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December 1, 2020
BUSINESS

IMF relation criticised

While businessmen were disappointed after meeting the Fund’s evaluation team, Social Democrat leader slammed the relation with IMF as ‘anti-Romania’. Jeffrey Franks says is Government’s decision to go on without the fund’s help.

Romania is a sovereign country and, if the Romanian government thinks the country is better off without the IMF, each can choose to walk its own way, the head of the IMF mission, Jeffrey Franks, stated, quoted by Mediafax, after talks with trade unions, patronages and entrepreneurs. The latter were hoping for concrete proposals for emerging out of the financial crisis, but the head of the delegation explained that the IMF has no such prerogatives. “We do not come up with measures. The Government takes measures and we support the Government’s plan for action,” Jeffrey Franks stated, in response to criticism.


Moreover, the latter argued that “Romania is a sovereign country, which may decide to put an end to the agreement with the IMF, but the Government does not consider it should renounce the agreement. The Government thinks we are playing an important part, and our intention is to assist in any way we can so that Romania may emerge out of the recession.” These statements come in response to those made by the businessman Dinu Patriciu, to the effect that representatives of the IMF “live in a theoretical world” and know nothing of Romanian economy, and that the Romanian authorities should find a way of dropping the agreement with the international institution. “I think we should find, as others before us, a quick way to send them packing home,” Patriciu stated. The businessman stated, on the adevarul.ro video chat, that Ion Tiriac had proposed to the IMF delegation the fiscal amnesty.


At the same time, Jeffrey Franks stated that the business community presented a list of claims for the recovery of economy, and the IMF “took note of it”. The head of the IMF mission to Romania explained that “we always like to meet the business community and trade unions, to know what they think about the progress of economy, to find out what they think are the best ways to get the economy back on track, as well as their concerns.”


“I had a useful exchange with the entrepreneurs,” Jeffrey Franks concluded.


Ponta considers the relation with IMF ‘deeply harmful’


The leader of the Social Democratic Party, Victor Ponta, attacks, in turn, the IMF. He doesn’t spare his admittedly, suspended, party colleagues, as is the case of Mihai Tanasescu. “Our relation with the IMF is deeply harmful. The IMF, starting with Mihai Tanasescu, lied to us all, tricked us, to offer support to a certain political group, claiming there will be an economic growth, now they claim there will be a growth in 2011. I don’t know whether the example of neighbouring countries which part ways with the IMF is the best solution, but I think that, at the moment, the relation with the IMF is anti-Romania,” Ponta stated, on Wednesday, on TVR.


Flexible labour force to raise productivity


The IMF delegation had, on Wednesday, talks with the minister of Labour, Mihai Seitan. Talks were conducted in the context in which the Romanian state failed to meet all the terms set in the agreement with the International Monetary Fund. Thus, debts to firms haven’t been paid, the Government failed to reduce public expenditure in time and there’s more. The unified public sector wages or pension law will not be applied during the course of this year. The wage law will be modified by the Government and trade unions, and the pension law will come in force only as of 2011.


“We understand there has been pressure in Parliament to pass other laws. However, we’ve agreed that, as long as there is an agreement to reform the pension system as of September, all will be well,” the head of the IMF delegation to Romania, Jeffrey Franks, stated, after his meeting with the minister of Labour. “We’ve also addressed the fact that in the future it will be crucial for Romania to have a flexible labour force which may generate a productivity growth, which holds, in fact, the key to Romania’s future economic development,” Franks added.


Possible budget rectification, in August


The first budget rectification for this year may be made in the second half of August, between August 15 and 22, date by which all ministers should send the Ministry of Finance data regarding savings obtained by restructuring, to be included in the rectification proceedings. “The process of restructuring hasn’t been completed, or savings obtained from this process should be taken into account in drawing up the project. Under these circumstances, we expect the rectification will be made in the second half of August, after talks with the IMF experts,” official sources stated, for Mediafax. Estimated expenditure in the consolidated budget rose in the first semester by 4 per cent, at RON 95.3 bln, and revenue ebbed by 0.1 pc, at RON 77.2 bln, so that the deficit amounts to RON 18.07 bln, within the limit agreed upon with the IMF. The Fund may call, on their next mission to Romania, in late October-early November, for the adoption of new measures to correct the budget deficit, according to analysts of ING Bank Romania.

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