Bucharest: The International Monetary Fund completed a review of Romania's loan accord and agreed to let the country widen its budget deficit to accommodate a public- sector wage increase after a third government took office this year.
The IMF and Romania reached a staff-level agreement to unlock funds from its ¤5 billion (Dh23 billion) standby loan after a two- day delay of the review by the fall of the previous government, the lender's Mission Chief Jeffrey Franks told reporters yesterday.
"Romania met almost all the targets under the accord except for two of them referring to some unpaid debt to private companies,'' Franks said. ‘'There are still difficulties in restoring the economic growth because of the international crisis and the risks remain high.''
Government change
Romania, which secured the loan from the IMF and the EU last year as a safeguard against the European sovereign-debt crisis, changed governments twice this year because of protests against austerity measures.
Former Prime Minister Emil Boc resigned on March 6 and his successor Mihai-Razvan Ungureanu lost a no-confidence vote in Parliament on April 27, three days after the IMF review began. The Social-Democrat Victor Ponta was appointed as Prime Minister on May 7.
