“Even if negotiations are not always pleasant, any partnership is useful,” Isarescu told a news conference.
Romania has a 4-billion euro stand-by agreement with the International Monetary Fund and the European Commission in place, the third loan since 2009. However, the latest negotiations were interrupted as the government disagreed with the proposed reforms for the energy market.
The governor said the government’s fiscal reform can be more credibly “sold” to foreign investors, which are financing Romania at lower costs currently.
“If we can’t present the reform credibly, all the winnings can be offset by rising interests.”
The central bank awaits the results of talks between the Romanian authorities and the team of experts from the IMF and EU in May about the proposed cut of the value added tax rate from 24% to 20% starting next year.
“A very serious discussion (with the IMF and EU) is needed to see how feasible is the VAT Rate cut.” The central bank head also said.