a partaker to these events, i can say that this process with the imf and the world bank was hardly an easy one, especially due to the lack of trust that had fallen over romania's international economic relations. part of the normalization of the relations with the international organizations was also joining the international financial corporation ( ifc ) – member of the world bank group in 1991. this institution has supported the romanian banking sector too, especially during the privatization process. joining miga finalized the normalization process. 1 / 3 bis - central bankers'speeches throughout the 1990s and up until the eu granted romania the functional market economy status in 2004, and later on, until the actual eu accession in 2007, the imf and the world bank have been our main economic and financial external partners, during the transition. it goes without saying that one central pillar of this transition was represented by the continuous reforms of the national legislation regarding the central bank and the financial sector reforms, which have benefited from the extensive contributions of imf and world bank staff. for instance, the essential legislation governing the banking system was drafted with the assistance of imf experts. in this context, i would like to mention the seven imf stand - by agreements that, in addition to the balance of payments support, have also contributed to the implementation of structural reforms prior to the eu accession. similarly, the world bank's programs have contributed to the development of the romanian financial and banking system ( e. g. the financial and enterprise sector adjustment loan ( fesal ) – focused on reforming the financial sector, and the private sector adjustment loan ( psal ) – offered support towards the privatization of the romanian banks and to the development of the monetary and capital market ). during this transition period marked by major changes, i would like to highlight one element of continuity. since joining the imf, romania has been part of the dutch constituency. in 2012, belgium and luxembourg joined, establishing the dutch - belgian constituency, one of the largest and most diverse constituencies at the imf. i have to mention that the national bank of romania has extensively benefited during the whole transition process from technical assistance from members of this constituency in two essential banking areas, such as bank supervision form the nederlandsche bank ( dnb ) and market operations from the national bank of belgium. actually, the first law on the statute of the national bank of romania was drafted following the model of the national bank of belgium, while the dutch influence goes even further back

a positive step and are expected to reduce public debt as a ratio of gdp by 20 percentage points by 2060. at the same time they also reduce the annual gross financing needs of the general government by around 5 percentage points of gdp. however, to ensure the sustainability of the debt going forward, additional medium - term measures are also necessary. when the debt - to - gdp ratio is above 100 %, measures that reduce interest payments on debt can improve the ratio quicker than a rise in the primary balance. for example, with a debt - to - gdp ratio of 180 %, a 1 percentage point reduction in the 13 / 23 bis central bankers'speeches average interest rate on debt will reduce the ratio of debt to gdp by 1. 8 percentage points. by contrast, a rise in the primary surplus as a percentage of gdp by 1 percentage point lowers the debt - to - gdp ratio by only 1 percentage point ( assuming that the fiscal multiplier is 0 which, as we well know, it is not ). a similar effect to lowering the interest rate can be achieved through a rise in nominal growth. for debt to be sustainable, it is important to look at the gross financing needs of the general government. the eurogroup agreement of the 24th may last year set the goal for gross financing needs of the government to be below 15 per cent of gdp in the medium term and below 20 per cent over the long term. with a primary surplus goal of 2 per cent, gross financing needs are higher than they would be if the primary surplus were held at 3. 5 per cent. 14 / 23 bis central bankers'speeches however, mild debt relief could reduce them and keep them within the limits set by the eurogroup. the interest burden is low until 2021 but increases substantially thereafter because of payments of deferred interest on the efsf loans and interest on new debt issued in financial markets. an exercise done at the bank looks at the impact of smoothing interest payments for efsf loans. looking at the right - hand - side diagram on the slide, the exercise entails that interest payments are smoothed, as in option 1, instead of remaining as they are now ( the baseline scenario ). what does such an exercise imply for the path of debt and gross financing needs? the baseline high surplus scenario assumes primary surpluses of 3. 5 per cent of gdp until 2027 and a gradual decline to 2 per cent by 2037. the baseline low surplus assumes only three years of primary surplus