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March 20, 2023

President, Premier, BNR Governor agreed: New accord with the IMF

The accord might be signed for “one or two years.”

The delegation of the International Monetary Fund, the European Commission and the World Bank yesterday continued its 6th mission of evaluation in Romania by meeting President Traian Basescu. At the beginning of the meeting with the representatives of international institutions, the head of state said that he agreed with PM Victor Ponta and BNR Governor Mugur Isarescu to reach a new accord with the IMF “for one or two years” from now. He added that, in the future, the IMF assistance is needed in order to provide specialised solutions for enforcing a medium-term strategy in Romania, capable to secure the economic growth, Mediafax informs.“I think this is the right moment to analyse the existing accord and also consider some elements of the future accord. As I discussed with the premier and with the governor of BNR, we decided to have a new accord with the IMF for another year of two,” Basescu said. The president noticed that the government sent the European Commission a point of view over the programmes aimed at the absorption of European funds for 2014-2020, and the reaction of Brussels was “rather unpleasant.” He added that authorities must agree with the IMF, EC and WB a medium-term strategy regarding the economic growth of Romania. PM Victor Ponta announced in August that he opts for a new preventive accord with the IMF, but the decision will be made in 2013, after the parliamentary elections. The premier added that a new accord would give the signal that Romania benefits from a certificate that guarantees its fiscal health. In his turn, PNL vice-president Dan Radu Rusanu said yesterday on RFI that the accord with the IMF should be renegotiated, because it is abnormal to privatise companies of “strategic importance” like CFR Marfa.

Romania did not find the key to economic growth

Romania was unable to find the key to economic growth, despite its mineral resources, low debts and the improving situation of the budget deficit, President Traian Basescu said Thursday during the meeting with the IMF delegation. According to his statement, Romania has many financing possibilities at home and cannot rely only on European money. “We have much copper, gold, resources whose exploitation was stopped because of very high costs. Now, the situation has changed,” Basescu mentioned. On the other hand, Romania’s inability to absorb the European funds is an issue. As for agriculture, the president said that 2012 was an average year, although there is much talk about a sharp decline with this regard. He proposed the members of the IMF delegation to also consider the things assumed by Romania within the European strategy for 2020, when they will discuss a possible new accord. Speaking about structural reforms, President Basescu added that authorities are partly responsible for the failure of the privatisations of Petrom, Cuprumin or Oltchim, while the other part goes to the failure to connect to market realities.

Modest economic growth in 2013 too

The head of the IMF delegation, Erik de Vrijer said that Romania will have a moderate economic growth this year, because of the draught that affected the agricultural output. He added that “the challenge for Romania” in the near future is to return to “a sound situation” with respect to economic growth and the convergence with the rest of Europe. The IMF official also warned about the high prices of food products and the unstable situation of Romanian agriculture. De Vrijer mentioned that this mission of the IMF, EU and World Bank delegation represents “a beginning” before the next legislative elections and the forming of a new government, adding that the experts will return at the start of next year for a new analysis of the situation in Romania. At the conclusion of the meeting, the chief of the IMF mission to Romania appreciated the fact that the government was able to keep under control the budget deficit, thus creating the conditions for “a normalisation of fiscal policies” in 2013. He added that it is still difficult to keep arrears under control and the problems for the whole situation of Romania’s public finance can also be caused by the financial corrections ruled by the European Commission on the operational programmes that were pre-suspended this year.The meeting held at the Cotroceni Palace between President Traian Basescu and the delegation of the IMF mission was also attended by the minister of Finance, Florin Georgescu.


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