With the current EUR 5 billion financial agreement with the International Monetary Fund (IMF) and other international lenders initially set to end this spring, Romania asked the IMF to discuss the new agreement in its board meeting in May, to give time to fulfill a series of pre-conditions. These include late arrangements and the budget evolution. It also asked to move forward the end of the current agreement, to July. The final mission to Romania on the current agreement will arrive most likely in July, according to Mediafax newswire, quoting unnamed official sources. Then the new agreement will also be negotiated.
Not everyone is optimistic about Romania’s chances for a new agreement however. Romanian president Traian Basescu recently said he did not think Romania will be able to close a new preventative deal with the IMF quickly, considering the status of the current agreement, which has basically been stagnating since May 2012.
“Since May last year, the agreement has been stagnating, we only had the macro stability ensured by the Boc government, but the rest, the restructuring, the modernization, the reduction of the budget – fueled system – these have been stalling,” said Basescu when asked about a new agreement with the IMF.
An IMF mission is currently in Bucharest and due to finalize the review tomorrow – January 29. European Commission and World Bank teams are accompanying the IMF. They are currently in talks with the Romanian Government over the economy, the 2013 budget, the structural reforms and the monetary policy, part of the seventh and eights reviews of the loan.
In previous statements, the Romanian Government pointed to January as the month when Romania would negotiate a new agreement with the IMF, to follow on from the existing deal. This would be Romania’s third deal with the international lender.
(photo source: presidency.ro; in photo: IMF representatives in Romania)