Antena 3 CNN Business Reuters: IMF calls on Romania not to jeopardize the progress made over the last years

Reuters: IMF calls on Romania not to jeopardize the progress made over the last years

Reuters: IMF calls on Romania not to jeopardize the progress made over the last  years
12 Noi 2014   •   14:35
The International Monetary Fund on Tuesday urged Romania not to jeopardize the progress made in recent years on keeping spending under control, under the circumstances where the government of Victor Ponta would like to end next year the agreement with the financial institution. "There is a commitment from Romania to further strengthen the fiscal situation. We expect this to be respected," Guillermo Tolosa, the  IMF representative for Romania and Bulgaria said in Sofia, Reuters reports, according to Mediafax.

He pointed out that a huge effort was made for the Romanian economy to be strengthened.


"Such a big effort was made for the economy to become stronger and more resilient to shocks, with this increased stability resulting from the fact that the state budget accounts are much better than six years ago. In these circumstances, we believe that it is extremely important for Romania not to jeopardize this considerable progress, "Tolosa said.


The IMF supported Romania in 2009, when the country went through a painful recession, reducing the budget deficit and encouraging reforms through a series of agreements that restored the country's credibility in front of investors.

Ponta is expected to become president after the  Sunday's election, boasting  the reduction of austerity measures and lowering  some  taxes in the two-year term and  with the promise to increase pensions next year, Reuters notes.

Such promises brought into  attention  the budget for 2015 and the possibility that the new government might be  tempted to relax fiscal policy, despite a commitment made  to maintain  the budget deficit to 1.4% of GDP.

Romania’s last agreement with the IMF, the third in 2009, is a stand-by agreement worth 4 billion euros expiring next year and probably will not be renewed. IMF suspended talks on the current agreement until after the election.

"The program will expire next year and then we will analyze the situation at the time. Romania has made considerable progress in the reform effort, and expectations of the moment are that Romania will be able to conclude the stand-by agreements of the last 5-6 years "Tolosa said.


This year Romania aims for a budget deficit of 2.2%, well below the 7.2% recorded in 2009. Ponta reported in October his intention to maintain a deficit target of 1.4% for 2015 Reuters notes.

The European Commission warned on Nov. 4 that the government will have to raise taxes or cut spending to offset projected revenue declines in 2015 generated by the lowering of  CAS, of the pole  tax and excise duties, otherwise the budget deficit will  rise to 2.8% of  the GDP.




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