Romania: A restart to the IMF program is secured
Overview:
Overview: The IMF Executive Board has approved the second and third reviews of the Stand-By Arrangement (SBA). This allows the disbursement of EUR2.5 bn. The program went off track due to political noise surrounding presidential elections last November. Following the re-election of President Basescu, a new Emil Boc-led government has succeeded in winning passage in parliament of an appropriate budget for 2010 and agreeing with the IMF on a revised set of structural economic reforms to help medium-term fiscal consolidation. Implementation of these measures –largely spending cuts - will face major opposition from the trade unions. Further progress under the Fund program is more important for facilitating early EMU entry than for the disbursements themselves given that the level of FX reserves is already high.