The IMF board approved on July 2 meeting to grant Romania a new instalment, namely 913 million Euros, according to an IMF press release. All of it will go to the Romanian National Bank.
IMF First Deputy Managing Director John Lipsky declared that "against the background of the large downturn, the Romanian authorities have made significant strides toward restoring macroeconomic stability and achieving an orderly adjustment of pre-crisis imbalances. They are taking ambitious adjustment measures to contain the weakening of the fiscal position and set the stage for a sustained improvement in public finances. Balancing the fiscal adjustment between expenditure cuts and tax increases will help cushion its social impact, while at the same time reversing excessive past increases in public wages."
So far, Romania received 10.7 billion Euros from the IMF. A new Fund mission will arrive in Romania after July 20.
Romania's representative at the IMF Mihai Tanasescu declared that the approval of the instalment would send international markets a strong message and indicates a strong support coming from the international community, Romanian news agency Agerpres informs.
"The meeting of the IMF Board went well and underlined three main directions. Firstly, it showed a strong support coming from the international community for the reforms Romania is now going through. The strongest support was shown by the US and the European Commission (...), that are backing the reforms that Romania is now putting into practice", Tanasescu declared.
Secondly, the ex-Finance minister underlined a "message of solidarity and trust in Romania, so that authorities could put into practice the fiscal adjustment measures. According to him, the international markets are to show more faith into Romania's fiscal-monetary policies.
"It is a sign of normality, but also of trust, that the Finance Ministry would be able to borrow from the internal market the sums it needs to cover the budget deficit, which needs to have an descending trend in 2010 and the years to come", Tanasescu added. He insisted that the result of the IMF Board meeting was a sign that all Europe could enforce measures as strong as in Romania.
Mihai Tanasescu concluded by saying that all money from this IMF instalment is going to Romania's National Bank (BNR).