IMF official Tanasescu: The hard time for Romania’s financing is over

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The hard time for Romania’s financing is over with the approval by the International Monetary Fund (IMF) of the 3rd and 4th disbursements of the stand-by loan, and the positive decisions of the IMF executive board will become visible in the weeks to come, with the release of the new Eurobond issue by the Romanian Finance Ministry, IMF representative for Romania Mihai Tanasescu tells daily Romania libera.

‘This is a signal to all markets that Romania is on the right path. The decision of the IMF executive board indicates seriousness and stability, which will become visible in the time to come in a boost in investor confidence and easier access to the capital markets. The Eurobond issue to be released in the weeks to come shows that the IMF signal is a positive one,’ Tanasescu said on Saturday.

He believes that the hard time for securing financing for Romania is over, because half of the 2.45 billion euros to come from the IMF will be paid directly into the Treasury’s accounts. Yet, he warned the Finance Ministry ‘a more careful management of the Treasury is required for the financing and refunding of internal and external loans to gain in predictability.’

On Thursday, Finance Minister Sebastian Vladescu reiterated the intention of his ministry to issue Eurobonds in the first quarter of 2010 and to start off a presentation tour in two weeks’ time, at the latest. Romania and the IMF has agreed on a Government deficit of 5.9 percent of the Gross Domestic Product (GDP) in 2010, with Tanasescu mentioning that the IMF has not set yet quarterly monthly deficit targets.

He added that Romania will reach almost half of the agreed 2010 deficit by June 30 and the deficit is divided almost in two, with a slightly higher weigh in the second part of the year. Tanasescu also said that the IMF has not set quarterly growth targets for Romania’s economy either and that he does not believe unemployment will reach 10 percent.

‘Obviously, there will be a rise in unemployment, but I do not believe unemployment in Romania will reach double digits,’ said Tanasescu. The IMF executive board on Friday completed the second and third revision of Romania under an external financing arrangement following which IMF pays out the third and the fourth disbursements of the stand-by loan worth a combined SDR 2.18 billion (nearly 2.45 billion euros). The amount so far supplied to Romania in the IMF under the two-year stand by arrangement stands at SDR 8.26 billion (nearly 9.32 billion euros).

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