Wednesday, global lenders agreed to support Romania to address the effects of the global economic and financial crisis.
The country reached an agreement with the International Monetary Fund, the World Bank, the European Union and the European Bank for Reconstruction and Development for a joint package of EUR 20 billion.
The International Monetary Fund will lend EUR 12.9 billion, the European Union will provide up to EUR 5 billion and the World Bank will contribute EUR 1 billion. The European Bank for Reconstruction and Development will increase its investments to the country by an additional EUR 500 million to EUR 1 billion over the next two years.
The financial assistance will be conditional on the implementation of a comprehensive economic policy programme, the European Commission said in a statement.
European Economic and Monetary Affairs Commissioner Joaquin Almunia said, I welcome the commitment by the Romanian authorities to implement a major programme of economic adjustment aimed at bringing the economy on a sound and sustainable growth path, including through strengthening financial sector supervision.
The European Union said the programme would seek to ensure adequate capitalization of banks and to strengthen financial sector supervision, including banking and winding-up laws.
Orsalia Kalantzopoulos, World Bank Director for Central Europe and the Baltic Countries said, Together with other international partners, the World Bank looks forward to working closely with the Government of Romania over the next two years in implementing a package of measures that will limit the severity of the recession and its impact on the vulnerable, but also lay the foundations for a sound and inclusive economic recovery that capitalizes on Romania's strengths and opportunities.
The World Bank support would focus on longer-term structural issues in three key areas -- public sector reforms, strengthening social protection to cushion the impact of the crisis and financial sector reforms to enhance the resilience and functioning of the sector. These measures would support the country's longer-term stabilization and economic restructuring agenda, the World Bank said.
The World Bank financing would be provided in the form of series of Development Policy Loans disbursed over the course of 24 months.
The World Bank and the IMF economic programme needs approval from respective Executive Boards.
The EBRD said in a statement that approximately half of its contribution will be dedicated to the financial sector, and the rest invested across the broader economy, including in the corporate, energy and energy efficiency and national and municipal infrastructure sectors.
EBRD President Thomas Mirow said, We are acting jointly in Romania now in order to stimulate the Romanian economy and shore up confidence in these exceptional global circumstances and give a new momentum to structural reforms.
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