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| A LOAN AGREEMENT FOR ROMANIA 26/03/2009 |
| (2009-03-26) |
| Last updated: 2009-03-27 19:35 EET |
Having stirred up political polemics over its possible economic and social implications, the idea of getting a loan from the IMF, aimed to help Romania contain the local effects of the world crisis, is now a fact. Representatives of the International Monetary Fund on Wednesday announced they agreed with the Bucharest officials on a stand-by accord worth 12.9 billion Euro.
5 billion Euro will be granted by the EU, 1 billion Euro by the World Bank and 1 billion Euro by the European Bank for Reconstruction and Development and other institutions. According to Prime Minister Emil Boc, the 20-billion euro loan is meant to relaunch Romanian economy.
The head of the two-party government, the pro-presidential Liberal Democratic Party and the leftist Social Democratic Party, pointed out that the agreement is more favourable than similar accords forged by the IMF with other East European countries such as Hungary and Latvia. PM Boc has insisted on the document's social component:
''This accord is aimed to help Romanians keep their jobs, pay back their loans by maintaining a rational and balanced euro-leu exchange rate, relaunch lending in Romania and support the business environment and economic activity. It is also meant to indirectly help us further pay pensions and salaries. We are trying to come up with solutions to be able to offer pay- rises to those in the low income bracket, in keeping with the inflation rate. We also want to ensure a reasonable pension level for those with small pensions.''
The downside of this agreement, however, regards the usual austerity measures imposed by the IMF in exchange for financial support. Romanian authorities have been warned to reform the system of pensions and cut budget spending, to keep state salaries within certain limits of the GDP, and to maintain the quantum of bonuses in constant ratio to the income.
As trade unions disapproved of all these measures, President Traian Basescu had to convene their leaders and launched an appeal for solidarity, as the IMF loan ''is not for the executive, but for Romania''. He urged trade unionists not to claim pay rises until the adoption of a single law for the budget system. Marius Petcu, leader of the National Confederation of Free Trade Unions in Romania - CNSLR Fratia, (traditionally supported by the PSD), seems to have agreed to this:
''If it weren't for this fear that, without a loan from the IMF the exchange rate would have been severely affected, we would have run out of liquidities, which are necessary to the proper functioning of companies, we would have rejected this option. But I think we can make it bearable.''
On the other hand, Aurel Cornea, head of the Federation of Free Trade Unions in Education, obviously bothered by the leading parties' having abandoned their exuberant electoral promises made last autumn, when they announced a 50% rise in the teaching staff's salaries, has said:
“I'm not satisfied because a 20-billion loan does not give me or any other Romanian citizen, the satisfaction of being a good thing.''
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