Members of the International Trade Committee approved an informal agreement between EU institutions on Tuesday, offering macro-financial assistance to Moldova under strict conditions.
The EU is set to provide a combination of grants and loans, worth €100 million to support the external financial needs of the country recovering from an economic and political turmoil.
Results of the agreement:
- the macro-financial assistance (MFA) should support Moldova's commitment to sound public finance management, fight against corruption and money laundering, the de-politicisation of public administration, an independent judiciary, the freedom of the media;
- a joint statement by the Parliament, the Council and the Commission underlines that a pre-condition for the assistance is that Moldova respects democratic rules, including a multi-party parliamentary system and the rule of law and also guarantees respect for human rights;
- such conditions should be linked to the payment of each instalment, and
- the Commission shall temporarily suspend or cancel any payments, if conditions and are not met.
The deal was approved by 30 votes to 6 with 2 abstentions.
“This vote confirms the strong support for a much-needed assistance package, and also the consensus that it should be conditional upon ambitious reforms. In the context of recent developments pertaining to changes in the electoral system, the Joint Statement places strong emphasis on the consideration by the Moldovan authorities of the recent recommendations of the Venice Commission. The EU is now very well equipped to react to any potential development concerning democracy and rule of law throughout the lifecycle of this support operation”, rapporteur Sorin Moisa (S&D, RO) said.
The full House will vote on the financial assistance at the July plenary session in Strasbourg.
In its second MFA since 2010, the EU will provide €60 million in loans and €40 million as a grant, to be disbursed in 3 instalments in 2017 and 2018, which provides for the 25% of country’s remaining financial needs after a €161 million loan from the IMF. Moldova fell into economic recession in 2014, when a banking scandal and fiscal difficulties, coupled with weak export performance shook the economy and the political landscape. The Deep and Comprehensive Free Trade Agreement with the EU, which has been applied since September 2014, has contributed to economic recovery and after several years of stalemate, substantial progress has been made in the reform process. The EU is currently Moldova’s key trading partner, with 63% share in total exports. In 2015, EU imports from Moldova grew by 5%, despite Moldovan exports shrinking with the rest of the world.