EU to unblock budgetary support for Moldova under certain conditions

Chisinau, 9 July /MOLDPRES/ - The European Union will unblock the budgetary support for Moldova only in certain conditions, according to a press release by the EU Delegation to Moldova. The payments will be made after all conditions stipulated by agreements signed by the government as to „goals of sector policy, macro-financial stability, as well as observance of principles of budgetary supervision and transparency”, are going to be fulfilled.

The problems, which the banking sector faces, have arisen concern as to macro-financial stability, the communiqué reads. The European Union believes that only a programme with the International Monetary Fund (IMF) might guarantee which measures will be taken in order to solve problems of the banking sector.

EU announces that it will provide the budgetary support only when a programme with IMF approved. A programme cannot be requested by an interim government, so this issue is an additional and serious reason „in order to speed up the creation of a new ruling coalition”.

„Once invested, the new government will have to immediately request the International Monetary Fund to negotiate a new programme. The approval of such a programme might reinstate confidence into the macro-financial stability of Moldova and would open the path to resume budgetary support payments by EU,” Head of EU Delegation to Moldova Pirkka Tapiola said.

The World Bank has also announced previously that it would offer Moldova a new budgetary support in amount of 45 million dollars in exchange for „ decisive actions in order to solve problems of the banking sector”. „It would be illogical and irresponsible that the World Bank to transfer to the budget money of its shareholders through “the front door”, while there are risks that bigger amounts of public money to be lost through „the back door”, due to frauds and corruption in the banking sector,” World Bank Country Manager for Moldova Alex Kremer said.

The signing of a cooperation programme with IMF „has a great importance in order to ensure the sustainability of budget both for short-term and medium-term”, the Finance Ministry says. The absence of a programme might jeopardise the obtaining of foreign budgetary support, the amount of which is about 2.238,1 million lei under the state budget draft.

The 2015 state budget was adopted with a deficit of 4 billion lei. The budget was executed with a deficit of about 959 million lei in the first five months of 2015, under the forecast level, as a result of dramatic reduction of expenditures by almost 19 per cent against the forecasts for this period. The government announced an austerity regime, in conditions when it does not manage to collect planned incomes to the budget and the foreign budgetary support was suspended.

(Reporter V. Bercu, Editor A. Raileanu)