Prime Minister Ion Chicu said there are at least two risks in Moldova’s relationship with the International Monetary Fund. These refer to particular conditions that the financial institution imposes on Moldova, related to the rise in domestic gas tariffs and the IMF’s rigidness in relation to the Government’s intentions to make massive investments in infrastructure, IPN reports.
“Our Government will continue to cooperate with everyone, but exclusively based on Moldova’s interests. We will continue to discuss when the discussions will go against the country’s interests, but will not accept conditions that undermine or annihilate our economic chances and that place an additional burden on the social sector, which means higher tariffs, taxes, etc. These are two issues we are discussing, but they are taboos,” Premier Chicu stated in the talk show “Moldova live” on the public TV channel Moldova 1.
Ion Chicu said two critical subjects were discussed during the visit paid by the IMF representative to Chisinau. One of these is the condition agreed by the previous Government – to raise the domestic gas tariffs until October 31, 2019. This condition wasn’t met. “We said that we cannot accept this, at least because the Republic of Moldova as of January 1, 2020 will purchase natural gas at a price that will be by S$ 65 on average lower than in 2019. It is illogical to increase domestic tariffs when you buy something cheaper,” he explained.
Also, the IMF is rather inflexible as to the Government’s intentions to significantly invest in the public infrastructure, especially in road reconstruction. “The Government will massively invest in the country’s infrastructure, in particular in roads. We planned large amounts for next year and need coordination, their consent so as to make investments that, according to the methodology, are considered budget deficit as the money is borrowed. In essence, this is not budget deficit, but state investment in infrastructure that will have a multiplying effect – development of the economy and attraction of private investment,” stated Ion Chicu.
He noted he is almost sure that a solution will be reached with the IMF so that the current program with the IMF could be completed and a new program could be approved next spring, but exclusively under conditions that meet Moldova’s economic and social interests.
Premier Chicu added the Government will prefer to take a break in the cooperation with the IMF if the latter insists on conditions that are unacceptable to Moldova.