IMF moves to resume financing for Kosovo

The International Monetary Fund said Monday 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) programme aimed at helping the Balkans country stabilize its budget and strengthen the financial sector.The IMF board will consider the new programme for confirmation in late April, the Fund said.It comes nearly a year after the Kosovar governments unilateral increase of public sector wages sparked objections in the IMF and led to it cutting short its previous 109 million euro programme set in July 2010, with only 22 million euros disbursed.At the time the IMF said Kosovo had deviated from programme commitments with the up to 50 percent raises for civil servants.Since then, the IMF said in a statement Monday, implementation of reforms pushed by the Fund has been broadly satisfactory.Significant overperformance 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 eurozones turbulence and inflation had eased, leading the Fund to raise its 2012 growth target for Kosov to 3.8 percent.