April 12 (SeeNews) - The Council of the European Union said on Wednesday it has agreed on providing 100 million euro ($106.5 million) to help Moldova fund its structural reforms.
"On 12 April 2017, EU ambassadors agreed the Council's negotiating stance on macro-financial assistance for the Republic of Moldova. Up to 100 million euro is proposed in EU assistance, of which 60 million euro in loans and 40 million euro in the form of grants," the EU Council said in a press release.
The assistance would support the country's economic stabilisation and structural reform agenda, helping to cover its external financing needs over the coming two years, it added.
The final vote in the European Parliament on the proposal now agreed on by the Council is scheduled to take place in May.
If granted, the financial assistance will be disbursed in three tranches in 2017 and 2018.
The funding would be provided under a memorandum of understanding which will include precise and specific conditions to be agreed by Moldova with the European Commission. Moldova requested complementary assistance from the EU in August 2015 and renewed that request in March 2016.
A precondition would be that Moldova respects effective democratic mechanisms, including a multi-party parliamentary system. The country would have to respect the rule of law and guarantee respect for human rights. Objectives also include the efficiency, transparency and accountability of public finance management, an effective prevention of corruption and money laundering, and financial sector governance and supervision.
The European Commission and the European External Action Service would regularly monitor the fulfilment of these preconditions and objectives.
"Since early 2016, the authorities have adopted a number of reforms, but need to undertake further efforts in implementing them, whilst those responsible for banking frauds need to be brought to justice. Reforms in the financial sector and in the management of public finances have been undertaken in the framework of negotiations on an IMF programme," the Council noted.
At the beginning of April, European Commission rapporteur for Moldova and MEP for Romania, Siegfrid Muresan, announced that the EU is ready to unlock the macro-financial assistance for Moldova if it sees real commitment to reform.
Moldova's economy expanded by 4.1% in real terms in 2016, mainly on the back of successful performance of the agriculture, forestry and fishing sector. However, the end-2016 foreign debt figure was equivalent to 97.7% of Moldova's 2016 GDP of $6.59 billion.
At the end of February, the International Monetary Fund (IMF) raised Moldova's economic growth forecast for this year to 4.5% from 3%, and said that it was considering providing a $21.2 million loan under an existent three-year credit facility.
($= 0.9427 euro)