IMF will unblock Romania aid when conditions fulfilled

The International Monetary Fund board will release a new tranche of loans to Romania as soon as the government fulfils conditions agreed during an evaluation mission, an IMF representative said on Monday.

“We reached an agreement at the level of experts. As soon as the conditions are met, we can expect the board to unlock a new tranche,” Jeffrey Franks said, speaking Romanian, during a press conference in Bucharest.

He added that the instalment, worth around €900 millions euros, could be released by mid-January.

Among the agreed conditions, Franks mentioned the final approval of the pensions and the public-sector pay reforms, as well as the reduction of state arrears.

Crisis-hit Romania last year obtained a €20-billion rescue package from the IMF, the European Union and the World Bank in exchange for austerity measures aimed at taming its deficit.

Franks praised authorities for having kept most of the promises made during the previous assessment mission and called on them to go ahead with the austerity plan.

“The government is on track to reach the public deficit target for 2010,” he said.

Romania has pledged to bring down the public deficit from 7.1 percent in 2009 to 6.8 percent in 2010 and 4.4 percent next year.

In order to do so, the government has slashed public wages by 25 percent and raised the VAT tax on goods sales and services from 19 percent-24 percent.

But Franks stressed the IMF still expected progress in several areas.

He said keeping public spending under control would accelerate economic recovery and added the IMF expected the Romanian economy to grow by 1.5 percent in 2011 after having contracted by 7.1 percent last year.

Check Also

Turkey’s Erdogan Plots Power Grab Over Lawyers’ Organisations

Angered by their continued independence and support for democracy and secularism, the Turkish strongman is …