Deloitte: The IMF agreement creates positive image abroad, but also entails tough measures

Any loan based on a stand-by agreement from the IMF is always a double-edged sword, in that the institution imposes a series of unpopular measures, which are often hard to put into practice, said George Mucibabici, chairman of Deloitte Romania, in an interview given to ZF. “Any IMF loan has its good and its bad aspects. The first bad thing is that you send a signal that things are not going well if you borrow from the IMF. Then comes the positive signal, that you have borrowed from the IMF, so you have liquidity, and you are doing OK. There are two sides to anything,” explained Mucibabici, former representative of Romania to the Fund. Referring to the strings attached to any IMF stand-by agreement, the Deloitte representative said they generate dissatisfaction and have a significant social impact. “If the IMF comes with a programme, it is hard to implement and one has domestic problems, but a positive image abroad because of the coherent programme in place. The downside is that measures need to be taken, but on the up side, the international community appreciates the implementation of these measures – there’s economic and financial discipline, and people become more relaxed again,” Mucibabici added, explaining the two-fold implications of an IMF loan.