| ECONOMIC DECISIONS RELATING TO LOANS AND INTEREST RATES 07/05/2009 |
| (2009-05-07) |
| Last updated: 2009-05-08 14:06 EET |
After Romania recently got the green light for a 13.5 billion Euro loan, the EC also approved the five billion it had promised Bucharest. The first instalment of 1.5 billion is available to Romania at the beginning of June, with the second coming in by the end of the year at the latest. This money goes straight to the Ministry of Finance, to cover the budget deficit. Prime minister Emil Boc explained that the loan agreement entails no conditional relation between the EU loan and monitoring the justice system, as it has been speculated.
Here is the prime minister:
‘The preamble refers to something that already exists in Romania’s EU accession treaty, namely the mechanism for co-operation and verification in the justice system, the fight against corruption, and the degree of absorption of community funds; and I clearly state that, irrespective of the duration and the framework of the assistance program, Romania will be monitored in keeping with European regulations on the fight against corruption and transparency in the use of European funds, but these things will not be put down in the technical agreement with the European Union’.
On the other hand, the foreign financing commitments, confirmed by the IMF and the EC, have convinced the national bank to reduce the reference interest rate from 10% to 9.5%. In this decision, the central bank took into consideration deflation. The measure came as a bit of a surprise to analysts, who expected for the interest rate to stay the same, or go down no more than 0.25%. The director of the Applied Economics Group, Liviu Voinea, sees the National Bank measures as a process that aims to unblock crediting:
‘In my opinion, it is not a single decision, but a trend that started about a month ago, and which will continue. This measure should not be seen individually, but as a part of a process of reducing substantially, I believe, the reference interest rate, reducing administrative constraints to the mandatory minimum reserve ratio; of course, this time it was not changed, but it will be. This overall process aims to affect the banking market, and break the loaning deadlock. The National Bank has managed to prove other times as well, that it generally has a cautious approach, avoiding sudden changes in the reference interest rate, and the effects are seen in time, because the measures are gradual’.
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2025-04-03
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