The World Bank Country Manager in Moldova Alex Kremer said the World Bank has reserved $45 million for support to the 2015 budget, but it cannot make such a large payment into the Government budget until decisive action to resolve Moldova’s banking sector problems are seen.

In a statement expressing his opinion, Alex Kremer says it would be illogical and irresponsible for the World Bank to transfer its shareholders’ money into the budget through the front door while there is a risk of even larger sums of public money being lost out of the back door through fraud and corruption in the banking sector.

The World Bank is only allowed to give budget support to any country when the national budget is sound and reflects policy decisions. Government will have to issue Government bonds to protect depositors from the banking fraud, and Moldova’s 2015 budget does not yet include the cost of interest on these bonds. The national budget is not therefore ready to receive budget support from the World Bank.

“We are advising the authorities that the three banks currently under special administration, Banca de Economii, Banca Sociala and Unibank, should be liquidated. Any attempt to nationalize and recapitalize Banca de Economii would not only increase the direct cost to the Government budget, but again would create a risk of taxpayers’ money being used to cover hidden losses and potential future losses,” stated Alex Kremer.

He noted that Moldovan citizens are entitled to better public services and they deserve well-paying jobs. “The average daily income of Moldovans was only 77 lei in 2013. One person in six had too little money for their basic needs. Schools need upgrading, health centers need equipment and three quarters of the rural population still do not have piped water. So Moldovans need public money to be spent well and businesses to be allowed to get on with creating jobs,” said the World Bank Country Manager in Moldova.