The European Parliament and the EU Council have reached a preliminary agreement on 1.9 billion euros Reform and Growth Facility for Moldova
According to the European Parliament, the new support plan for Moldova, agreed by their negotiators, should help accelerate socio-economic reforms in Moldova, strengthen sustainability and promote its integration into the EU, mitigate the impact on Moldova of Russia's aggression against Ukraine. The agreement includes extended grants, accelerated financing and a reliable oversight by the Parliament. It is emphasized that the EU countries and MEPs agreed on substantial improvements to the new support Facility for Moldova, focusing on better financing and democratic oversight. The aim of the said Facility is to support Moldova in overcoming serious challenges, in particular mitigating the profound impact of Russia's war against Ukraine on the security, economy and livelihoods of Moldovan citizens, as well as strengthening its resilience to ongoing and unprecedented hybrid attacks and foreign malicious interference directed against the country and democratic processes and institutions. The parties agreed to increase grant-based support. Specifically, negotiators agreed to allocate 520 million euros in grants, up 100 million euros over initial proposals, along with 1.5 billion euros in low-interest loans. This adjustment ensures that Moldova can carry out reforms without unsustainable debt accumulation. Accelerated access to financing has been agreed. Thus, the Facility will provide 18% pre-financing of the total aid, up from the initial 7%, which will allow resources to be quickly allocated to energy security, anti-corruption infrastructure and modernization of public services. Administrative capacity building is envisioned. Thus, the allocated 20% of grant funds will be used to strengthen Moldova's institutions through digital governance systems, training of civil servants and judicial reforms - prerequisites for efficient management of EU funds. A strengthened oversight structure has been agreed upon. To ensure full parliamentary control, the agreement establishes a dialog between the European Parliament and the European Commission to regularly review the implementation. It was also agreed to provide additional voluntary contributions from other donors, such as international financial organizations, to further financially support Moldova, and that the Facility will not support activities or measures that undermine Moldova's sovereignty and territorial integrity. “In difficult times, reliable friends are especially important. We have just completed the trilogue on Moldova's Growth Plan and 1.9 billion euros will be allocated to accelerate economic growth, strengthen reforms and anchor a free Moldova in the European Union. This confirms that the EU is a reliable partner for the Moldovan people,” EU Commissioner for Enlargement Marta Kos said. The co-rapporteur of the Budget Committee, Siegfried Muresan, said that after 3 months of close negotiations, the EU institutions managed to reach an agreement on the adoption of 1.9-billion-euro Reform and Growth Facility for Moldova. At the same time, he suggested that it was possible to increase the preliminary financing by more than 200 million euros. These are funds that will come to Moldova soon after the mechanism enters into force. “By increasing the pre-financing by 200 million euros and the overall allocation by 100 million euros, enhanced immediate support is mobilized to help Moldova advance reforms, accelerate its European integration and counter the economic and energy consequences of Russian aggression. This ambitious agreement underlines Europe's ability to react decisively to the escalation of geopolitical challenges,” Siegfried Muresan said. He said that the EU shows that it understands this and is united in helping Moldova to fight against external attacks, to improve people's living standards and to continue following the European path. The preliminary agreement on 1.9-billion-euro Reform and Growth Facility for Moldova will be submitted to the plenary session of the European Parliament in March and to the EU Council for final approval. It is planned that in 2025-2027, the maximum amount of resources to be provided to Moldova through the Facility will amount to 1 billion 785 billion euros in current prices. This includes up to 1.5 billion euros in soft loans and 385 million euros in grants. In addition, 135 million euros will be allocated to secure loans. The Reform and Growth Facility is part of the EU's wider Growth Plan for Moldova, aimed at doubling the country’s economy within a decade, while promoting socio-economic stability. Earlier it was reported that the EU is allocating funds from the Reform and Growth Facility for Moldova for the following purposes: new roads, bridges and railroad infrastructure; energy security - to complete a new power transmission line and start construction of 2 more, which will connect Moldova to the EU power grid; construction of 2 new well-equipped hospitals in Cahul and Balti; improving access to finance and supporting 25 thousand enterprises, including small family businesses, etc., etc., as well as for the construction of a new electricity transmission line. // 20.02.2025 - InfoMarket
