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Romania May Get 360 Million-Euro Loan Payment From World Bank by End-Oct.
Romania may receive a 360 million- euro ($464 million) payment from the World Bank as part of its international bailout loan by the end of October, the bank’s country manager, Francois Rantrua said.
The Finance Ministry and a team from the World Bank are negotiating the final details for the disbursement by Sept. 10 and will be presented to the bank’s board on Oct. 19, Rantrua said in a Sept. 4 interview in Bucharest. The payment depends on parliament’s approval of changes to the pension system and the introduction of health insurance co-payments, he said.
“The pensions, the co-payments in health, as far as I know all these things are pretty advanced and they are conditions for disbursement,” Rantrua said.
The European Union’s second-poorest country is relying on a 20 billion-euro bailout from the International Monetary Fund, the European Commission, the World Bank and the European Bank and Reconstruction and Development to finance its budget deficit as a recession hit the state revenue.
Prime Minister Emil Boc’s government raised the value-added tax by 5 percentage points to 24 percent and cut public wages by 25 percent from July to meet bailout conditions.
The payment from the World Bank will help finance budget operations. Romania has received a total of 10.7 million euros from the IMF, 2.5 billion euros from the European Commission and 300 million euros from the World Bank since 2009.
Romania is turning to international markets to raise funds to cover its budget for the second time this year after failing to sell leu-denominated Treasuries on the domestic market because investors are seeking too-high yields to compensate rising prices. The country is struggling to recover from its worst recession on record, as dwindling revenue and pressure on the leu forced it to look abroad for the bailout loan last year.
To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net.
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