EUR 6.8 bn in state reserves. Financing risk dropped significantly


According to Ministry of Public Finance, the sum covers almost six months of the gross financing demand for this year.

The state’s current foreign currency reserves are EUR 6.8 billion and covers 5.8 months of the gross financing demand for 2014, the Ministry of Public Finance (MFP) states in its Report on the Economic and Budget Situation for the First Six Month of 2014. According to MFP, the financing risk – defined as the main risk relative to the public Gov’t debt portfolio – has dropped significantly as the mean remaining maturity of government bonds issued on the internal market increased from 2.4 years in later 2013 to 2.8 years at the end of June 2014.
In addition, the mean remaining maturity of the Euro-bonds portfolio has gone up in the timeframe under analysis from 6.2 years in late 2013 to 7.2 years at the end of June 2014. The mean remaining maturity for the overall public Gov’t debt portfolio has also increased from 3.9 years at the end of 2012 to 4.9 years in late May 2014.“All these trends have generated a decrease in the gross financing demand for 2014 – determined according to the budget deficit and the volume of public debt refinancing – which has reached below 10 percent of GDP (9.5 percent of GDP) for the first time after the economic and financial crisis of 2008,” the report shows further.
On May 31, 2014, the level of gross public debt was 40.8 percent of the GDP, of which public Gov’t debt accounted for 38.6 percent and local public debt for 2.2 percent. The increase in direct Gov’t public debt was prompted by the incurring of liabilities to refinance the budget deficit, the refinancing of public Gov’t debt, and by consolidating the State Treasury foreign currency reserves.
This year’s Q1 implementation indicates that the fiscal consolidation process continues to be enforced and measures are being taken to remain within the perimeters agreed upon with our external partners (EC, IMF, WB), which in turn will create the premises for reaching this year’s budget deficit target. Another conclusion that can be drawn from the MFP report is that necessary resources are being ensured for the European fund absorption rate set for this year and for the ongoing investments whose payment deadlines depend on the implementation stage.
EUR 24.67 bn from EU since the accession
The same economic report reveals that Romania received from the European Union (EU) budget EUR 24.67 billion since the accession in 2007 until the end of the first semester of 2014 and paid to the EU EUR 10.2 billion in the same period, the flow balance being in Romania’s favour with EUR 14.46 billion.
According to MFP data, after the accession, in 2007, Romania received from the EU pre-accession funds worth EUR 2.66 billion and post-accession funds accounting for EUR 22.01 billion, out of which structural and cohesion funds – EUR 9.07 billion, rural development and fishery funds – EUR 5.644 billion, payments from the European Agricultural Guarantee Fund – EUR 5.936 billion, and other post-accession funds – EUR 1.35 billion.
In the first semester of 2014 Romania received from the EU budget EUR 3.58 billion and paid EUR 1.005 billion, the balance being in Romania’s favour with EUR 2.58 billion.
In the first half of this year, Romania received structural and cohesion funds worth EUR 1.74 billion, rural development and fishery funds – EUR 521.35 million, and European Agricultural Guarantee Fund payments for farmers – EUR 1.29 billion.
The Romanian authorities estimate to draw EUR 7.86 billion from the EU in 2014.

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