Moldovan government has approved the ratification of a memorandum and agreements with the EU on new macro-financial assistance amounting to 150 million euros.
In particular, the Cabinet approved the ratification of a 120-million-euro credit line agreement between Moldova, the European Union and the National Bank of Moldova on macro-financial assistance for Moldova, a grant agreement between Moldova and the EU on macro-financial assistance for Moldova, and a memorandum-agreement between Moldova and the EU on macro-financial assistance for Moldova. All three documents were signed in Brussels on June 22 and stipulate that Moldova is to receive from the EU, under the new macro-financial assistance, 120 million euros in preferential loans and 30 million euros in grants. It is worth mentioning that on April 6, the European Parliament and the Council of the European Union decided to provide additional macro-financial assistance to Moldova in the context of the impact on Moldova of the war in Ukraine, in particular, to restore the economy affected by the consequences of the war and the pandemic, as well as to manage the gas crisis that started in October 2021. The Memorandum of Understanding between the Republic of Moldova and the EU on macro-financial assistance provides a list of conditions that the country will have to fulfill in order to receive EU macro-financial assistance worth 150 million euros. The money is expected to be allotted in three equal tranches of 50 million euros. The first tranche is expected to consist of a 35-million-euro loan and a 15-million-euro grant, the second - a 40-million-euro loan and a 10-million-euro grant, and the third - a 45-million-euro loan and a 5-million-euro grant. EU financial assistance will be provided between 2022 and 2024, starting from the first day after the entry into force of the Memorandum of Understanding. The allocation of the tranches will depend on the progress of the implementation of the provisions of the Memorandum and other agreements between Moldova and the EU. There are 3 conditions for the first tranche, 6 conditions for the second tranche, and 6 conditions for the third tranche. The macro-financial assistance will contribute to Moldova's economic recovery by promoting a set of policy measures. The basic reforms are focused on the following areas: energy sector, fight against corruption, rule of law and business climate. The money will also be used to cover our country's budgetary needs. Preferential loans within the EU macro-financial assistance will be allocated to Moldova for a period of 15 years, and the interest rate for each tranche will depend on the cost of the European Commission's borrowings in the international financial market. As InfoMarket reported earlier, Moldova asked the EU to increase macro-financial assistance to our country from 150 million to 300 million euros, and its grant component - from 30 million euros to 150 million euros, noting that the longer the war in Ukraine lasts, the more humanitarian aid , security and socio-economic assistance will be needed by Moldova. In this regard, Moldova called on the European Commission to increase financial and technical assistance to Moldova and analyze the possibility of making advance payments in installments and take into account the request of the Moldovan authorities to increase the previously approved macro-financial assistance operation from 150 million to 300 million euros, including an increase from 30 million up to 150 million euros in grants to help Moldova cover the large budget deficit caused by this crisis. It is emphasized that such an increase in macro-financial assistance is necessary, since the current amounts were determined before the military conflict in Ukraine. // 29.06.2022 – InfoMarket
