Reforms and European Funds, the key to meet IMF targets
The disbursement of the next tranches under the stand-by arrangement with IMF and EU is not the problem, but the way Romanian authorities use the money in attracting EU funds, said the governor of NBR, stressing that the external borrowing was inevitable in case of Romania.
“In order to calm the public opinion – it seems to be a major concern on how the country will find the resources to repay the loan - I can say that this is not the issue here, but the way local authorities will use the money to put in place reforms and to attract EU funds. We borrowed €20bln and we still have to take €30 billion from European Union,” said Isarescu.
The governor stressed that the two agreements with IMF and EU were “useful for Romania, in fact they were inevitable”, given the higher-than-expected external gap.
Current account deficit is expected to reach 5.5% of GDP this year, from 12.3% in 2008.
“We are talking about nearly €10 billion. What would Romania have done without the borrowed resources? The bet of the agreement was not credibility only, but the need to replace private capital with the public capital from these international financial institutions”.
“In order to calm the public opinion – it seems to be a major concern on how the country will find the resources to repay the loan - I can say that this is not the issue here, but the way local authorities will use the money to put in place reforms and to attract EU funds. We borrowed €20bln and we still have to take €30 billion from European Union,” said Isarescu.
The governor stressed that the two agreements with IMF and EU were “useful for Romania, in fact they were inevitable”, given the higher-than-expected external gap.
Current account deficit is expected to reach 5.5% of GDP this year, from 12.3% in 2008.
“We are talking about nearly €10 billion. What would Romania have done without the borrowed resources? The bet of the agreement was not credibility only, but the need to replace private capital with the public capital from these international financial institutions”.