Romania Follow-Up Deal With IMF To Focus On Money-Losing Cos - Sources

Romania’s follow-up agreement with the International Monetary Fund will comprise several key requirements meant to rein in the budget deficit and boost the economy, including a better management of the large state-run companies, people close to the negotiations said Monday.

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"The issue of large state-owned companies will be better monitored under the new agreement and the IMF appreciates that selling the viable companies would ensure a cheaper financing of the budget deficit," the people familiar with the talks told MEDIAFAX.

Romania's new arrangement with the IMF, to be enforced sometime after a standing EUR13 billion agreement expires in May, will include clear targets regarding the arrears of large money-bleeding companies, IMF mission head Jeffrey Franks said last week.

According to IMF data, Romania's top ten largest money bleeders registered total arrears worth 7 billion lei (EUR1=RON4.2684) in November last year.

In 2009, Romania and the IMF signed a two-year standby loan agreement, part of a larger EUR20 billion package that includes funds from the EU, the World Bank and other foreign lenders.

Romanian authorities said recently the follow-up arrangement will likely be a precautionary deal, but gave no details on how much they want to borrow.

Joint teams from the IMF and the European Commission will be in Bucharest until February 8 for the seventh and final review of the two-year agreement and discuss the terms for a new deal.

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