IMF to keep giving funds to Kosovo

IMF to keep giving funds to Kosovo

WASHINGTON - Agence France-Presse
The International Monetary Fund said on March 5 that it was planning to resume financial aid to Kosovo after cutting off funding last year in a dispute over raises for civil servants.

The IMF said it had reached agreement with Kosovar authorities on a new 20-month, 107 million euro ($141 million) program aimed at helping the Balkan country stabilize its budget and strengthen the financial sector.

The IMF board will consider the new program for confirmation in late April, the Fund said.

It comes nearly a year after the Kosovar government’s unilateral increase of public sector wages sparked objections in the IMF and led to it cutting short its previous 109 million euro program set in July 2010, with only 22 million euros disbursed.

At the time the IMF said Kosovo had “deviated from program commitments” with the up to 50 percent raises for civil servants.

Since then, the IMF said in a statement on March 5, implementation of reforms pushed by the Fund “has been broadly satisfactory.”

“Significant over-performance has been achieved with respect to fiscal targets,” it said.

 “Most structural conditionality has also been met, with important progress especially in the area of financial sector reforms.”

The economy had largely withstood the eurozone’s turbulence and inflation had eased, leading the Fund to raise its 2012 growth target for Kosovo to 3.8 percent.