Last week, the Ecofin Council and the European Commission (EC) issued a joint statement regarding its grant of €5 billion in medium-term assistance to Romania. The financial assistance will be provided in conjunction with the IMF (€13 billion), World Bank (€1 billion), the European Bank of Reconstruction and Development and other international creditors that in total will amount to approximately €20 billion “over the first period to the first quarter of 2011.”

The EC has conditioned the financial aid on “the implementation of a comprehensive economic policy programme” by the Romanian government pursuant to a Memorandum of Understanding that has not yet been finalized. Romania will have to adopt measures that are “designed to enable the economy to withstand short-term liquidity pressures while improving competitiveness and supporting an orderly correction of imbalances in the medium term” and “seek to ensure adequate capitalisation of banks and to strengthen financial sector supervision, including banking and winding-up laws.”. European Economic and Monetary Affairs Commissioner Joaquin Almunia welcomed “the commitment by the Romanian authorities to implement a major programme of economic adjustment aimed at bringing the economy on a sound and sustainable growth path, including through strengthening financial sector supervision.”

The EC and the Economic and Financial Committee intends to “monitor and closely observe that the economic policy conditions attached to the financial assistance are fully implemented and may request additional measures when and if circumstances so require.”