Low public sector debt structural reform High growth potential Moderate contingent liabilities Modest wealth Limited budgetary flexibility Weakening external liquidity, as external imbalances will persist over the foreseeable future The ratings on the Republic of Romania are supported by its low public sector debt burden; the reform anchor provided by impending EU membership, expected in 2007; and the economy's high growth potential. These strengths are offset by low prosperity, the government's limited short-term budgetary flexibility, and a gradual weakening of external liquidity indicators. EU entry on Jan. 1, 2007, will support the ratings by locking in past reforms, and provide a framework for further growth- and investment-enhancing economic and institutional modernization. Driven first and foremost by dynamic investment, we expect
