Romania’s President Traian Basescu has endorsed the letter of intent [LoI] drafted by the government under the second review of the stand-by arrangement [SBA] with the IMF in early February, Ziarul Financiar daily reported quoting the president as saying.

This unblocks the SBA with the IMF since the president’s veto on the first quarterly review completed at the end of last year put a question mark over the smooth continuation of the arrangement with the Fund.

Having a valid SBA with the IMF is particularly important ahead of the European and presidential elections this year, after the leftist senior ruling party gained full control over the executive and might consider social measures with impact on the fiscal balance in order to maximise its performance during the coming ballots.

Back in December, the president objected the government’s plans for higher car fuel excise taxes and for a broader rise in taxation. Later in 2014, Basescu objected also the government’s plans to help, from public funds and under an extremely controversial system, the low-income individual bank debtors.