The International Monetary Fund's managing director is urging Romania to tap into its natural energy resources and European Union funds to improve its sluggish economy.

Christine Lagarde said Tuesday Romania had reserves of untapped natural gas that could be extracted "if funds are well and wisely used".

The IMF chief also noted that Central and East European countries had returned to growth with only Croatia and Slovenia in recession.

In June, the government sealed a €3.5 billion standby agreement with the IMF, part of a two-year 5 billion euro deal signed with the IMF and the EU. Now, Romania is considering signing a new deal with the IMF and the EU to make it more attractive to foreign investors and support the restructuring of state-owned companies.