IMF to arrive in Bucharest on January 21, for first, second evaluation of precautionary agreement with Romania

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A mission of the International Monetary Fund /IMF/ will visit Bucharest from January 21 to February 5, 2014, for discussions on the first and the second evaluation of the precautionary agreement with Romania, which was approved on September 27, 2013 said, on Thursday, the IMF Resident Representative in Romania and Bulgaria, Guillermo Tolosa.

The IMF mission will discuss with the Romanian authorities the recent economic developments and priorities in economic reforms. Also discussed will be the measures to offset the deficit in revenues following the postponement by three months of the increase in excise duty on fuels, so as to ensure the budget deficit target of 2.2% of GDP, he said.

According to an IMF press release, the Fund's mission, headed by Andrea Schaechter, will take place jointly with the expert teams of the European Union and of the World Bank. In addition to meeting the authorities, they will also meet representatives of political parties, trade unions, business owners' associations, banks and civil society organizations.

The conclusions will be revealed at the end of the mission, underscored Tolosa.

President Traian Basescu told a December 19 press conference that he had signed into law the 2014 state budget as the Government had agreed to postpone by three months the provisions on increasing the excise duty on diesel oil and petrol.

In early December, Traian Basescu showed that had decided not to approve the memorandum on the negotiations with the IMF, the World Bank and the European Commission because the Government had assumed the increase in excise duty on fuels by 7 eurocents per litre.

Minister Delegate for Budget, Liviu Voinea said on December 29 that the exact solution to offset the budget loss from postponing the increase in excise duties on fuels is not yet agreed on, but it would be part of the next letter of intent with the IMF and European Commission (EC).

The Ministry of Public Finance /MPF/ announced on December 24 that it was not considering, under any circumstances, the introduction of new fees and taxes or increasing the existing ones. The MFP made that announced because the media wrote that the revenues not recorded following the postponement of the introduction of the 7-eurocent excise duty on fuels would be ensured by the introduction of additional taxes and fees.

The main source to balance revenues, following the postponement of the introduction of a higher excise duty, fuel, is the improvement in revenue collection, which is on an upward trend, the MFP informs. According to the MFP, the actual budgetary impact of postponing the introduction of higher excise duty on fuels will be quantified in July, depending on the trend of the Romanian economy and budget revenues in H1 of 2014.

In turn, the IMF Resident Representative in Romania, Guillermo Tolosa said that the authorities in Bucharest must take measures to offset the decrease in revenues due to the postponement by three months of the increase in the excise duty on fuels, in view of meeting the deficit target of 2.2% of GDP. AGERPRES

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