Romania, IMF Disagree On Privatizations, Social Security Contributions – Sources

They said the negotiations have come to a halt and did not produce the letter of intent, which should have been drawn up Friday. The Government was willing to privatize almost none of the companies suggested by the IMF. The Romanian authorities want to reduce the social security contribution rates as soon as possible, given the good tax collections in the first quarter, although this decision was to be announced later in the year, said the sources.

Through the previous letter of intent, the Government pledged to make a list of the state-owned companies to be privatized, reorganized or closed by the end of April. Prime Minister Emil Boc later announced that the list would be drawn up by the end of June.

A meeting between the delegation and President Traian Basescu, originally scheduled for Friday 3 p.m., was postponed for Saturday, when the evaluation will be almost complete.

After negotiations on a follow-up deal, the list of companies monitored by the IMF was extended to include Romania’s largest budget debtor CNH, alongside Termoelectrica, CFR SA, CFR Calatori, CNADNR, Metrorex, CFR Marfa, Electrificare CFR, Electrocentrale Bucuresti, Posta Romana, Tarom, Oltchim, as well as six other energy and railway companies. The National Landscaping Company, or ANIF, was taken out of the list after the company managed to narrow its debt down.

Mihai Tanasescu, Romania’s representative to the IMF, said Friday that a decision whether or not to reduce social security contribution rates would be taken in three months, during a new evaluation, when the effects of the new Labor Code will be apparent.