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IMF Restricts Romania’s Invest In Road Infrastructure – Transp Min

The International Monetary Fund opposes Romania’s authorities decision to continue the construction of roads and highways with funds from the European Investment Bank, as it triggers a higher budget deficit, Transport Minister Radu Berceanu said Thursday.
IMF Restricts Romania’s Invest In Road Infrastructure - Transp Min
06 aug. 2009, 18:14, English

"IMF does not allow us to continue investments in the road infrastructure because they hike the budget deficit," Berceanu said after talks with the IMF’s delegation in Bucharest.

Berceanu said he asked the IMF delegation to allow the ministry to continue its infrastructure projects with the money taken from the EIB.

"We asked to spend as much as we can this year, as we have the money, but we have fiscal constraints," Berceanu said.

He added the IMF officials agreed the infrastructure investments are favorable for the economy, but requested a different allocation of public funds.

"Talks will continue tomorrow (Friday- e.n.), Saturday and Sunday, to find a formula so that this agreement might go further," Berceanu said.

In March, the Romanian authorities negotiated with IMF a deficit of 24.36 billion lei (EUR1=RON4.2098) for 2009, respectively 4.6% of GDP, the ceiling being specified in the stand-by agreement with the international institution.

However, the Government wants IMF to accept a higher budget gap due to the worsening economic conditions.

An IMF mission is in Bucharest to evaluate the institution’s stand-by agreement with Romania, worth EUR12.95 billion. Romania borrowed a total of EUR19.95 billion from IMF, the European Union, the World Bank, the European Investment Bank, and the European Bank for Reconstruction and Development.