Next year will see the nearly 20 billion-euro record loan takenout by Romania from foreign financers mature, and the National Bankand the Finance Ministry are set to start repaying loaninstalments, with one of the issues discussed being whether theGovernment will have to sell some of its assets in order to repaythe money.
Recently, Grzegorz Konieczny, general manager of FranklinTempleton and portfolio manager of FP (Fondul Proprietatea), wasquoted as saying by Reuters that the Government had to sellholdings in order to pay back the IMF programme. He said FondulProprietatea (Property Fund) expected the Government could raisenearly 1.5 euros selling shares in state-owned companies in thenext couple of years.
So far, the authorities have only paid interest on the nearly 20billion-euro record-high loan sealed with the IMF, the EuropeanCommission and the World Bank nearly two years ago.
The first principal payment will be made on August 6th 2012 andwill amount to 546 million special drawing rights (SDR), i.e. over600 million euros at the current SDR value.
"The repayment of the loan is done in instalments. There is nomajor pressure involved. Under no circumstances is the Governmentunable to repay the loan unless it sells holdings in state-heldcompanies. The sale is a solution that can be considered. TheGovernment's intention to sell stakes on the stock exchange hasbeen previously announced. It is not unexpected. But I don't thinkthe Government is forced to do this amid pressure to repay theloan," said analyst Aurelian Dochia.
On another note, as part of the new precautionary arrangement withthe IMF, the state-run companies will be much better monitored,considering the high level of arrears, and the Fund believes theresources derived from privatising viable companies could providecheaper financing of the budget deficit, sources close to thenegotiations say.
On the other hand, while the arrangement with the IMF will continuein some form or another, the continuation of the agreement withforeign banks on maintaining exposure to Romania is not ironclad,and may be dropped, as parent banks maintain exposure voluntarily,sources close to the talks say
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