IMF could propose minor changes to stand-by agreement, review mission head says

The International Monetary Fund, which has a delegation in Romania until January 27 to review the country’s bailout loan, could make certain changes to the additional letter to the initial agreement, following its current evaluation, according to Jeffrey Franks, head of the IMF evaluation mission in Romania. However, they will not be dramatic, he added. “These are not radical initiatives, but we continue to evaluate the needs and the means to solve these needs. We are looking at the implementation and changes to some measures, if they are needed, but we are also looking at the areas where progress was made,” said Franks. “This doesn’t mean we will modify the targets,” he added, saying this was the normal procedure.

His statement comes after the Romanian finance minister Sebastian Vladescu said the authorities were negotiating changes in the stand-by agreement with the IMF, adding that he had already received a document with proposed measures from the fund.

The IMF mission currently in Romania is making the second and third revision of the IMF bailout loan, which should result in a further EUR 2.3 billion for the country. The fund said it would probably release the funds to Romania even though the country had failed to meet its proposed inflation target for last year. The annual rate of inflation was 4.7 percent last year, above the proposed Central Bank (BNR) target.

The IMF has set an ambitious reform agenda for Romania this year, said Franks. “I am optimistic we can make significant progress in 2010 and that when the crisis is over, the economy will be ready to rebound,” said Franks. He added that the stand-by agreement with Romania was never in danger of being canceled, but only needed to be delayed due to the elections. 2010 will be a year of economic revival, said Franks, and Romania could be a success story, he concluded.

Corina Saceanu

Read more about

Air Show in Bucharest on Saturday for Aviation Day: dozens of military aircraft to fly over Aviatorilor Square

read more