- €150 million to cover a part of the financing gap worth 1.2% of GDP
- Reform-oriented government can access funding if it meets certain conditions
Parliament agreed to provide Moldova with €150 million in macro-financial aid to cover a part of its external financing needs.
MEPs endorsed the Commission’s proposal to give the government assistance to stabilise the country’s economic situation by 558 votes to 20, with 10 abstentions. The €120 million in loans and €30 million in grants will be paid out in three instalments until 2024; the first tranche is planned for this summer.
For the money to be disbursed, Moldova must show good progress in implementing a macroeconomic programme set up by the International Monetary Fund (IMF). It also has to put in place additional policy measures to be co-signed with the EU to, among other issues, recover assets lost after bank fraud in 2014, reform public finance management, justice sector, public procurement and improve labour sector rights.
Moldova’s reform-oriented government, in place for almost a year, has started work on good governance and justice and stepped up the fight against corruption, MEPs say. However, Moldova’s economy was battered by the COVID-19 pandemic and a drought in the summer that resulted in the country’s economy contracting by 7%, which was exacerbated by a gas dispute with Russia’s Gazprom in 2021.
“Even though Moldova has already taken some measures to combat corruption, organised crime, and illicit financial flows, there is still scope for further reforms, notably in democratic institutions, decentralisation, setting up public administration and depoliticising public anti-corruption institutions. Currently, Moldova is feeling the impact of the war next door, which has raised energy prices and brought additional costs. As a result, the present macro-financial assistance is no longer sufficient to cover the financing gap. I therefore welcome the Commission’s efforts to find other ways to support Moldova in stabilising its economy”, said rapporteur Markéta Gregorová (Greens/EFA, CZ).
The IMF identified that, for 2022, Moldova has a $480 million (€440 million) gap in its financing needs.