January 4 (SeeNews) - The European Commission said on Tuesday it adopted a proposal to grant Moldova a new macro-financial assistance (MFA) of up to 150 million euro ($170 million) to help the country cover part of its external financing needs over the coming two years.
Some 120 million euro of the financial assistance would be provided in medium-term loans at favourable financing conditions, while the remainder would be provided in grants, the Commission said in a press release.
The proposed MFA, which requires adoption by the European Parliament and the Council before it can enter into force and disbursements can be made, would accompany Moldova's new IMF $591 million funding programme, approved on December 20.
Disbursements under the proposed MFA would be strictly conditional on good progress with the IMF programme and on the implementation of specific policy conditionality to be agreed between Moldova and the EU in a memorandum of understanding, the Commission noted. These policy conditions aim to address some of the fundamental weaknesses exposed in recent years in the Moldovan economy and economic governance system, and in other key areas, including good governance and fight against corruption, the rule of law, and energy security.
In the Commission's view, Moldova continues to face many challenges, notably the need to tackle corruption and governance problems that have contributed to a weakening of the fiscal and balance-of-payments positions over the past several years, prompting support from international partners. Moldova has recently faced a significant energy crisis, which coupled with the post-pandemic recovery has further implications for the economic stability and outlook in Moldova going forward, the Commission pointed out.
The new MFA would build on the two previous such operations through which the EU has disbursed a total of 160 million euro to Moldova since 2017.
($=0.883 euro)