EU disburses €50 million in Macro-Financial Assistance to the Republic of Moldova

EU disburses €50 million in Macro-Financial Assistance to the Republic of Moldova
by
11 October 2021 | 10:49

The European Commission, on behalf of the EU, has disbursed €50 million in macro-financial assistance (MFA) to the Republic of Moldova. This disbursement is part of the €3 billion emergency MFA package for ten enlargement and neighbourhood partners, which aims to help them respond to the economic impact of the COVID-19 pandemic. MFA support is provided through loans at very favourable rates. The programme is a concrete demonstration of the EU’s solidarity with its partners to help respond to the economic impact of the COVID-19 pandemic.

Paolo Gentiloni, Commissioner for the Economy, said: “I am pleased that the European Union has disbursed a further €50 million in financial support to the Republic of Moldova. This is a concrete demonstration of the EU’s commitment to helping Moldova respond to the economic and social impact of the COVID-19 pandemic. These funds, released following the fulfilment of agreed policy commitments, acknowledge the progress the country is making in implementing the measures needed to secure a more stable and prosperous future.”

The first €50 million disbursements to Moldova under this MFA programme took place in November 2020. Moldova has made remarkable progress to complete the policy conditions agreed with the EU for the release of this second and final €50 million disbursement under its current COVID-19 MFA programme. These included important measures to improve public financial management in the health sector, fight against corruption, measures to strengthen good governance and the rule of law, as well as to improve the business climate.

Moldova also continues to satisfy the pre-conditions as regards the respect of human rights and effective democratic mechanisms, including a multi-party parliamentary system and the rule of law. 

With this disbursement, the EU has successfully completed five out of the 10 MFA programmes in the €3 billion COVID-19 MFA package and disbursed the first tranches to all partners.

The Commission continues to work closely with the rest of its MFA partners on the timely implementation of the agreed policy programmes.

Background

MFA is part of the EU’s wider engagement with neighbouring and enlargement partners and is intended as an exceptional crisis response instrument. It is available to enlargement and EU neighbourhood partners experiencing severe balance-of-payments problems. It demonstrates the EU’s solidarity with these partners and the support of effective policies at a time of unprecedented crisis.

The decision to provide MFA to ten enlargement and neighbourhood partners in the context of the COVID-19 pandemic was proposed by the Commission on 22 April 2020 and adopted by the European Parliament and the Council on 25 May 2020.

In addition to MFA, the EU supports the partners in its Neighbourhood policy and the Western Balkans through several other instruments, including humanitarian aid, budget support, thematic programmes, technical assistance, blending facilities and guarantees from the European Fund for Sustainable Development to support investment in the sectors most affected by the coronavirus pandemic.

EU-Moldova relations

The COVID-19 MFA programme for Moldova is part of a comprehensive effort by the EU to help mitigate the economic and social impact of the pandemic and accelerate the recovery. This engagement is in accordance with the EU-Moldova Association Agreement, and with the overall Team Europe’s support, which builds on joint efforts of EU Member States. Among others, Moldova was one of the first countries to benefit from the COVAX facility and the EU vaccine-sharing mechanism, with over 1 million doses of vaccines distributed across the country.

In addition, the MFA disbursement comes shortly after the release of the €36.4 million grant of budget support as part of the EU Economic Recovery Plan for Moldova of up to €600 million for the next three years. In line with this plan and the Economic and Investment Plan for the Eastern Partnership, the EU will continue to support Moldova on its path to full economic recovery and further reform implementation.

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