THE WRAP-UP OF THE FIRST DAY Vlădescu and Blejnar, the first to be questioned by the IMF

The experts of the IMF yesterday had the first round of talks at the headquarters of the Ministry of Public Finance, with Minister Sebastian Vlădescu and Sorin Blejnar, the head of the National Tax Administration Agency, on the state of budget revenues in the first quarter.

Minister Sebastian Vlădescu said that the budget execution in the first quarter is within the nominal deficit target of 8.25 billion lei, agreed upon with the IMF, but the budget revenues were lower than forecasted.

On the other hand, the chairman of the National Tax Agency said that, during the first round of discussions with the IMF officials, a review of the budget revenues for the first quarter was made. Also discussed was the status of VAT reimbursements and the measures proposed for increasing budget revenues.

According to sources quoted by Mediafax, the Government will request a new exemption from the outstanding public debt, which wasn"t met in the first quarter of 2010.

"The targets that we have agreed upon with the IMF for the first quarter were met, except for the level of budget arrears, in other words the amounts owed by the state which are overdue by more than 90 days. There will almost certainly be another exemption from the Fund, if we prove that progress was made in this direction", the quoted sources say.

The calendar concerning the arrear targets negotiated with the IMF in February involves lowering the levels of arrears to 1.27 billion lei at the end of March, to 1.09 billion lei by the end of the first half of the year. At the end of December, the arrears of the consolidated general budget stood at 1.5 billion lei. By the end of 2010, they must be decreased to 480 million lei.

The experts of the IMF expect the economy to only increase by 0.8% this year, instead of 1.3%, as for the initial estimates. However, Sebastian Vlădescu warned that the IMF forecast may be "overly optimistic", and emphasized directly that the revision of the expected budget revenue numbers could cause a correction of the budget revision could cause further downward adjustment of the economic growth.

The board of the International Monetary Fund arrived in Romania yesterday to evaluate the extent to which Romania met the performance criteria of the Stand-By Agreement. The technical mission of the IMF will remain in Romania by May 7th, when it will present its conclusions.

In the coming days, the IMF has scheduled meetings with officials from professional associations, the Government, of the Ministry of Labor, the Ministry of Transports, of the Economy, union leaders, and officials from the Authority for State Assets Recovery (AVAS) and the Central Bank.