A joint mission from the Commission, the International Monetary Fund (IMF) and the World Bank wrapped up a two-week review of Romania's economic progress on Friday under a 20 billion euro multilateral support package signed in March. The IMF said earlier in the day that it has suspended the economic review and will postpone its third loan tranche until the political situation in the country stabilises.
"The second tranche from the European Union balance of payments assistance programme amounts to 1.0 billion euro and will be disbursed following completion of the programme review and if the conditions are met," the European Commission said in a statement.
The Commission also said the current political environment is hindering further fiscal consolidation that remains necessary and that the current interim government cannot legally submit a 2010 budget to Parliament or take strong commitments on measures to bring the 2010 deficit down to 5.9% of GDP, in line with programme targets.
“Discussions will continue in the coming weeks and another mission will return to Bucharest as soon as the political situation has been clarified to successfully complete the review under the programme. A broad political consensus and renewed commitment to reforms are crucial to overcome current difficulties,“ the commission added.
Political uncertainty has been high in Romania following the fall of the country's minority government in October.
Earlier on Friday, President Traian Basescu nominated the mayor of one of the Bucharest districts, Liviu Negoita, as prime minister-designate, two days after parliament rejected his previous nomination Lucian Croitoru, an advisor to the central bank governor.
According to analysts, Negoita who is member of ruling Democrat-Liberal Party, has slim chances of winning approval for his cabinet in parliament, where the opposition controls two-thirds of the seats.
