Prime Minister Victor Ponta told private news channel Antena 3 on Saturday that Romania has met the most important requirements set by the International Monetary Fund (IMF), citing the budget deficit and the structural reform of the energy sector among them, Agerpres reported.

Finance Minister Florin Georgescu was quoted as saying on Friday that Romania hopes it will finalise its current EUR5bn aid package led by the IMF in January and sign a new one in February. This would be the third aid deal for Romania since it first turned to the IMF in 2009, when an economic crash ended a credit boom and public finances fell in disarray.

"Most requirements and maybe the most important ones have been met and I mean the budget deficit first and foremost The budget deficit in ten months is 1.2 percent of GDP. We still have 1 percent left to spend in the last two months. The investment expenditure this year accounted for 6.4 percent; it was of 6.5 percent last year, i.e. 0.1 percent more, but it was amid double deficit. Therefore, we did not cut from the investment side. The public personnel expenditure this year accounted for 6.7 percent as compared to 6.6 percent last year, but we can have up to 7 percent of GDP next year, according to the negotiation set with the IMF and this also includes the pay rises - giving back the cut wages, in fact', Ponta said.

He said the most important achievement, in his opinion, is the energy sector reform and he concretely meant the legislation and also Hidroelectrica hydro-electric power company, which has been rid of the preferential contracts and Oltenia Energy Company, that has returned to profit-making. He stressed there are two items delayed in the commitments made by Bucharest to the IMF, namely Transaz natural gas grid and the Romanian Railways Company (CFR) Freight Branch.

'As regards Transgaz, we have achieved the entire procedure for listing 15 percent of its stock, but amid the current circumstances - and this was one of the topics of the discussions I had with President (Traian) Basescu - and particularly as prospecting works point to a very great potential of Romania as regards natural gas in the period ahead, if we were to sell the 15 percent right now we'd get a pretty low price. We must discuss with the IMF officials to see whether they consider this is the right time or, quite the contrary, whether private management and development of Transgaz helps us more on the long term', Ponta said.

With respect to the CFR Freight Branch, the Romanian Supreme Defence Council did not approve its being put up to privatisation, therefore the state authorities will discuss such issue with the IMF as well.

'We must discuss with the IMF whether, in its viewpoint, it is absolutely compulsory for us to sell a majority shareholding in CFR Freight Branch, as long as 40 percent of the Romanian market is operated by private firms, or whether private management that should cut losses would be a better solution', he said.

The Prime Minister stressed national airline Tarom already has private management, Hidroelectrica is ending the insolvency and a tender for Nuclearelectrica nuclear power producer will be extended, because there currently is no major investor in nuclear energy in Europe.

Source: bne