European Council
Council of the European Union

Republic of Moldova: Council endorses agreement on financial assistance

Council of the EU
  • 15/06/2017
  • 10:10
  • Press release
  • 367/17
  • Foreign affairs & international relations
  • Economy & finance
15/06/2017
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On 15 June 2017, EU ambassadors endorsed an agreement reached with the European Parliament on macro-financial assistance for the Republic of Moldova.

Up to €100 million is provided for in EU assistance under an agreement reached by presidency and EP representatives on 6 June 2017. Of this, €60 million was agreed in loans and €40 million in the form of grants. This will supplement resources provided by the IMF and other multilateral institutions.

The assistance will be aimed at supporting the country's economic stabilisation and structural reform agenda, helping to cover its external financing needs over the 2017-18 period.

The Republic of Moldova's economy was affected by political instability during the period between elections in November 2014 and January 2016. It has also been affected by a banking fraud scandal, weak economic activity and import bans imposed by Russia. Since early 2016, the authorities have adopted a number of reforms, but need to undertake further efforts in implementing them, whilst those responsible for banking frauds need to be brought to justice. Reforms in the financial sector and in the management of public finances have been undertaken in the framework of negotiations on an IMF programme.

In November 2016 the IMF approved three-year arrangements with the Republic of Moldova, under its 'extended fund facility' and 'extended credit facility', for $178.7 million. The Republic of Moldova requested complementary assistance from the EU in August 2015 and renewed that request in March 2016.

The EU assistance will be subject to a memorandum of understanding, including precise and specific conditions, to be agreed by the Republic of Moldova with the Commission.

Joint statement on the preconditions

Parliament, Council and Commission agreed a joint statement in the light of changes to the electoral system in the Republic of Moldova.

The statement emphasises that respect for effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and guarantees for human rights are a precondition for receiving assistance.

Objectives specified in the decision also include the efficiency, transparency and accountability of public finance management, an effective prevention of corruption and money laundering, and financial sector governance and supervision.

The Commission and the European External Action Service will regularly monitor the fulfilment of these preconditions and objectives.

Next steps

The Parliament and the Council will now be called on to adopt the decision without further discussion.

The Council requires a qualified majority. (Legal basis: article 212 of the Treaty on the Functioning of the European Union.)