March 13 (SeeNews) - Moldova needs to improve the rule of law and business environment, which is still affected by endemic corruption as well as inconsistent policy-making, the European Commission (EC) said on Monday.
"Moldova's consolidation of its democracy and rule of law requires further reform efforts," the European Commission said in a joint report with the European External Action Service ahead of the EU-Moldova Association Council on 31 March 2017.
Moldova signed an association agreement with the European Union in 2014, which took effect fully last July.
"We are already seeing some positive first results from Moldova implementing the Association Agreement but more needs to be done," Johannes Hahn, commissioner for European neighbourhood policy and enlargement negotiations, said.
The Commission pointed out in the report that last year Moldova adopted a number of reforms which aim to restore the independence of the judiciary and tackle corruption, make the public administration more efficient, restore macro-economic stability, and approximate legislation on electricity and natural gas with EU laws, as well as other key areas of the agreement.
However, respect for human rights and fundamental freedoms requires greater attention, in part due to weaknesses in the justice system, the EC noted. "Perceived political interference in the judiciary and law enforcement is a systemic impediment to social and economic development."
Regarding economic development, crucial reforms were adopted to restore macro-financial stability following the massive banking fraud.
Moldova has been trying to cope with a major banking crisis since November 2014, when about $1 billion went missing from three of the country's banks. The sum was equal to about 16% of the impoverished ex-Soviet state's 2015 gross domestic product.
The Commission emphasized that investigations still need to be carried out to bring all those responsible for the banking fraud to justice, and the business and investment climate remains negatively affected by wide-spread corruption and inconsistent policies.
Moreover, access to finance, in particular for small and medium sized enterprises (SMEs), remains difficult, the report showed.
The Commission noted that the $178.7 million (167.4 million euro) three-year assistance programme agreed with the International Monetary Fund (IMF) in November was an important milestone in putting the country back on the path of macro-financial stability, allowing EU budget support payments to be resumed.
($=0.9371 euro)