June 15 (SeeNews) - The Council of the European Union and the European Parliament (EP) said on Thursday they agreed on providing 100 million euro ($106.5 million) to help Moldova fund its structural reforms.
"Up to 100 million euro is provided for in EU assistance under an agreement reached by presidency and EP representatives on 6 June 2017. Of this, 60 million euro was agreed in loans and 40 million euro in the form of grants," the Council and the Parliament said in a joint press release.
The assistance would supplement resources provided by the IMF and other multilateral institutions and support Moldova's economic stabilisation and structural reform agenda, helping the country to cover its external financing needs over the coming two years, it added.
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.
in 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 $6.59 billion.
In May, The European Bank for Reconstruction and Development (EBRD)] increased its projections for Moldova's economic growth to 3.0% in 2017 on the back of lower inflation and international financial assistance.
($= 0.9427 euro)