Following are details of key IMF programmes in emerging Europe.
Romania’s international lenders extended a 20 billion euro bailout programme on Wednesday, reassuring investors spooked by the country’s deep recession, though it may face tougher compliance hurdles in future.
ROMANIA:
— Romania’s economy contracted more than 7 percent last year and is still mired in recession and dependent on the bailout deal, which pools aid from the IMF, the European Union and the World Bank.
— Bucharest has received about 13 billion euros, and the lenders’ green light paves the way for distribution of a further 900 million euros from the IMF and 1.2 billion euros from the EU.
— The IMF said Bucharest still has to comply with its previously agreed commitment to pay about 2 billion lei ($624 million) in arrears, which analysts said could make it more difficult to meet the full-year deficit target.
UKRAINE:
— Ukraine said on July 29 it would use $2 billion of a new $15 billion IMF facility to finance its budget deficit this year and stick to tight fiscal targets imposed under the deal.
— Ukraine’s government, bowing to IMF pressure, on July 14 announced a 50 percent rise in the price of domestic gas from August.
— Under the new deal it needs to reduce the budget deficit to 5.5 percent of GDP this year from an earlier projected 6.3 percent.
— The IMF suspended a $16.4 billion bailout programme last November after the previous Ukrainian leadership reneged on pledges of financial restraint.
HUNGARY:
— Talks intended to review Hungary’s IMF/EU financing deal collapsed in July over the lenders’ demands for tough government action to keep the budget deficit within target.
— Hungary, which runs central Europe’s highest public debt at about 80 percent of GDP, won’t be able to use remaining funds in its 20 billion euro ($26 billion) loan secured in 2008, until it reaches a deal with the IMF and EU.
SERBIA:
— Serbia agreed with the IMF last May to freeze pensions and wages in 2010 and reduce state administration, as part of a 3 billion euro stand-by deal agreed in 2009. In return, Belgrade was allowed to increase its budget deficit to 4.8 percent in 2010, from a previously planned 4 percent.
— Serbia drew the first tranche of almost 800 million euros in mid-May 2009.
KOSOVO:
— The IMF approved a 108 million euro ($140 million) stand-by loan arrangement for Kosovo to help raise revenues and restrain spending two years after it declared independence.
— The IMF said it would immediately disburse about 22 million euros ($28 million) under the 18-month programme, with the rest subject to quarterly performance reviews. — Kosovo became the third country from ex-Yugoslavia to reach a loan deal with the IMF. The deal requires that Kosovo limit its 2010 budget deficit to 3.4 percent of GDP, a fund official said in late May.
MOLDOVA:
— An IMF mission visiting Moldova said on May 13 it would recommend disbursement of a third tranche of $90 million after forecasting higher-than-expected GDP growth for 2010.
— The 2010-2012 aid programme for one of Europe’s poorest countries totals $574 million.
LATVIA:
— The IMF said on July 22 it was cautiously optimistic about Latvia’s economic prospects and praised tough government policy actions aimed at securing rescue funds. The IMF, which led a bailout for the Baltic state at the end of 2008, approved a further 100 million euros on the same day. — The coalition government of Prime Minister Valdis Dombrovskis has had to slash spending and hike taxes and must draw up a menu of further austerity measures for a new government taking office after elections on October 2.
— Under the loan programme, Latvia has committed to reduce its budget deficit to 6 percent of GDP next year and to 3 percent in 2012, with the goal of adopting the euro in 2014.
TURKEY:
— The IMF urged Turkey to speed up the withdrawal of crisis-related fiscal stimulus in 2010 and called for a gradual rise in interest rates.
— Lawmakers will not vote on Turkey’s fiscal reform bill before the summer recess, Finance Minister Mehmet Simsek said on July 16, delaying passage of a law seen as vital to Ankara’s push for an investment grade credit rating. He said the government would maintain fiscal discipline.
— Turkey and the IMF announced in March that Ankara had decided against a new standby deal with the Fund, ending months of speculation in financial markets. — Turkey’s previous $10 billion deal expired in 2008.
