Ponta on 3-billion-euro loan: It has highest cost of Romania's history

The 3-billion-euro loan recently drawn by the Government "has the highest cost of Romania's history," the interest being almost 2.2 billion euro, Pro Romania party Chairman and former PM Victor Ponta told a press conference on Sunday according to Agerpres.

He spoke of the 3-billion-euro loan which the Government, the Finance Ministry took in only one day.

"Besides the amount value, it is definitely the biggest loan ever taken by Romania in one single day, 3 billion euro, it is the longest term, 30 years, and has the highest cost of Romania's history (...), as we speak today we'll pay a 2.2 billion euro interest during the credit," he said.

At the same time, the Pro Romania leader said the loan in question was taken for "current expenses."

"If this loan had been taken for an investment (...), it is a loan I would have praised (...). Unfortunately, as you know, the 3 billion are for current expenses, namely pensions, salaries and other expenses... they will be gone, there will be nothing left behind. Only a 5.2 billion euro debt, which we all have to pay," Ponta pointed out.

He said that, if such a credit had been made for a certain project, Romania could have borrowed from the European Investment Bank (EIB) or the European Bank for Reconstruction and Development (EBRD).

"If we had had a project to ask money for, we could have borrowed money from the international financial institutions, the EIB, the EBRD, at half the interest, maybe less than half. But if you don't have projects, you go and take money from banks, and banks give it to you at a huge interest. (...) We borrowed 3 billion, we give back 5 billion and we don't do anything with the money," Ponta said.

The Public Finance Ministry on Wednesday borrowed 3 billion euros following the launch of a new series of bonds under the "Medium Term Notes" security issue programme. According to the Order published in the Official JOurnal, the issue was administrated by Citigroup Global Markets Limted, Erste Group Bank AG, ING Bank N.V, JP Morgan Securities plc and Societe Generale. The amount corresponding to the issue will be used for funding the budget deficit and refunding and early reimbursement of governmental public debt.