Bloomberg: Romania wants new deal with the IMF

The Romanian Government plans to start talks with the International Monetary Fund (IMF) and the other international creditors over a new loan agreement. The biggest political parties support the idea of a new IMF agreement and negotiations could start this year, according to Bloomberg. However, Romania’s current agreement with the IMF, European Union and World Bank hasn’t been reviewed in over a year, as the international financiers and the Romanian authorities haven’t been able to reach common ground over the fiscal relaxation measures and the salary increases in the public sector. Romania’s Government went on with the tax cuts, although scaled down compared to the initial proposals, despite opposition from the IMF representatives and from Romania’s National Bank. Romania may get into a new deal with the International Monetary Fund and the European Union in 2016 to help protect against market shocks, Finance Minister Eugen Teodorovici said on Thursday, in an interview with Bloomberg. He said that Romania didn’t need funding from the IMF and could raise money on its own, but that it was better to have a safeguard against potential market turmoil. The Social Democratic Party (PSD) and the National Liberal Party (PNL) leaders said they supported the negotiations. Romania has had three deals with the IMF, EU and World Bank since April 2009. The most recent deal, a EUR 4 billion backstop, reaches its end this month. Romania hasn’t drawn any money from this last loan. The IMF warns that unrealistic fiscal relaxation could endanger Romania’s hard-earned macroeconomic stability Romanian Central Bank governor: Deal with IMF and EC should continue Romania’s Finance Ministry would like new agreement with the IMF IMF view of Romania: Internal imbalances corrected, but vulnerability to external shocks remains editor@romania-insider.com