International Monetary Fund (IMF)'s Managing Board will discuss the draft of a new agreement with Romania only after seeing on its desk a report on the efficiency of the economic programmes it has run together with the Bucharest in the last 14 years.
The Romanian authorities were caught unawares by this decision of the IMF, which pushes the date of the much-wanted agreement for some time in May, as Finance Minister Mihai Tanasescu estimates.
The evaluation report may weigh alarmingly heavy in any further decision about Romania, as that the conclusions of the document are easy to anticipate, considering the results obtained. After 1990, Romania has signed six agreements with the IMF and only the last of them has been fulfilled with a lot of effort in the end. Out of total available funding of some $2.8bn, the Governments that came one after the other applied as many reform measures agreed upon as to draw a little more than half of it. "Relating it to the last 14 years, the result is not exactly positive," Tanasescu admits. He believes the document could reach the Managing Board of the Fund by early April.
The repeated failures in applying IMF's programmes in Romania were mentioned by several members of the institution's Board last year, who doubted there was a point to negotiating new agreements. Especially since Romania's situation does not call for such assistance that is supposed to prevent slippages, which may impact on the balance of the international markets.
Still, Romania cannot do without a new bill of credibility from the Fund in any way, all the more so since the European Union has just showed severe signs of doubt about accession-related progress. The Nastase Cabinet is therefore displaying interest in discussing a longer-term agreement with the IMF that should cover the 2005-2006 period until the accession, instead of the one-year term as previously mentioned.
"We should have a longer programme for stability. A more powerful support is needed for us to embrace a certain type of economic policies," Mihai Tanasescu says, explaining the need for the IMF anchor and implicitly hinting that the Government is too weak to maintain those policies on its own. So that the Finance Minister on Monday met with an IMF delegation run by Susan Schadler, deputy head of the Europe I Department. The mission of the delegation is to periodically evaluate Romania's medium-term macroeconomic policies, under Article IV in the Fund's statute. razvan.voican@zf.ro
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