Romania's failure to cut spending would put the release of next tranche at risk

European Commission delegation chief, Fabienne Ilkovitz, warned that the Commission will disburse the next tranche under the IMF-led aid deal to Romania only if the Government puts in place its planned spending cut program by the end of June.

“The European Commission will disburse the second tranche under the aid package in summer most likely, but if the Government fails to act so as to reduce state spending by the end of June, there will be problems with the release of the tranches”, said Ilkovitz.

The representative of the European Commission added that the Government’s spending cut measures will have to be implemented before the disbursement of the tranche from the European Commission, stressing that due to European procedures, after the approval of the tranche in June, the money will be arrive in Romania as late as September.

On the other hand, IMF mission chief, Jeffrey Franks said that, the board of the fund would normally give the green light to the next tranche for Romania at the end of June, but if the planned spending cut program will not be implemented before that date, the board could defer the release for as long as needed.

“If the government would need another week, we’ll defer it by another week, but if it would need another two months, we will combine the reviews and release two tranches simultaneously”, said Franks.


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