Romania to Sign New IMF Deal

Romania is to sign a new deal with the IMF in a bid to deal with its economic problems, Romanian President Traian Basescu has said. Basescu said at a parliamentary meeting on Tuesday he said the agreement will be signed next March after the current one expires.

He said: “No one is lending to Romania long-term, because of the structural deficits … [the country] faces huge difficulties in getting three-year loans.

“A new deal is necessary as Romania has to finance its budget deficit.”

Last year, recession-hit Romania signed a €20 billion two-year standby agreement with the IMF as part of a larger aid package which included funds from the EU, the World Bank and other foreign lenders.

Romania has pledged drastic public spending cuts to rein in its deficit, which last year stood at 7.4 per cent, and restart its economy which continued to contract in the first quarter.

The IMF estimates Romania’s economy will contract for a second year in 2010, shrinking by as much as 1.9 percent amid weak domestic demand, before growing by up to 1.5 percent in 2011.

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