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Mission of International Monetary Fund arrives on Wednesday in Bucharest

The Mission of the International Monetary Fund (IMF) arrives on Wednesday in Bucharest for talks with the Romanian authorities with a view to establishing conditions in which Romania will be earmarked the sums stipulated in the previously signed documents with the IMF.

Interim PM Emil Boc said there's no need to renegotiate the agreement with the IMF and that so far Romania has observed the contractual obligations. Until October 1, Romania has observed all the commitments,' said Emil Boc.

The Romanian PM said that a range of problems might arise. 'Indeed we have the pension law which MPs preferred to postpone and to maintain privileges, we have the law on fiscal responsibility which is ready and which we'll submit to Parliament next week, the third fundamental obligations is the adoption by the end of the year the Law on state budget. The Government is preparing the framework for the next cabinet,' said Boc.

The Romanian authorities begin talks here on Wednesday with the missions of the International Monetary Fund (MF), the World Bank and the European Commission aimed at setting the requirements for granting Romania the amounts set in the previously signed documents.

Following a request by Romania's president, the IMF will send a delegation to Bucharest over October 28 - November 9. Given the current political situation, the IMF mission will start the talks with the Bucharest authorities with respect to the second evaluation according to the Stand-By Agreement, head of the IMF mission in Romania Jeffrey Franks has said recently. According to him, one of the requirements to be set by the IMF will be to limit the budget deficit at no more than 5.9 percent.

President Traian Basescu stressed that, in his opinion, a range of the Stand-By Agreement provisions should be changed. 'Firstly, they should find whether Romania has met the commitments made for the first three quarters of the year in order to be disbursed the loan tranches for December, while at the same time the revision of the Agreement for 2010 should be made. There will be a meeting of the (IMF) board of directors on December 15, when revisions of the agreement may be approved and it is obvious some changes must be made, since Romania will not be able to meet the commitments made by December 31', he said.

Basescu pointed out that 'if we do not get money from the Fund, we can get into big social difficulty. And this is something we should avoid'.

The importance of the current talks with the IMF was also highlighted by U.S. Vice President Joe Biden, who said during a visit to Bucharest last week that 'together with our European partners, with the IMF and the World Bank, we worked for the international support for your economy (Romania's - editor's note) to be present when you need it'.

Romania's financing agreement with the IMF covers 24 months, with the international lender to disburse Bucharest a total 12.95 billion euros in eight tranches, out of a support loan worth 19.95 billion euros, of which 5 billion euros comes from the European Commission, one billion euros from the World Bank and one billion euros for the European Bank for Reconstruction and Development and the European Investment Bank.

Romania has so far received 6.57 billion euros from the IMF, of which the second tranche amounted to 1.85 billion euros. The third tranche, the disbursement of which depends on the results of the talks to begin in Bucharest on Wednesday, amounts to 1.5 billion euros.

A World Bank delegation will also be visiting Bucharest at the same time with the IMF mission, in order to discuss the requirements for giving Romania the second loan under the Development Policies Programme (DPL) totalling 360 million euros. DPL focuses on the management of public finances, on the measures relating to the social and financial sector and it completes the IMF- and European Union backed programmes.

The first DPL loan of 300 million euros was approved by the World Bank's board of directors on this July 16, it was signed on Sept. 1 and transferred Romania on Oct. 20.

The agenda agreed upon within the Development Policies Programme supports the structural policies and reforms aimed at Romania's fiscal sustainability and at backing the economic recovery process. The World Bank mission will work in close cooperation with the IMF and EU in order to assess the progress made by the Romanian authorities in working out and implementing the structural policies and reforms previously agreed. A decision on the second loan within the DPL will be made only after careful evaluation of the achievement of the previously agreed reform programme, the World Bank said in a release sent on Friday, Oct. 23

Sursa: http://www.agerpres.ro

Tags: world agreement european billion euros romania which monetary international wednesday bucharest talks mission

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