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Macedonia requests (EURO)480 million IMF loan

Macedonia requests (EURO)480 million IMF loan

Macedonia has requested a credit line worth (EURO)480 million over two years from the International Monetary Fund, the fund said Wednesday _ seeking a safety net in the midst of Europe's debt crisis and bond-market turmoil.
IMF Managing Director Dominique Strauss-Kahn said Wednesday he will "rapidly" seek approval of the request from the fund's executive board.
Macedonia's conservative government says it will use the money to support the budget and capital investments. It expects the economy to grow 2 percent this year and 3.5 percent in 2011.
The former Yugoslav republic dipped in recession in 2009 with unemployment hovering around a staggering 30 percent.
The loan would be offered under the IMF's new Precautionary Credit Line arrangement, designed to act as a safety net mainly for smaller economies that are fundamentally in good shape but struggling to cope with the global financial crisis.
The arrangement does not require economic austerity _ contrasting with the IMF's bailout loans to neighbor Greece, which is receiving (EURO)110 billion from the fund and European countries after over-borrowing brought it to the brink of default.
"Macedonia has a sustained track record of sound economic policies. Its economic fundamentals and policy framework are strong, and the Macedonian authorities have demonstrated a commitment to maintaining this solid record," Strauss-Kahn said in a statement.
"I therefore intend to move ahead rapidly in seeking approval by the Fund's Executive Board of Macedonia's request for a PCL arrangement."
On a visit to Greece Tuesday, Strauss-Kahn urged the European Union and individual countries to take preventive steps to avoid a repeat of Greece's troubles elsewhere.
Macedonian Finance Minister Zoran Stavrevski and Central Bank governor Petar Gosev welcomed the arrangement.
"This is confirmation that Macedonia has a stable economy. This arrangement is a clear signal that IMF believes in the Macedonia's economic polices," Stavrevski said.
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Online:
http://www.imf.org/external/np/sec/pr/2010/pr10478.htm
http://www.imf.org/external/np/exr/facts/pcl.htm