PM Boc: Romania does not plan to ask IMF to hike loan

Bulgaria, Croatia also deny the bailout talks.

Romania’s Government does not plan to ask the International Monetary Fund (IMF) to increase the loan or to amend the macroeconomic indicators agreed in spring, and the first half indicators will be analyzed as of July 20 when official data is available, Prime Minister Emil Boc said Friday. “In the economic policy nothing has changed from yesterday until today, everything that was valid yesterday is still valid today. We are waiting for the official evaluation of the economy in the first semester and we will make a tough analysis. We currently do not envisage hiking the flat tax or the VAT or changing the macroeconomic indicators,” Boc said, answering a press question. Boc equally denied Romania aims to ask the IMF to raise the loan value. “We have just received the loan. We should first spend the money we have,” Boc said, reminding the government intends to ask IMF to increase the budget deficit target to include higher investment funds. The Romanian authorities will talk on July 28 with the representatives of IMF on Romania’s economic evolution as well as on increasing investments in infrastructure to put an end to the economic decline, declared the Finance Minister Gheorghe Pogea.

German daily Handelsblatt reported Friday, citing unnamed sources close to the IMF, that Romania, Belarus, Ukraine, Serbia and Latvia are speculating an earlier payout or an increase of the IMF-aid package, while Bulgaria, Croatia and Macedonia have asked the fund for assistance. Romania and the IMF signed in May a EUR12.95 billion two-year stand-by arrangement, as part of a EUR19.95 billion financial support package that also includes funds from the European Commission, the World Bank, the European Investment Bank, and the European Bank for Reconstruction and Development. Croatia, Bulgaria and Macedonia denied the report from the German daily. Handelsblatt said Bulgaria’s incoming government, likely to be led by the centre-right GERB party, which won a July 5 parliamentary election, planned to start talks soon with the IMF about a standby credit line, citing local media. In Sofia, the outgoing Socialist-led government and the GERB party both said they had not opened talks with the IMF. Biser Boev, tipped to become the next economy minister in the new Bulgarian government yet to be formed, said the next government will first slash spending and ask the IMF to audit its budget revision. But it would wait on aid. “Our intentions have not changed,” Boev told Reuters.

On Croatia, Handelsblatt said central bank governor Zeljko Rohatinski believed it was increasingly likely that Zagreb would need IMF support, after the central bank pumped 5 billion euros into the economy. But Croatian Prime Minister Jadranka Kosor said no request had been made. Macedonia’s outgoing finance minister, Trajko Slaveski, also said his country had not entered into loan negotiations. Handelsblatt said Hungary’s government, which took a bailout in October, had not yet decided whether it needs additional funds.

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