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Băsescu: We're going to the IMF, nobody will lend us long-term money

Băsescu: We're going to the IMF, nobody will lend us long-term money
22.09.2010, 12:37 11

President Traian Băsescu officially admitted in a speech beforethe Parliament that Romania would sign a new loan agreement withthe International Monetary Fund (IMF) in 2011.

The President did not say how much money Romania would requestfrom the Fund, but explained that Romania would need 5.7 billioneuros just to cover the budget deficit that it committed to keep at4.4% of GDP in 2011.

"In 2011 we need to borrow 5.7 billion euros just to cover thebudget deficit (...) In 2011 we will sign a new agreement with theInternational Monetary Fund."

Businesspeople believe the President's messages announcing a newloan only serve to make fears about Romania's real situation worserather than calm things down.

"If the President comes up with a speech that clearly sends themessage that there is no other way than an IMF loan, I'm afraid itwill induce fears that will create an entire chain of negativereactions, and the problems will not be fixed by public speeches. Ifor one am totally against a new IMF loan," says Florin Pogonaru,chairman of the Association of Businesspeople in Romania(AOAR).

According to the head of state, the agreement with theInternational Monetary Fund has to do with Romania's credibility,but also with the fact that because of the deficits and theimbalances in the economy nobody will lend long-term money toRomania.

"I'd want us to borrow for ten, five or fifteen years. Only thatRomania has huge trouble taking loans falling due in threeyears."

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