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Romania To Ask IMF For New Waiver On Govt Arrears

Romania hasn’t met the first-quarter performance criteria in the sector of general government arrears and will ask the International Monetary Fund for a new waiver of non-observance, IMF mission head Jeffrey Franks said Monday.
Romania To Ask IMF For New Waiver On Govt Arrears
10 mai 2010, 12:20, English

The request will be examined at the IMF board decision in June, Franks told a news conference in Bucharest.

This would be the third waiver of non-observance in the government arrears sector granted by the IMF since the start of a EUR13 billion loan agreement signed with Romania in 2009.

„We are aware, and the government is also aware, that this is not a good situation,” Franks said.

Romania must bring its government arrears down to 480 million lei (EUR1=RON4.1246) by year-end, from RON1.5 billion in December last year.

The country has pledged to eliminate all arrears by the end of the IMF program in 2011.

An IMF mission arrived in Bucharest April 27 for the fourth review of Romania’s performance under a EUR13 billion loan package signed last spring. Following the mission, the IMF will decide whether to disburse a fifth installment to the country, worth EUR850 million.

However, the money is conditioned by Romania’s ability to implement a series of drastic spending cuts in the public sector aimed at boosting revenue and containing a growing public deficit.