EU executive proposes 5 bln euro loan to Romania

The European Commission said on Tuesday it had proposed giving Romania 5 billion euros in financial assistance to help Bucharest deal with the effects of the financial crisis.

Romania secured a 20 billion euro aid package last month from the EU and International Monetary Fund to help it thwart a financing crisis and stabilise its stricken economy.

"The proposed European Union loan is part of a multilateral package which will total up to 20 billion euros ($25.81 billion) and is conditional upon the implementation of a comprehensive economic programme to which the Romanian authorities committed … to put the Romanian economy on a sound and sustainable footing," the EU executive said in a statement.

The country of 22 million people on the EU's eastern frontier is the third member of the bloc to be bailed out after Hungary and Latvia during the global economic crisis.

The financial turmoil has wiped out sources of funding for an economy heavily reliant on foreign cash.

The proposed medium-term financial assistance to Romania will be discussed by the bloc's 27 finance ministers at a regular meeting on May 5, the Commission said.

"EU support to Romania underlines our solidarity to our member states," EU Economic and Monetary Affairs Commissioner Joaquin Almunia said in a statement.

"This will ultimately put Romania in a position to return to a sound and sustainable convergence path."

The IMF is expected to contribute 12.95 billion euros to Bucharest with an additional combined financial support of around 3 billion euros coming from the World Bank, the European Investment Bank and the European Bank of Reconstruction and Development.