Thursday, March 19, 2009

Romania situation challenging but manageable-EBRD

BUCHAREST, March 18 (Reuters) - Romania is undergoing a challenging economic situation but one that is manageable, while a deal with the IMF will boost investors' trust, the head of a European development bank said on Wednesday.

Romania has approached the European Union and the International Monetary Fund for support, the third member of the euro zone after Hungary and Latvia to seek outside help to ride out global financial turmoil.

An IMF mission arrived in Bucharest last week to hold loan talks and is due to leave town on March 25. The head of the European Bank for Reconstruction and Development (EBRD) arrived in Bucharest on Wednesday, also to discuss support.

'The situation is certainly challenging but it is also manageable,' Thomas Mirow, the head of the EBRD told private financial television The Money Channel in an interview.

'Romania is probably somewhere in between, not as bad as Baltic states not as good as Poland,' he said.

Mirow said the EBRD plans to allot around 500 million euros to support the Romanian banking system over the next two years, while overall assistance may reach around 1 billion euros over the same horizon.

In late February, Mirow said Eastern European banks could need some $150 billion in recapitalization and $200 billion in refinancing to stave off the risk of a banking failure in the region.

The EBRD, the European Investment Bank and the World Bank last month launched a joint program to lend up to 24.5 billion euros to help banks and businesses in Eastern and Central Europe.

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