EUROPEAN COMMISSION PROPOSES TO INCREASE MACRO-FINANCIAL ASSISTANCE TO MOLDOVA BY €145 MILLION

The European Commission has proposed to increase the ongoing Macro-Financial Assistance (MFA) to the Republic of Moldova by up to €145 million, bringing the total amount of ongoing MFA support to up to €295 million, the Commission’s press release said.

The document further held that, “With this proposal, the Commission is standing by Moldova as the country continues to implement its reform agenda, while at the same time facing the fallout from Russia's war of aggression against Ukraine, battling an energy crisis, and hosting a high number of refugees from Ukraine”.

The increase in the MFA would help the country cover part of its additional funding needs in 2023, support macro-economic stability and provide for further reforms, the Commission wrote.

Commission President Ursula von der Leyen said: “We stand in solidarity with Moldova as shockwaves of Russia's brutal war continue to impact the country. Today we propose to top up macro-financial assistance to Moldova by €145 million. This will greatly support the country's economy and energy security.”

Out of the additional €145 million, up to €45 million will be provided in grants and up to €100 million in loans at favorable financing conditions. The amount is to be disbursed in two additional installments planned for the third and fourth quarters of 2023, provided policy conditions are fulfilled.

The two additional disbursements under the proposed MFA increase would be strictly conditional on satisfactory progress with the International Monetary Fund program and on the implementation of new policy conditions to be agreed between Moldova and the EU and added to the existing Memorandum of Understanding.

These policy conditions would aim to address some of the fundamental weaknesses exposed in recent years in the Moldovan economy and economic governance system, and in other key areas, including good governance and fight against corruption, the rule of law, and energy security.

“It is now for the European Parliament and the Council to consider and adopt the proposal to increase the ongoing Macro-financial Assistance to Moldova. Once adopted, the proposal will enter into force and disbursements can be made”, said the Commission’s press release.