Basic facts about the programme

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.

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.

• First supplemental MoU of 27 December 2011 [613 KB]
• Memorandum of Understanding of 29 June 2011 [10 MB]
• Council Decision 2011/288/EU of 12/5/2011 providing precautionary EU medium-term financial assistance for Romania

Key documents

2009-2011 BoP assistance programme

• Council Decision 2009/459/EC of 6/5/2009 providing Community medium-term financial assistance for Romania
• Memorandum of Understanding of 23/6/2009 [998 KB]
• Supplemental MoU of 22/2/2010 [464 KB]
• Second Supplemental MoU of 02/08/2010 [3 MB]
• Third Supplemental MoU of 19/01/2011 [2 MB]
• Fourth Supplemental MoU 08/04/2011 [4 MB]

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

2012

• 9 May - Statement by the WB, EC, and the IMF on the Review of Romania’s Economic Program [15 KB]
• 27 April - Joint press release by the IMF and EC Missions in Romania
• 28 February – Letter of Intent/ Memorandum of Economic and Financial Policies [2 MB] ; Technical Memorandum of Understanding [2 MB]
• 5 February - Statement by the WB, EC and IMF on the Review of Romania’s Economic Programme

2011

• 22 December - The Balance of Payments Programme for Romania. First Review - Autumn 2011 (Occasional Paper)
• 7 November - Statement by the EC and IMF on the Review of Romania’s Economic Program
• 1 August - Statement by the EC and IMF on the Review Mission to Romania
• 29 June - The European Commission and Romania sign Memorandum of Understanding (MoU) on EUR 1.4 billion pre-cautionary balance-of-payments assistance
• 22 June - Last tranche of €150 million disbursed to Romania under the 2009-2011 BoP support programme
• 9 May - European Commission Staff Statement after a joint mission with the IMF and the World Bank to Romania
• 24 March - Romania receives €1.2 billion in Balance of Payments Support
• 18 March - European Commission and IMF welcome the continued support by the parent banks of the largest foreign-owned banks for Romania
• 17 March - €4.6 billion bond issued to assist Ireland and Romania
• 8 February - European Commission Staff Statement after a joint mission with the IMF and the World Bank to Romania.

2010

• 3 November - European Commission Staff Statement after a joint mission with the IMF and the World Bank to Romania
• 22 September - Commission pays € 1.15 billion in Balance of Payments support to Romania
• 4 August - Commission concludes that conditions for third disbursement of the EU BoP assistance of €1.2 bn have been met
• 22 July - Press statement. Commission and IMF welcome the reaffirmed support of parent banks to their Romanian affiliates
• 10 May - Statement after joint mission to Romania
• 11 March - EU disburses second instalment of €1 billion Community financial assistance to Romania
• 25 February - Signature of Supplemental Memorandum of Understanding
• 28 January - EU Balance of payments programme for Romania

2009

• 18 November - European Banking Coordination Initiative Meeting for Romania
• 28 July - Commission pays first instalment of € 1.5 billion in balance-of-payments support to Romania
• 23 June - Commission and Romania sign Memorandum of Understanding (MoU) on €5 billion balance-of-payments loan
• 21 April - Commission asks Council to provide a medium-term loan to Romania as part of coordinated multilateral financial assistance
• 25 March - EU intends to provide medium-term financial assistance to Romania of up to € 5 billion