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IMF: we agreed on Romania’s future necessary policies

de A.C.
Marţi, 8 februarie 2011, 11:22 English | Top News

Jeffrey Franks, IMF: 

  • In the last 2 weeks, IMF/EC/WB delegations discussed a new multilateral program for Romania 

  • The new program, once approved by the IMF board will offer 3.6 billion euro assistance from the IMF for 2 years  

  • At the level of experts, we agreed a new economic program and made a final evaluation for the current program  

  • We expect to request the approval of the IMF board regarding the new evaluation and the new program  

  • Authorities decided not the access the available resources from the last installment and have a precautionary type of agreement for the next one  

Istvan Szekely, European Commission 
  • Romania had major accomplishments with the help of this problem: it managed to pull itself from the dangerous area and consolidated public finances. Deficit will be below 3% in 2012 and structural measures were already taken  

  • The most important accomplishment was to strengthen fiscal regulations and maintain a financial stability in times of crisis 

  • It is time for Romania to focus on structural reforms to be able to obtain its growth potential  

  • The reform program for the next years will focus on improving conditions for businessmen, on infrastructure and EU fund absorption 

  • In the energy sector, the priority is to liberalize the market for non-residential users In the transports sector, the objective is to reform the railway system overall In the labour sector, the objective is to create a flexible labour market so that salaries can reflect productivity 

Catalin Pauna, World Bank 

  • In the last 2 years the World Bank has been working with the IMF and EC to sustain Romania. Our main target of our support was structural reforms in the public sector; protecting those with few possibilities and increase efficiency of the social programs and strengthen the financial environment in Romania WB is content with the progress of reforms. The economy is stable, markets regained trust in Romania  

  • In the last two weeks WB worked with the government to consolidate progresses made so far  

  • The new program wishes to help fiscal consolidation and sustain structural reforms that are still necessary WB will offer Romanian 400 million euro to help improve budgetary spending 

  • We will sustain the reform of the social assistance system We will support the government to coordinate and monitor reforms at the central level 

Jeffrey Franks, International Monetary Fund 

  • We did not bring significant changes to economic estimates. We see signs that the economy is recovering and has every potential to starting growing from 1.5% in 2011 to 4-4.5% in 2012  

  • Inflation rate took the estimated trajectory but the pressure on food and petrol prices pushed the inflation a little over our estimate. We expect it to bounce back to our estimate in the second part of 2011 

  • There have been extraordinary efforts in the fiscal sector to organize it. The 2010 deficit was successfully met  

  • We were impressed by the commitment of authorities to make the necessary adjustments even in the tough social condition Targets for 2011 and 2012 can be attained 

  • The objective of the new pack is to stimulate durable economic growth We need to eliminate structural barriers  

  • The government will focus on paying its debts to the private sector which still impedes growth; on increasing spending with public investments by stimulating the absorption of EU funds. There is 19 billion euro free money from the EU. Using just 4 billion euro/year would be extraordinary  

  • The government will also focus on transforming Romania into a destination for investors. Stability will cut risks and interest rates for investors. Bureaucracy will have to be simplified and facilitate new companies  

  • Another challenge for the government is to implement profound reforms in state companies. The decision not to take the next IMF installment is extremely positive. 

  • The central bank has enough reserves and does not need the 900 million euro installment  

  • Adjusting energy tariffs has three stages: adjusting non residential consumers which will start soon; the second will address residential consumers and will be slower, will start later; the third is establishing those vulnerable consumers who will receive subsidies. 

  • Hospitals will be treated different.  

  • The state will decide who it will restructure state companies, we do not request a certain number of lay offs. Once reforms will be finished, more jobs will be created

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