Romanian PM says agreement with IMF only preventive measure

BUCHAREST – Romania’s agreement with the International Monetary Fund (IMF) and the European Commission is only meant as a preventive measure, Prime Minister Emil Boc said on Wednesday.

“The agreement we are going to conclude with the European Commission and the IMF is meant only as a preventive measure, which is confirmed by the flat tax and the VAT which will stay at the current level,” Emil Boc told an economic conference, adding that Romania is only concluding this agreement “to prevent certain negative consequences to the Romanian economy.” 

According to him, increasing the flat tax and the VAT would not be “good measures for the health” of the Romanian economy right now.

“An increase now in the flat tax and VAT will affect the business environment and the health of the business system,” Boc said.

In his opinion, the flat tax is good for the economy and should be maintained, and an increase in VAT will only put in difficulty those who have small and very small incomes.

An IMF mission is visiting Bucharest to continue its assessment of Romania’s macroeconomic conditions.

The delegation will hold talks on a possible IMF program for Romania. Such a program will be part of a multilateral pro-active and safety financial package to be backed by the European Union and the World Bank among other international financial institutions.

According to government sources, the Romanian authorities intend to borrow 19 billion euros (23.75 billion U.S. dollars), 12billion euros from the IMF and 7 billion euros from the EU, following an evaluation by the Finance Ministry and the central bank.