The loan from the European Commission (EC), worth EUR 5 bln, granted to Romania, shall be provided in 5 installments, over 3 years, and it shall be repaid in 7 years, the European officials checking, at regular intervals, whether the Romanian authorities observe the commitments undertaken.
As the understanding memorandum agreed between the two parts, whose terms were outlined in an official document received by Mediafax, points out, “Romania is willing to adopt and implement additional consolidation measures to secure macro-financial stability, should such measures become mandatory during the assistance program. The Romanian authorities consult the Commission prior to adopting any such additional measures,” the document reads.
Romania shall open a special account with the National Bank, to manager the EC financial assistance on medium term.
The interest borne by the EUR 5 bln loan from the European Commission is 3 per cent per year. According to HotNews.ro, the European Commissioner Leonard Orban said, on Saturday, during the launch of “Studies of strategies and politics – SPOS 2008” that it is too early to speak about the EU lending terms, since these are to be set over the next weeks. Yet, in similar terms as in case of IMF agreement, the EC asks, in addition, for reducing expenditures with salaries by canceling the salary raises scheduled for 2009 along with a cut in the number o jobs, including by having one vacancy, out of seven, filled in. The document includes a distinct paragraph stating “the reduction of expenditures with salaries in the public sector, in nominal terms, compared to the values of 2008, by canceling the salary raises in this sector (5 per cent in nominal terms) scheduled for 2009 (or through additional staff layoffs inducing an equivalent effect) and by cutting jobs in the public sector, including through replacing only one employee out of seven who leave the public sector.”
The installments following the first payment from the loan granted by the EC are conditional upon the implementation of certain policies addressing, among others, the gradual raise of the retirement age over the actual level, mainly in case of women, along with the gradual provision of contributions to pensions in case of civil employees exempted from this.