ECO-BUS WEEKLY DIGEST July 13-18. Most important Economy & Business news by IPN
● MONDAY, July 13
Health crisis is not an excuse for changes that should take place, Peter Michalko
The Head of the EU Delegation to Moldova Peter Michalko assured that the second tranche of €30 million of the macro-financial assistance provided by the European Union will reach Moldova in several days. He warned that the current crisis is not an excuse for the changes that should take place. “Those who will not do reforms, including the important reform in the justice sector, will be unable to offer the citizens an opportunity after the crisis caused by the coronavirus pandemic is overcome,” the official stated in an interview for RFE/RL’s Moldovan Service. “I think the money will come in several days, namely when the technical procedure is over. This is money intended for the state budget. It is the second tranche of the macro-financial assistance of the program signed in 2017. Regrettably, the second tranche of this assistance could be paid only now,” said Peter Michalko, noting the third tranche could not be offered already.
● TUESDAY, July 14
Iurie Fala: Many of our compatriots would come home gladly
Many of our compatriots would be glad to return home and to invest money in Moldova, but clear signals in this regard should come from the state and from the local authorities, showing that they know how to support the businesses, executive director of the Association of Fruit Producers and Exporters “Moldova Fruct” Iurie Fala said in a public debate entitled “How and who the European Union helps in the Republic of Moldova” , which was staged by IPN. The expert noted that regrettably, we do not have such signals now. “We witnessed good starts, but these didn’t develop appropriately. For example, what was done through the Rural Development Foundation produced an excellent result, but we should go on. However, the local councilors are often guided by shadow interests. We created the Agency for Intervention and Payments in Agriculture. This is a very important institution, but it didn’t achieve results similar to those of its Romanian counterpart. Our power is permanently changing and the reforms are thus implemented slowly and badly,” stated Iurie Fala.
Viorel Furdui: Until state does not set clear development course, money for development will not be available
The problem of access of Moldovan local authorities to European assistance stopped existing, the executive director of the Congress of Local Authorities of Moldova (CALM) Viorel Furdui stated in the IPN public debate “How and who the European Union helps in the Republic of Moldova”. According to him, on the contrary, the demand for foreign support exceeds the supply now. “After the last local elections, a large number of those who came to power are considering the possibilities of attracting funds with great interest. They try to take part in all the contests and use the available instruments to attract money for developing their communities,” said Viorel Furdui.
Passenger air traffic in first half of this year down 62%
The latest assessments of the influence of the pandemic on air transport show a considerable decline given that a large part of the fleets or national and foreign airlines has been grounded. According to the Civil Aviation Authority of Moldova, almost 507,000 passages had been transported in the first six months of this year, a decline of 62.3% compared with the corresponding period of 2019, when 1,343,938 passengers were conveyed. In January-February this year, there were transported 384,881 passengers. This is approximately 76% of the passenger traffic for the first six months of the year, up 7.5% on the corresponding period last year.
First six of 12 locomotives bought by CFM delivered to Chisinau
The first six locomotives of the 12 purchased by the Republic of Moldova with the assistance of European financial institutions got to Chisinau. In his speech, Minister of Economy and Infrastructure Sergiu Railean said this is a first step towards reorganizing Moldova’s Railways (CFM), which is covered by the rail transport system reform. This investment will reduce consumption and costs for maintaining locomotives, will diminish the transportation time and will increase the speed of movement, said the official. The locomotives were produced by the Kazakh company General Electric, which won the tender contest held in 2018. The value of the contract for the purchase of the 12 new locomotives is €45 million. The money was lent by the EBRD and EIB.
● WEDNESDAY, July 15
State Tax Service launches VAT refund program
The State Tax Service said that a VAT refund program was launched and the subjects registered as VAT payers have the right to the refund, from the state budget, of the VAT registered in the deduction balance for the subsequent period. According to the program, the period for which the refund is possible is the period between this May, when the state of emergency was lifted, and this December. During the crisis determined by the pandemic, the business entities can use the balance of the deducted VAT sum.
Decline in remittances can lead to impoverishment of families that are dependent on these, discussions
Remittances and personal transfers are very important for the Republic of Moldova because they represent about 17% of the GDP. The lack of these can lead to the impoverishment of the families that are dependent on remittances. The politicians and regulatory authorities are encouraged to facilitate the transmission and receipt of remittances. The subject was discussed within a working group coordinated by the United Nations Development Program (UNDP). National Bank vice governor Cristina Harea said the personal remittances in 2019 constituted US$1.3 billion. The personal transfers reach Moldova through international money transfer systems, classical bank transfer system and through bilateral systems between countries. In 2020, remittances declined by about 12% in March and April, but they grew by about 25% in May. The rise is probably due to the change of the transmission channels. Earlier, a part of the money was sent through units of transport. When transport was suspended, the persons turned to electronic transfers. Remittances from Russia decreased by about 26% compared with the corresponding period last year. Remittances from Germany, Italy, France, Turkey, and Ukraine also declined.
Wizz Air suspends all routes between Moldova and Italy until July 31
Wizz Air decided to suspend all its routes between Moldova and Italy until July 31 inclusive owing to the travel restrictions imposed by the Italian authorities on all the flights to Moldova. The passengers who booked tickets will be informed about the suspension of flights automatically by email if they booked directly on wizzair.com or through the mobile application. The clients will automatically receive 120% of the price paid for the ticket in the WIZZ client account. This sum can be used during the next 24 hours to buy products and services provided by Wizz Air.
Government removes enterprise from list of facilities proposed to be privatized
The executive decided to strike off “Sanfarm–Prim” SA from the list of facilities proposed for privatizations. This enterprise with majority state capital was chosen to receive, store and distribute the humanitarian aid and donations provided to the Ministry of Health, Labor and Social Protection during the COVID-19 pandemic. Presenting the draft decision in the Government’s meeting, director general of the Public Property Agency Gennady Țepordei said it was established that the public health system of Moldova during the pandemic acutely needs a pharmaceutical storehouse to ensure the state’s pharmaceutical security in crisis situations and “Sanfarm-Prim” SA should thus remain under state control.
Changes made to “First House” program
The Government approved the diminution of the initial own contribution within the “First House” program from 10% to 5% of the purchase price of the apartment. Simultaneously, it is increased the age limit of persons who can take part in the program from 45 to 50 years. There will also be excluded the conditions concerning the lack of dwelling or ownership of homes not larger than 9 m2 per family member. The persons who own homes, but intend to purchase a larger house will also be able to apply to the program.
● THURSDAY, July 16
Termoelectrica continues to modernize heat networks
Children from 27 education institutions and the dwellers of over 350 apartment buildings situated in Botanica district of Chisinau as of this year will enjoy consistent heating services of a higher quality, Termoelectrica said in a press release. The heat supplier noted that it performed works to modernize an important section of primary heat pipes on the portion of Sarmizegetusa St between Cuza-Vodă Blvd and Burebista St, with a length of 840 meters and the diameter of 700 mm. The company’s director general Veaceslav Eni during a visit to the site said Termoelectrica undertook to improve the services provided to the over 500,000 consumers, to follow a road to modernization. “We succeed in doing this here too. These works will enable us to provide heating services of a higher quality, minimizing the risk of disconnections in the cold season,” stated Veaceslav Eni.
NBM concerned about method of handling criminal case against employees
The National Bank of Moldova (NBM) expresses its profound concern about the procedural search actions and the method of handling a criminal case that was recently started against employees holding key posts. In a press release, the NBM says the case refers to a decision taken by the central bank in accordance with the commitments undertaken by the Republic of Moldova by the memorandum of understanding with the IMF, in the context of the banking system reform done by the Bank during almost four years. The goal is to ensure shareholder transparency, healthy corporate governance in banks and a regulatory framework that is needed to ensure a stable banking system.
Results achieved in rural areas with EU support to be disseminated within campaign
Rural development remains in the focus of the EU’s attention, stated the Head of the Delegation of the European Union in Chisinau Peter Michalko, announcing the launch of the information campaign “EU for Rural Moldova”. This is a project designed to propagate the results and changes achieved in rural areas with the EU’s support. “Within this campaign, we would like to see more interested sides so that the rural areas realize the existing opportunities and invite communities to promote initiatives on the spot as, who else if not they, know the necessities and challenges in their localities and how they can be overcome with the support of the European Union. Because only together we become stronger,” stated the European ambassador. Peter Michalko noted the EU during many years has supported rural communities through projects that would help the people in villages feel better. The goal of the campaign launched today is for a larger number of people to learn about what the European Union does to contribute to the development of rural communities in Moldova. “We offer money and you implement projects for your future,” said the ambassador.
● FRIDAY, July 17
€20m in loans from EU transferred to Finance Ministry
The Republic of Moldova received the €20 million in loans of the second tranche of the EU macro-financial assistance. The money was transferred to the accounts of the Ministry of Finance on July 16. The €10 million in grants will be disbursed in the course of next week. According to Deputy Prime Minister Sergey Pușcuța, Minister of Finance, the money was disbursed because Moldova fully fulfilled the conditions stipulated in the memorandum of understanding, which included important conditions concerning financial sector governance, public sector, fighting of corruption and money laundering, energy sector and business climate, implementation of the DCFTA.
Compensation and assistance for plane passengers in connection with COVID-19
The Civil Aviation Authority of the Republic of Moldova encourages the travellers to accept vouchers instead of a refund for cancelled flights, which can be used for other flights. The air operators are encouraged to show flexibility in the provision of travel services by changing the flight data without imposing penalties or by issuing vouchers in case of refusal to embark passengers onto flights to countries that imposed travel restrictions on Moldovans. In a circular, the Civil Aviation Authority says the vouchers will enable the passengers to travel on the same route and in the same conditions as those specified in the initial reservation.
Winemaker relates case of swindle and ignoring of court decisions
The manager of a wine company based in Bucovăț town of Strășeni district Eugen Bogatyi said that for over two years he has tried to obtain a debt of 4 million lei from a company operating in southern Moldova to which he sold his products. He won the case in all the courts of law and there is a final court decision in this regard. Things have worsened because he cannot work and cannot pay money to the farmers from whom he buys grapes. In a news conference, Eugen Bogatyi said that SRL “Vintage Avenue” was registered in 1999 and since 2005 it has processed grapes and made wine in bulk. As they do not have their own vineyards, they buy grapes from farmers from neighboring villages, who represent about 400 peasant farmsteads. The company annually purchases by up to 2,000 tonnes of grapes and makes wine, this being its main business. Since 2005 until 2018, the company hadn’t had debts to the farmers from whom grapes were bought.
Call to authorities and PGO: Don’t allow farmers to be mocked at!
Representative of about 400 peasant farmsteads call on the authorities and the prosecutor general to intervene and help them in the situation experienced by them. The farmers said they work assiduously and grow grapes and sell them to a winemaker from Strășeni district so as to earn their living. Now they cannot get their money owing to a debt that the winemaker cannot recover from a company based in southern Moldova even if there is an irrevocable court judgment and he thus cannot pay them for the supplied grapes. Grigorii Manolache from Bobeica commune and other villagers grow grapes for the company operating in Bucovăț. In a news conference the man said the people lost hope as they are openly robbed. He called on the prosecutor general to take measures and oblige the company to repay the debt to the winemaker so that he, for his part, could pay the farmers.
Long-lasing trials can generate bankruptcy, winemaker
When a company owner goes to court to seek justice and the trial lasts longer than planned, the business can go bankrupt, said the manager of “Vintage Avenue” Eugen Bogatyi, who had been in litigation for three years and could not continue production in the period and could not implement the planned investment projects. He ultimately won the case by an irrevocable court decision, but the defendant didn’t repay the debt of 4 million lei to him. In a news conference, Eugen Bogatyi said that since 2005 it has processed grapes and made wine in bulk in Bucovăț town of Strășeni district. In the winter of 2017, he signed a contract for the sale of wine with a company based in a southern district. Until February 2018, the agreed quantity of wine was supplied to this. The company was to make payments to the winemaker until May, but didn’t do it. In June 2018, he sued the company in order to recover the debt of about 6 million lei. A definite judgment in this case was passed by the Supreme Court of Justice in October 2019. In the period, the entrepreneur fulfilled his obligations to the state and regularly paid taxes.
● SATURDAY, July 18
President Dodon announces major investments in irrigation systems
One of the national projects for farmers will be to restore the irrigation systems in the Nistru and Prut Rivers in which billions of rubles was invested in the Soviet period, said President Igor Dodon. “Agriculture in the Republic of Moldova without irrigation does not have any chance of survival. We have experienced drought this year and the forecasts for the future are not the best ones,” the official said in the program “President Responds”. “It is urgently needed to rehabilitate all these systems and we will come up with a national program to this effect. At the current stage, we will make major investments in the given infrastructure. We should allow irrigation from artesian wells, as we allowed from ponds and rivers,” stated President Dodon.
