● MONDAY, March 30
Differing opinions about rise in electricity charges
Representatives of energy companies insist on raising the tariffs on energy resources at a time when representatives of civil society consider the rises are unjustified. Contradictory opinions were stated in the talk show “Reply” on Prime TV channel. Ion Comendant, adviser to the president of Gas Natural Fenosa, said that initially the company intended to ask increasing the electricity charges by 75%. Alexandru Mija, head of the Tariffs Division of the National Agency for Energy Regulation (ANRE), said the Agency will not manage to approve the tariffs by April 1. “We are now examining the applications of “Moldova-Gaz” and “Gaz Natural Fenosa” to increase the tariffs from two viewpoints – if the rises are justified and if the charges can be raised gradually,” he stated. The president of the Association of Energy Consumers of Moldova Nicolae Mogoreanu accused the ANRE of not being functional. “If this Agency had accepted the requests to raise tariffs immediately, the consumers wouldn’t have been put in the situation to pay higher tariffs at once. The sudden rise in charges will negatively affect the economy. The economic entities will be put in the situation to reduce production, the number of employees, etc.” he stated.
Postal authorities of Moldova and Romania launch cash transfer service
The postal authorities of Moldova and Romania have launched a cash transfer service with a fixed commission of €5 for transfers of at most €1,000. According to a press release of the Ministry of Information and Communication Technology, the transferred money will reach the addressee within 24 hours. In Moldova there are over 1,000 post offices, while in Romania – more than 5,500.
Banks involved in stealing of money must be liquidated, EU ambassador
The Head of the EU Delegation to Moldova Pirkka Tapiola consider the situation in the financial-banking sector of the country is worrisome and a thorough investigation is needed so as to punish those who stole the money and to recover at least a part of the losses. According to the ambassador, a solution is to liquidate the banks involved in the theft, transferring people’s deposits to other banks. On March 30, Pirkka Tapiola presented the 2014 European Neighborhood Policy Progress Report for Moldova, which shows that the country is confronted with serious problems in the financial sector that pose a risk to stable economic development.
● TUESDAY, March 31
Small farmers will be able to purchase irrigation equipment in installments
The Millennium Challenge Account (MCA) Moldova and the 2KR (Increase of Food Production Project) Project Implementation Unit signed a financing agreement for launching the irrigation equipment leasing program with a budget of US$2.2 million. The program is intended for small and medium-sized farmers who do not have access to bank loans because of lack of security. The farmers will be able to purchase equipment to the value of up to US$100,000 from 2KR. The buyer will pay initially 25% of the price of the equipment, while the rest of the money during three years. If the beneficiary does not manage to pay the installments in three years, 2KR will analyze each case apart and could offer a grace period. The program supports the investments of farmers in irrigation equipment and in obtaining high value added products.
Two more power suppliers ask raising charges
The electric power suppliers SA “Red Nord” and SA “Red Nord-Vest” asked increasing charges by 50% and 61% respectively. As in the case of the others operators that asked the National Agency for Energy Regulation (ANRE) to raise the charges, the two suppliers invoked the fluctuations on the currency market. In the debates staged by the ANRE on March 31, the representative of “Red Nord” Anastasia Munteanu said that following the non-adjustment of the tariffs, the losses sustained by the company as a result of the depreciation of the leu in 2012-2014 came to 293 million lei. If the asked rise is approved, the end-users will pay 2.42 lei/kWh instead of 1.62 lei/kWh. “The new charges should be agreed as soon as possible as we will be unable to pay for the purchased power soon,” she stated. The representative of “Red Nord-Vest” Daniel Chiviriga said the main factors that lead to the necessity of increasing tariffs are the rise in the average purchasing price of power, the depreciation of the leu against the main foreign currencies and the modification of the tariffs for power transportation services. If the new charges are approved, the clients of “Red Nord-Vest” will pay 2.71 lei/kWh instead of 1.68 lei/kWh.
Moldova encouraged to strengthen results achieved in energy sector
Moldova achieved results in reforming the energy sector, but these results should be strengthened, said participants in the event held to mark the completion of the technical assistance project for implementing the Sector Policy Support Program – Support to Reform of the Energy Sector (TA-SPSP). According to Deputy Minister of Economy Tudor Copaci, the major goal of the project was to support the Government and the Ministry of Economy as well as the local institutions to increase the security of the energy supply, to improve energy efficiency and to promote the use of renewable sources of energy and co-generation.
● WEDNESDAY, April 1
Expert about decline in Moldova’s external debt
The National Bank said the external debt of Moldova has decreased. At the end of 2014, the public and publicly guaranteed external debt came to US$1.731,05 billion (- 2.5% on the end of 2013), while the non-guaranteed private debt to US$4.763,83 billion (-2.7%). Economic expert Tatiana Lariushin said that things are much more serious beyond these figures. A country doing reforms needs a growing budget and a rise in debts when profound reforms are implemented would be more logical in Moldova’s case. Tatiana Lariushin stated that Moldova receives a lot of grants and technical assistance from the development partners, but no country developed based on grants only. Serious reforms that really change people’s lives are done by investments. To attract investments, profound structural reforms are needed. “What money can we settle this debt with is the second question as, in the absence of a memorandum with the International Monetary Fund, there are great risks and uncertainty as regards our capacity to clear this debt. A lot of things are very unclear. The 2015 budget hasn’t been yet agreed and this affects first of all the businesses as they cannot plan their costs, not speaking about the development of the business or of the country,” she stated.
Nine persons applied for post of CFM director
Nine persons filed applications to take part in the contest to fill the post of director general of the state-run railroad company IS “Calea Ferata a Moldovei” (CFM), the Ministry of Transport and Road Infrastructure has said. The nine persons who submitted applications by the March 31 deadline are: Viorel Pantelei, Vasile Dabija, Nicolae Midone, Sergiu Panuta, Ion Cirstea, Vladimir Cebotari, Nicolae Armas, Grigore Vornicescu, and Sergiu Dragoman. The contest consists of two stages: the examination of CVs and the interview within which the candidates will have to present a clear view on the economic situation at the CFM, the company’s infrastructure and the rolling stock and the development objectives, including as a written conception on at most ten pages.
New energy efficiency project launched in Chisinau
The public institutions of Chisinau municipality and those from the hoisting sector could become more energy efficient when a new project launched by the Ministry of the Environment with the support of UNDP on April 1 is implemented. Within the project, there will be selected buildings where thermal insulation works and, if necessary, window replacement, heating system modification and other works will be executed. The services can be accessed based on a financing mechanism that does not involve direct investments on behalf of the beneficiary. Nicolae Zaharia, manager of the project “ESCO Moldova – Transforming the Market for Urban Energy Efficiency in Moldova by Introducing Energy Service Companies”, said the beneficiaries will be selected in concert with the local authorities. The buildings will be rehabilitated by ESCO (Energy Services Company) companies that will have access to the guarantee fund made available within the project to enable taking out loans from banks. The investments will be recouped in several years through the bills paid by the beneficiaries.
● THURSDAY, April 2
VAT for users of e-Invoice will be refunded in 10 days
The period during which the VAT for economic entities using the e-Invoice system will be refunded will be reduced from 30 days to 10 days. There will also be eliminated the chamber fiscal inspection. The new regulations are to be presented to the Government for approved by May 15. According to the note, the Tax Inspectorate can see all the information about the invoices issued and signed through the e-Invoice system in real time and in a centralized way. Given the free access to fiscal information in electronic format, there is no need to carry out chamber fiscal inspections.
Grant of over US$5m for young farmers
Parliament ratified the agreement for financing the Inclusive Rural Economic and Climate Resilience Program between Moldova and the International Fund for Agricultural Development. Under the agreement, Moldova will receive a grant of over 28 million Danish kroner (about US$5.2 million). Minister of Agriculture and Food Industry Ion Sula said the grant will be used to finance about 400 projects of young entrepreneurs working in the agricultural sector, especially in rural areas, and to create at least 600 new jobs.
Parliament ratifies financing contract for “Moldova’s Orchard” project
The European Investment Bank (EIB) offers Moldova a loan of €120 million for implementing the project “Moldova’s Orchard”. The financing contract was ratified by Parliament in two readings on April 2. Minister of Agriculture and Food Industry Ion Sula said in Parliament that the loan is provided for modernizing and restructuring the horticultural sector. The project will have a positive impact on the Moldovan agricultural producers as these will have access to cheaper financial resources compared with those provided by banks.
● FRIDAY, April 3
National producers can gratis promote their products on 999 platform
The national producers can promote their products free of charge on the online platform www.market.999.md, by the end of this year, within a project launched by Simpals and the Ministry of Economy. Simpals director general Dmitri Voloshin, who owns the announcements portal 999.md, in a news conference said the national producers need to be supported in the current period of economic crisis. The launched project enables the sellers to place goods on a common platform, while the visitors can compare their prices and choose the most suitable ones. The visitors of the portal can make purchases directly from the producer, without involving the managers of the platform. “Such projects exist in most of the countries, but what is important is that we want very much to help the national producers. We offer them the possibility of publishing advertisements gratis. If the crisis continues, we will extend the period during which the producers will be able to place their offers free. We already have ten national furniture and clothing companies that advertise on our platform and are satisfied with the results,” said Dmitri Voloshin.
Government intends to negotiate new program with IMF
Prime Minister Chiril Gaburici handed over a letter addressed to the Director of the IMF’s European Department Poul Thomsen to the head of the IMF mission Ivanna Vladkova-Hollar. The letter informs about the Government’s readiness to initiate the negotiations on a new program of cooperation with the IMF. “In a move to strengthen macroeconomic stability, continue the structural reforms and diminish the negative impact of the external factors on the country’s economic development, we respectfully ask initiating the negotiations on a new program of assistance and invite the IMF mission to pay a visit to Chisinau in the near future so as to discuss the new program,” reads the letter.
Government approves budget-fiscal policy for 2015
The size of the non-taxable income for private individuals this year will be 29,640 lei, as against 27,852 lei in 2014. The personal exemption will also rise, from 9,516 to 10,128 lei, while the exemption from maintained persons will grow from 2,124 to 2,256 lei. The Government approved the budgetary-fiscal policy for 2015 in its April 3 meeting. As regards VAT, the reduced quota of 8% will be used only in the case of growers and importers or living animals intended for reproduction, of fruit, vegetables and grains. The economic entities can voluntarily register as VAT taxpayers if they intend to provide taxable supplies of goods and services.
2015 draft state budget law approved
The 2015 draft state budget law, approved by the Government on April 3, provides for an expenditure of 34.315 billion lei and for incomes of 30.338 billion lei. The incomes will represent 25.6% of the GDP, an increase of 0.7 percentage points compared with 2014. The budget deficit will be almost 4 billion lei. Under the draft law, the agriculture subsidization fund will be 610 million lei, 110 million lei of which will come through the EU-funded Sector Budget Support on Economic Stimulation in Rural Area (ESRA) Project. 180 million lei will be allocated through the Competitive Agriculture Project financed by the World Bank for supporting the producers affected by the bans imposed by Russia on the export of agri-food products. More than 177 million lei is to be transferred to the Energy Efficiency Fund.
Discussions with Transnistrian side resumed within working group on economic matters
After almost half a year, the discussions with the Transnistrian side were resumed within the working group on economic matters. The working group, headed by Deputy Minister of Economy Octavian Calmac, met at the OSCE office in Tiraspol. The Ministry of Economy said the discussion on farmers’ access to their farmland in Dubasari district was resumed. The Transnistrian side informed that contracts were signed with the authorities of Dubasari district, which ensure farmers’ access to their farmland based in rental. According to the representatives of Transnistria, permits were issued in February for cultivating 5,000 ha of land, which is 90% of that farmland. The subject will be clarified in subsequent meetings following an exchange of data.
● SATURDAY, April 4
Parliament should not adopt budgetary-fiscal policy in variant approved by Government, farmers
The farmers are dissatisfied with the budgetary-fiscal policy approved by the Government, especially because the agriculture subsidization fund wasn’t raised as the farmers asked. At the beginning of next week, farmers associations will make effort to convince Parliament that the budgetary-fiscal policy should not be adopted in the variant proposed by the Government. Otherwise, they will have to resort to protests. Alexandru Slusari, chairman of the Union of Agricultural Producers Associations “UniAgroProtect”, has told that, in principle, the farmers are not against increasing the VAT on particular agricultural products from 8% to 20%, but the fact that the agriculture subsidization fund remained 610 million lei, when the farmers asked that it should be 1.2 billion lei, is serious.
State social insurance contribution the same as last year
The Government approved the 2015 state social insurance budget that provides for incomes of 13.4 billion lei, an increase of 12% on last year, and for an expenditure of 13.5 billion lei, up 11.6% on 2014. The mandatory state social insurance contributions will be 9.8 billion lei, by 6% higher than last year. In 2015, the state social insurance contribution will remain 29%, 23% of which will be paid by the employer, while 6% by the employee. The contribution paid by the employer for the social insurance of employees from civil aviation, who are considered to be working in special conditions, will represent 33%. For the persons employed based on individual work contract in the agricultural sector, the contribution will remain 22% of the labor remuneration fund, 6% of which be subsidized from the state budget.
The state social insurance costs will represent 76.6% of the expenditure. The largest costs were planned for paying pensions. In 2015, the average pension will increase by 66.47 lei. The monthly allowance for raising the child younger than three will rise by 191.19 lei on average. The social welfare spending will grow by 36% on a year before. The number of recipients of social benefits will rise by 1,239 on 2014, while that of recipients of cold-month allowances – by almost 67,000.
Deductions for automobile costs of enterprise heads will be limited
The tax deductions for costs incurred for maintaining and repairing vehicles used by heads of enterprises, executive directors and other managers will be restricted, IPN reports, quoting a bill with amendments that result from the 2015 budgetary-fiscal policy approved by the Government. Thus, deductions will be allowed from the costs for one vehicle used by each subdivision of the economic entity. It is also suggested taking into account the VAT paid for maintaining and repairing only one vehicle of each subdivision of the economic entity. “This measure meets the good practices existing in the EU, which we should gradually implement,” said Minister of Finance Anatol Arapu. He gave an example, saying in Moldova there are registered 450 Porche cars, half of which in the name of economic entities. “It’s clear that these vehicles aren’t used in the production activity. That’s why the state budget should not cover these maintenance costs,” he stated.
Government anticipates decline of up to 1% in GDP
The executive forecast a decrease of up to 1% in the Gross Domestic Product (GDP) after analyzing the macroeconomic and budgetary-fiscal framework for 2015. Last year the economic growth was 4.6%. The main causes for the diminution of the GDP will be the economic declines in the region, especially in Russia, and the worsening of the situation in Ukraine. In these countries that are Moldova’s commercial partners, the demand for Moldovan produces will decrease. This will determine the passivity of the business sector and the diminution of the internal consumption of the population.
