The first item in the agreement the Government is looking to sign with the International Monetary Fund will be the series of measures that needs to be set and taken to curb arrears and prevent new debts from piling up, Finance minister Mihai Tanasescu says. He promises to have arrears account for 0.5% less of GDP next year compared to the current 3%.
A step already debated by the Government is establishing joint teams comprised of representatives of the Finance Ministry and of the Economy and Trade Ministry, who will check how the state-run companies accomplish their revenue targets set in the budgets endorsed and how they spend their money every month.
The Government has to present the IMF negotiators detailed programmes for restructuring the companies subordinated to the Economy and Trade Ministry, which are supposed to help cut costs.
A project of the Finance minister would be the transfer of the accounts of the loss-making state-run companies from banks to the Treasury, so that all their cash flows could be monitored and the risk of further accumulation of debts to the state budget could be avoided.
The step might meet with heavy opposition, though, as it is hard to believe the companies in question can cope under such conditions. At the same time, curbing arrears is crucial if the goal to push inflation below 10% next year is to be attained. The agenda of the negotiations with the International Monetary Fund also includes the continuation of the mine closing and railway sector restructuring programme in 2004. The fiscal policy chapter is based on the 2004 budget draft sanctioned by the IMF.
The budget has to keep being used as leverage to curb inflation. IMF's representatives want to sit down with the Government and the National Bank of Romania (NBR) and find ways to keep the current account deficit currently getting closer to 5% of GDP in check.
razvan.voican@zf.ro
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