Decision 2022/563 - Macro-financial assistance to Moldova - Main contents

EN

Official Journal of the European Union

L 109/6

Relations between the European Union (the ‘Union’) and the Republic of Moldova (‘Moldova’) continue to develop within the framework of the European Neighbourhood Policy (ENP) and the Eastern Partnership. Moldova joined the Eastern Partnership in 2009, which was followed by the negotiation of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part (2) (the ‘Association Agreement’). The Association Agreement, which includes the gradual introduction of a Deep and Comprehensive Free Trade Area (DCFTA), was signed on 27 June 2014 and entered into force on 1 July 2016.

Moldova’s economy has been significantly affected by the recession in 2020 which was caused by the COVID-19 pandemic, by the protracted political stalemate in the country after the presidential elections in November 2020, and by the recent energy crisis. Those circumstances have contributed to Moldova’s sizable financing gap, deteriorating external position and growing fiscal needs.

Following the parliamentary elections in July 2021, the new Moldovan government has demonstrated a strong commitment to implementing further reforms, with an ambitious programme entitled ‘Moldova in good times 2021-2025’. That programme focuses on key policy areas including justice sector reforms, the fight against corruption, good governance and the rule of law.

A renewed commitment to carrying out such reforms and a strong political will have led the Moldovan authorities to significantly accelerate the implementation of reforms. This has also enabled Moldova to successfully complete the macro-financial assistance operation in the context of the COVID-19 pandemic pursuant to Decision (EU) 2020/701 of the European Parliament and of the Council (3), as all reform actions agreed with the Union in the Memorandum of Understanding were fulfilled, with the exception of one action, on asset recovery, for which a waiver was granted. To that end, the Commission consulted the committee of representatives of the Member States and received no objections.

After the adoption of a new International Monetary Fund (IMF) programme, negotiated in 2020, stalled, the IMF re-engaged with Moldova following the parliamentary elections in July 2021 and reached a staff-level agreement on a programme under the Extended Credit Facility and the Extended Fund Facility for the amount of USD 564 000 000. The new programme was adopted by an IMF Executive Board decision of 20 December 2021. That programme aims to sustain the economic recovery of Moldova, launch an ambitious governance and institutional reform agenda, strengthen transparency and accountability, improve public policy predictability, strengthen financial institutions and foster deregulation.

In view of the worsening economic situation and outlook, Moldova requested complementary macro-financial assistance from the Union in November 2021.

The Union’s indicative allocation for Moldova under the European Neighbourhood Instrument was EUR 518 150 000 for the 2014-2020 period, including budgetary support and...