BUCHAREST: Romania could negotiate a new type of arrangement with the International Monetary Fund (IMF) once its standby aid deal expires next year, Prime Minister Victor Ponta said on Wednesday.
The IMF came to Romania's rescue in 2009 after a real estate bubble burst and plunged the eastern European country into economic turmoil. In a series of deals since then, Romania was nudged into cutting its fiscal deficit and make reforms, and some investors are jittery about Romania cutting itself loose from the IMF.
A new agreement could mean a flexible credit line, which the IMF created in 2009 for countries with good economic track records. That would come with fewer conditions than the quarterly reviews Romania has had to pass to keep its standby precautionary aid deals going.
Poland took a flexible credit line from the IMF in 2009 and renewed it for two more years in January 2013.
"If we succeed to finish the aid deal successfully, and I think we will, we won't need a new precautionary aid deal ... Maybe we can discuss another arrangement. I think there are different types of deals with the IMF, for example with Poland," Ponta said.
Bruised by a surprise defeat in a presidential election in November and the loss of two coalition allies, Ponta shored up his government with a reshuffle last weekend, swapping technocrats for political appointees in key posts.
With falling fiscal and current account deficits, Ponta said Romania was in a better position than ever to withstand regional shocks, especially the threat of gas supply shortages and of Russia.
Ponta's government will look to capitalise on an election-free year in 2015 to build a consensus on a tweaked royalties tax for natural resources, he said, adding that Romania would keep income tax unchanged in 2015 and 2016.
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