WASHINGTON, May 22, 2014 – The World Bank Group Board of Directors discussed today a Country Partnership Strategy (CPS) for Romania for 2014-2017. The new strategy outlines the Bank’s cooperation with the Government of Romania over the next four years. Also today, the Board approved a EUR750 million budget support loan (DPL), the first of a series of such operations loans included in the new CPS.
The Bank’s loan series supports critical reform measures to strengthen public debt management, enhance the quality of public spending, and improve the performance of state-owned enterprises and the functioning of property, energy, and capital markets, all of which are key for private sector development and growth. The DPL series builds upon previous budget support lending to Romania and complements the ongoing European Union (EU) and International Monetary Fund (IMF) programs.
The new strategy supports Romania’s goal of converging with EU income levels, focusing on improving living conditions for the poorest 40 percent of the population while ensuring gender equality. The strategy is focused on three main pillars: (i) creating a 21st century government, (ii) supporting economic growth and job creation, and (iii) increasing social inclusion. The CPS is the result of extensive consultations with a wide variety of stakeholders in the government, the European Commission and international institutions, the private sector, academia, think-tanks, civil society, and representatives of selected municipalities and residents within Romania.
“Romania and the World Bank Group are deepening an already strong and fruitful partnership”, said Ms. Mamta Murthi, World Bank Director for Central Europe and the Baltic Countries.
“Romania is now stable from a macroeconomic perspective and better prepared than before 2008 to absorb global and regional markets volatility. Reaching a growth above 3.5 percent in the medium term, and catching up with the rest of the European Union will require better infrastructure, a policy environment capable to attract significant amounts of private sector investment, and improved utilization of EU funds. We are aware of these challenges, and we hope to reach these ambitious objectives with the technical and financial assistance of the World Bank.” said Liviu Voinea, Minister Delegate for Budget and Romania’s Governor of the World Bank Group..
“Our expectations are that Romania’s economic growth will further trend upwards and structural reforms implementation will continue. We welcome World Bank's decision to support our endeavors, including the new CPS, whose objectives reflect our aim to offer predictability to the business environment and a more efficient public sector. Over time, we have built a strong partnership with the World Bank that allowed operations in various sectors of the economy. Looking forward, we hope that it will continue to support the structural reform process, including in public finance. I am aware that the business environment expects fiscal measures that lead to economic growth and development, not only to higher revenues. The fiscal policies that I will promote would pave the way for a more efficient, predictable and transparent public finance system,” said Ioana Petrescu, Minister of Public Finance.
Under the new strategy, the Bank will provide lending and advisory services. The Bank’s private sector arm, the IFC, will work with financial intermediaries to support small and medium enterprises, provide loans to under-served populations, and co-financing for EU programs where appropriate. IFC will help develop Romania’s competitive advantage in primary goods production, food and beverages processing, and retail and will complement the Bank’s activities in areas such as infrastructure, including through public private partnerships with an emphasis on energy efficiency, innovation and new technologies especially for exporters. MIGA, not active in Romania since 2004, is now looking into provide guarantees to key state-owned enterprises in the energy sector to support the expansion of local and regional interconnections.
“I am optimistic about Romania’s future and, if the reform process is deepened and sustained, I am convinced that convergence with the European Union average income will return to a pace similar to pre-crisis level and will benefit every citizen in Romania.” said Elisabetta Capannelli, World Bank Country Manager for Romania.
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