The European Union’s executive has formally called on the bloc to offer Romania a five billion Euro bail-out to save it from financial collapse. The hand-out, part of a 20 billion Euro deal agreed in principle with the World Bank and International Monetary Fund on March 25, is intended to support Romania’s currency, battered in the recent economic storm, and to keep its government solvent. It comes with a demand that the country bring its government deficit back under the EU’s approved limit of three percent of gross domestic product (GDP) by 2011, the European Commission said in a statement.
Romania will also have to strengthen its national financial regulations and improve the transparency and general competence of the public authorities to qualify for the funding. The EU funds, to be raised on international money markets, will be paid out in up to five installments over the next two years. EU finance ministers are expected to approve the commission’s proposal on May 5. Romania is the third EU member to need an emergency bail-out from the bloc, after Hungary and Latvia applied for help in late 2008.