Romania Given More Time To Meet IMF Demands

Romania is to get two more months to hit its agreed goals with the IMF, ater falling behind with several targets.The IMF is granting Romania two extra months, until June, to meet its commitments, after falling behind in some of its targets connected to a 5 billion euro aid plan.

“Romania has requested extending the programme for two months. We have agreed to ask the IMF board to grant this extension,” Erik de Vrijer, the mission chief to Romania, said on Tuesday.

The extension period is crucial for Romania, as reforms have not progressed as quickly as envisaged. By June, Romania is to introduce a co-payment system in the health sector and start selling off the freight company CFR Marfa, among others.

Romania has pledged to privatise and to restructure several state-run companies. Six initial and secondary public offerings were scheduled by the end of last year for transport and energy companies, but the government ony actually did so for the power company Transelectrica, in March 2012.

Another programme falling behind schedule is finding private sector management for state companies. So far, Romania has introduced private management only to two, Tarom and CFR Infrastructura.

Romania is hoping to conclude a new precautionary-type agreement with the IMF and the EU when the ongoing deal expires in March.

“A new agreement will maintain the confidence of investors. If Romania remains under the umbrella of the accord, it will allow us to consolidate results,” the Prime Minister, Victor Ponta, said last week.

Cash-strapped Romania is dependent on a 20 billion euro rescue package from the IMF, the European Union and the World Bank.

It obtained the loan in May 2009 in exchange for agreeing to push through tough austerity measures aimed at taming the country’s yawning deficit.

An IMF mission came to Bucharest early this month to discuss the next review of the programme.