Romania’s new agreement with IMF – main targets

By bne IntelliNews August 6, 2013

Public offering of minority stakes in key state-controlled energy companies, cutting the payment arrears and streamlining the tax collection agency are the main targets of Romania's new stand-by arrangement (SBA) with the IMF, Ziarul Financiar daily comments, quoting leaked documents drafted during the preliminary talks on the follow-up deal in Bucharest. The Fund's Board is expected to endorse the follow-up agreement in the autumn.

The government will carry out the IPOs that were delayed under the past SBA with the Fund. The IPOs at nuclear plant operator Nuclearelectrica [10%] and the natural gas extraction and storage company Romgaz [10%] were postponed until the autumn of 2014 – by the end of September and October, respectively. The 10% IPO of hydropower company Hidroelectrica will take place by May 2014. The shares of both Hidroelectrica and Romgaz will be listed on the local stock exchange as well as on a foreign exchange under dual listing procedures.

The government also promises to sell the majority stake in cargo railway company CFR Marfa by the end of September. The privatisation is now in limbo after the government endorsed the privatisation contract but has not published it in the official journal yet. President Traian Basescu urged the government to publish the contract – or the bidder might ask for compensations. The would-be buyer is not likely to have the necessary funds, President Basescu added. As we reported, the government picked GFR as a winning bidder for 51% in CFR Marfa. GFR is supposed to pay EUR 202mn and invest RON 200mn [EUR 45mn].

Quarterly reports will be drafted on the situation of public payment arrears in state-controlled companies. The reports will be released by the 25th day after the end of each quarter. To reduce arrears, decisions such as placing certain companies under solvency might be taken.

The tax collection agency ANAF will be reorganised via transforming its 221 independent local bureaus into 8 regional directorates. The 1,500 employees of the fiscal law enforcement agency Garda Financiara will be incorporated into ANAF. Garda Financiara will be dismantled. One-stop-shops for contributors will be set up. In terms of taxation, the property taxes will be increased for the property used in commercial activities – like the apartments let to firms that use them as offices.

Related Articles

IMF recommends fiscal consolidation for Romania

The International Monetary Fund (IMF) has estimated that the fiscal policies envisaged by Romania will result in a wide deviation (of over 2% of GDP) from the optimum 1.5% of GDP medium-term budget ... more

Owner of Romania’s Dedeman reportedly close to signing largest ever deal in the Romanian office segment

Dragos Paval, owner of Romania’s biggest DIY retailer Dedeman, is reportedly close to signing an agreement with Africa Israel Investments for the acquisition of an office building project in ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss