With or without political crisis, IMF not willing to re-negotiate budget

Publish date: 09-12-2009
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Even if the political crisis is prolonged, the International Monetary Fund (IMF) is not willing to re-negotiate the budget deficit target in 2010 of 5.9 percent of the GDP, agreed on with the Romanian authorities. According to Tonny Lybek, the IMF representative for Romania and Bulgaria, the 5.9 percent target is anyway 'quite high', and the Romanian authorities agreed to it, Agerpres informs. Lybek said this year the IMF had revised the 2009 budget deficit target because the macro-economic context had changed and the deficit was adjusted from 4.6 percent to 7.3 percent of the GDP, adding that the economic climate and the foreign demand were expected to improve in 2010. The IMF also said that, in order for Romania to stay within the 2010 budget deficit limit of 5.9 percent, a number of options would be considered both in terms of budget revenues and of budget expenditures.

The IMF representative added that the unemployment rate was expected to reach 9 - 10 percent in Romania in 2010. On the other hand, no date has been set for the future evaluation mission of the IMF, Tonny Lybek noted. 'We have not set any dates for the next missions, neither we nor the World Bank. We are prepared to come when the Romanian authorities are also ready', Lybek said. In November, Lybek was saying that the IMF did not want just any budget from the Romanian politicians, but a credible budget. After the evaluation mission, the IMF Board will decide if the Evaluation Report could be concluded, which depends on the progress made by Romania.

An IMF, World Bank and EU mission was in Romania from October 28 to November 6 to evaluate the way in which Romanian authorities had fulfilled their commitments towards the Fund. The financing agreement for EUR 19.95 bn extends over a period of 24 months, when the Fund is supposed to disburse EUR 12.95 bn in eight instalments. The balance of the amount comes from the European Commission, the World Bank, EBRD and EIB: EUR 5 bn from the EC, EUR 1 bn from the World Bank and EUR 1 bn from EBRD and EIB together.


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