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IMF and EU, a new mission in Romania during October 25 to November 7

A new mission of the International Monetary Fund (IMF), European Union and World Bank will be in Romania from October 25 to November 7, 2011, for evaluation of budgetary policies.

At the last assessment in August, the EU and the IMF have urged the Romanian authorities to maintain budgetary discipline and continue reform in the public sector, given that Romania is to return to growth this year, after two consecutive years of recession.

For 2011, the economic growth was estimated at 1.5 percent and in 2012 to 3.5 - 4 percent. But recently, Finance Minister Gheorghe Ialomitianu, announced that it is possible to adjust the forecast for 2012, amid the new wave of crisis globally.

'It is possible to adjust the forecast from the one established in the summer, as we discussed with the IMF and the EC, namely 3.5 percent of GDP. Let us hope that the adjustment will not significantly differ. I want the new forecast to be as close as possible to 3.5 percent, but we do not know if we will succeed. You see that all EU countries have made adjustments down of the growth forecast for them, ' Finance head said on October 18.

Regarding 2011, Minister Ialomitianu expressed his conviction that Romania will end this year with a growth of 1.5 percent of GDP, while other estimates indicate 1.7 percent of GDP.

In an interview for AGERPRES, IMF mission chief for Romania Jeffrey Franks said that Romania must keep its commitments to economic reforms foreseen in the International Monetary Fund (IMF) and the European Union (EU) program, despite electoral pressures in 2012.

Given the uncertainties in global economic climate it will be important for Romania to keep its commitments to economic reforms under the program with the IMF and the EU, despite electoral pressures, said Jeffrey Franks.

He also said that in terms of achieving the deficit target, of 3 percent for 2012, the authorities kept their firm determination to respect the agreement.

Romanian authorities retain their firm determination to respect the deficit target set for 2012. Any deviation from this objective should obtain approval of EU ministers since it was established under the excessive deficit procedure, said the head of IMF mission to Romania, Jeffrey Franks.

In March 2011, the Bucharest authorities decided to extend the agreement with IMF, through a precautionary agreement worth 3.09 billion SDR (about 3.5 to 3,6 billion euros), or 300 percent of rate that Romania has in the IMF.

The new agreement with IMF is accompanied by a preventive support one of 1.4 billion euros from the European Union and a 400 million euro loan from the World Bank.

In 2009, when it was hardly hit by the economic crisis, Romania has requested emergency assistance from the IMF, EU and World Bank, totaling 20 billion euros.

The Board of the International Monetary Fund (IMF) approved on September 29, 2011 the second evaluation of the precautionary agreement, making available for Romania a new tranche of around 480 million euros.

This is the third installment that IMF released for Romania for emergencies, the first being of 67 million and the second about 475 million euros.The new agreement with IMF will last 24 months and will run concurrently with a new preventive agreement with the EU, worth 1.4 billion euros and a loan of 0.4 billion from the World Bank .

Since this is a precautionary arrangement, the money from IMF can be drawn only in exceptional circumstances, such as a speculative attack on leu, triggered by a crisis in the region, resulting in a massive loss of reserves and trust or, if the Treasury fails, two - three times, to fund itself at acceptable costs.

The whole amount, 3.6 billion euros, the Fund will provide Romania based on the new precautionary agreement is intended to go to the National Bank.

Sursa: http://www.actmedia.eu

Tags: romania billion euros agreement percent october economic mission euro

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