IMF Grants New Loan to Romania, New Government Sworn In

Romania and the International Monetary Fund (IMF) have agreed on a USD 4 B loan to Bucharest.

The credit package deal was struck after President Traian Basescu gave his approval, as Bulgarian website Investor.bg reports.

Basescu has long resisted the agreement as it forces Romania to impose an excise tax for fuels at EUR 0.07 per liter.

He also objected to the previous cabinet's plan to reschedule the bank loans of low-income borrowers and was at odds with the government over this and other strings the IMF attaches to its financial assistance.

The president, however, abruptly changed his stance on Wednesday, also backing Prime Minister Victor Ponta's new government which the same day was approved in a confidence motion.

Ponta's new government led by his Social Democrats, which is his third cabinet since May 2012, was sworn in on Thursday, pledging to pull Romania out of the political and economic turmoil.

The IMF's new loan to Bucharest is the third one after the beginning of the financial crisis.

A total of USD 20 B were assigned in 2009-2010, with agreements worth USD 5 B over the next three years.

In return of the money, Bucharest was obliged to make severe budget cuts.

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