Public finance minister Sebastian Vladescu considers that Romania could shift, after the next evaluation, from a stand-by loan agreement to a “precautionary” arrangement with IMF, which would demonstrated that the Romanian economy steadily recovers. However, Vladescu believes that it is too early to say if this decision can be made soon. “It is too early to say if we shall change the arrangement after the next evaluation. Hopefully, we shall shift to a precautionary agreement, because this would mean that the global economy is recovering and the Romanian economy has recovered,” he declared, quoted by Mediafax.

A “precautionary stand-by” agreement differs from a “stand-by” agreement because the money amounts stipulated in the agreement may be used only in emergencies, although it establishes for the signatory country similar economic arrangements. BNR vice governor Cristian Popa was saying recently that it would not be impossible for Romania to attract less money than the total amount agreed through the funding agreements with IMF and EU. A new IMF mission will come to Bucharest at the end of April or the beginning of May to evaluate the criteria fulfilled by Romania in March, and the next tranche could be released by June 15. Valentin Lazea, chief economist of the National Bank of Romania, also stressed that, like in the case of Hungary, the shifting to a “precautionary” arrangement would be a message of confidence conveyed to the markets that Romania can handle its problems alone.

“The advantages would be intangible, especially a better perception of the Romanian economy, not necessarily of costs,” the BNR official said, quoted by Hotnews.ro. Romania has a two-year loan agreement with IMF, totaling EUR 12.95 bln, the total foreign funding package from the IMF, the EU, the WB and the EBRD rising to EUR 19.95 bln.

In early May, IMF transferred the first tranche of the loan (around EUR 4.8 bln), which entered BNR’s reserve, and in September it granted also the money representing the second tranche (EUR 1.85 bln), half of it going again into BNR’s foreign currency reserve, and the other half into the state Treasury which is with BNR. Until the end of February, IMF will transfer to Romania another two tranches, with a total value of EUR 2.3 bln.