“Romania won’t be applying for IMF waivers, because all prior actions are on schedule,” Ponta said in an interview, arguing the country has yet to announce a buyer for the majority stake in state-run freight railway carrier CFR Marfa.
The prime minister, however, never said the government might have made several errors in drafting the letter of intent recently sent to the IMF.
According to the document obtained by Mediafax, Romania has missed over half of its goals assumed under a two-year EUR3.6 billion loan with the International Monetary Fund due for completion in late June, including a long-overdue reduction in government arrears. The document noted the authorities in Bucharest have applied for IMF waivers on the failed targets, pledging a series of “corrective measures.
The document says Romania missed three of the five quantitative performance criteria needed to successfully complete its agreement with the IMF, namely the target on net foreign assets, the floor on general government overall balance and the criterion on the stock of central government and social security arrears.
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 the IMF requirements.
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. To ensure the successful completion of the IMF program, the government promised to gradually eliminate the general government arrears by the end of 2013.
Additionally, the authorities pledged to select a buyer for 51% in CFR Marfa on June 21, five days before the IMF board is expected to make its assessment on Romania’s progress.
A positive review of Romania’s program could open the way for a new agreement with the international institution, whereas a negative assessment would mean that the country’s loan program would expire de facto.