The delegation headed by Jeffrey Franks will tackle with Romanian authorities a program suitable for the country, part of a multilateral financing package including the European Union and World Bank.

Earlier today deputy premier Dan Nica said an IMF delegation is to arrive in Romania this week only to carry an assessment of the economy, not grant a loa, NewsIn informs.

The Prime Minister Emil Boc admitted last week the government is in talks with the European Commission about a potential financial aid. If it takes a similar step with the IMF, the government will officially speak about it, Boc said.

“We are worried about the lending slowdown in Romania,” Nica said, adding the Cabinet is looking into ways to help banks resume crediting. In the past weeks talks focused on taking an external financing to prop up the economy.

Romania’s president Traian Basescu addressed the Parliament today pleading in favor of an external loan to insure payments to the budget and protect the country from a rapid deterioration of the economy, in the current economic downturn context.

Romania is faced with serious issues such as the current account deficit and the large debt of the private sector of 24 billion euros which are on everybody’s lips, the president said.

The European Union has in store 30 billion euros for member countries this year and in 2010, but the money is inaccessible without a partnership with the IMF as the European Commission lacks mechanisms to control how the money is being spent, Basescu stressed.

A delegation including Romania's central bank vice governor Cristian Popa and Cabinet secretary from the Finance Ministry, Bogdan Dragoi, went to Washington last week to negotiate with the International Monetary Fund a loan for Romania, people from the financial market told NewsIn.

Talks on contracting a foreign loan sparked tension amid the ruling Liberal Democrat and Social Democrat coalition, the latter requesting the former to present during a meeting today the reasons behind such a move.
No official figure on how much money Romania needs was laid on the table yet.

Romania’s president pleads in favor of external loan to shield country from rapid deterioration

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Romania’s president Traian Basescu addressed the Parliament yesterday pleading in favor of an external loan to insure payments to the budget and protect the country from a rapid deterioration of the economy, in the current economic downturn context.

Romania is faced with serious issues such as the current account deficit and the large debt of the private sector of 24 billion euros which are on everybody’s lips, the president said.

The European Union has in store 30 billion euros for member countries this year and in 2010, but the money is inaccessible without a partnership with the International Monetary Fund as the European Commission lacks mechanisms to control how the money is being spent, Basescu stressed.

A foreign loan would be a “safety belt” for Romania in the eyes of rating agencies, he said. The president reiterated the biggest challenge of the economic crisis is the difficulty to foresee its evolution.

Romania’s not using the money obtained through external credits in the past years is a proof of the inefficient bureaucracy according to the chief of state. Romania could have used some 3.55 billion euros financing from the European Investment Bank, the European Bank for Reconstruction and Development and the European Commission’s bank, the president said.

Other 5.5 billion euros structural funds for 2007, 2008 and 2009 were not spent in Romania, he added.
The president started his speech in front of the two reunited chambers of Parliament by saying Romania could turn into a reformed and modernized state once the crisis is over.

Some 375 lawmakers attended the session in Parliament.

The president announced at the end of last week his intention to address lawmakers on important economic issues.

A delegation including Romania's central bank vice governor Cristian Popa and Cabinet secretary from the Finance Ministry, Bogdan Dragoi, went to Washington last week to negotiate with the International Monetary Fund a loan for Romania, people from the financial market told NewsIn.

Talks on contracting a foreign loan sparked tension amid the ruling Liberal Democrat and Social Democrat coalition, the latter requesting the former to present during a meeting today the reasons behind such a move.
No official figure on how much money Romania needs was laid on the table yet.