In 2009, Romania negotiated a 20 billion euro loan with the IMF, the European Union and the World Bank. The agreement ends next year. Part of the funds helped pay state wages and pensions last year, when the country’s economy shrank by 7.1 percent.
During a meeting with IMF mission chief to Romania on Monday, Traian Basescu said the two sides should assess in October whether Romania should extend the current agreement with the Fund or sign a precautionary agreement.
In July, Basescu said Romania needs a new accord with the IMF. But he said he would prefer a precautionary agreement, which would allow the country to access funds only if it faces a critical situation.
Romania is mired in its worst recession of the past two decades. The government has slashed public sector wages by a quarter and hiked sales tax from 19 to 24 percent on July 1 to reduce the budget deficit _ measures derided by Romanians but requested by the IMF.
Jeffrey Franks, the IMF’s mission chief to Romania, made an unscheduled visit to Prime Minister Emil Boc and the new finance minister and labors ministers late Friday after Boc fired five ministers, including the finance minister, saying it was necessary to continued economic reforms.
