IMF postpones bailout review mission to Romania

Written by on July 16, 2012 in Europe, News - No comments

The International Monetary Fund (IMF) and the European Commission (EC) have postponed their joint bailout review mission to Bucharest until after the July 29 referendum to impeach president Traian Basescu, the country’s prime minister Victor Ponta said on July 16.

Romania was the third EU country to receive aid, in 2009, after Greece and Hungary, from the IMF, EC and World Bank. The next review mission is scheduled to assess Romania’s progress in implementing austerity reforms and decide whether to release the next tranche of the $25 billion bailout.

Ponta said that the mission, originally scheduled to arrive in Bucharest on July 24, was now postponed by a week. “It’s a normal matter, we have had a long relationship with the IMF and they do not want to be entangled in electoral campaigns,” he said, as quoted by Romanian media.

Ponta criticised the economic policies of his predecessors in government, taking a swipe at Basescu, whose allies controlled the cabinet between 2009 and May this year, when Ponta took office. However, his government has said earlier that it was committed to the terms of the bailout deal with the IMF and did not plan to renegotiated the terms of the existing agreement.

He denied reports claiming that his cabinet planned to raise taxes, saying that the “source of misinformation” was media allied with Basescu.

The ruling coalition, made of Ponta’s social-democrats and the centre-right National-Liberal party, voted to suspend Basescu on July 6, citing the president’s interference in the government’s activity, an allegation that Basescu denies. Basescu’s impeachment is the subject of the July 29 referendum, where he is expected to lose the vote, but might still stay in the job if turnout is below 50 per cent.

The political upheaval of the past weeks has had a major impact on the country’s currency, the leu, which sank to a new all-time low against the common European currency, at 4.557 lei a euro, on July 16. The currency also lost ground versus the US dollar, reaching 3.74 lei a dollar.

Local analysts have said that the currency will continue to decline against major currencies as long as political uncertainty continues to dominate the agenda.

 (Photo: CameliaTWU/flickr.com)

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