The Central and Eastern Europe Countries (CEE) have fewer opportunities to support the economy in the context of the current financial turbulence impact on growth, and Romania's situation is so fragile that it has recently agreed an International Monetary fund (IMF) standby program, according to the Financial Times.

The concern on the drop in growth in Western Europe, the biggest export market for countries in the region, amplified the effect. In this context, the room for a local fiscal boost is very limited. “Hungary is already saddled with big public debts and the necessity for fiscal consolidation. Romania is so fragile that it has (prudently) recently agreed an International Monetary Fund standby program,” notes Financial Times.

In March this year, Romania and the IMF signed a EUR 5 billion loan agreement, successor to a larger EUR 20 billion bailout package that ended in April this year. The International Monetary Fund's board approved in June the first review of the precautionary deal with Romania and will make the second tranche available, worth around EUR 480 million.

Irina Popescu, irina.popescu@romania-insider.com

(photo source: Sxc.hu)