Basescu said he will refuse to send Parliament authorities’ new letter of intent to the IMF unless structural deficits for social security and pensions remain untouched.
The head of state had a meeting Sunday with officials of the IMF, European Commission and the World Bank. The meeting was also attended by Finance Minister-designate Florin Georgescu, Finance Ministry state secretary Gheorghe Ghergina, Romania’s representative to the IMF Mihai Tanasescu, and central bank representative Adriana Marinescu.
Romania’s finance minister-designate said Saturday negotiations with international partners have ended successfully after two days of talks and authorities have agreed on the terms of a new letter of intent to the IMF under Romania’s stand-by agreement. Georgescu said authorities have pledged to continue reforms and macroeconomic policies to ensure the country’s economic and financial stability.
The International Monetary Fund and European Commission have accepted Romanian authorities’ plans to restore public wages to pre-austerity levels gradually, with a first raise, of 8%, to take place as of June 1. Also starting June, Romania may start paying back pensioners who have had money retained for social security.
“We have increased the budget deficit target just enough to restore public wages to their June 2010 level, with a first raise, of 8%, to be operated in June, and we have found a solution to refund social security contributions to pensioners, also starting June,” Finance Minister-designate Florin Georgescu said Saturday evening.
The previous cash deficit agreed with the IMF was of 1.9% of the gross domestic product.
Romania is currently under a precautionary EUR3.6 billion stand-by loan agreement with the IMF, has a similar agreement for EUR1.4 billion with the European Commission and a EUR400 million credit line from the World Bank.