Romanian president Traian Basescu has actively opposed the formation of a government backed by his opponents in parliament.
Nine European banks with subsidiaries in Romania have reaffirmed their commitment to "maintain their exposure to the country and ensure adequate capital levels" at their subsidiaries, the European Commission and the International Monetary Fund (IMF) have said in a joint statement.
The nine lenders – Austria's Erste, Raiffeisen and Volksbank, Greek Eurobank EFG, Alpha Bank, Piraeus Bank and National Bank of Greece, French Societe Generale and Italy's UniCredit – have agreed to keep the capital adequacy ratio of their Romanian subsidiaries at 10 per cent, the statement said. The European Union-mandated minimum ratio is eight per cent.
"The meeting was a follow-up to those held on March 26 and May 19, when the banks initially committed to maintain their positions in Romania. As of end-October 2009, the exposure of parent banks to Romania was broadly maintained compared to the benchmark date (March 2009)", the statement said.
All parent banks had complied with their commitments to provide additional capital for 2009 as of end-September 2009, ensuring that the capital adequacy ratio of their subsidiaries will remain above 10 per cent.
Foreign banking groups agreed to maintain higher capital adequacy ratios after Romania agreed a $26.5 billion bailout deal with the IMF and the EU in May 2009. However, the government has struggled to quickly implement cost-cutting reforms in the public administration and the situation was made worse by the political uncertainty following the fall of the Emil Boc cabinet in October.
The IMF has withdrawn its mission, which was due to assess Romania's compliance with the terms of the bailout, and now expects Romania to miss the fiscal deficit target set by the bailout agreement.
"The programme remains in effect, and discussions will continue in the coming weeks and another mission will return to Bucharest as soon as the political situation has been clarified to successfully complete the review under the programme," the statement said.
Local observers do not expect that to happen until after the presidential election run-off on December 6, at the earliest, or even early 2010 if snap parliamentary elections are called.
Greece needs the aid package from the European Union, the European Central Bank and the International Monetary Fund in order to avoid defaulting on $19 billion in bond payments due in March.