Romania Should Implement Structural Reforms To Boost Competitiveness – IMF

„Romania suffered a significant depreciation of its currency going into the crisis. This downward pressure on the currency reflected some negative effects of the crisis, of course, but it had the positive effect of making Romanian exports more competitive,” Franks said in an interview for IMF released Monday.

„The bottom line is a gain of about 15 percent in competitiveness as a result of the more depreciated currency,” he added.

Franks said the IMF/EU program attached to a EUR20 billion loan package for the country includes a series of measures aimed at boosting competitiveness, measures that will „make it easier to invest structural funds from the European Union.”

In addition, Romania decided to reactivate its privatization program and is considering measures to increase efficiency in the public sector, Franks said.

„Those policies will help to make the economy more productive so that, once the European recovery takes firm hold, Romania will be well placed to make the most of it,” he added.

Joint teams from the IMF, the European Commission and the World Bank visited Romania between April 27 and May 10 for the fourth review of the country’s performance under the loan agreement.

At the end of the mission, Romanian authorities announced a series of austerity measures aimed at lowering the budget deficit and ailing the economy, including a 25% cut in public wages.

Romania and the IMF have agreed to a budget deficit of 6.8% of the gross domestic product in 2010, from an initial target of 5.9% of GDP.

In addition, the government promised to cut the number of public employees by 70,000 this year, to 1.29 million and pledged to „aggressively” revive the privatization program.