IMF Welcomes Romania’s Quick Response To Court Ruling

„The Romanian authorities have shown strong commitment to their economic program by quickly identifying compensatory measures after the ruling of the Constitutional Court,” said Tonny Lybek, the IMF’s Regional Resident Representative in Romania and Bulgaria.‪

The IMF board will meet July 2 to review Romania’s progress under a EUR13 billion loan agreement and decide on whether to disburse a new tranche to the country.

„Subject to the board’s completion of this review, the fifth tranche (SDR768 million, or about EUR900 million) will become available to the National Bank of Romania after two working days,” Lybek said in a statement.

Romania has pledged to cut public spending and lower its budget gap to 6.8% of the gross domestic product this year, from a deficit of 7.4% of GDP in 2009.

Last week, the Constitutional Court rejected a 15% cut in pensions, leading the government to increase the sales tax by five percentage points to 24% instead.

The decision created panic among investors and pushed the leu to its lowest level ever against the euro, despite official assurances that the IMF deal was not endangered.