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State-owned enterprises, an essential item to be discussed by Romanian authorities with IMF

An important item in the program concluded between the International Monetary Fund (IMF) and Romania refers to the structural reforms and in particular the situation of state enterprises over which the discussions of the IMF mission with Romanian authorities will be mainly focused in the period April 27 - May 9, Chief of the IMF mission to Romania Jeffrey Franks announced on Wednesday.

'In this new program we should focus on structural reforms and the situation of enterprises with state capital, field we are going to mainly focus on during our discussions with the Romanian authorities', said Jeffrey Franks, who also stressed that the mission is going to hold talks with Romania's National Bank (BNR) on the monetary policy, the inflation target and the situation in the financial sector.

Head of the IMF mission to Romania underlined that the IMF is expecting that 'most targets provided in the program have been met and the existing data so far seem to be positive, but our experts must examine the situation in the next 10 days'. As usual, during the evaluation missions, the IMF 'will review the macro-economic forecast '.

Jeffrey Franks also added that the IMF mission to Bucharest will make the first assessment of the new standby precautionary type agreement with Romania. 'My colleagues from the European Commission (EC) will carry out a final review of the previous agreement with Romania, and the future program between the European Commission and Romania will enter into force in the coming weeks', Franks underlined.

Alongside IMF, the joint mission also includes representatives of the European Commission and of the World Bank (WB).

The Stand-By Agreement between Romania and the IMF started on March 31, 2011 and is a precautionary type one, amounting to SDR 3.1 billion, respectively 3.6 billion euros, representing approximately 300 percent of the share Romania has in IMF.

The new agreement with IMF is spread on a 24-month period, and will be run concurrently with a new precautionary deal with the European Union, worth 1.4 billion euros, as well as with a loan of 0.4 billion euros from the WB.

Since this is an arrangement of a precautionary type, the money from the IMF can be drawn only in exceptional situations, such as an attack on the national currency triggered by a crisis in the region, materialized in a large loss of reserves and trust, or if the Treasury fails two - three times to get funds at acceptable costs. In these circumstances, the entire amount of 3.6 billion euros, which the Fund will make available to Romania through the new precautionary agreement, will be destined to BNR.

Sursa: http://www.actmedia.eu

Tags: precautionary agreement billion state mission enterprises romanian romania bnr