Twenty-seven state-run or private companies failed to pay the instalments on the foreign loans secured by the State last year, so that the Finance Ministry was forced to pay some $460 million on their behalf.
The state-secured public foreign debt amounted to $3.2bn by late 2002, up $430.7 million since the end of 2001.
The money paid by the Finance Ministry from the state budget is recovered at the exchange rate valid on the date of every payment, plus interests and late penalties.
At the same time, the Banking Assets Resolution Authority (AVAB) undertook to collect the state’s receivables derived from the payments made by the Finance Ministry on the security pledged for foreign loans contracted by various companies. The public foreign debt of the State amounted to $9.56bn by the end of 2002. The public foreign indebtedness cap set for 2002 was of $3.4bn, with the annual debt service planned to keep at no more than $2bn over the next few years.
The foreign public debt directly contracted by the State totalled $6.29bn ROL by December 31, 2002, $1.2bn higher than in late 2001. Nearly 59% of the total accounts for the foreign loans taken through the Finance Ministry from IBRD, EBRD, EIB, EU, G-24, Germany, Credit Suisse First Boston, JP Morgan, Deutsche Bank, ING Barings and Schroeder Salomon Smith Barney and worth $3.6bn.
The foreign loans directly contracted by the State throughout 2002 were aimed at the development of the financial markets, financing the social development fund project, the rural development project, water supply for villages, the adjustment and institutional development of the public sector, rehabilitating the roads and protecting the Sulina Canal. At the same time, an eurobond issue worth 700 million euros was released to finance the budgetary deficit.
The IMF-supplied foreign loans contracted and managed by the National Bank of Romania (NBR) on behalf of the State amounted to $425.6 million, which accounts for 6.8% of the foreign public debt directly contracted by the State.