Decision (EU) 2017/1565 on providing macro-financial assistance to Moldova

Summary:

Decision (EU) 2017/1565 - adopted by the European Union (EU) in September 2017 - which allocates macro-financial assistance of a maximum amount ot €100 million to Moldova with a view to supporting the country's economic stabilisation and a substantive reform agenda.

Further information:

Moldova's government requested Macro-Financial Assistance (MFA) from the European Union in August 2015 and reiterated that request in March 2016. The European Commission decided to address that request - considering political and economic developments in the country since 2014 - in January 2017, by adopting a Decision on an MFA to Moldova of up to €100 million, of which €60 million in the form of loans and €40 million in the form of grants. An informal agreement between the co-legislators on the draft Decision was reached on 6 June. The compromise text was endorsed by the European Parliament on 4 July and by the Council of the European Union on 17 July. It was signed by the co-legislators on 13 September.

Disbursements under this programme are conditional on good progress with a related programme sponsored by the International Monetary Fund (IMF) and on the implementation of specific policy conditionality to be agreed between Moldova and the EU in a Memorandum of Understanding (MoU). In light of proposed changes to the country's electoral system, the institutions also produced a joint statement on preconditions for this programme, highlighting the importance of the respect for a multi-party parliamentary system and for the rule of law.

In June 2018, the disbursement of the first installment was put on hold by EU authorities, due to a deterioration of conditions relating to rule of law and mounting political issues. Following a change of government, the European Union decided in July 2019 to resume budget support assistance. The first tranche of this MFA was delivered to the country on 10 October. The second and final disbursement was approved on 10 July 2020. The disbursement followed the fulfilment of the policy commitments agreed with the EU, as laid down in the MoU.

• Primary Source

Commentary and Analysis

EPRS: At a Glance, June 2017: Macro-financial assistance to Moldova http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_ATA(2017)607281

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News

EurActiv, 16/01/2017: Commission approves new aid programme for Moldova https://www.euractiv.com/section/enlargement/news/commission-approves-new-aid-programme-for-moldova/

The Guardian, 06/04/2018: EU to Moldova: sort out corruption or €100m funds will stay blocked https://www.theguardian.com/world/2018/apr/06/eu-to-moldova-sort-out-corruption-or-100m-funds-will-stay-blocked

Balkan Insight, 04/07/2018: Brussels Blocks Cash for Moldova Over Cancelled Elections https://balkaninsight.com/2018/07/04/brussels-turns-off-aid-tap-after-moldova-elections-annulment-07-04-2018/

Reuters, 04/07/2018: EU freezes aid to Moldova as row over mayoral election festers https://uk.reuters.com/article/idUKKBN1JU2FV

Balkan Insight, 10/10/2018: Oligarchs Have ‘Captured Moldova’, EU Resolution Warns https://balkaninsight.com/2018/10/10/eu-urges-moldovan-authorities-to-respect-democratic-standards-10-10-2018/

RFE-RL, 15/11/2018: EU Cuts Moldova Funding Amid Rule-Of-Law Concerns https://www.rferl.org/a/eu-cuts-moldova-funding-amid-rule-of-law-concerns/29603052.html

OCCRP, 16/11/2018: EU Says Moldova 'trapped' by Oligarchy, Cuts $22 Mil. in Funding https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8913-eu-says-moldova-trapped-by-oligarchy-cuts-22-mil-in-funding

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Official

EUR-Lex: COM(2017)14: Proposal for a Decision providing macro-financial assistance to the Republic of Moldova http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2017:014:FIN

EUR-Lex: SWD(2017)12: Ex-ante evaluation statement http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2017:012:FIN

European Parliament: Legislative Observatory: Procedure File for Proposal on Macro-financial assistance to Moldova https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2017/0007(COD)

European Commission: Press Release, 13/01/2017: Commission proposes EUR 100 million in Macro-Financial Assistance to the Republic of Moldova http://europa.eu/rapid/press-release_IP-17-40_en.htm

Council of the European Union: Press Release, 12/04/2017: Republic of Moldova: Council agrees to €100 million financial assistance https://www.consilium.europa.eu/en/press/press-releases/2017/04/12/moldova-financial-assistance/

Council of the European Union: Press Release, 15/06/2017: Republic of Moldova: Council endorses agreement on financial assistance https://www.consilium.europa.eu/en/press/press-releases/2017/06/15/moldova-agreement-financial-assistance/

European Parliament: Press Release, 04/07/2017: Parliament approves EU financial help for Moldova http://www.europarl.europa.eu/news/en/press-room/20170629IPR78680/

European Commission: Press Release, 10/10/2019: EU approves €30 million disbursement in Macro-Financial Assistance to the Republic of Moldova https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6060

European Commission: Press Release, 10/07/2020: EU approves €30 million disbursement in macro-financial assistance to the Republic of Moldova https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1309

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