Brussels, 21/08/2012 (Agence Europe) - The IMF, the European Commission and the World Bank judged, at the end of their sixth review trip that took place from 31 July to 14 August, that Romania was broadly respecting the economic adjustment programme that it is applying in exchange for credit lines that are available should it need them.
The international fund lenders emphasise the importance of strong political will on the part of the Romanian authorities in order to implement the reforms, while the rivalry between Romanian Prime Minister Ponta and President Basescu left a deep impression at the European summit (see EUROPE 10666). “Political determination is needed to ensure that overdue structural reforms - necessary to achieve higher and inclusive growth - will be put in place”, the three organisations state in a joint press release.
In the budgetary domain, difficult decisions will have to be taken in order to guarantee an annual consolidation of public finance at the level of 0.5% of Romanian GDP. The objective of bringing the public deficit back below the 3% bar requires the reduction of public expenditure. Great effort is also needed to rationalise public investment in credible projects. Other challenges will have to be met to limit spending in the health sector and to make a success of the deregulation of the energy sector.
The aid available to Romania amounts to €3 billion from the IMF, balance of payment support from the EU of €1.4 billion, and loans from the World Bank for €1 billion. At this stage the Romanian state does not wish to draw on these resources which remain available as long as Bucharest applies the economic adjustment programme. (MB/transl.fl)