“Staff-level agreement has been reached with the authorities and we will recommend the review mission be completed,” said Erik de Vrijer, head of the IMF mission to Bucharest.
“However, prior measures are required,” he added.
The IMF official said Romania must reduce the level of local government arrears, adding that the government will issue an ordinance allowing local authorities to use available resources to pay existing arrears.
Other measures comprise adjusting natural gas prices to production costs as of mid-September, launching the privatization of state-run chemical company Oltchim (OLT.RO) and running a secondary offering for 5% in gas pipeline operator Transgaz (TGN.RO), de Vrijer said.
All four terms are prerequisite for the approval of the review report at a meeting tentatively scheduled for late September, the IMF mission chief said.
Joint teams from the IMF, the European Commission and the World Bank visited Bucharest during July 31 to August 14 for the sixth review of Romania’s economic program under a EUR5 billion precautionary loan agreement. Following the review, the IMF is scheduled to release the seventh installment of the loan, worth some EUR510 million.