now in the stage of discussion and plan will be submitted next March. If the proposals are approved in the European Authority, will make Germany supports additional emergency funding of the European Union who previously had submitted several European countries.

Last month the countries in the eurozone requesting the additional funds the European Financial Stability Facility (EFSF) to USD598 billion, from this moment the only USD400 billion. (GoFinance)

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