IMF: Without further actions, the budget deficit will reach 9% of the GDP * We estimate 7.8% with the approved measures 

The IMF, European Commission and World Bank delegations organised a press conference to present the preliminary conclusions of their visit to Bucharest.

JEFFREY FRANKS (IMF)

• We made excellent progress in our discussions with the authorities during the last 10 days. We believe we can finalise the analysis on the economic evolution soon, so that in a short period we will forward the next instalment if the political situation is resolved.

• Although we did not manage to make the analysis, we will continue to analyse, from our offices, and we are ready to send missions for conclusions as soon as the situation will allow for this.

• At this point, we’re seeing a better situation, a -7.5, -8 economic drop.

• For 2010, we expect a slight increase: 0.5%, 1%.

• The indicative criterion addressing the government’s spending was not reached.

• In 2010 there will be other difficulties as well, besides the ones already anticipated. They will lead to a higher deficit in 2010 if measures are not taken.

• Practically, without additional actions, we expect the deficit to reach 9% of the GDP in 2010.

• Together with the Finance Ministry, we identified a set of measures that will bring the deficit to a convenient 5.9% level.

• The biggest challenge is to transform these aims into a budget that is elaborated for Romania.

• There is the need for a broad political agreement to vote those necessary measures to respect the targets.

• It is true that non-performing credits continue to increase because the economy is weak, but the problem is still under control.

• The crisis in Romania has been severe. There will be painful problems in the years to come, but we have perspectives to set policies in places, to find solutions to bring Romania on the growth path.

• With the agreed additional measures, the budget deficit will reach 7.8%, with the measures that have been already adopted or are with the Constitutional Court.

• We will decide on giving an instalment. It will not happen until the end of the year for sure.

• The IMF has the money ready if very fast actions would be necessary to solve the political situation by the end of the year. If it does not happen now, we will forward the money in the beginning of January.

• The budget needs to get to the parliament and be approved in the parliament.

ELENA FLORES (EUROPEAN COMMISSION)

• In the second half of the year the economic situation did not deteriorate with the same speed.

• As soon as the political uncertainties will be resolved and there will be an official budget for 2010, we will have the possibility to finalise and free the instalments.

ARNTRAUT HARTMANN (WORLD BAND BUCHAREST OFFICE CHIEF)

• Alongside all other organisations, we focused on certain programmes that will lead towards a better fiscal stability in the medium term, in 3 to 10 years.

• We focused on programmes addressing a better management of the public administration, health department and salary system.

• The Romanian authorities have made constant efforts to progress through these reforms.

• More specifically, we are encouraged by measures regarding national security and assistance, measures that are not year enforced but will be with the new pensions’ system reform.

• We are glad to record these processes, but having in mind that these are medium-term programmes, it is necessary for certain laws to be implemented.

• As you know, the current political situation does not allow legal initiatives and that is why we will need to wait for the day when law projects will be introduced and approved.

• We are sending a support message and we wish to work together with the IMF and the EC to see this reform through.