IMF calls for restructuring highly indebted state companies

The IMF representative in Romania, Mihai Tănăsescu said that the International
Monetary Fund called for restructuring the executive branch of state companies with
large debts and constant losses in their activity.

The IMF representatives, present in Bucharest, strongly required the executive the
restructuring of state companies with large debts and constant losses in their activity, the
Fund’s official Mihai Tănăsescu told Radio România Actualităţi.

He added that the economy and transport ministries showed their recovery plans for the
monitored companies, and the IMF expected their implementation.

The companies under the Ministry of Economy, monitored under the IMF agreement
have reached their financial goal for the most part in the first quarter of 2011 – the
economy ministry said on Wednesday, after a meeting with a delegation from the IMF,
World Bank and the European Commission.

The IMF representative in Romania, Mihai Tănăsescu said that the results might still be
positive.

‘Both at the Finance Ministry and at the Transport Ministry, the main discussion topic
was related to how structural reforms, restructuring plans, companies subordinated to
these ministries are going towards the streamline and the reduction in arrears and losses’,
Mihai Tănăsescu added.

25 billion lei are the debts of 150 companies owned by the state towards the consolidated
budget.

The state companies ranked first in terms of arrears represented almost 73 percent of the
total arrears of the state companies, as their growth has been particularly high in the rail
and mining sectors.

Economic and financial analysts are skeptical

This is the reason for which the analysts are skeptical about the potential efficiency of
state-owned companies.

‘The IMF has been watching these companies for more than two years without being able
to determine the authorities to make significant progress.’

‘There is a series of delays and uncertainties even inside the statistical records, regarding
the figures that were are collected from these state companies and that were processed
by the Ministry of Finance, no concrete new actions have been registered concerning the
reduction of losses within these companies’, Răzvan Voican said.

Also on Wednesday there was discussed the situation of the establishment of the two
national energy companies, a matter that has been delayed for more than two years.

‘The successful companies in the energy field do not suit the idea of Romania having
such strong two companies to compete with’, Răzvan Voican said.

Translated by: Iulia Florescu
MA Student, MTTLC, Bucharest University