Romania, IMF To Analyze Raise In Minimum Wage

Franks said Romania has delayed adopting and implementing a unitary wage law for the public sector and a pension reform but said he hopes delays will be recouped.

He added he knows there has been pressure on authorities to raise the minimum wage but such a move needs to be analyzed to avoid potential damaging effects on the country’s economy.

Franks also said the budget deficit is at 4.4% and all data seems to be in order at first sight.

Romania’s representative to the IMF, Mihai Tanasescu, said he hopes Romania manages to pass required legislation in time and not endanger the EUR20 billion IMF-led loan. He said the minimum wage issue has not been discussed yet but will likely be a topic in Wednesday’s meetings between Romanian authorities and the IMF delegation.

An IMF delegation arrived in Romania Wednesday to review the country’s progress under the loan agreement and discuss a new agreement Romania might seek.

Tonny Lybek, the IMF’s representative for Romania and Moldova, told MEDIAFAX last week IMF officials will have preliminary talks with Romanian authorities about continuing the current program and negotiations will likely take place early next year.

Romania and the IMF last year signed a EUR12.95 billion two-year standby agreement, as part of a larger EUR19.95 billion package which includes funds from the EU, the World Bank and other foreign lenders. The current loan agreement ends in May 2011.

The IMF review mission will be in Romania until November 1.

Romanian President Traian Basescu said Sunday he unreservedly supports an agreement for an open credit line from the International Monetary Fund.