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December 8, 2022

Romania cannot afford to fully renounce its relationship with IMF, official says

‘Suspending the arrangement with the International Monetary Fund (IMF) is a difficult moment. According to Chairman of the Fiscal Council, Ionut Dumitru, Romania cannot afford now to fully renounce its relationship with the IMF, because it has to meet the obligations it undertook in the area of structural reforms, to give a positive signal to the financial markets.
Dumitru told Agerpres on Friday that, as official statements show, the arrangement is suspended in that talks will resume this November only. ‘Apparently, some things will happen in the meantime. That is, until talks resume, the Government seems to take certain measures that have a significant impact, first of all cutting the social security contributions. The impact is more than significant, RON 3, 4, 5 billion in one year. The figures are more than significant and the risk for 2015 budgetary skidding is very high, unless compensatory measures are found. In fact, this was probably the position of the IMF as well: we can implement the measure if compensatory measures are found,’ said Dumitru.
In his opinion, the compensatory measure provided for in the piece of legislation approving 5-percent cuts in the social security contributions, which is improving collection, cannot be taken into account.
‘We are talking here about billions of lei that cannot emerge overnight from improved collection. I do not mean to say that would be impossible, but our experience so far has proved it will not happen,’ said Dumitru.

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