Moldova runs the risk of being left without a new agreement with the IMF and without external financing in general - Octavian Armasu said.
The President of the National Bank of Moldova said this in an interview with Europa Liberă radio. He noted that it is already unlikely to approve a new program with the International Monetary Fund by the end of this year, since Moldova has not fulfilled the last precondition regarding the appointment of new NBM vice presidents, and there is little time left, given the upcoming Christmas and New Year holidays. The head of the National Bank believes that Moldova may sign a new program with the IMF at the beginning of the next year, provided that all the actions that have been agreed with the Fund are carried out. This is the last action requested by the Fund - the appointment by the parliament of all vice-presidents of the NBM, as well as the cancellation of those initiatives that, in addition to the concern of external creditors, will have a negative impact on Moldova. “First of all, I am talking about the bill on the abolition of the law, on the basis of which government securities were issued for the recapitalization of the National Bank,” said Octavian Armasu. He recalled that he proposed 3 candidates to the parliament for the post of NBM vice-president, but the relevant parliamentary commission approved only the candidacy of Alexandru Sava, and two other candidates were rejected: Constantin Schendra and Maia Pircalab. “I asked to reconsider this decision; I sent a letter to parliament, in which I gave additional arguments, with a detailed description of their work experience, claiming that it falls within the requirements of the law. The law requires people to have 10 years of financial or monetary experience. My colleagues have such experience, one of them worked in the banking sector, the other worked in the field of audit, where he conducted an audit of the banking sector, after which he became the head of the supervisory department! ”- said the President of the National Bank, expressing hope that the parliament will decide on the appointment of Constantin Schemdra and Maia Pircalab as vice-presidents of the NBM. He also recalled that the law requires the NBM President to select candidates for the post of vice president. “I insist on the observance of the law, I presented these candidates as required by the law. The law stipulates that the president chooses candidates and proposes them independently. Moreover, the law prohibits the NBM President from using certain advice or instructions from anyone regarding the nomination of candidates. I did it and we’ll see what happens next. I want the process to proceed strictly in accordance with the law,” said Octavian Armasu. He also noted that the cancellation by the parliament of the Law on the issue of government bonds in fulfillment by the Ministry of Finance of payment obligations arising from state guarantees of November 17, 2014 and April 1, 2015 may lead to a financial blockade of Moldova against the backdrop of a complete pandemic, a huge state budget deficit. “It needs to be financed, the country needs financing, and we may not receive it because of these initiatives,” the NBM head noted. He recalled that the budget deficit next year will be very large and this budget requires significant funding. The law on the budget for the next year says that the deficit will be covered by the funds of the IMF, the European Union, the World Bank, but Moldova runs the risk of not receiving these funds. Octavian Armasu stressed that if Moldova does not have an agreement with the IMF, then the country will not be able to receive assistance from the development partners. “Usually other development partners condition aid on the existence of a program with the International Monetary Fund, since the IMF assesses the country's ability to absorb this financing and return it later, thinks over the policy in this regard,” the NBM head said. According to him, the repeal by the parliament of the law, on the basis of which government securities were issued to recapitalize the National Bank, will worsen relations with the IMF, which is likely to take a step back, and possible negotiations with the Fund will be much more difficult. “First of all, it will be necessary to correct what has been done now, in any case it will be necessary to restore the capitalization of the National Bank, it will be necessary to put things in order in other matters, and the IMF will obviously set certain conditions to avoid such deviations in the future. So we will have to work hard again to have a new program with the IMF,” said the President of the NBM. // 17.12.2020 - InfoMarket.
