Germany confirmed on Tuesday that Romania was in talks with the International Monetary Fund to secure aid as it faces up to liquidity problems due to its reliance on external financing in the global credit crunch.
Bucharest has yet to admit to having approached the global lender, although sources said on Monday that a Romanian delegation was in Washington for discussions. If a deal is reached, the country of 22 million would be the third European Union member to seek help from the IMF as the global cash shortage spreads to eastern Europe, hitting economies highly dependent on foreign funding.
“Romania is in talks with the IMF over additional loans,” German Foreign Minister Frank-Walter Steinmeier said after a meeting with his Romanian counterpart Cristian Diaconescu in Berlin. “I hope they will lead to success.” The Romanian government’s spokeswoman declined to comment.
Steinmeier said Berlin wanted to remain in close contact with Romania, one of Germany’s key export markets in eastern Europe, but added there was no agreement yet whether Brussels should also offer financial help.
Romania has already started talks with Brussels on getting aid in what could become an IMF-led rescue plan similar to those sought by crisis-stricken Hungary and Latvia last year.
“Whether beyond that, other talks with the European Union are to be considered -- on taking up Commission facilities to support the budget as happened toward Latvia and Hungary -- that remains to be seen,” Steinmeier said.
“At any rate, I think there is support from the side of the European Union and the member states. Since the crisis accelerated in October, Romania has turned from being the EU’s fastest-growing economy into one of its most vulnerable as big hard currency debt and budget deficits fanned external imbalances.”
Many economists now say it could plunge into a payment crisis without international help to plug cash shortages, estimated at several billion euros. (Reuters)