The International Monetary Fund (IMF) board will postpone its review of the current stand-by agreement for November this year. Also, Romania’s prime minister Victor Ponta told Bloomberg that Romania will not need a new agreement with the IMF next year, after the current one expires.

This comes after the Romanian Government and the IMF delegation, which has been present in Romania since June 2 for the third review of the agreement, didn’t reach a consensus on the reduction of the social security tax (CAS).

The Government couldn’t convince the IMF representatives that the CAS reduction by 5 percentage points starting July 1, 2014, is sustainable, according to sources quoted by Mediafax.

Prime minister Ponta said earlier today (June 12) that Romania must reduce labor taxation in order to encourage job creation.

However, IMF asked the Government to come up with other measures to compensate for this tax reduction which would negatively impact Romania’s budget revenues.

editor@romania-insider.com