The European Commission, on behalf of the EU, has today approved the disbursement of €30 million in macro-financial assistance (MFA) to the Republic of Moldova. This is the second and final disbursement under Moldova’s current MFA program following the first installment of €30 million in October 2019. It is composed of €10 million in grants and €20 million in low-interest, long-term loans, IPN reports, quoting a press release.
The program is designed to assist Moldova in covering its external financing needs, which is especially important in light of the coronavirus pandemic, while implementing a wide-ranging and ambitious reform agenda.
“The European Union stands by the Moldovan people in these difficult times. I also want to commend Moldova for the reform efforts being pursued, for instance in improving the justice system and fighting corruption,” said Paolo Gentiloni, Commissioner for the Economy.
The disbursement follows the fulfillment of the policy commitments agreed with the EU, as laid down in the Memorandum of Understanding. These included important measures in the fields of financial sector governance, public sector governance, the fight against corruption and money laundering, energy, and business climate and the implementation of the Deep and Comprehensive Free Trade Area (DCFTA).
MFA disbursements are conditional on good progress with IMF program Moldova has successfully completed the sixth and final review of the three-year Extended Credit Facility and Extended Fund Facility IMF program in March 2020.
MFA disbursements are also conditional on the fulfillment of certain political preconditions. The Commission and the European External Action Service (EEAS) consider that there has been sufficient interim progress to this end, in particular on a number of specific short-term actions communicated by the EU to the Moldovan authorities in February, related, inter alia, to justice, anti-corruption, media and civil society issues. The Moldovan authorities also committed to continuing with justice reform, in particular by tabling long-awaited constitutional amendments for judicial reform, in accordance with international standards. Therefore, taking into account these efforts, the Commission and the EEAS consider that the political preconditions for granting the disbursement of the second installment of MFA have been met. The Commission and the EEAS monitor the fulfillment of these preconditions on an ongoing basis throughout the lifecycle of the MFA programs.
Separately, the EU is also making further MFA loans of €100 million available to Moldova, as part of the Decision to provide MFA to ten partner countries to help them limit the economic fallout from the coronavirus pandemic. The Commission stands ready to disburse the first installment of this new MFA as swiftly as possible after the Memorandum of Understanding (MoU) with Moldova has been legally enacted. The MoU lays down the policy actions that need to be taken in return for the assistance.