Tuesday, January 29, 2013

IMF gives Romania more time to meet aid targets

BUCHAREST (Reuters) - The International Monetary Fund will grant Romania until June to hit targets under an 5 billion euro (4.2 billion pounds) aid scheme, a Fund official said, giving the country extra time to meet its commitments under the programme.

Erik de Vrijer, IMF mission chief to the European Union's second poorest state, said on Tuesday he would ask the IMF board to allow the agreement to run past its March expiry date, with reforms having not progressed as quickly as envisaged.

Erik de Vrijer, International Monetary Fund (IMF) mission chief to Romania, gestures during a news conference in Bucharest August 14, 2012. REUTERS/Bogdan Cristel

Romania is recovering only slowly from a deep recession, which forced it to seek IMF help to prop up its economy.

It has cut its budget gap to 3 percent of gross domestic product but has lagged in structural reforms such as selling inefficient state companies and overhauling healthcare.

"Because there were some (missed) targets ... the government has requested to extend the programme for two months," de Vrijer told reporters. "We have agreed to ask the Board ... to grant this extension."

Doubts over the durability of the IMF support programme have sent the leu currency to record lows.

Prime Minister Victor Ponta's leftist government, which won a landslide election victory in December, says it is committed to a new agreement to maintain the confidence of investors.

During the extension, the government plans to list a 15 percent stake in pipeline operator Transgaz and to pick consultants for initial public offerings in power companies Nuclearelectrica, Romgaz and Compania Energetica Oltenia.

(Reporting by Luiza Ilie; Editing by Sam Cage, John Stonestreet)

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Tuesday, January 29, 2013

IMF gives Romania more time to meet aid targets