Romania’s deal with the International Monetary Fund, which might not be the last as the country hopes to negotiate another one later this year, seems to have reached a sensitive spot. Romania asked for a two-month grace period to fulfill its commitments, which include the privatization of freight company CFR Marfa and the co-payment system in the health sector. The IMF experts agreed “in theory” as the country’s Prime Minister Victor Ponta puts it, but IMF experts are expected to make statements about the agreement today (January 29 ), after some tense discussions yesterday.
Liberal Dan Radu Rusanu, president of the budget commission in the Chamber of Deputies, openly criticized previous agreements with the IMF right at the start of the discussions yesterday. He mentioned the previous privatizations made at the request of the financial institutions, which did not turn out very well for Romania. Erik de Vrijer, head of the IMF mission to Romania, currently in Bucharest, asked the media to exit the room to continue the discussion, also saying the allegations did not have a solid base.
Romania had pledged to start six initial and secondary public offerings by the end of 2012, for Transelectrica, Transgaz, Romgaz, Hidroelectrica, Nuclearelectrica and Tarom, but only managed to do so for Transelectrica, in March 2012.
Another program in which Romania lags behind is in finding private sector management for state companies, after having placed private management only at Tarom and CFR Infrastructura.
Meanwhile, the opposition in Romania commented on a possible end of the agreement unless significant progress is made in the next two months. Romania had an agreement with the IMF, signed in 2004, which was not completed, and ended after one evaluation. The country later had another deal with the IMF, for some EUR 13 billion, which ended in 2011. The existing EUR 5 billion deal with the IMF and the European Union is meant to be solely precautionary.
(photo source: gov.ro)