Speaking at an international economic conference in Bucharest, Franks said the markets are looking for any signs of weaknesses that might indicate which country is the most vulnerable and therefore will be the next victim.
This scenario already happened with Greece, Portugal and Ireland, he added.
Franks said Romanian authorities should focus on three core economic sectors to avoid stepping in the line-of-sight of speculators. First, Romania must eliminate the main vulnerabilities in the economy and then it should set up buffers to protect the financial system. Additionally, the country must honor its long-term commitments, the IMF official said.
Franks added Romania has made good progress in eliminating many of the vulnerable aspects over the past three years, particularly in reducing a ballooning deficit which threatened the financial sector.
A joint mission of the IMF, the European Commission and the World Bank will be in Bucharest until November 7 to review Romania’s progress under a EUR5.4 billion loan agreement signed in April.