On Friday 13 January, the European Commission proposed granting Moldova macro-economic assistance with an envelope of €100 million to help the country to face its financial needs over the next two years.
This conditional support, which has still to be approved by the Council of the EU and the European Parliament, will come on top of IMF assistance approved in November 2016. It will be divided up as follows: €40 million in grants and €60 million in medium-term loans under advantageous conditions. Three payments will be made over the period 2017-2018.
In return, the Moldovan authorities will have to act to maintain macro-economic stability, stimulate growth and improve the governance of the country. According to the Commission, Moldova has many challenges to face, including the fight against corruption, and it must "thoroughly investigate the massive banking fraud that hit the country's economy in 2014". During that year, $1 billion disappeared from three major banks in the space of two days, equivalent at the time to 13% of the former Soviet republic's GDP.
The European institution firmly believes that the entry into force of the association and free-trade agreement between the EU and Moldova in July 2016 has partly offset the slowing trade between Chișinău and its principal economic partners (see EUROPE 11585). Moldova previously received macro-economic aid from the EU to the tune of €90 million between 2010 and 2012.
In September 2016, the European Court of Auditors found that EU aid under the neighbourhood instruments (€782 million since 2007) had had only a limited effect on strengthening Moldova's public administration (see EUROPE 11615). (Original version in French by Mathieu Bion)