Romania taps IMF for Help

As the global financial crisis looms, more and more countries beseech to International Monetary Fund for assistance. Just recently, Romania was provided with a total of €20 billion with the help of European Union and World Bank.

Settlement of foreign debts which are due this year and restructuring of local economy are the priorities of the said aid. Romania showed the biggest growth rate last year amongst the EU members and the aid will surely help them to get back on the track.

European Union through European Bank for Reconstruction and Development provided €5 billion which will be invested in Romania over two years and the World Bank will issue a project aid worth €1.5 billion. The IMF will cover the rest of the total bail-out money to nearly €13 billion.

This brings the Romania as the third EU member and seventh country in Eastern Europe to have received IMF funding following other countries such as Belarus, Hungary, Ukraine, Latvia, and among others.

IMF also encouraged foreign banks that are operating in Romania to lend a hand in rescuing the economy by giving assistance to their local subsidiaries. In harsh times like this, when the local industries are plummeting, loans from the healthy foreign owned banks are the best options to cushion the effects of the crisis. IMF also appealed to foreign banks not to withdraw their investments in the country.

Romania started its call for foreign funding since the crisis took a hard hit on their industries beginning with the fall of the steel prices and a huge drop on in demand for automobile exports.