Massive rescue package: Romania may be the recipient of 20-bln euro package from IMF

multilateral rescue package, designed to dodge a severe economic crisis in one of the poorest countries in EU, will probably be similar to 20-bln euro program in Hungary last year, said an official familiar with the issue, cited by Financial Times.

Romanian government and IMF have reached an agreement on quantitative parameters of last week’s package, during an official visit of a Romanian delegation to Washington. Within the next ten days, the experts of IMF, European Commission and World Bank will be in Romania to hammer out the final points.

“The agreement will confer Romania sufficient time to implement the policies… without looking over their shoulder to see if a crisis is on sight”, said the official.

Romanian government did not disclose any details on the size of the rescue package, as it is named by Financial Times.

Romania will thus, become the fourth east-European country to call for financial support at international institutions in the heat of economic downturn, after Hungary, Ukraine and Latvia.

The package that Romania will receive will run for longer than 17 months, to which Hungary was a joint beneficiary, said the official cited by Financial Times, without commenting any further.

European Bank for Reconstruction and Development and European Bank for Investment will provide financing to Romanian private sector and financial institutions. It is very likely that EBRD and BCR to have initiated talks for an additional 150-mln euro loan.

Romania needs external finance of roughly 12-13 bln euros, the required amount not covered by the financing reaching 10 bln euros in the best case scenario and 20 bln euros in the worst case scenario, said Ionut Dumitru, senior economist at Raiffeisen Bank, in a statement last week.