Foreign indebtedness cap - 3.5bn euros

The Government set Romania’s foreign public indebtedness cap for 2004 to 3.5bn euros, by an emergency ordinance endorsed during Thursday’s session. “The cap may of course fluctuate, depending on subsequent developments. It is calculated in line with a number of indicators. As things stand right now, Romania may borrow up to seven billion euros this year. When we first calculated it based on projects, we got 4.2bn euros. We thought we should go for 3.5bn euros to see how execution goes. If it works just fine, we will raise the cap,” Finance minister Mihai Tanasescu said. The cap on foreign loans is derived by correlating the data on the public debt with a series of macroeconomic indicators, such as the gross domestic product, the volume of exports of goods and services, the trade balance deficit and the foreign currency reserve of the State. The same normative act set the domestic public indebtedness level to 33,406bn ROL. The public indebtedness cap comprises the total loans attracted from domestic and foreign sources the State can contract and secure in one year. Domestic indebtedness last year reached 34,643.8bn, while the foreign cap was set to $3.4bn. ZF