Romania close to unblock stand-by arrangement with IMF

By bne IntelliNews February 27, 2014

Romania’s government has endorsed the Letter of Intent (LoI) drafted under the second review of the stand-by arrangement with the IMF and President Traian Basescu promised to endorse it under certain circumstances, Adevarul daily reported.

Basescu previously vetoed the first LoI drafted in December, invoking the government’s planned car fuel excise hike.

PM Victor Ponta informed about his agreement with Basescu on the critical issues in the LoI, announcing that the letter would be sent quickly to the IMF.

Basescu had previously promised to endorse the new LoI in case it does not mention the car fuel car excise [still likely to be enforced by the government as of April] or the government’s planned support for low-income bank debtors. The government is increasingly unlikely to go forward with the said plan to support low-income bank debtors, a plan initially backed by the central bank and not criticised by the IMF – but more recently, after more detailed analysis, seen as a debatable, unclear, complicated procedure likely to end in more benefits for banks than for bank debtors.

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