International lenders see Romanian reforms 'on track'

Romania's economic reforms have made reasonable progress according to the EU, the IMF and the World Bank. Despite the good news, the trio is worried about Romania's political climate. The European Union, the International Monetary Fund and the World Bank said on Tuesday that economic reforms in Romania were advancing and remained "broadly on track." Romania made the reforms as part of an agreement with its international lenders in return for bailouts. In a statement marking the end of yet another progress review under a three-year-old bailout scheme, they said Bucharest was going in the right direction despite "challenging conditions." The lenders indicated that the progress toward recovery appeared jeopardized by an ongoing political war between the ruling Social-Liberal union coalition and center-right President Traian Basescu, who was targeted by an impeachment bid six weeks ago. Political turmoil has affected market confidence, it said, and must be settled to continue moving forward. "Political determination is needed to ensure that overdue structural reforms -necessary to achieve higher and inclusive growth - will be put in place," Tuesday's statement said. Moderate GDP increase Romania joined the EU in 2007, but has not yet adopted the euro. The country suffered two years of recession in 2009 and 2010 before booking moderate growth in early 2011. Official data released on Tuesday showed Romania's economy logged 0.5 percent growth in the second quarter of this year. Lenders said they expected real growth to reach just under 1.0 percent throughout 2012 and 2.5 percent next year. In May 2009, Romania secured a 20-billion-euro ($24.74 billion) rescue package in exchange for drastic spending cuts. Some two year later, the IMF and the European Union gave the green light for a fresh credit line of five billion euros for emergency situations in the struggling southern European nation.