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Balance-of-payments assistance to Romania

On 5 November 2013, a joint EC/IMF mission assessed that the Romanian financial support program to solidify economic growth while maintaining macroeconomic and financial stability remains broadly on track.

Basic facts about the programme 

2013 - 2015 BoP pre-cautionary assistance programme

On 4 July 2013, in the light of remaining risks to its balance of payments, the Romanian authorities requested a third EU medium-term financial assistance programme, again jointly with an IMF Stand-By Arrangement. The EU and IMF assistance is expected to be treated as precautionary, with no actual disbursements foreseen. The new programme will continue to provide support to the economic programme of the Romanian government aiming, among other things, at consolidating macroeconomic, fiscal and financial stability, increasing the resilience and the growth potential of the economy, enhancing administrative capacity, reforming the tax administration and improving public financial management and control.

The new programme will run for 24 months (until end-September 2015) and is composed of precautionary assistance by the European Union of up to EUR 2 billion and by the IMF of up to SDR 1.75 billion (around EUR 2 billion) supported by a new stand-by arrangement. In addition, the World Bank will continue providing earlier committed support of EUR 891 million, of which EUR 514 million is still to be disbursed.

2011 - 2013 BoP pre-cautionary assistance programme

In February 2011 a follow up joint EU/IMF precautionary financial assistance program was requested to support the re-launch of the economic growth with a focus on structural reforms, while improving fiscal sustainability and consolidating financial stability. The World Bank will continue providing earlier committed support to Romania under its development loan programme (DPL3) and support for social assistance and health reforms.

On 12 May 2011, the Council of the European Union adopted a decision to make available a precautionary medium-term financial assistance of up to EUR 1.4 billion for Romania. The EU assistance for Romania under the Balance of Payments (BoP) facility comes in conjunction with IMF support through a Stand-by Arrangement (SBA) in the amount of SDR 3.090 billion (about EUR 3.5 billion, 300% of Romania's IMF quota), approved on 25 March 2011, which the authorities will also treat as precautionary. The World Bank will continue providing earlier committed support of EUR 400 million under its development loan programme and of EUR 750 million of results based financing for social assistance and health reforms.

2009 - 2011 BoP assistance programme

The sudden increase in risk aversion during the financial crisis caused market participants to become increasingly concerned by Romania's large internal and external imbalances in the form of a 5.7% of GDP budget deficit and a 11.6% of GDP current account deficit. As a result, capital inflows fell markedly and the exchange rate of the RON against the euro depreciated by more than 30% between August 2007 and January 2009. Consequently, the Romanian authorities applied in Spring 2009 to the EU, the IMF and other international financial institutions for financial assistance.

In May 2009 an agreement was reached to provide multilateral financial assistance to Romania with an overall amount of € 20 billion, consisting of the following contributors:

  • European Community, € 5 billion under the balance-of-payments assistance programme
  • International Monetary Fund, SDR 11.44 billion (around € 12.95 billion) under an IMF Stand-by arrangement approved on May 4 2009, amounting to 1,110.77 percent of Romania's quota
  • The World Bank, € 1 billion under a Development Policy Loan
  • The EIB and the EBRD, € 1 billion combined.

The EU financial assistance has been disbursed in 5 instalments:

  • € 1.5 billion released 27 July 2009
  • € 1 billion released 11 March 2010
  • € 1.15 billion released 22 September 2010
  • € 1.2 billion released 24 March 2011
  • € 150 million released 22 June 2011

The average interest rate on the amounts disbursed by the European Commission is around 3%, with repayments starting in 2015.

Key events in the balance-of-payments assistance programme for Romania








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