President Basescu: IMF Follow-Up Deal To Allow Reforms To Continue

Update 05.07.2011 ZF English

Romanian President Traian Basescu said Saturday that the new deal with the International Monetary Fund is "precautionary" and its purpose is continuing reforms, with international financial assistance.

The President said Romania has achieved fiscal and financial stability, which must now be consolidated. Economic indicators point to a technical recovery from recession, he said, while warning that authorities must remain cautious. According to preliminary data, the gross domestic product grew by 0.4-0.6% in the first three months of 2011, and by 1.1-1.3% compared to the first quarter of 2010. The economy is expected to grow by 1.5% in 2011 compared to 2010, and by 3.5% next year.

Basescu also said the talks with the IMF delegations have confirmed that the Romanian banking system is well-capitalized with a solvency of 14.7%.

The major objective for 2011 is optimizing state-owned companies, said the President.

In March, Romania and its international partners signed a two-year precautionary agreement, successor to a EUR20 billion bailout package received during May 2009- March 2011. Under the follow-up deal, the IMF will disburse EUR3.5 billion to Romania, while the European Union and the World Bank will contribute EUR1.4 billion and EUR400 million, respectively.