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EC Team Joins IMF, WB For Loan Review Mission To Romania

A delegation of the European Commission will be in Bucharest October 28 through November 9 to assess Romania's economic performance regarding a EUR1 billion disbursement from EU funds, the Commission said in a statement Friday.

The statement comes one day after both the International Monetary Fund and the World Bank said they will send assessment missions to Romania over the same interval. However, the Commission and the IMF did not rule out the possibility of a follow-up mission to Romania to continue talks with the authorities in Bucharest after a new government is formed.

Romania, which secured EUR20 billion in international aid from the IMF, the European Union and other foreign lenders, is relying on the disbursement of a third EUR1.5 billion tranche from the IMF and a second EUR1 billion installment from the EU by the end of this year.However, the recent collapse of Romanian minority government has raised doubts about the country's success in complying with the loan terms, highlighting the possibility of a delay in the next disbursements of the foreign package.

The review mission's success depends on Romania's ability to eliminate risks of fiscal slippage at the end of this year and to adopt the 2010 budget considering a government deficit no higher than 5.9% of the gross domestic product, the Commission said. In addition, Romania and the international institutions must reach an agreement regarding fiscal, macroeconomic and structural policies necessary to complete the financial aid program successfully.

ING Says IMF May Delay Loan Disbursement To Romania

Romania can't be sure that the International Monetary Fund will disburse the third tranche of a EUR13 billion loan by the due deadline in December, given the current political situation, ING Bank Romania said in a report Friday.The ING analysts believe Romania might be confronted with the same situation as Latvia after its government collapsed in February this year. The IMF has delayed disbursing a scheduled tranche from March through August, until Latvia approved additional austerity measures for the 2010 budget, ING analysts said.

However, the IMF might take a gentler approach with Romania, they noted. Romania has yet to approve the draft budget for 2010 and chances are the act will not be adopted until next year.In addition, Romania's budget deficit could widen further, exceeding the cap of 7.3% of the gross domestic product the authorities in Bucharest and the IMF have agreed upon after the first review mission of the loan in August.

According to ING, the IMF agreed to send the second assessment mission to Romania before a new government is in place to calm the financial markets and help ease pressure off the national currency.On Thursday, the IMF said a second assessment mission will be in Romania October 28 through November 9 to review the country's economic performance and discuss the objectives for the next year.However, a follow-up mission may be necessary, due to "ongoing political developments," the IMF said in a statement.Romania and the IMF signed in spring a two-year standby arrangement for EUR12.95 billion, as part of a wider EUR19.95 billion aid package the Eastern European country took from the EU, the World Bank and other foreign lenders to cope with the recession.The World Bank also announced Thursday that will visit Romania at the same time as the IMF to assess the country's progress, even if it recently stated the visit was postponed until Romania has a new government.

Sursa: http://www.actmedia.eu

Tags: romania ing government billion review mission

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