The state-owned Air Moldova will benefit from a financial aid of 75 million lei (approx. 4,38 million USD) from the state enterprise of the Chișinău International Airport, reports Mold-Street.
The assistance was recently approved by the Competition Council of Moldova with the aim to save the national airlines from failing to operate its flights. Air Moldova reportedly faces the problem of lack of financial resources, which causes the “slowdown of the company because of the impossibility of timely payment of the maintenance costs for the airplanes” and thus, delay of flights.
Three big Moldovan banks- Victoriabank, Moldova-Agroindbank and Mobiabanca,- informed Air Moldova about it not meeting the capital sufficiency criteria set by the National Bank for loan beneficiaries.
Only in the first 8 months of 2017, Air Moldova has a record of net losses worth 111,5 million lei, having its capital worth -2,9 million lei (minus 2,9 mil). The Competition Council found out that the losses have increased since 2013- from 604,6 million lei to 1,12 billion lei in August 2017. The management of the Moldovan airlines did not give an explanation for the company’s losses.
The respective Council motivated that closing down Air Moldova would seriously damage the air traffic to EU and CIS destinations, adding that the next competitor, Wizz Air, is not able to fill in the gap.
After 6 months, the Economy and Infrastructure Ministry (who proposed the given assistance), together with the Agency for Public Property, Aeronautic Civil Authority, and the Chișinău International Airport, will have to present either a restructuring plan or one of dissolving Air Moldova. Previously, Economy Minister Octavian Calmîc declared that Air Moldova is not be privatized until 2019.
Air Moldova operates flights to 29 destinations: Athens, Barcelona, Bologna, Brussels, Bucharest, Dubai, Dublin, Florence, Frankfurt, Istanbul, Krasnodar, Larnaca, Lisbon, London, Madrid, Milano, Moscow, Paris, Rome, Venice, Verona, Vienna, Sankt-Petersburg and Torino, plus the 5 season flights – Antalya, Heraklion, Tivat, Corfu and Zakynthos.
3 UN agencies will receive 1 million dollars for supporting the most vulnerable COVID-19 patients from Moldova
Three United Nations (UN) agencies from Moldova – UNICEF, UN Women and the International Organisation for Migration (IOM) will receive one million dollars from the UN COVID-19 Response and Recovery Multi-Partner Trust Fund to support the country in its fight against COVID-19 pandemic, according to a press release of the UN in Moldova.
The agencies are involved in a programme lasting for 6 months and aiming to ensure effective and accessible health services for COVID-19 patients in Moldova, with a focus on vulnerable and disadvantaged persons.
Mainly, the funds will be used for purchase of personal protective equipment for health and non-health institutions, such as hospitals, police, border police, penitentiaries, social assistance centres and others “in order to ensure efficient and safe provision of public services during the COVID-19 crisis.”
Additionally, such supplies as sanitisers, protective supplies, food packages (for at least two months), soap, etc. will be transmitted to the most vulnerable groups of women from Moldova, including women affected by violence, women living in shelters, HIV and AIDS positive women, disabled women, and Romani women.
According to the Ministry of Health, Labour and Social Protection data, out of the total of 7147 confirmed cases of COVID-19 in Moldova, 59% are represented by women. Most infected women are between 40 and 69 years old. 67 infected women are pregnant.
“The global epidemic of COVID-19 poses a clear risk to the health and well-being of the Republic of Moldova. Within this project, the control and management of the infection at the border control points of the country will be strengthened by updating and disseminating of international standards-compliant operating procedures for detection, notification, isolation, management and referral of travellers potentially infected with coronavirus, delivering necessary training for the border police officers, providing necessary supplies to screen the incoming citizens to prevent the spread of the disease,” is mentioned in the press release.
The United Nations in Moldova has been supporting the Government of Moldova and the Ministry of Health, Labour and Social Protection in three main areas: health system preparedness, technical support and capacity building, and risk information and communication on COVID-19 under the guidance of WHO Moldova.
The United Nations (UN) COVID-19 Response and Recovery Multi-Partner Trust Fund is a UN inter-agency finance mechanism launched by the UN Secretary-General to support low- and middle- income programme countries in overcoming the health and development crisis caused by the COVID-19 pandemic. The Fund’s assistance targets those most vulnerable to economic hardship and social disruption.
The fund is currently supported by the Governments of Norway, Denmark, the Netherlands, and Switzerland.
Photo: Iran Press
Coronavirus drains the wine industry
Until the coronavirus pandemic, the Moldovan wine industry was flourishing. In 2019, Moldova exported 15,67 million decalitres of wine, while the total exports’ value reached 3,086 billion lei. Most of the Moldovan wine arrived in China, Romania, and the Russian Federation.
In a country where winegrowing accounts for 7% of total exports and 3% of the country’s GDP, the coronavirus pandemic has hit small producers hard, disrupting the plans of the big players of the industry as well.
About five wineries were forced to temporarily cease their activity, as their employees were massively infected with COVID-19.
On April 25, villages of Etulia and Cismichioi, from Vulcanesti district, were put into quarantine. That happened after four locals who were employed at Etulia Winery, which is part of Bostavan Wineries Group, tested positive for COVID-19. Next, it was decided to test all employees and their relatives for coronavirus – a total of 174 persons, out of which 77 were infected.
“Wine products are not essential”
83% of the wine produced in the Republic of Moldova last year was exported. Data for March showed that export volume decreased by 9% and export value by 11%, as compared to the same period in 2019.
According to the evaluations made by the National Office for Vine and Wine (NOVV), this year exports of wine products may decrease by 30% or even 50%, as compared to 2019.
Head of the Policy and Regulation Service in the Field of Wine Products Sector within the Ministry of Agriculture, Liliana Dascaliuc, said that exports were reduced by 20% in the first three months of 2020, although the data are preliminary. “Winegrowing will be affected in the same way as the entire agriculture, even the whole economy. Wine and wine products are not essential,” commented the expert.
Vlada Vutcarau is the co-founder of the ATU urban winery, a family business that produces up to 40 000 bottles a year. The coronavirus pandemic and the state of emergency have reduced sales by 90%, while the tourism activity has zero income. “We are talking about huge losses. We continue to produce, but the revenues come from sales, not from production,” explained Vlada.
However, there is a positive aspect – according to the young woman – the business has moved online and “we focused on the local producer. When buying local, we invest in our people and the money stays in the country.”
88% of Moldovan companies are negatively affected by the declining demand for products and services, said a study of the US Chamber of Commerce.
So, the authorities have implemented some measures to support economic agents, including wineries. These measures include reducing the VAT rate from 20% to 15% for the hotels, restaurants and catering sector.
The co-founder of ATU winery, Vlada Vutcarau, claimed that the supporting state measures do not help them that much.
“We do not receive visitors. Therefore, we do not generate VAT. This reduction does not provide any benefit at the moment, because we do not record any income anyway. We do not have the revenue, from which to save those 5% and distribute them to salaries.”
She also believes that the measures announced by the authorities represent political games and the state avoids taking responsibility. “Maybe it can’t afford it.”
Trouble never comes alone, as the co-founder of the winery believes. This year’s drought worries her just as much. “Time will tell us what we will be able to harvest this autumn. There could be an even bigger crisis,” she said.
Corn instead of grapes
On April 10, the Commission for Emergency Situations adopted Provision No. 16. One of the included regulations concerned the subsidy mechanism for economic agents: the enterprises that have totally or partially stopped their activity would be granted a subsidy in the amount of the paid income tax, along with other social contributions.
The director of the Milestii Mici winery, Viorel Garaz, wondered if the state has financial resources to subsidise entrepreneurs. “As long as the economic agents do not work at all or carry their activity to a very small extent, their contributions to the state budget are very small. If the subsidies are not paid immediately, the companies will shut down their activity and will no longer need them,” explained the specialist.
The Milestii Mici winery produced almost 1,2 million bottles of wine in 2019, out of which almost 60% were exported. Following the pandemic hit, the company recorded a 60% decrease in sales on the local market. Exports fell by 40% and, since March 8, the winery has not been visited by any tourists.
“Our plans for one year or two have been turned upside down: to extend the restaurant, to acquire electric vehicles, to plant vines, to open a network of stores. The saved money went to rent, salaries and utilities’ payment.”
COVID-19 diminished the budget for planting vines. Milestii Mici winery decided to sow 36 ha of corn instead of the Feteasca variety of grape.
Also, the winery had to terminate the contracts with several retired employees. The overall number of workers was reduced from 206 to 142. “We cannot pay the indemnity for technical unemployment to pensioners. They at least have a pension, but young people who stay at home with their children … We decided to pay them at least something,” said Viorel Garaz.
The underground galleries of Milestii Mici are located at a depth of 85 m and have a total length of 200 km. They store almost 2 million bottles, which is why it has reached the Guinness Book of Records as the world’s largest wine collection by number of bottles.
Challenges over time
The state of emergency in the Republic of Moldova is not the first hit to winemakers. In 2006, Russia banned the import of wines because it would not have complied with sanitary regulations. At that time, almost 80% of the total wine production was exported to Russia. Estimates showed that the embargo losses exceeded $ 100 million.
Next, in 2013, three months before signing the Association Agreement with the European Union, Russia put again an embargo on Moldovan wines.
“It is a crisis that affects us all and we have to contribute by consuming more local wine. Behind a bottle of wine is an entire industry: there are vine growers, people who work in production, winemakers, people in the laboratory. Besides, there is the glass industry, the cardboard packaging industry, there are people who deal with label design and so on. Buying a bottle of wine, in fact, maintains an entire chain of several sectors,” commented the author of the finewine.md blog and wine expert, Andrei Cibotari.
This text is a translation. The original article here.
Photo: Wine of Moldova
Warnings of travel companies from Moldova – a moratorium required and protests to be organised
The tourism industry in Moldova is heavily affected by the pandemic crisis. Beside the fact that the sales decline has broken all records, more and more tourists demand trips cancelling and refund of advance payments.
Taking into consideration the current situation, business entities operating in the tourism sector claimed they can’t afford paying tourists the money for contracts signed before mid-March back. They called for a moratorium to be imposed and announced a demonstration to be organised on the first day after the state of emergency is lifted in the Republic of Moldova – May 15.
Through the #SOStourismMoldova event, tourism companies together with the National Association of Travel Agencies aim to ask the Government, the Parliament and the President of the country to get involved in finding ways of solving the tourism sector problems.
“We ask the authorities to introduce a moratorium for a period of 540 days for the service contracts signed until March 17 or an emergency bill to be voted by the Parliament, which would allow us to make the refunds within an extended period of up to 540 days,” is specified in the request.
Travel agents and tour operators organising international trips informed that the collected through the signed contracts money have been already transferred to various service providers abroad. Without a moratorium, there are high chances of tourism businesses’ insolvency and, as a consequence, a whole industry crash is possible.
“We do not ask for state money. We demand a moratorium. We want to return the tourists’ money and not to become insolvent. We want to recover and continue working at home.”
As an answer, Prime Minister Ion Chicu announced the tourism companies about the Government’s intention to support their lending capacity by offering state guarantees in the amount of up to 50% of the value of the necessary pledge and interest subsidies. “In the coming days, the Executive will examine a set of measures in this regard,” it is said in a press release of the Government.
Women from the left bank of the Dniester
The village of Doroțcaia is located on the eastern side of the Dniester River, near a border crossing point installed...
Critical changes blocked in Moldovan politics – the Constitutional Court dictated the separation of powers
On July 7, the Constitutional Court (CC) of the Republic of Moldova issued a decision, according to which, the dissolution of the...
Protecting public health or violating freedom of movement? Protests in Transnistria
On July 02, a protest has been registered in Ribnita (a city in the Transnistrian region). Dozens of city residents...
COVID-19 statistics: Moldova’s harmful figures that still can break the European records
In June, the COVID-19 pandemic advanced rapidly in the Republic of Moldova. The number of contaminated persons increased by 92%...
The effect of Russia’s constitutional changes on the Transnistrian region
A nationwide referendum is held in the Russian Federation between June 25 and July 1 in order to amend the constitution...
A natural water cycle? The floodwater dangers that are neglected in Moldova
Due to heavy rains in Ukraine, Romania and the Republic of Moldova, the employees of the General Inspectorate for Emergency...
Record remittances sent to Moldova during the COVID-19 pandemic – expert’s explanation
The remittances sent by Moldovans from abroad reached a record level in May 2020. The last time there was a...
Survey// Popular COVID-19 fake news in Moldova and people’s (dis)information sources
More and more Moldovans have to deal with fake news every day. Unfortunately, a part of population believes them. According...
Older people’s rights and dignity must be protected amid the COVID-19 pandemic
By Alanna Armitage Across Europe, from Spain to Serbia, care homes for older people have become hotspots of COVID-19 infections....
The Russian loan agreement declared unconstitutional – escaping the trap of excessive debt or missing a chance to overcome the crisis?
The judges of the Constitutional Court of the Republic of Moldova (CC) declared the Agreement between the Government of Moldova...