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Economy

The Russian loan agreement declared unconstitutional – escaping the trap of excessive debt or missing a chance to overcome the crisis?

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The judges of the Constitutional Court of the Republic of Moldova (CC) declared the Agreement between the Government of Moldova and that of Russia, providing for a loan of 200 million euros to be allocated to the Moldovan budget, to be unconstitutional. The decision was announced yesterday, as the adopted law on the ratification of the agreement, along with 2 related Government’s decisions have gained the same status.

The bill on the ratification of the agreement was adopted shortly after the Russian Federation and the Republic of Moldova had signed a loan agreement, on April 17. It was adopted with the vote of 56 socialist and democrat members of the Moldovan Parliament.

At the same time, the exercise of the constitutionality control of some provisions was requested by several opposition MPs, after the legality and feasibility of the conditions for granting the loan have been questioned by experts and civil society.

See also: Experts: What is wrong with the credit agreement signed with the Russian Federation?

In the Opinion on the conditions of the EUR 200 million loan offered to the Republic of Moldova by Russian Federation published by the Watchdog experts, Sergiu Tofilat and Valeriu Pasa, is mentioned that the purpose of the loan was to cover Moldova’s budget deficit and to finance joint projects of the agreement parties.

The agreement included abusive provisions though, according to the published opinion. First, the agreement provided that Russian companies would be contracted for projects funded by the loan. “Currently, no public information about the nature of the projects, the benefits for Moldova, the costs and the list of Russian companies is available. Given Russian widespread disreputable precedents and Igor Dodon’s obedience to Vladimir Putin, it is probable that Dodon will promote companies controlled by Putin’s people, which will execute the projects at higher costs in order to misappropriate a part from the loan,” is mentioned in the opinion.

Moreover, the loan agreement stated that the Republic of Moldova would have to undertake to repay other loans received from Russian Federation, in addition to the 200 million euros loan. Therefore, “there is a risk that Russian companies controlled by Putin’s entourage would register companies in the Republic of Moldova in order to borrow funds from Russian banks, under the guarantee of the Russian government, while the payment obligations would be registered as Moldovan national debt to Russian Federation.”

All debts would have been repaid at an interest rate of 2% per year, plus 2% annual penalty*150% to the entire debt, including  to the interest and penalties for other loans, that is while applying a penalty to another penalty is an illegal provision that can’t be applied in Moldova.

Taking into consideration that the loan agreement didn’t provide for the jurisdiction that would litigate any loan related disputes and that other loans including private debts could be simply added up to the consolidated national debt, that could create difficulties in a potential international litigation against the Russian Federation. “If Russia claims that the Agency, as a creditor of Moldova, is a separate entity from the Russian government, the Republic of Moldova will have to prove in front of an international court that all the actions of this creditor in relation to the debt of Moldova are dictated by Kremlin,” said the Watchdog experts.

Moldova would risk to have its access blocked to foreign financing by the Russian Federation. “According to IMF rules, lending is prohibited to countries with outstanding debts to other countries.” And Moldova would have been gather an impressive foreign debt as a result of the agreement.

In such a way, the experts concluded that the abusive conditions of the loan agreement would have allowed for a considerable increase of the Moldovan national debt to Russian Federation, which could be used as a control instrument in Moldova’s strategic infrastructure areas, as it previously happened in the natural gas sector.

The only Moldovan citizen that could benefit from this agreement would be President Igor Dodon. “The EUR 100 million second tranche, scheduled by October 31, 2020, may lead to the re-election of Igor Dodon as president,” Watchdog representatives opinated.

Prime Minister Ion Chicu and President Igor Dodon denied all accusations and repeated the same words in front of Moldovan people:

“This agreement does not involve any financial or political risks. This agreement does not jeopardise the economic security of the country, nor does it affect other agreements.”

As a consequence of the CC decision to declare the loan agreement unconstitutional, it’s ratification was blocked along with the funds that won’t reach the Moldovan budget. “In the context of the crisis, we can get through this year without Dodon’s airports and the roads around them. We can reduce the expenses for them by the amount of the Russian loan,” suggested Former Minister of Finance, Natalia Gavrilita.

According to the World Bank projections regarding Moldova’s economic development, the unfolding economic crisis will lead to a contraction of Moldova’s economy in 2020. “If the coronavirus outbreak is largely contained by mid-2020, with a recovery thereafter, in the baseline scenario by year-end, the economy will still have to deal with a recession of 3.1 percent. […] Increased social needs and unemployment, as well as fiscal stimulus through public investment, will bring fiscal deficits above the historical average in the years to come,” is mentioned in the report.

However, a prolonged disruption of economic activities until August 2020 would cause Real GDP growth to fall by 5.2%, which would be the biggest drop since 2009. “Weaker growth will further strain public finances faced with already large financing needs at 15 percent of GDP. A higher number of returning migrants, high social spending needs and high unemployment may put additional strain on labor market conditions and create further fiscal pressures,” said the World Bank projections that were updated recently.

Photo: Feodora Chiosea | Getty Images

Jurnalistă that speaks English very well. De aia Maria are grijă că prietenii noștri străini să nu piardă nicio informație valoroasă despre actualitatea din Moldova.

Society

“They are not needy, but they need help”. How Moldovan volunteers try to create a safe environment for the Ukrainian refugees

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At the Government’s ground floor, the phones ring constantly, the laptop screens never reach standby. In one corner of the room there is a logistics planning meeting, someone has a call on Zoom with partners and donors, someone else finally managed to take a cookie and make some coffee. Everyone is exhausted and have sleepy red eyes, but the volunteers still have a lot of energy and dedication to help in creating a safe place for the Ukrainian refugees.

“It’s like a continuous bustle just so you won’t read the news. You get home sometimes and you don’t have time for news, and that somehow helps. It’s a kind of solidarity and mutual support,” says Vlada Ciobanu, volunteer responsible for communication and fundraising.

The volunteers group was formed from the very first day of war. A Facebook page was created, where all types of messages immediately started to flow: “I offer accommodation”, “I want to help”, “I want to get involved”, “Where can I bring the products?”, “I have a car and I can go to the customs”. Soon, the authorities also started asking for volunteers’ support. Now they all work together, coordinate activities and try to find solutions to the most difficult problems.

Is accommodation needed for 10, 200 or 800 people? Do you need transportation to the customs? Does anyone want to deliver 3 tons of apples and does not know where? Do you need medicine or mobile toilets? All these questions require prompt answers and actions. Blankets, sheets, diapers, hygiene products, food, clothes – people bring everything, and someone needs to quickly find ways of delivering them to those who need them.

Sometimes this collaboration is difficult, involves a lot of bureaucracy, and it can be difficult to get answers on time. “Republic of Moldova has never faced such a large influx of refugees and, probably because nobody thought this could happen, a mechanism of this kind of crisis has not been developed. Due to the absence of such a mechanism that the state should have created, we, the volunteers, intervened and tried to help in a practical way for the spontaneous and on the sport solutions of the problems,” mentions Ecaterina Luțișina, volunteer responsible for the refugees’ accommodation.

Ana Maria Popa, one of the founders of the group “Help Ukrainians in Moldova/SOS Українці Молдовa” says that the toughest thing is to find time and have a clear mind in managing different procedures, although things still happen somehow naturally. Everyone is ready to intervene and help, to take on more responsibilities and to act immediately when needed. The biggest challenges arise when it is necessary to accommodate large families, people with special needs, for which alternative solutions must be identified.

Goods and donations

The volunteers try to cope with the high flow of requests for both accommodation and products of all kinds. “It came to me as a shock and a panic when I found out that both mothers who are now in Ukraine, as well as those who found refuge in our country are losing their milk because of stress. We are trying to fill an enormous need for milk powder, for which the demand is high and the stocks are decreasing”, says Steliana, the volunteer responsible for the distribution of goods from the donation centers.

Several centers have been set up to collect donations in all regions of Chisinau, and volunteers are redirecting the goods to where the refugees are. A system for processing and monitoring donations has already been established, while the volunteer drivers take over the order only according to a unique code.

Volunteers from the collection centers also do the inventory – the donated goods and the distributed goods. The rest is transported to Vatra deposit, from where it is distributed to the placement centers where more than 50 refugees are housed.

When they want to donate goods, but they don’t know what would be needed, people are urged to put themselves in the position of refugees and ask themselves what would they need most if they wake up overnight and have to hurriedly pack their bags and run away. Steliana wants to emphasise that “these people are not needy, but these people need help. They did not choose to end up in this situation.”

Furthermore, the volunteer Cristina Sîrbu seeks to identify producers and negotiate prices for products needed by refugees, thus mediating the procurement process for NGOs with which she collaborates, such as Caritas, World Children’s Fund, Polish Solidarity Fund, Lifting hands, Peace Corps and others.

One of the challenges she is facing now is the identifying a mattress manufacturer in the West, because the Moldovan mattress manufacturer that has been helping so far no longer has polyurethane, a raw material usually imported from Russia and Ukraine.

Cristina also needs to find solutions for the needs of the volunteer groups – phones, laptops, gsm connection and internet for a good carrying out of activities.

Hate messages

The most difficult thing for the communication team is to manage the hate messages on the social networks, which started to appear more often. “Even if there is some sort of dissatisfaction from the Ukrainian refugees and those who offer help, we live now in a very diverse society, there are different kind of people, and we act very differently under stress,” said Vlada Ciobanu.

Translation by Cătălina Bîrsanu

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Important

#WorldForUkraine – a map that shows the magnitude of the world’s actions against Russian aggression

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The international community and volunteers from all over te world have launched #WorldForUkraine as a platform that shows the magnitude of the world’s actions against the Russian aggression. In a digital world – it is an interactive map of public support of Ukrainians under the hashtag #WorldForUkraine – rallies, flash mobs, protests around the world. In the physical dimension – it is your opportunity to take to the streets and declare: “No to Putin’s aggression, no to war.”

„Today, along with the political and military support, emotional connection with the civilized world and truthful information are extremely important for Ukraine. The power to do it is in your hands. Join the #WorldForUkraine project and contribute to the victorious battle against the bloodshed inflicted on Ukraine by the aggression of the Russian Federation”, says the „about the project” section of the platform.

Go to the streets — Tell people — Connect and Unite — Become POWERFUL

Volunteers have launched #WorldForUkraine as a platform that shows the magnitude of the world’s actions against Russian aggression. In digital world – it is an INTERACTIVE MAP of public support of Ukrainians worldforukraine.net under the hashtag #WorldForUkraine – rallies, flash mobs, protests around the world. In the physical dimension – it is your opportunity to take to the streets and declare: “No to Putin’s aggression, no to war.” There you may find information about past and future rallies in your city in support of Ukraine. This is a permanent platform for Ukrainian diaspora and people all over the world concerned about the situation in Ukraine.

So here’s a couple of things you could do yourself to help:

* if there is a political rally in your city, then participate in it and write about it on social media with geolocation and the hashtag #WorldForUkraine

* if there are no rallies nearby, organize one in support of Ukraine yourself, write about it on social media with geolocation adding the hashtag #WorldForUkraine

The map will add information about gathering by #WorldForUkraine AUTOMATICALLY

Your voice now stronger THAN ever

All rallies are already here: https://worldforukraine.net

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Important

How is Moldova managing the big influx of Ukrainian refugees? The authorities’ plan, explained 

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From 24th to 28th of February, 71 359 Ukrainian citizens entered the territory of Republic of Moldova. 33 173 of them left the country. As of this moment, there are 38 186 Ukrainian citizens in Moldova, who have arrived over the past 100 hours. 

The Moldovan people and authorities have organized themselves quickly from the first day of war between Russia and Ukraine. However, in the event of a prolonged armed conflict and a continuous influx of Ukrainian refugees, the efforts and donations need to be efficiently managed. Thus, we inquired about Moldova’s long-term plan and the state’s capacity to receive, host, and treat a bigger number of refugees. 

On February 26th, the Ministry of Labor and Social Protection of Moldova approved the Regulation of organization and functioning of the temporary Placement Center for refugees and the staffing and expenditure rules. According to the Regulation, the Centers will have the capacity of temporary hosting and feeding at least 20 persons, for a maximum of 3 months, with the possibility of extending this period. The Centers will also offer legal, social, psychological, and primary medical consultations to the refugees. The Center’s activity will be financed from budget allocations, under Article 19 of Provision no. 1 of the Exceptional Situations Commission from February 24th, 2022, and from other sources of funding that do not contravene applicable law.

The Ministry of Inner Affairs and the Government of Moldova facilitated the organization of the volunteers’ group “Moldova for Peace”.  Its purpose is to receive, offer assistance and accommodation to the Ukrainian refugees. The group is still working on creating a structure, registering and contacting volunteers, etc. It does not activate under a legal umbrella. 

Lilia Nenescu, one of the “Moldova for Peace” volunteers, said that the group consists of over 20 people. Other 1700 registered to volunteer by filling in this form, which is still available. The group consists of several departments: 

The volunteers’ department. Its members act as fixers: they’re responsible for connecting the people in need of assistance with the appropriate department. Some of the volunteers are located in the customs points. “The Ministry of Inner Affairs sends us every day the list of the customs points where our assistance is needed, and we mobilize the volunteers”, says Lilia Nenescu. 

The Goods Department manages all the goods donated by the Moldavian citizens. The donations are separated into categories: non-perishable foods and non-food supplies. The volunteers of this department sort the goods into packages to be distributed. 

The Government intends to collect all the donations in four locations. The National Agency for Food Safety and the National Agency for Public Health will ensure mechanisms to confirm that all the deposited goods comply with safety and quality regulations. 

The Service Department operates in 4 directions and needs the volunteer involvement of specialists in psychology, legal assistance (the majority of the refugees only have Ukrainian ID and birth certificates of their children); medical assistance; translation (a part of the refugees are not Ukrainian citizens). 

According to Elena Mudrîi, the spokesperson of the Ministry of Health, so far there is no data about the number of  Covid-19 positive refugees. She only mentioned two cases that needed outpatient medical assistance: a pregnant woman and the mother of a 4-day-old child. 

The Accommodation Department. The volunteers are waiting for the centralized and updated information from the Ministry of Labor about the institutions offering accommodation, besides the houses offered by individuals. 

The Transport Department consists of drivers organized in groups. They receive notifications about the number of people who need transportation from the customs points to the asylum centers for refugees.

The municipal authorities of Chișinău announced that the Ukrainian children refugees from the capital city will be enrolled in educational institutions. The authorities also intend to create Day-Care Centers for children, where they will be engaged in educational activities and will receive psychological assistance. Besides, the refugees from the municipal temporary accommodation centers receive individual and group counseling. 

In addition to this effort, a group of volunteers consisting of Ana Gurău, Ana Popapa, and Andrei Lutenco developed, with the help of Cristian Coșneanu, the UArefugees platform, synchronized with the responses from this form. On the first day, 943 people offered their help using the form, and 110 people asked for help. According to Anna Gurău, the volunteers communicate with the Government in order to update the platform with the missing data. 

Translation from Romanian by Natalia Graur

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