Paralyzed state, let external financial support wait …

Moldovan state functionality continues to be paralyzed. Although public and private institutions are automatically following their activity anaemically, the whole society, followed by the country’s external partners, all awaiting the formation of a functioning parliamentary majority.

In the agony of political statements and campaigning to promote parties for entering the parliament, there has been made a lot of references to Western and Eastern partners, however, parties completely forgot about the EUR 100 million (the European Union’s financial support to the Republic of Moldova) and the blocking of the macro-financial assistance installments in July 2018.

The European Union, an absolute leader in the field of non-reimbursable financial assistance to the Republic of Moldova, is actively involved in supporting the development of the socio-economic environment of the country, with a significant contribution to the development of financial, commercial and administrative management policies, the development of civil society, agriculture, SMEs, with an important contribution to education and training. Analyzing the top of the funding groups, we find that the European Union is the main financier and partner of the Republic of Moldova. The share of EU funding accounted for 28% of total funding, reaching an absolute value of € 1.19 billion, resulting in a vital and ongoing need to re-establish relations with the European Union.

Top financiers of the Republic of Moldova

Source: Platform for External Assistance Management.

At the same time, at present, the most important way of developing and modernizing our country, including the business climate, is the implementation of the Association Agreement. However, in the implementation of the Association Agreement (AA), including the priority reforms, Moldova has enough arrears.

The European Parliament published on 15 October 2018 the Report on the Implementation of the EU-Moldova Association Agreement, according to which the Foreign Affairs Committee undertook an investigative mission to the Republic of Moldova in April 2018, drawing the following conclusions:

  1. Any decision on future payments under macro-financial assistance should be made only after the parliamentary elections planned to take place in February 2019;
  2. Also, payments under all budget support programs should remain pending until significant progress is made in terms of democratic standards;
  3. Meanwhile, funds should be redeployed to support civil society and independent media in Moldova, as well as the private sector and local authorities;
  4. The suspensive clauses of the EU-Moldova agreement, in particular Articles 2 and 455 of the AA, and the reference criteria for combating corruption and money laundering related to the liberalization of the visa regime are recalled.

Thus, the granting of financial assistance depends on the successful implementation of certain economic measures, as well as the realization of political conditionality: observance of democratic mechanisms, observance of the rule of law and respect for human rights.

AOAMP President, Alexei Repede, claims that “the financial and result indicators of the EU assistance programs can have a sustainable impact on the socio-economic development of the Republic of Moldova only when the implementation of these programs and sectoral policies is carried out efficiently and transparently, by facilitating investment and supporting the entrepreneurial environment and in a permanent dialogue with civil society, to update the real situation about the many impediments and existing opportunities.

At the same time, encouraging the development of entrepreneurial activity capable of creating jobs needs to be achieved at the same time as increasing the confidence of all state institutions to facilitate the development of the business environment. Representatives of the deconcentrated services in the territory of the Republic of Moldova should reorient from the control objective to supportive counseling, contributing to the development of the entrepreneurial environment, development that allows for economic growth and contributions to the state budget, not vice versa, by collecting and increasing penalties among entrepreneurs to ensure the increase in the state budget. “

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