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IMF tells Romania to push on with reforms

Tuesday - 1/29/2013, 8:20am  ET

BUCHAREST, Romania (AP) -- The International Monetary Fund has called on the Romanian government to implement deeper structural reforms and to apply for more European Union development funds to help economic growth.

Romania is borrowing rescue loans from the IMF, and the two sides this week agreed to extend the EUR5 billion ($6.72 billion) aid scheme by three months to June to give the government more time to meet its reform commitments.

Erik de Vrijer, the IMF's chief of mission for Romania, said Tuesday that one key problem is a lack of economic growth.

"Growth is lower than what it could be even though what it could be is lower than what it should be," he said.

Economic growth nudged slightly above zero in 2012, a year of political instability when the country had three prime ministers and Parliament impeached the president -- a move that ultimately failed as too few people voted in a subsequent referendum to oust the head of state. The IMF forecasts growth of 1.5 percent this year.

De Vrijer said that besides more reforms of the economy, Romania could tap more EU structural funds, money that is earmarked for development and infrastructure projects.

"Progress in structural reforms is difficult and susceptible to delays ... but if the government succeeds in doing the things we agreed, it will get high marks," he said at the end of a visit which began on Jan. 15.

The IMF will extend its current EUR5 billion ($6.72 billion) aid scheme by three months to June to give the government more time to meet its commitments.


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