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BCR: Political stability crucial for the ambitious IMF-set targets

“The political stability is crucial for putting the ambitious fiscal and structural reforms agreed with IMF in place”, Banca Comerciala Romana said in a report compiled by Eugen Sinca.

The pressures between the two parties that formed the governing coalition don’t help the country in meeting the macro policy targets agreed with the international institutions, report suggested. These targets were difficult to meet anyway, with or without the political crisis.

Raiffeisen: Political tumult could have a negative impact over exchange rates and real economy

The political instability could limit the government’s ability to bolster the supervisory framework on public finances and would put the stand-by arrangement with IMF and European Commission at risk, Raiffeisen Bank said in a report.

Raiffeisen Bank’s senior economist Ionut Dumitru said recently that political tumult “could put the stand-by arrangement with International Monetary Fund and European Commission at risk, which would have a negative impact over the approach to risk in Romania, and subsequently over exchange rates and real economy”, and would damage the country’s recovery prospects.

He outlined two scenarios: In the first case, interim ministers will be appointed instead of those nominated by the Social-Democratic Party which would function for only 45 days before a new government comes to power after being passed by the Parliament, or in the second case, a new government could be formed now and approved by the legislative body.

“It is unlikely for a new coalition to be formed, as this would mean long-range political instability. Let us remember that presidential elections are scheduled for November 22, 2009”, the economist stressed.


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