Lagarde will be visiting Bucharest ahead of the IMF board meeting on June 26 ending Romania’s current stand-by agreement.
According to Romania’s latest letter of intent to the IMF, the country has missed over half of its goals assumed under its two-year EUR3.6 billion loan agreement and it has applied for waivers on the failed targets, pledging a series of “corrective measures”.
Romania and the IMF have signed a two-year EUR3.6 billion loan agreement in 2011, successor to a larger EUR13 billion deal secured in 2009. The program was initially due for completion in April this year, but the government has requested a three-month extension to meet requirements and the completion date has been moved to late June.
The elimination of government arrears, a target for which Romania has repeatedly asked and obtained a waiver of non-observance, alongside the privatization of state-run freight company CFR Marfa are prerequisites for the successful completion of the IMF program.
A positive review of Romania’s program could open the way for a new agreement with the IMF, whereas a negative assessment means the country’s loan program would expire de facto.