MOLDOVAN GOVERNMENT APPROVES SIGNING OF CREDIT AGREEMENT WITH EU

Finance Minister Octavian Armasu and National Bank of Moldova (NBM) President Sergiu Cioclea were empowered by the Parliament to sign the Credit Agreement with the European Union on macrofinancial assistance to Moldova.

The macrofinancial assistance to Moldova is provided by the EU and is a financing operation worth 100 million euros, 60 million of which – in the form of credit and 40 million – in the form of grant. The memorandum of financing was approved on November 13, 2017 within the Committee of EU member countries. The proposed sum is based on updated assessment of country’s external financial needs.

According to the memorandum, approved by the European Union, the results expected from the implementation of macrofinancial assistance in Moldova are the following:

- Overcoming the economic shock, caused by the budget position worsening and balance position payment, as a result of bank fraud in November 2014, as well as lowering of exports and remittances due to decline in relations with some trade partners;

- Ensuring of macroeconomic stability and structural reforms in the country;

- Contribution to the total efficiency of the package of financial support from the side of the international community of donors;

- Strengthening of Government’s adherence to reforms and its aspirations towards closer relations with the EU;

- Improvement of public finance administration;

The 60-million-euro credit will be paid in three equal parts in 2018, while the using of funds will be based on the progress in implementing the Memorandum with IMF and conditions, agreed between Moldova and the EU. The term of credit is up to 15 years, interest rate is applied to each tranche and will depend on the European Commission’s assessment of the state of things in the international financial market.

As Infotag has already reported, negotiations on receiving macrofinancial assistance from the EU continued the whole year. The European Commission, European Parliament and its standing committees have discussed this issue several times. The first tranche of assistance should have arrived until the end of 2017. However, the European Parliament postponed the adoption of this decision due to the fact that the Moldovan Parliament decided to change the voting system in defiance of Council of Europe’s Venice Commission and the OSCE. After new negotiations, it was decided to provide macrofinancial assistance to Moldova, but it will come only in 2018.