In the European Union, there is a fiscal rule according to which the governments must control the deficits. Such fiscal norms are stipulated in the EU treaties. Even the famous figures that most of the people know - debt-to-GDP ratio of 60% and the deficit of 3% as a target – are specified in the EU treaties. Currently, in the process of coming closer to the EU as a candidate country, Moldova should develop its legislation to reflect these rules, Josip Juric, projects manager at the EU Delegation to Moldova, stated in the National Bank of Moldova’s podcast “Given Sense to Money”, IPN reports.
“Moldova, in fact, already has particular fiscal rules in force. But later we will cooperate with this country so as to bring them closer to the way in which they are defined in the EU. Besides fiscal rules, this will include the independent Fiscal Council. This can be done in the medium term. It will take time to develop particular support and until Moldova adjusts itself,” explained Josip Juric.
According to him, there is another aspect related to the fiscal framework, which should be taken into account immediately, namely the efficient use of the budget sources in Moldova. “What we noticed the past few years is that Moldova executes the budget of capital investments below the upper limit. Why is this aspect less good? A capital budget means practically investments in infrastructure. These are roads, these are hospitals, these are all things Moldova needs to develop further, while the under-execution of this budget means that the sum planned in the budget is higher than what is effectively done as a result. We see this thing as being suboptimal,” said the expert of the EU Delegation.
According to him, namely for this reason, there is a project, there are experts of the Ministry of Finance whose goal is to help the country plan, develop and then implement public investment projects. Consequently, in a year the situation will be very different and that planned capital investment budget could be executed.
In another development, Josip Juric said the Republic of Moldova over the past two years experienced a lot of crises and it does not go only to the energy crisis, but also to the war in neighboring Ukraine. There was the refugee crisis, the increasing cost of life for the citizens. “Nevertheless, going further I think that the perspectives are positive and this is how who see things from the EU’s perspective. This is also confirmed by the recent Moody's report that, even if it repeated the rating for Moldova, it placed the country in the positive rankings. An important thing that should be noted is that the external elements that influence the economy are external and they implicitly do not depend on you, but you should definitely prepare for them. I think that speaking about Moldova, the country is much better prepared for winter and for the autumn season,” noted Josip Juric.