The Lending Agreement Essay

2902 words - 12 pages

Studies in Business and Economics


Lucian Blaga University of Sibiu, Romania

This paper focuses on the lending arrangements of the IMF in EU countries during
crisis period. First, we reviewed the literature regarding IMF-supported programs in times of
crisis. On the other hand, we provided a description of the IMF arrangements in EU countries in
2008-2013. We found that these programs differ in type, duration, amount and conditionality, but
not significantly in their key objectives (achieving sustainable public finances and ensuring
financial ...view middle of the document...

Analyzing the financial crises that have threatened Mexico, Thailand,
Indonesia, Korea, Malaysia, Russia and Brazil between 1994 and 2001, Fischer (2003)
discusses the reform of the international financial system stressing the role of the IMF
reforms in crisis prevention and responses.
Reviewing the IMF’s current practices, Weisbrot, Cordero and Sandoval (2009)
conclude that in the crises of the 1990s Fund „made serious mistakes that adversely
affected the economies in need” and „failed to act as a lender of last resort”. They find
that „the Fund’s current policy decisions and orientation remain similar to those of the
Edwards and Hsieh (2011) highlight recent changes in IMF lending,
considering that „this is a marked change from earlier decades, during which IMF
lending was more evenly distributed across regions, and Europe accounted for a
relatively low share”.
Barkbu, Eichengreen and Mody (2012) describe financial crises and the
multilateral response in the last 40 years warning that both crises and programs have
changed over time.
Other studies evaluate the effects of IMF loan programs on economic growth,
reforms and other variables: Conway (1994); Garuda (2000); Dicks-Mireaux, Mecagni
and Schadler (2000); Hutchison and Noy (2003); Martinez-Vazquez and Mina (2003);
Barro and Lee (2005); Dreher and Rupprecht (2007); Hajro and Joyce (2009); Abbott,
Andersen and Tarp (2010); Dreher and Walter (2010).
The framework underlying the IMF conditionality is described in: Buira (1983);
Joyce (1992); Guitian (1995); Drazen (2002); United Nations (2010).
2. IMF arrangements in EU countries in 2008-2013 - some features
The characteristics of the IMF programs (type, period and amount) in EU
countries in time of crisis are presented in Table 1. We analyzed only the nonconcessional IMF-supported programs through the General Resources Account (GRA)
not concessional arrangements through the Poverty Reduction and Growth Trust

Studies in Business and Economics - 135 -

Studies in Business and Economics
Table 1. IMF arrangements in EU countries during 2008-2013 (millions of SDRs)
No. Country Facility


Date of

Date of
Expiration or
Cyprus EFF
May 2013
May 2016
Greece EFF
March 2012
March 2016
May 2010
March 2012
Hungary SBA
November 2008 October 2010 10,537.5
December 2010 December 2013 19,465.8
December 2008 December 2011 1,521.6
Poland FCL
January 2013
January 2015 22,000.0
January 2011
January 2013 19,166.0
July 2010
January 2011 13,690.0
May 2009
May 2010
Portugal EFF
May 2011
May 2014
Romania SBA
September 2013 September 2015 1,751.3
March 2011
June 2013
May 2009
March 2011
Source: IMF - IMF Lending Arrangements Database



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