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Bloomberg : Romania and Bulgaria could need IMF help
Romania and Bulgaria could need IMF help, Bloomberg says. The need for financing of the two countries reaches 100 billion dollars. The RBC Capital analysts, Societe Generale and Capital Economics consider that Romania and Bulgaria are European states with the highest need of capital on the verge of global recession. In Romania and Bulgaria the cost of the protection against the non-compliance with the commitments of bond issuers is the highest in the region. It increased by 300 points over the last six months and contracts on 5 years reached 620 points in Romania and 550 points in Bulgaria. The stock exchange indices have in 2008 the highest losses in the region. Romania and Bulgaria relied on foreign investment and on external loans in hard currency to increase the living standard and the reduce the gap between Romania and the other developed countries. The need for financing of Romania is 75 billion dollars or 30% of GDP Capita Economics shows. Bulgaria needs 30 billion dollars or 50% of the GDP. Romania and Bulgaria have used more money than they can afford for some time, Nigel Rendell, analysts with RBC Capital Markets says. Loans in hard currency are 50% of the market of Bulgaria and 55% in Romania. The same share had Hungary when they requested, last month an injection of 25.5 billion dollars from IMF, the European Union and the World Bank. The risks of Romania and Bulgaria are the higher as the local currency depreciated. The leu lost in 2008 20% against the dollar and the Bulgarian currency over 18%. The officials from IMF denied the information in the press according to which Romania had required financial help from the international institution. IMF approved loans of 40 billion dollars over the last two weeks, 15.7 billion for Hungary, 16.4 billion for Ukraine and 7.6 billion for Pakistan. Serbia insured a line of 516 million dollars. Iceland has to receive 2.1 billion and Belarus required last month 2 billion dollars. Turkey announced its need for capital last week. Japan proposed the increase of available IMF funds from 200 to 300 billion dollars, the Money Channel announced.