Commission pays €1 billion in Balance of Payments support to Romania

The EU disbursed today €1 billion to Romania, the second instalment of a €5 billion loan, which was agreed in May 2009 as part of a multilateral financial assistance package. On the same day, it also paid a third instalment of €500 million to Latvia (see IP/10/263). The disbursement to Romania follows a positive assessment by the Commission of the implementation by the Romanian authorities of the conditions agreed in the Memorandum of Understanding (MoU).

"I am happy to report that Romania has complied with the policy conditions for the second EU disbursement. The financial assistance by the EU, the IMF and other international financial institutions has helped Romania overcome the worst of the economic and financial crisis," said Economic and Monetary Affairs Commissioner Olli Rehn. "Progress made towards fiscal consolidation needs to be accompanied by structural policy reforms, including the adoption and implementation of the fiscal responsibility law and the revised pension legislation."

The EU disbursed today €1 billion to Romania, its second instalment in the context of the Balance of Payment loan assistance granted to Romania in May 2009. It now expects Romania to implement the reforms necessary to fulfil the conditions for the disbursement of future instalments. These conditions are set out in the Memorandum of Understanding (MoU), and in the Supplemental MoU, which was signed was signed by the Romanian authorities on 18 February 2010 and by Commissioner Olli Rehn on 22 February 2010.

The SMoU reflects the continued commitment of the Romanian authorities to rigorously implement the agreed macro-financial stability programme and to adopt fiscal governance, financial market and structural reforms in a timely manner. Important reforms include the adoption and implementation of the fiscal responsibility act, the revised pension law and the follow up legislation to the unified wage law adopted in October 2009.

All these actions are necessary to enhance medium term prospects for job creation and growth, allowing the resolution of the imbalances that have worsened the effects of the crisis and permitting the Romanian economy to catch up with the European mainstream. With these objectives in mind, the EU will continue to work closely with the Romanian authorities and the IMF to ensure a successful implementation of the economic reform program and a timely repayment of the loans provided within the context of the multilateral financial assistance package.