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World Bank to earmark first tranche worth 300m euros to Romania

The World Bank's Executive Directors Council on Thursday approved a loan to Romania worth 300 million euros ($423 million), designed to contribute to cushioning the effects of the global economic downturn and help Romania to resume growth and convergence to the European Union, reads a release sent to Agerpres by the World Bank.

World Bank's loan is part of the loan program for development policies within the Country Partnership Strategy for the 2009-2013 period. The strategy identifies the main three sectors in which the World Bank will involve Romania, namely economic growth and competitiveness, reform of public sector and social and space cohesion. The loan program for development policies focuses on public financial management, in social sectors, as well on the financial sector and is fully adjusted to the respective pillars of the country strategy.

The reforms in the field of public financial management include trans-sectoral measures referring to the Medium-Term Expenditure Framework (MTEF) and the initial measures due to wage reforms of the public sector. The Medium-Term Expenditure Framework will provide strategic allotment of budget resources, as well as stricter control of budget execution, reads the World Bank release. A public sector reform will lead to a more transparent and encouraging public wage system.

The proposed operation is also focusing on sectoral reform in the education and health field, where measures aim to improve fiscal management, promoting more efficient services and unbiased access.

Social protection consolidation measures focus on the programs of assistance and pensions, which cushion the impact of the incumbent financial crisis, as well as the economic problems, improving the programs' efficiency and viability for the future.

In the financial sector, the endorsed reform measures are included in two wider categories - management of unexpected situations and reforms, for the enhancement of governance and for the supervision of the financial sector, for the strengthening of resistance, functionality and stability of the respective sector.

The Public Financial Management, Social Protection and Financial Sector Strengthening Program aims to support the implementation of the government's program to strengthen public expenditure management, to cushion the impact of the crisis on the poor and vulnerable, and to minimize risks of a domestic financial sector crisis by addressing current and potential vulnerabilities, said Mr. Benoit Blarel, chief of World Bank office in Romania.

'The approach of the structural reform agenda is very important, because the strengthening of the economy's resistance to the crisis' shocks will better endorse Romania in its drive of resuming sustained growth on medium term,' said Swati Gosh, task Team Leader within the program.

The loan's maturity is of 14 years and a grace period of 13.5 years. Over 1991-2009, the World Bank funded 54 projects in Romania, totaling a commitment worth nearly $5.5 billion.

 

Sursa: http://www.agerpres.ro/

Tags: sector financial management measures public reform worth romania program world

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