IMF back in August

The talks of the Romanian authorities with the International Monetary Fund (IMF) about signing a new loan agreement are not over yet, as the IMF negotiators are to come back to Bucharest by the end of August. The Romanian Government still has a few problems to solve.

“It is still necessary to talk about the financial performance of the state-run companies, mainly of those in the energy sector, and about the measures to ensure a prudent salary policy for those companies,” IMF negotiator for Romania Neven Mates said, after the end of discussions with the Government.

On the other hand, Finance minister Mihai Tanasescu announced that Government representatives and the IMF delegation had completed talks about the memorandum of understanding aimed at concluding a new loan agreement.

The Fund’s experts left Bucharest at the end of last week, “carrying the memo in their pocket,” but are to come back in August to discuss the completion of the 2002 budget draft with the Romanian authorities.

The economic indicators of the budget draft were also included in the memo of understanding, the Finance minister maintained.

As for the economic forecast for 2002, preliminary talks were conducted last week. Official sources mentioned the IMF team headed back for Washington with a draft of the memo of understanding, including the issues already agreed upon. At the same time, the matters still pending are clearly specified.

Mihai Tanasescu says there have also been preliminary talks about next year’s budget. “In essence, we have agreed upon fiscal policy, public spending and the funding of the budgetary deficit. We will finalise the draft budget based on the macroeconomic forecasts available at the end of July and include it in the memo of understanding,” the Finance minister specified.

He claims the memorandum of understanding will be discussed by the IMF Board in September. Also in September, the Romanian Executive representatives and the World Bank experts will work out the final details of the PSAL II agreement.

“Romania will be able to submit the two documents to the IMF and the World Bank during the annual IMF and World Bank reunion in late September or early October,” Tanasescu said.