Monday, October 1, 2012

IMF Agrees to Unlock $663 Million for Romania

The International Monetary Fund agreed to unlock about $663 million under Romania’s precautionary loan after reviewing the country’s progress in meeting the terms attached to the bailout.

The Romanian government has indicated it still has no intention to draw on the 3.7 billion-euro ($4.8 billion) plan, which was approved in March 2011, the IMF board said in an e- mailed statement after meeting today in Washington.

“The economic outlook remains challenging due to the difficult external and internal environments that have led to exchange-rate pressures and undermined confidence,” IMF First Deputy Managing Director David Lipton said in the statement. “Steadfast program implementation is essential to preserve the hard-won macroeconomic stability and boost investment and growth potential.”

The eastern European country is counting on a 5 billion- euro, two-year accord from the IMF and the European Union, its second bailout package, to act as a safety net amid the European sovereign-debt crisis.

The government complied with the IMF’s terms this month by auctioning a majority stake in chemical company Oltchim SA (OLT) and submitting a prospectus to the stock-market regulator for the sale of 15 percent of Transgaz SA (TGN), Prime Minister Victor Ponta said Sept. 25.

Romania also raised natural-gas prices 5 percent for households and 10 percent for companies and cut unpaid debt to private companies, the IMF’s other two demands, Ponta said.

“Remedial measures to ensure a decline in arrears remain a priority,” Lipton said in today’s statement. “Additional efforts are needed to improve tax administration and reform the health care, energy and transportation sectors.”

To contact the reporters on this story: Irina Savu in Bucharest at; Sandrine Rastello in Washington at

To contact the editor responsible for this story: James M. Gomez at Chris Wellisz at

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