Moldovan government takes responsibility for seven laws of financial, banking sector, agreed on with IMF

Chisinau, 26 September /MOLDPRES/ - The government, at an extraordinary meeting today, ruled to take responsibility before parliament on seven laws concerning the financial and banking sector, as well as converting into state debt of the emergency loans provided by the National Bank of Moldova to the three banks which had been liquidated. All the draft laws were coordinated with the International Monetary Fund (IMF), which is to consider a new programme for Moldova in next October.  

“All laws will be passed in the formula validated by IMF. We adopt this formula, of taking responsibility, as we have no time; one month is left till the meeting of the IMF Executive Board. If we use the classical formula, we will not manage to adopt the concerned laws and unlock the financing of IMF and European Union,” Prime Minister Pavel Filip said.

The package of laws comprises seven drafts on the redressing and resolution of  banks, central securities depositary, issuance of securities on account of the guarantees offered to BNM by the government in 2014 and 2015, for the loans provided to the banks declared bankrupt, drafts on amendment of the state budget law, law on the state social insurances budget and the law on health insurances accounts.  

According to the draft law on converting the emergency loans into state debt, the government plans to issue state bonds worth 13.583 billion lei for a period of up to 25 years, at an interest rate of five per cent. The bonds will be submitted to the National Bank.

Under the draft on rectification of the state budget, the budget revenues and spending will be cut by 2.65 billion lei. The deficit is estimated at 4.182 billion lei or 3.15 per cent of the Gross Domestic Product (GDP). The domestic state debt in late 2016 will stand at 21.7 million lei and the external one – 32.4 billion lei, which accounts for 40.8 per cent of GDP.   

The state social insurances budget will be completed with 84 million lei, under the draft assumed by the government.

Following the last visit by IMF representatives to Moldova, Prime Minister Pavel Filip has repeatedly said that he was sure that Moldova would have an agreement with the Fund in October 2016.

IMF experts and Moldova’s authorities in last July reached a staff-level agreement  on a programme of economic reforms backed by a financing arrangement through the Extended Fund Facility and Extended Crediting Facility. The access to financing is proposed to be set at 75 per cent of Moldova’s quota at IMF (129 million Special Drawing Rights or almost 179 million dollars). This staff-level agreement will have to be approved by the IMF leadership and the Executive Board.    

There are 16 conditions imposed by the International Monetary Fund. They refer to the fiscal, budgetary, financial, banking and energy sectors.  

(Reporter V. Bercu, editor L. Alcaza)