REMEMBRANCE IN TIME - Index of

łĂRANU: Romania Economic Opening To The West And External Debt … 329
Through the Paris Club of creditor countries (institution created in 1956 and comprising
19 developed countries) and with France, Romania managed to defuse the debt crisis.
Were held long discussions with the IMF, Paris Club, the London Club, representing
major commercial banks and several governments have guaranteed loan for Romania.
The discussions resulted in some rescheduling. But the government in Bucharest has been
ordered to urgently pay payable (up to one year). IMF provided, however, some facilities
funding and support in restructuring foreign loans. At the negotiating table due loans
were rescheduled in 1982 ($ 2.7 billion) and 1983 ($ 770,000,000).
The "structural adjustment" program agreed with the IMF was implemented
successfully by the Bucharest authorities, the balance of payments surplus since
becoming in the year's 1982. Although consider a rescheduling of payments and 1984, it
was not necessary, the current account allowing timely payment of all foreign maturities.
Unfortunately, the summons to pay urgent all accounts payable (perceived at the top
nomenklatura as interference in internal affairs) upset the Ceauşescu who decided that
Romania has to pay the entire foreign debt. Result was positive in terms of lower external
debt of Romania's credibility on financial markets, but the for the Romanian economy
this decision was a blow. Imports of raw materials and above all, the modern technology
were drastically reduced leading to lower quality industrial products and a malfunction of
most Romanian companies. Add to this the steep, the decline in living standards of
people, many consumer goods that would have to find domestic were exports.
To shorten the period of payment of foreign debt, Ceauşescu decided to be sold on the
Western market a quantity of 80 tonnes of gold from central bank vaults. This amount
would be redeemed after the external debt was liquidated. In early 1987 the gold was
sold, were already collected over one billion dollars, which sum was immediately used to
pay foreign loans, the interest is paid between 7-11%.
Although foreign exchange reserves in the coming years could provide redemption of
gold sold by December 1989, only 21 tonnes of gold sold was bought.
George Stroe, former director of the Romanian Foreign Trade Bank and currently vice
president of CSP, described the gesture to sell gold from the treasury of the country as an
"error", this kind of measures are applied only in case of disasters or wars. This mistake
was doubled, according to the same economist, by the second decision, gold sold was
only partially redeemed.
In the years 1987-1988 were paid exorbitant external debt: 356 million dollars in 1987,
4.252 million in 1988 and 1.790 million in 1989.
At the end of 1989, Romania's bank accounts were availability of $ 1.8 billion and some
developing countries, claims receivable were $ 2.9 billion U.S. In December 1989,
Romania, practically had no external debt.
Unfortunately, no.
Prepayment of the entire foreign debt was one of the most unwise economic
decisions before December '89. It was, after an informed opinion of Adrian Vasilescu,
a violation of bank rules severely punished by the representatives of international
financial market.