Former ministers advise Boc on IMF negotiations

Within months of taking over the country's helm, the government led by Liberal-Democratic Prime Minister Emil Boc, is engaged in sensitive negotiations with the International Monetary Fund (IMF) and the European Commission for a loan estimated at some €19 billion, aimed to help Romania cope with the international financial crisis.

Daily, ministers, experts of the Ministry of Finance, and the National Bank of Romania are holding meetings with representatives of the international organizations, who are trying to figure out how the economy stands, what are its financing needs, and what measures are needed to ensure stability. Public spending is under scrutiny, while economic growth and the budget deficit are the main indicators on which the two parties are to focus talks.

Several former prime ministers and finance ministers who negotiated or signed stand-by agreements with the IMF talked to Business Standard about their experiences, and provided advice for the current negotiators. "The best approach in negotiations is to be honest," former Prime Minister Victor Ciorbea said. Former Finance Minister Decebal Traian Remes agrees: "The only [thing] that works is the brutal, naked, unnuanced truth. This is who we are, these are our indicators, we have the following targets, and will reach these this way, in stages. As long as they do not catch you in a lie, they will work hard," he said.

Speaking of the conditions likely to be imposed - which many fear, because these could include harsh cost cuts and higher taxes, former Finance Minister Daniel Daianu said the country should avoid "a far too tough monetary program, as was the case in 1997 [Ed. n. when Romania was negotiating a stand-by agreement with the IMF]. We should not give in to measures that would allow speculators to act on the exchange rate," he said.

Business Standard