Franks, IMF: Romanian state companies are “huge lead ball” that pulls the economy down

Jeffrey Franks, the head of the International Monetary Fund (IMF) delegation in Bucharest has recently said that the Romanian state companies are like a “huge ball of lead” that are pulling the country’s economy down, and the progress made by the Romanian authorities is not sufficient. Also, Romania’s protection to the instability of the financial markets should not be perfect, but sufficient for the country to avoid becoming one of the most vulnerable countries and the next victim of the markets, added Jeffrey Franks. The IMF representative thinks that Romania should continue reforms despite the difficult times. Romania’s efforts made in the last three years are not sufficient for the country to afford not paying attention to obstacles in the future, said Franks, adding that the countries that are now “sailing smoothly” have several years of reforms behind. A joint team formed of the International Monetary Fund (IMF), European Commission (EC) and the World Bank representatives are in Bucharest between October 25 and November 7 for the third evaluation of the country’s new stand-by agreement. In March 2011, Romanian authorities decided to extend the agreement with the IMF through a precautionary agreement worth EUR 3.6 billion. The new agreement with IMF is accompanied by a EUR 1.4 billion preventive support from the European Union and a loan of EUR 400 million from the World Bank. Recently, the International Monetary Fund’s Executive board has approved the second review of the precautionary agreement and will provide for Romania the third tranche of EUR 480 million. The first tranche was of EUR 67 million, while the second amounted to around EUR 475 million. Irina Popescu, irina.popescu@romania-insider.com (photo source: Sxc.hu)