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IMF technical assistance mission comes to Bucharest on Wednesday

An IMF (International Monetary Fund ) technical assistance mission will be present in Bucharest on Wednesday, July 22, upon the authorities’ request.

Meetings within technical missions usually take place at director or secretary of state level within institutions of the state, such as ministries, BNR (Central bank), ANAF (National Tax Administration Agency ).

Talks will focus on measures of fiscal relaxation the government wants to adopt through the Fiscal Code and calculations based on figures concerning the budget impact of measures.

According to sources, IMF experts will meet ANAF representatives and approach the topic of recovering debts from state companies.

Internal revenue announced on Tuesday that it had blocked accounts of TVR and RATB and will continue with all big tax payers that register debts to the state budget.

The IMF technical mission comes to Bucharest in a delicate moment of political unrest, when president Iohannis rejected on Friday the Fiscal Code and sent it to Parliament for a new analysis.

Government representatives consider the president’s decision is a political one affecting economy and businesses, which are waiting for the approval of the Code in order to set up business plans.

IMF and the European Commission criticised the relaxation measures provided by the Fiscal Code, mainly the reduction of VAT from 24% to 19%, because of the budget impact they have and which may lead Romania to a deficit of over 3% next year.

The preventive accord concluded with IMF, EC and World Bank will end in September, most probable without a final evaluation from international partners.

Finance Minister Eugen Teodorovici had announced in June that the IMF mission was expected in mid-July. On July 17, he restated that Romania's agreement with the IMF and the European Commission stands, and the country must use the remaining time to meet as many commitments as possible. He mentioned that a new agreement had not been discussed, but could be "when the present one is completed." 

On the other hand, European Commission Vice President Valdis Dombrovskis declared after the July 13 meeting of the Economic and Financial Affairs Council of the EU that the EC was worrying about Romania's balance of payments programme; he recommended the Romanian authorities to adopt the necessary reforms by September. 

The current EU programme of financial assistance to Romania has been approved in October 2013; it runs in parallel to the stand-by agreement with the IMF. The programme was preventive and no funds were drawn. It was meant to support Romania's macroeconomic, fiscal and financial consolidation and to improve the country's growth potential and economic resilience; the focus was on the administrative capability, the reform of the tax administration, the management of public finances, the governance and the restructuring on state-owned companies.