Romania's Finance Minister: We hope to meet IMF objectives by June 20

Romania can meet all the IMF's targets under the current Standby Arrangement by June 20, said the country's Finance Minister Daniel Chiţoiu. There have also been no problems “so far,” according to Chiţoiu, who spoke earlier today (June 3) at a press conference. However, the Minister used vocabulary such as “hope” rather than more definitive expressions and it looks like Romania's race to meet objectives will go right down to the wire.

“We hope to have met all targets by June 20. Why do I say June 20th? Because that is the final date for the CFR Marfa privatization and we should have a result by then,” said Chiţoiu, quoted by news agency Mediafax, after attending a parliamentary group meeting of the Senate.

The IMF deal was extended by three months until the end of June to allow Romania time to meet outstanding commitments under the current arrangement. The privatization of the national rail freight company CFR Marfa and the payment of local government arrears are the main remaining points to be resolved.

The first attempt to privatize CFR Marfa failed when the Transport Ministry rejected all three offers received. The tender has been re-opened and the same three bidders have joined the second attempt under revised conditions – minimum annual turnover for bidders dropped from EUR 100 million to EUR 20 million but the same minimum price for CFR Marfa: EUR 180 million. The Transport Minister Relu Fenechiu has to some extent staked his reputation on the success of the privatization, saying previously that he would leave his job “the next day” if the bid to privatize the rail freight company was unsuccessful due to “Ministry failings.”

PM Victor Ponta said around two weeks ago that the local government arrears issue had not been resolved, but that it can be sorted out in time for the IMF's assessment.

The Finance Minister also confirmed today that Romania would seek a new IMF deal shortly after the conclusion of the present arrangement.

The current EUR 3.6 billion Standby Arrangement between Romania and the IMF began in March 2011. So far, Romania has used the funds available as a precautionary credit line and has not drawn on them.

Liam Lever, [email protected]

 

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Romania's Finance Minister: We hope to meet IMF objectives by June 20

Romania can meet all the IMF's targets under the current Standby Arrangement by June 20, said the country's Finance Minister Daniel Chiţoiu. There have also been no problems “so far,” according to Chiţoiu, who spoke earlier today (June 3) at a press conference. However, the Minister used vocabulary such as “hope” rather than more definitive expressions and it looks like Romania's race to meet objectives will go right down to the wire.

“We hope to have met all targets by June 20. Why do I say June 20th? Because that is the final date for the CFR Marfa privatization and we should have a result by then,” said Chiţoiu, quoted by news agency Mediafax, after attending a parliamentary group meeting of the Senate.

The IMF deal was extended by three months until the end of June to allow Romania time to meet outstanding commitments under the current arrangement. The privatization of the national rail freight company CFR Marfa and the payment of local government arrears are the main remaining points to be resolved.

The first attempt to privatize CFR Marfa failed when the Transport Ministry rejected all three offers received. The tender has been re-opened and the same three bidders have joined the second attempt under revised conditions – minimum annual turnover for bidders dropped from EUR 100 million to EUR 20 million but the same minimum price for CFR Marfa: EUR 180 million. The Transport Minister Relu Fenechiu has to some extent staked his reputation on the success of the privatization, saying previously that he would leave his job “the next day” if the bid to privatize the rail freight company was unsuccessful due to “Ministry failings.”

PM Victor Ponta said around two weeks ago that the local government arrears issue had not been resolved, but that it can be sorted out in time for the IMF's assessment.

The Finance Minister also confirmed today that Romania would seek a new IMF deal shortly after the conclusion of the present arrangement.

The current EUR 3.6 billion Standby Arrangement between Romania and the IMF began in March 2011. So far, Romania has used the funds available as a precautionary credit line and has not drawn on them.

Liam Lever, [email protected]

 

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