ECONOMY

IMF spurs Romania reform

BUCHAREST (Reuters) – The International Monetary Fund (IMF) pressed Romania yesterday to push on with tough reforms involving thousands of job losses in order to complete a standby accord for the first time in 14 post-communist years. The $413 million accord between the Balkan country and its main economic mentor expires in October and is seen as crucial for Romania’s progress in economic reforms ahead of joining the European Union as early as 2007. «To complete this accord, we have discussed corrective measures,» IMF chief negotiator for Romania Neven Mates told a news conference at the end of a two-week mission. «We agreed on prior actions to complete this review… we expect this to be achieved and the board to meet on October 8.» The measures include 19,000 layoffs this year in three companies in the railway sector, where wage rises will be prudent, Finance Minister Mihai Tanasescu told reporters. Up to 1,300 jobs will be cut in the mining sector. Romanian unemployment stood at 663,606, or 7.1 percent of the work force, in June. Such steps are aimed at easing pressure on the current account deficit, seen at 4.8 percent of gross domestic product toward the end of the year against a 4.5 percent estimate. Mates said avoiding pressure from growing domestic demand on the country’s current account was crucial in the context of a weak world economic environment and urged faster privatizations. Wages, which rose above productivity growth at 9 percent in real terms, and non-governmental credit must be limited and losses in the state-owned energy sector must be cut, he said.