Romania should continue its agreement with the International Monetary Fund (IMF) and the European Commission (EC).

The current international situation generated by the Greek crisis and the internal context generated by the new Fiscal Code make this agreement necessary, said Mugur Isarescu, Romania’s National Bank governor. He emphasized that Romania must continue its negotiations with the IMF and European Commission, because the agreements with these institutions increase the country’s credibility abroad.

“We must prove that we are not going in zig-zags but that we have the capacity to take gradual measures and hold a line,” said Isarescu.

He added that the central bank can’t adjust its monetary policy again to compensate for the fiscal relaxation measures in the new Fiscal Code and that the international institutions can temper the Romanian politicians’ decisions. He explained that the Parliament couldn’t increase the standard of living artificially, if the economic reality doesn’t support this.

Romania currently has a 2 EUR billion stand-by agreement with the IMF, which expires in September this year. It is a preventive deal and the authorities haven't accessed the funds so far.

editor@romania-insider.com