Romania plans to borrow EUR4 billion from the IMF and the European Commission, pending approval from the boards of the two institutions. The financing package, the third such deal Romania would sign with its international partners, will be supplemented by a EUR1 billion loan from the World Bank.
The authorities in Bucharest will treat the new deal as precautionary, meaning they do not plan to draw on the available funds.
“The new stand-by arrangement will support our comprehensive economic program for 2013–15 to maintain sound macroeconomic policies and financial sector stability, and continue structural reforms in an environment of significant external uncertainties,” Romania said in its letter of intent to the IMF agreement.
To secure the new financing line, Romania has pledged to a series of actions ahead of the IMF’s board meeting next week, including approving several government ordinances in the fiscal and public investment sectors.
Romania and the IMF have signed a two-year EUR3.6 billion loan agreement in 2011, following the completion of a larger EUR13 billion deal secured in 2009. The agreement was supplemented by a EUR1.4 billion loan from the European Union and another EUR1 billion from the World Bank. The country has not drawn any funds under the second program.