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| CURRENT ISSUES TACKLED AT TOP LEVEL 18/03/2009 |
| (2009-03-18) |
| Last updated: 2009-03-19 14:06 EET |
“The command centre of Romania’s talks with the International Monetary Fund has officially moved to Cotroceni”, writes the daily newspaper Cotidianul, referring to the meetings between the president and the representatives of the Fund, the National Bank governor Mugur Isarescu, prime minister Emil Boc and some of the ministers dealing with economic affairs, with the exception of the Social Democratic ministers.
The media have been eager to interpret the absence of the Social Democratic Party from the talks with the president as having to do with its reservations against a possible loan from the International Monetary Fund. The Social Democratic wing of the two-party government is said to be somewhat irritated with the impetuosity of the president, who seems to play the leading role in the negotiations with the IMF a little too ostentatiously. Leaving aside the political mood inside the coalition and the relationship between the Social Democratic Party and Traian Basescu, what’s more important right now is the assessment of the Romanian economy recently completed by the International Monetary Fund.
In an interview to a private TV channel, the president said the situation is worse than expected, and the effects of the crisis will be felt in 2010 as well. He explained that Romania will see a contraction in exports with a negative impact on the labour market. A foreign loan is thus necessary for the country’s “safety net” the president talked about in a recent Parliament address. The total value of the loan will be around 20 billion euros and will be available for two years. The president is confident that the terms of the loan will be subject to fair negotiation:
“I’m convinced the government will negotiate these terms properly and if we show solidarity, we’ll do it very well. I hear people asking about how we are going to pay back the loan. We won’t have to do it very quickly and we won’t borrow too much money to begin with, but just as much as we need out of a loan which is available for two years. For a while, we will only pay the interest rate and I hope we will negotiate a good rate, around 3% or even less. So, for 5 to 7 years we will only pay the interest rate and only for the amount we borrow.”
The representative of the only party to have carried through an agreement with the International Monetary Fund after 1989, the Social Democratic deputy prime minister Dan Nica admits that the greatest advantage of a foreign loan is that it makes the national currency stronger in the face of speculative attacks. The reservations of the Social Democrats and the trade unions are related to the budget limitations this loan would imply.
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2025-04-03
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