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Economy

The National Bank of Moldova releases a coins set of 1, 2, 5 and 10 lei

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The set is presented as a fold, inserted into a pouch, containing 2 coins in circulation with a nominal value of 1, 2, 5 and 10 lei, writes BancaMea. The coins included in the set are accepted as payment on the territory of the Republic of Moldova at their nominal value.

The minting set is marketed through the licensed banks in the Republic of Moldova, which establishes the selling price independently, but this cannot be higher than 3% than the price established by the National Bank of Moldova.

The sets were issued in a print run of 5000 copies, a communique of the National Bank of Moldova announces.

The current sale price of the set (valid until March 31, 2019) is 135 lei, according to the NBM website.

Source: bnm.md

Economy

Moldova will receive two grants of about 12 million dollars from the USA

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The United States will offer two grants of a total amount of $ 12 million to Moldova, under two previously signed between the USA and Moldova agreements. According to a press release of Ministry of Finance of the Republic of Moldova, the money will be offered in the form of technical assistance.

The first grant will supplement the total amount of the Assistance Agreement between the Government of the Republic of Moldova and the Government of the United States of America for a more efficient and responsible democratic governance, which amounts $ 6.6 million, reaching a total value of $ 50.8 million.

The main objective of the program is to ensure a democratic, efficient and responsible government in the Republic of Moldova, by involving citizens in the decision-making process of the Government, ensuring a more transparent and responsible judiciary, and creating conditions for local public authorities to be more involved in solving citizens’ needs.

The second grant represents a supplement to the Assistance Agreement between the Government of the Republic of Moldova and the Government of the United States of America for the increase of trade and investments in key sectors, which adds up $ 5.4 million, reaching a total value of $ 48,4 million.

The objective of the program is to increase competitiveness, improve the business climate and the regulatory framework, to increase access to finance, to improve the skills of the workforce and to fight corruption.

Recently, the US Ambassador to the Republic of Moldova, Dereck J. Hogan, emphasised that external partners want to see a Government implementing reforms, otherwise the country will be lacking financial support. “We want the current Government to continue implementing reforms in the same way. External partners insist on continuing to implement reforms. If external partners, including the US, will not see progress, of course we will stop funding,” the ambassador said.

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Economy

The state budget for the next year includes a deficit of 7 billion lei. Why this could be a problem?

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On November 27th, the Government of the Republic of Moldova approved the draft budget for the next year. The document displays revenues of over 44 billion lei and expenditures of 51 billion lei. Thus, a budget deficit of 7.4 billion lei was calculated, whereas a lower amount- 6.1 billion lei – was previously presented at the meeting of the National Commission for Collective Consultations and Negotiations on November 25th.

Assurances vs doubts

“The budget deficit difference of 1.3 billion lei is the equivalent of an eventual investment loan for the development of road infrastructure,” explained Minister of Finance Sergei Pușcuța. The minister explained that the deficit will be financed by loans on the internal market, issuance of securities ​​and privatisation of public assets, yet he didn’t provide too many details about it. “The real budget deficit is 2.6 billion lei only,” added Pușcuța.

The internal state debt is expected to not exceed 25.7 billion lei, and the external state debt is forecasted to be 41.8 billion lei at the end of the next year, according to the projections made by the Ministry of Finance.

On the other hand, former Minister of Finance Natalia Gavriliță criticised the decision of the current Government, saying that it is taking irresponsible actions. “The Government increased overnight the state budget deficit to 7.4 billion lei, or 3.25% of GDP. The draft budget was approved without the Government publishing the annexes or the informative notes to the budget. The Minister of Finance avoided to specify how this deficit will be financed. These decisions, which will affect our country in the coming years, are taken with maximum irresponsibility,” the former Minister of Finance said.

The main public expenditures

The main focus of the future public expenditures are investments in infrastructure, creating jobs and increasing people’s well-being, according to an official statement made on the Government official page. That is why, a series of social projects and expenditures were approved, such as granting an unique support for people that receive a low level of pensions and allowances, increasing the cold weather allowance, pension indexation for former military corps, etc.  “We are a Government that is focused on people. That is why we came up with these projects. There is financial coverage for these projects,” said Prime Minister Ion Chicu. The coverage, as the head of Government mentioned, will be provided from the estimated difference in social security revenues, which are expected to be 2 billion lei higher than the revenues in 2019.

Money from abroad

Next year, the Government expects to receive more than 8 billion lei from abroad, according to the annex to the state budget, prepared by the Ministry of Finance, out of which 109.7 million lei in the form of grants received from other states’ Governments, 1.6 billion from donations received from international organisations and 6.3 billion lei from foreign received loans.

At the same time, the US Ambassador to the Republic of Moldova, Dereck J. Hogan, emphasised that external partners want to see a Government implementing reforms, otherwise the country will be lacking financial support. “The PSRM-ACUM coalition had more potential to implement the necessary reforms. Now we expect this to be done by the current Government. […] We want the current Government to continue implementing reforms in the same way. External partners insist on continuing to implement reforms. If external partners, including the US, will not see progress, of course we will stop funding,” the ambassador said.

“Moldova has now a new government, and the need for genuine reforms remains,” stated Federica Mogherini during a speech at the European Parliament Plenary debate on eastern neighbourhood developments. So the external source of financing for Moldova remains conditioned and, therefore, is not certain.

World Bank projections

According to the World Bank economic projections for the Republic of Moldova, the budget revenues was going to reach 29.5% of GDP (66.25 billion lei), while the budget expenditures was going to represent 31.6% of GDP (70.97 billion lei) in 2020. Consequently, a lower budget deficit was expected – 4.72 billion lei. The public external debt was forecasted to raise to 146.43 billion lei, as compared to its actual value of 122.74 billion in 2018. Thus, it is not clear yet how the Ministry of Finance calculated the value of 41.8 billion lei for the state external debt  and whether the values included in the state budget, as well as the Government promises to cover the budget deficit reflect the reality.

Next, there draft budget law will be examined in up to 3 readings in the Parliament, based on an explanatory statement of the Government and the reports’ presentation by specialised committees.  If it’s the case, the necessary changes will be made and the state budget law will be adopted.

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Economy

The 3rd EU assistance package for Moldova approved – the amount and programmes to which the budget support is directed

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On October 31st, the European Commission has approved a new disbursement of about €25 million, that representing assistance to the budget of the Republic of Moldova in order to support the Moldovan government in delivering key reforms in the areas of policing, fight against corruption and money laundering, agriculture, as well as rural development, according to a press release of the European Commission.

“Today’s assistance package – the fourth since July – demonstrates the EU’s strong and continued commitment to the reform path of Moldova. It should be seen as recognition of the sustained efforts made by the Moldovan government to address problems within vital areas such as justice and the rule of law for the benefit of the Moldovan people. The EU stands ready to further assist this important process conditional to tangible results, especially on the much-awaited justice reform,” Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations, declared.

The previous payments were made as following:

The amount of €24.85 million corresponds to budget support disbursements under two programmes:

  • Support to Police reform: particularly, for modernisation of police structures, women participation in the police force, pilot community policing projects, strengthening the rapid-reaction capacities of its intervention teams to emergency calls and reducing the intervention time, building new anti-corruption units within the police to actively promote and implement the principles of zero tolerance to corruption;
  •  ENPARD Moldova – Support to Agriculture and Rural Development: namely, for enhancing the competitiveness of Moldovan agri-food sector by supporting farm investment, creation of producer groups and helping agri-food establishments trade with the EU, helping agricultural producers to comply with international and EU quality standards on food safety and supporting rural development initiatives, initiated at the local level.

According to the platform of EU-funded technical assistance projects in the Republic of Moldova, eu4moldova.md, our country is the largest beneficiary of EU aid per capita in the European neighbourhood, which means that the European Union invested 619 851 649 in the Republic of Moldova until this moment.

The experts believe that in the absence of DCFTA (Deep and Comprehensive Free Trade Area), the Moldova’s state budget would have lost over 7 billion lei in revenues, and the private sector would have lost at least 320 million euros in investments in fixed capital, according to a  report issued by the Expert-Group representatives and the Institute for European Policies and Reforms.

Still, the potential offered by the EU-Moldova Association Agreement has not yet been fully reached, as a lot is still to be done, especially when it comes to functioning of democratic institutions and strengthening the rule of law and the independence of justice.

“The prevention and combating of high-level corruption has been mainly characterised by selective justice practices or by lack of finality, despite the consolidation of the normative and institutional framework by creating the Anti-corruption Prosecutor’s Office and by reforming the integrity system. Efforts aimed at police reform were recorded, being also supported by our development partners. However, the depoliticization of law institutions remains an arrearage. Corruption is still perceived as the main problem of the society. […] All of these have affected the EU-Moldova dialogue, including the use of the full support from the European Union,” the Expert-Group report showed.

Photo: ec.europa.eu

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