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Tanasescu(IMF): IMF and EC ask government to include arrears in budget deficit

IMF and EC asked the government to report budget deficit according to the model used by EU – ESA95, which includes state debts to companies, Romania's representative with IMF, Mihai Tanasescu said.

'No calendar was established to report ESA 95. The tendency is to replace it', Tanasescu added.

Since the conclusion of the accord with IMF and EC, Romania has fulfilled the budget deficit targets established in the program with international institutions, but the state has constantly reported unpaid debts to companies.

The adoption of ESa95 reports is an IMF and CE demand to make a more truthful report, Tanasescu explained.He mentioned that most EU states report budget deficit according to ESA95 and Romania's adoption of the system would be a positive sign for international markets given by a more transparent report system.

According to ESA 95 the budget deficit was 8.6% of GDP in 2009, higher than the cash reports of 7.2% made by Romanian authorities. In 2008 the budget deficit was 5.7%of GDP according to ESA and 4.9% of GDP according to the cash model.

BNR governor Mugur Isarescu has recently declared that the state must give a positive signal in solving the arrear question , a 'savage' crediting form which creates a credibility problem for Romania.State arrears are classified by IMF as engaged debts unpaid for more than 90 days. The government missed the target established with IMF for arrear level since the beginning of the accord in 2009.

According to the cash model, the budget deficit recorded last year was 33.3 billion lei, or 6.5% of GDP, under the limit established in the IMF accord of 34.6 billion lei. For this year the authorities intend to cut the budget deficit to 4.4% of GDP.Romania has a foreign financing accord with IMF, EU and other international financial institutions for 20 billion euro.

An IMF-EC mission is in Bucharest for the seventh evaluation of the stand-by accord in which the fulfillment of objectives for the last term 2010 is analysed and conditions for a new preventive accord will be negotiated. The visit ends on 8 February.

Government's letter of intent is to be drawn up until weekend

The Government will draw up and negotiate the letter of intent with the International Monetary Fund (IMF) until the end of this week, Romania's chief negotiator with the IMF Mihai Tanasescu said on Tuesday.

'At the Transports Ministry they talked about the subordinated companies and they made an inventory of the problems these companies had and, taking these issues into account, the Government will establish its targets. A programme of restructuring the subordinated companies needs to be implemented both in the Economy Ministry and in the Transports Ministry and its implementing will not last one year or two, but several years. Restructuring may mean any kind of measure,' said Tanasescu at the end of his talks with the Transports Ministry representatives.

An IMF mission, headed by Jeffrey Franks, is in Bucharest from January 25 till February 8, for the seventh evaluation within the stand-by agreement. The visit of the IMF mission is taking place at the same time with those of the European Commission and the World Bank.

Romania received 12.44 billion lei from the IMF, out of a total 13.5 billion euro loan, to which one can add the 3.5 billion euros received from the EC, as part of a 5 billion euro loan, as well as the 300 million euros, which are part of a one billion euro loan from the World Bank, as other 300 million euros are going to be released soon, after the World Bank Board's approval on January 20, 2011.

The most recent tranche of the IMF loan worth 904.8 million euros was disbursed to Romania on January 7, 2011.The total support package for Romania, agreed upon on May 4, 2009, with the major global financiers, amounts to 20 billion euros.

Sursa: http://www.actmedia.eu

Tags: accord companies romania billion euros tanasescu which budget according deficit report government bnr euro

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