The European Union, International Monetary Fund, and World Bank collaborated on Wednesday to bail out Romania with a €20 billion loan – making Romania the third country in Eastern Europe, after Hungary and Latvia, to receive financial assistance to help survive the current recession.
A breakdown of the loan has the IMF issuing a majority of the funding at €13 billion, the EU committing €5, and the World Bank accounting for €1 billion. The extra €1 billion will be sponsored by a collection of smaller creditors and the European Bank of Reconstruction and Development.
The loan comes under the stipulation that Romania make severe cuts in public spending and wages, as well as with a strong urging from other EU members that the country recapitalize its banks and enhance its deposit guarantee scheme.
“I am aware of the hardships that Romania and its citizens are encountering at this time of crisis but I am confident that, with the right policies and with the help of the EU and other international bodies, they will emerge stronger,” said EU Economic and Monetary Affairs Commissioner Joaquín Almunia.