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International lenders ready to give loan installment to Romania

(Xinhua)
Updated: 2010-08-04 23:37

BRUSSELS - The European Commission said Wednesday that Romania has met the conditions to receive the third disbursement of loans from the European Union.

Romania's economy was suffering due to the global financial crisis. A bailout plan worth 20 billion euros ($26.4 billion) has been promised by the EU, the International Monetary Fund, and the World Bank as the Romanian government agreed to carry out deep budget cuts.

A joint mission of experts from the three international lenders visited Romania from July 26 to Aug 4 to appraise the country's progress in reform program, the commission said in a statement.

The mission concluded that the fiscal consolidation measures promised by the Romanian government have been implemented and appear sufficient to reduce the country's budget deficit to 6.8 percent and 4.4 percent of gross domestic product (GDP) in 2010 and 2011 respectively.

Romania is also committed to bring its deficit below 3 percent of GDP in 2012.

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According to the aid package, the EU will provide 5 billion euros via its balance-of-payments facility, which is used to help non-eurozone countries facing financial difficulties.

The EU so far has disbursed 2.5 billion euros in two installments to Romania.

A third installment of 1.2 billion euros will be delivered as soon as the EU finance ministers approve the mission's conclusion.

The Romanian economy was expected to shrink 1.9 percent in 2010 after a contraction of 7.2 percent in 2009, said EU representative Laurent Moulin.

The IMF, however, expects the country to return to a growth of between 1.5 and 2.0 percent during the period.