Romania jeopardises its emergency loan

Romania's constitutional court on Friday ruled that a 15-percent pension cut planned as part of the government's austerity programme was unconstitutional. The package is a prerequisite for the paying out of the next instalment of a 20 billion euro IMF and EU emergency loan for the country. The daily România Liberă calls the ruling a Pyrrhic victory: "The victory of those who contested the proposed austerity measures will ensure that the crisis worsens and we all lose in the end - including the pensioners who have won this battle. ... International credit rating agencies have already expressed concerns about a potential freeze on the IMF agreement. Because the higher cost of covering the risks of loans approved for Romania will limit the finance ministry's possibilities for obtaining loans on the external market and lead to higher interest rates on the domestic market. ... Romania could then end up having difficulties paying off the debts it already has."

» full article (external link, Romanian)
More from the press review on the subject » Domestic Policy, » Fiscal Policy, » Economic Policy, » Financial Markets, » Banks, » Europe, » U.S., » Global, » Romania
All available articles from » Aurelian Dochia

» To the complete press review of Monday, June 28, 2010