IMF Deal Could End Early If Romania Secures Enough Financing – Moody’s

Last year, Romania signed with the IMF a EUR13 billion standby arrangement, part of a larger EUR20 billion package that includes money from the EU, the World Bank and other foreign lenders.

So far, the eastern European country has received around EUR7 billion in IMF money and but the institution has put additional tranches on hold due to political uncertainty following the government collapse in October last year.

An IMF mission is expected to arrive in Romania on January 20 for a new assessment of the country's economic performance in view of disbursing another EUR2.3 billion from the loan.

According to Moody's, the Romanian government which was formed at the end of December "has sufficient support in the parliament to tighten spending and undertake structural reforms, which should allow the IMF/EU program to resume in February or March."

Nevertheless, the executive led by Prime Minister Emil Boc is "weak and divided" and political instability is far from over.

"Early parliamentary elections are a strong possibility," Moody's also said.

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