Moldovan government rejects president's suggestion on public debt of "stolen billion"

Chisinau, 15 February /MOLDPRES/ – The Cabinet did not support the legislative initiative of President Igor Dodon of repealing the law on conversion to public debt guarantees provided by the State National Bank of Moldova (BNM) for credit emergency assistance to three robbed banks. That law produced legal effects which can not be canceled and bonds, issued by the Ministry of Finance, were sent to BNM, it was stated at today meeting of the Government.   

The document states that, given that it was impossible to restore the financial situation at Banca de Economii a Moldovei (BEM) (Bank of Savings of Moldova), Unibank and Banca Sociala (Social Bank), BNM withdrew the license and initiated liquidation. Therefore, the Ministry of Finance issued and sent to BNM bonds amounting to 13 billion 341 million lei, which represented at the time the amount of outstanding loans of those three banks.   

"Default on those guarantees, whatever the reasons, would mean state technical default and taking a series of serious consequences such as suspension of external funding from development partners, donors and international financial institutions, lowering the rating of the country", said at Government meeting, Octavian Armasu, Finance Minister.

The minister added that in his legislative proposal, president had not taken account of the fact that "repeal of a law does not remove the legal effects caused already under the rule of law repealed. In this context, government bonds have already been issued and sent to BNM by the Ministry of Finance". The issue of bonds "was also one of the prior actions under program with International Monetary Fund (IMF)", says the statement on project.

IMF reacted categorically against this initiative, launched late last year, and said it would reassess the agreement with Moldova, if the Decision on converting loans of urgency provided by BNM to three robbed banks in public debt would be canceled. "If some commitments that are related to ensuring the program objectives will be canceled, we will have to reassess if they can be made the major goals of the program," said IMF in a statement.

President Igor Dodon said in an interview for Free Europe Radio that did not give up the initiative for annulment of "stolen billion" law which is in Parliament, despite the fact that it has not been approved neither by government nor foreign partners of Moldova, primarily IMF.  

"I am not giving invalidate the law that put "stolen billion" on citizens’ shoulders. My initiative is in Parliament and I would like a plenary vote. If not, Socialists will launch an initiative group for a national referendum," Dodon said.

"The Constitutional Court examined several complaints regarding this law. The first was made even by representatives of Socialist Party and was rejected after it was filed a complaint with the ombudsman. This law is perfectly constitutional and is a legal consumed," said previously Prime Minister Pavel Filip. According to Premier, had it not adopted the law, Moldova did not obtain last year €60 million from Romania, $35 million from IMF, €45.3 million from EU assessed programs and $45 million from the World Bank.

(Reporter V. Bercu, editor L. Alcaza)