Romania president to approve IMF deal review after govt split

Reuters News
Posted: Feb 26, 2014 6:19 AM

BUCHAREST (Reuters) - Romania's President Traian Basescu said on Wednesday he will ratify a review of the European Union state's aid deal led by the International Monetary Fund, to send a signal of stability after the ruling alliance split the day before.

Basescu had previously refused to approve the deal review because the leftist government had negotiated with the IMF an excise tax on fuels and a plan to reschedule the bank debts of low-income borrowers - two policies he opposed.

Basescu has argued the fuel tax would choke the economy, while the loan plan was seen as a populist appeal to poorer voters in an election year.

The two measures are still likely to be implemented, but they will be taken out of the letter of intent.

"I will sign the letter of intent as soon as the government approves it, I hope it is today. The fast approval ... is a signal of stability," Basescu told reporters.

Romania has a 4 billion euro aid deal from the IMF and the European Commission, its third since 2009.

(Reporting by Luiza Ilie; Editing by Matthias Williams)