March 19 (Reuters) - Central and Eastern European countries have embarked on spending cuts, that include reducing state wages and pensions, and other measures as part of conditions of bailout packages from the IMF.
Analysts say in some cases, the moves may spark public unrest that could lead to governments in the region losing elections or being forced out of office, but they said any upheaval will most likely be more subdued than the deadly riots that broke out in some countries during the Asian crisis.
Following are some key details of conditions attached on IMF rescue packages for various countries:
* BELARUS -- In January, Belarus agreed with the IMF recommendation for a 20 percent devaluation of the Belarussian rouble and tied the currency to a basket of currencies made up of the dollar, euro and Russian rouble.
-- The IMF said the devaluation, together with accompanying wage restraint and the right fiscal and monetary policy, would set the stage for an improvement in the current account.
-- Belarus has already received the first $788 million tranche of a $2.5 billion IMF credit approved late last year.
* HUNGARY -- The IMF, the EU and World Bank agreed a $25.1 billion rescue package last November in the biggest loan for an emerging market economy since the crisis began.
-- The IMF's conditions forced the government to make additional spending cuts, including in social spending and public sector wages, which had been regarded as taboo so far.
-- To reduce Hungary's large public debt the government has targeted a fiscal deficit in 2009 of about 2.5 percent of GDP.
-- The measures to reduce government expenditure include wage freezes and the suspension of a 13th-month salary bonus for public servants in 2009.
* ICELAND -- The IMF approved a $2.1 billion loan for Iceland in November as part of a $10 billion package.
-- Iceland's central bank hiked interest rates by six percentage points to a record 18 percent in October as a condition for receiving the aid.
-- A decision on the IMF deal was delayed until Iceland agreed to sort out wrangles with Britain and the Netherlands over obligations to foreign depositors in failed bank Landsbanki.
-- Last week the IMF said stringent controls on the flow of capital, put in place to stabilise the island nation's currency, needed to be retained for the time being.
* LATVIA -- Latvia was forced to seek a 7.5 billion euro ($10.11 billion) rescue from the IMF, EU and other lenders in December last year. The deal allowed Latvia to keep its currency pegged to the euro but at a cost of painful adjustments in other areas to drive down real wages and lower budget spending.
-- Latvia also agreed to keep its budget deficit in 2009 below 5.0 percent of gross domestic product and to bring it to 3.0 percent of GDP in 2011.
-- As well as financial sector measures, Latvia is cutting public sector salaries by 15 percent in 2009 and raising tax rates to boost its coffers. Other steps to boost the stability of the financial sector included capital injections by the banks, a revamped insolvency law and improved supervision, according to a letter the government sent to the IMF.
* SERBIA -- Serbia started talks with the IMF on Monday for a two-year loan worth 3 billion euros. The Fund had already approved a stand-by loan in January, and its terms required that Serbia cut its budget deficit to 1.75 percent of GDP in 2009, from 2.7 percent in 2008.
* TURKEY -- The Turkish government wants to sort out differences with the IMF on a major loan deal after talks were suspended in January. The previous $10 billion stand-by accord expired in May, and Turkey has said it will only sign a deal with the IMF if it serves the country's interests, and that it would not agree to the IMF's standard belt-tightening policies. * UKRAINE -- Ukraine's parliament on Tuesday met credit conditions imposed by the IMF by altering provisions of the 2009 budget giving the government leverage over the central bank.
-- The IMF approved a $16.4 billion loan package in November last year, but suspended the credit's second tranche due to concerns over the size of the country's proposed budget deficit.
CRITICISMS:
ARGENTIA -- Argentina blames the fund for helping set the stage for the country's 2001-02 economic meltdown, which prompted a massive debt default and devaluation of the local peso currency. It complains the conditions the IMF imposed on its loans were partly responsible for causing the crisis. -- Argentina used central bank reserves to pay off its debt to the IMF in 2006, seeking independence from the lender. The IMF has not done a routine annual review of Argentina since.
-- Argentina has said it will push for changing IMF lending practices and increasing the voting power of emerging market economies, at the April 2 meeting of the Group of 20 countries.
MALAYSIA -- Malaysia led a chorus of criticism from Asia of the way the IMF diagnosed and managed Asia's 1997 financial crisis. It rejected IMF medicine in pulling itself out the crisis, preferring home-grown remedies including a dollar peg for its ringgit currency and the imposition of wide-ranging capital and dealing controls.
-- The then Prime Minister Mahathir Mohamad hit out at the IMF and World Bank as being in thrall to rich nations and their multinational corporations.
RUSSIA -- Russia bears a grudge against the IMF, which provided advice for many ill-fated market reforms in the 1990s.
Source: Reuters;