Romania PM Says Govt Will Use Budget Revision Funds To Pay Some Of Its Largest Debts

Romanian Prime Minister Emil Boc said Wednesday on public radio the Government will use funds earmarked at the budget revision due until August 20 in order to pay part of its largest debts, mainly debts amassed in the healthcare sector.

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Boc stressed that the draft decree regarding the budget revision stipulates funds for the payment of state debts.

IMF mission chief Jeffrey Franks said Wednesday the International Monetary Fund will release another EUR914 million of its EUR13 billion loan to Romania as soon as the Government has fulfilled pre-conditions to reduce budget deficit.

Franks stressed Romania's end-June targets were broadly met, except for the general government arrears. He added the authorities must reduce the arrears by around 2 billion lei (EUR1=RON4.2527) before the IMF's board can disburse new funds. Franks added the IMF cannot consider a new waiver of non-observance in the sector unless the Romanian authorities show serious commitment to resolve the situation.

Romania and the IMF last year signed a EUR13 billion loan agreement, part of a larger EUR20 billion aid package that includes funds from the EU and other international lenders.

Joint teams from IMF and the EU arrived in Bucharest July 26 for the fifth review of Romania's agreement.

Following the mission, the IMF will decide whether to disburse another EUR914 million to Romania.

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