IMF concerned about budgetary deficit

Sidex’s privatisation was the main topic on the agenda of the meeting between the Privatisation Authority minister Ovidiu Musetescu and the IMF negotiator for Romania, Neven Mates, on Friday.

“Mates had very precise questions, about confidential data, and I wanted the IMF officials to understand how difficult Sidex is to privatise and I get the distinct impression they did,” Ovidiu Musetescu said.

The Governmental commission negotiating the sale of the controlling interests in Sidex Galati will meet with PM Adrian Nastase this week to get the necessary authorisation to complete talks with the LNM Group, according to the minister.

“We will present the PM with documents containing all the delicate issues in the contract that we can negotiate, so that we could have a framework-contract outlined by the end of June,” Musetescu added.

The talks between the Romanian authorities and the IMF representatives over the next few days will focus on reconciling the Law on granting incentives for SMEs with the Law on direct investments, on the modification of certain provisions on the global income tax law and on ways to attain a consolidated budget deficit of 3.5% of GDP, government sources told Mediafax.

IMF had been in favour of a 3.5% deficit all along, a level that would be attained, said the quoted sources, who also pointed out the importance of monitoring this level.

The Government took a 3.7% budgetary deficit into account when drafting this year’s budget, as well as 25% in inflation and 4.1% in economic growth.

As for the Law on global income tax, the IMF officials feel the 5 million lei set as the minimal pension level on which to levy taxes is too high.

Talks over the next few days will focus on the measures the Romanian authorities have to take in order to monitor salaries, arrears and budgetary expenses.

PM Adrian Nastase at the end of last week said “where the salaries are concerned we will be able to do more in terms of income control”.