● TUESDAY, October 2

Pavel Filip: Coming of EBRD to Moldova increases credibility of banking sector

Prime Minister Pavel Filip encouraged the European Bank for Reconstruction and Development (EBRD) to further support the Government’s reform agenda that delivers tangible results for the citizens and the national economy. The Premier had a meeting with the Managing Director for Financial Institutions of the EBRD Francis Malige. He thanked the EBRD for entering Moldova’s market and the Bank’s team for facilitating the entry of Banca Transilvania into the banking sector of Moldova and for participating in the International Consortium that intends to purchase 41% of the shares in Moldova Agroindbank (MAIB), which is a  bank of systemic importance. He noted such actions increase the credibility of the national banking system. For his part, Francis Malige confirmed the Bank’s readiness to develop the cooperation relations with the Republic of Moldova in areas of common interest, noting it is important to ensure an attractive business environment and to consolidate the project implementation capacities. Since the start of the EBRD’s operations in the country, the Bank has invested over €1.1 billion in almost 120 projects in Moldova’s financial, agribusiness, energy, infrastructure and manufacturing sectors. In 2017, the financial operations of the EBRD in Moldova came to  €130 million.

Fiscal reform will bring revenues of about 700m lei to population, opinion

The fiscal reform that came into force on October 1 this year will bring additional revenues of about 700 million lei to the population as the personal exemption was raised and a common taxation rate of 12% was set. The issue was developed in the talk show “Issue of the day” on Canal 2 TV channel. Besides the benefits for the ordinary citizens, the business entities are also advantaged as they will save about 1.7 billion lei as a result of the reduction in the social contribution rate from 23% to 18%. “These saving could be either invested or used to increase the salaries and such moves will stimulate economic growth,” stated Dorel Noroc, head of the Fiscal and Customs Policy Division of the Ministry of Finance. According to him, after October 1 the citizens should have higher salaries as their pays will be taxed according to a new system. As of October 1, a tax rate of 12% is put on the revenues of private individuals, as opposed to a rate of 7%  on incomes lower than 33,000 lei and a rate of 18% on incomes larger than this sum used until now. Taxi drivers with a monthly salary lower than 10,000 lei will pay a common tax of 500 lei a month. The personal exemption rose to 24,000 lei a year. The personal exemption for persons who remained with disabilities as a result of the war for defending the country’s integrity and of the Afghanistan war will be 30,000 lei.

Changes proposed to two decisions concerning activity of “Moldova IT park”

The administration of the information technology park “Moldova IT park” will convoke the assembly of resident companies with a notice that will be sent at least ten days beforehand. The assembly will be considered deliberative if it involves 25% of the total number of resident companies, including those that are represented at a distance, by using special software. The assembly’s decisions will be taken by the votes of 50+1 of the participants. The Ministry considers the reduction in the quorum at the assembly of residents, including of those represented at a distance, will remove particular blockages and will contribute to improving interaction of the park’s administration with resident companies. Under the other changes, the administration of the park will no longer be obliged to inform, in written form, the residents of the sending of information about the activity to the relevant authorities. The salary earners whose work contracts are suspended will be considered employed and the resident company will not pay for them the minimum tax of 30% of the average official salary. The first information technology park in Moldova started work at the beginning of this year. In August, “Moldova IT park” had as residents over 250 companies of the about 400 working in the IT sector in Moldova.

Contract for sale and purchase of 41.09% of shares in MAIB

The Government of the Republic of Moldova and the International Consortium of Investors (EBRD, Invalda INVL, Horizon Capital) on October 2 signed the contract for the sale and purchase of a stake of 41.09% in the commercial bank Moldova-Agroindbank (MAIB) SA. National Bank governor Sergiu Cioclea noted two years ago less than a quarter of the banking assets were managed by international groups with a good reputation. Now, with the coming of the consortium of investors led by the EBRD to MAIB, the figure exceeded 70%. This is incontestable progress and a giant step towards ensuring shareholder transparency and the functioning of the Moldovan banking system. “The financial consolidation of the national banking system is another important aspect of this transaction. With a market share of about 30%, MAIB is a systemic bank, which means the health of the whole system depends on its wellbeing,” stated Sergiu Cioclea.

Air Moldova airline sold

The commercial contest to privatize the Moldovan airline Air Moldova was won by Civil Aviation Group SRL that manages the Romanian airline Blue Air. The Public Property Agency said the value of the transaction is 1.2 billion lei. According to the Agency, 50 million lei was transferred to the state budget, while the rest of the sum will go to cover the debts of Air Moldova. The investor also pledged to solve the operational and development problems of the company. The state-run airline was privatized in a move to save it and to avoid its bankruptcy. According to the strategy for developing Air Moldova, Civil Aviation Group will launch seven new routes by the end of 2019 and four new routes in 2020. Long-distance flights, to the U.S., Canada and China, are to be provided in 2021. The frequency of flights to existing destinations will be increased. The number of operated aircraft will be gradually raised so that the fleet of Air Moldova will consist of 14 planes in 2021. Civil Aviation Group plans to extend the aeronautic personnel with ten additional crews until 2021. The number of pilots and crew members will rise from 180 at present to 380 in 2021. The investor will allocate about €3.5 million for forming and training personnel until 2023.

● WEDNESDAY, October 3

Veaceslav Ioniță: Moldova needs investments, not money

The Republic of Moldova needs now investments, not money. Currently, there is about 15 billion lei on the accounts of Moldovan banks, but this money cannot be used and the National Bank has to block this money, economic expert of the Institute for Development and Social Initiative “Viitorul” Veaceslav Ioniță stated in the talk show “Fabrika” on Publika TV channel, IPN reports. According to him, Moldova is bypassed by investments, but it needs these as the foreign investments bring not only money, but also management and technology. The banking system needs very clear internal procedures and rules so as to combat swindles and to avoid delinquent loans. “In two years, 14 billion lei was brought into our banking system in the form of deposits. The people trust the banks that have a total of 63 billion lei. On the other hand, loans are not extensively released and the money, instead of coming to banks and leaving, remains blocked,” said Veaceslav Ioniță, noting that National Bank has to take this money and pay interest to banks from the citizens’ money.

Farmers cannot sell grapes because these are of a poor quality, opinion

The grape harvest this year is rich and this gladdens the farmers, but these complain they do not have where the sell the grapes and if they sell these the price per kilogram is much lower. The farmers said that owing to the weather conditions, the quality of grapes is poorer this year. As the table grapes are usually exported, these do not meet the quality requirements. On the other hand, processors say the harvesting of technical sorts of grapes started two-three weeks earlier than usual and they thus started the processing campaign with much larger suppliers and this generated problems related to production and storage. According to specialists, the main problem is caused by grapes of the sort Moldova. Gheorghe Gaberi, president of the Association of Grape Producers and Exporters of Moldova, said the farmers didn’t look after the grapes well in the rainy months of this summer and thus have grapes of a poorer quality. These are cracked and moldy. The farmers do not have where to sell their grapes as the domestic market can assimilate a very small quantity and these cannot be exported because they do not meet the quality requirements. Nicolae Chiosa, production manager at Purcari Winery, said the winery he represents gathers grapes from all the farmers, small or large, without restrictions. The main problem is the fact that the technical sorts of grapes started to be collected two-three weeks earlier compared with the previous years and the companies experience problems as they do not have containers for storing the liquid under fermentation. According to the manager, Purcari Winery maximally processes technical sorts at its five processing points in Moldova and offers 4 – 4.5 lei per kilogram of grapes, which is a reasonable price dictated by the market.  In January – June this year, Moldova exported grapes to the value of approximately 10m lei. The largest volumes are sold to Romania, Russia and Belarus. Moldova can annually export 10,000 tonnes of grapes to the EU. This year the export quota was 60% used. This is 5,950 tonnes.

People urged to become involved in “Good Roads for Moldova II” project

The local public authorities are recommended to stage public consultations at the local level in the course of October and to engage the people in these so as to identify the roads sections of major importance that need to be repaired, The information will be transmitted to district councils and the councils, for their part, will pass it on to the Ministry of Economy and Infrastructure, which will include it in the “Good Roads for Moldova II” project. In a press briefing, Minister of Economy and Infrastructure Kiril Gaburici said 2,600 km of roads in all the country’s districts are to be repaired or built in 2019.A sum of 2 million lei will be allocated from the Road Fund for rehabilitating 1,600 km of roads. The other costs will be covered through international programs. State Road Administration chief Gheorghe Curmei noted that 830 km of roads of the 1,200 km included in the project “Good Roads for Moldova” have been repaired. The works on the other segments go on. The “Good Roads for Moldova II” project is expected to benefit 2.5 million people.

Economic growth was robust last year, central bank

The economic growth in Moldova last year was robust, but the internal consumption prices increased on a temporary basis. The Gross Domestic Product grew by 4.5% supported by the rise in domestic consumption and the agricultural production. The economic growth in the main destination countries of Moldovan migrants accelerated the volume of remittances that, for their part, contributed to a higher purchasing power of local consumers, National Bank governor Sergiu Cioclea stated in the meeting of the Parliament’s commission on economy, budget and finance that examined the 2017 annual report of the NBM. The report says the average annual variation rate of the consumer price index was 6.6%. This is by 0.2 percentage points higher than in 2016. The annual inflation rate of consumer prices rose from 3% in January to 7.3% in December 2017 under the influence of the prices of energy and food products and the rise in the tariffs of regulated services. Nevertheless, the annual basic inflation rate continued to evolve in the limits of the inflation target and was 4.8% on average. The balance of bank loans expressed in lei continued to decline, but at a slower pace, totaling 33.5 billion lei in December 2017, by 3.7% less compared with the corresponding period of 2016. The banks continued to attract deposits and the balance of these came to 59.9 billion lei at the end of 2017, up 9% compared with the corresponding period of 2016.

WTO Center for Government Procurement Notification and Information to work in Moldova

The Cabinet approved the creation of the World Trade Organization Center for Government Procurement Notification and Information that will be responsible for the presentation of statistical data. This will offer methodological assistance to contracting entities in publishing procurement announcements and will inform the competent central administrative authorities and business entities about eventual changes in the legislation on government procurement, adjustments or new opportunities of entering the markets of the member states. The Center will also appraise the amendments to normative documents that do not comply with the WTO Agreement on Government Procurement. The Ministry of Finance will be responsible for ensuring and cooridnaing the Center’s activity. The WTO Agreement on Government Procurement enables resident economic operators to take part in government procurement procedures in the member states, to present proposals and participate in the negotiation of bids of the states that are to become a party to the Agreement

Top Prize in Winemaking awarded to “Sălcuța”

The joint company “Sălcuța” SRL won the 2018 Top Prize in Winemaking for special accomplishments in making high-quality wine, propagating traditions and excellent quality of national wins, promoting Moldova’s image as a winemaking country on the international arena and contributing to the development of the Moldovan wine tourism. The company was created in Sălcuţa village of Căuşeni district in 1995. It is a member of the Winegrowing Association of the Delimited Geographical Region “Ştefan-Vodă”. The company’s wines are sold in Germany, Romania, Poland, the Czech Republic, Slovakia, the Baltic States, Japan, Belarus, Kazakhstan, Ukraine and some of the African states. “Sălcuța” SRL owns over 250 ha of vineyards, including of national sorts of grapes. For special merits in 2017 alone, the winery won ten medals at different national and international contests. The Top Prize in Winemaking is annually handed over on the National Wine Day.

● THURSDAY, October 4

Expert-Grup seeks investigation into accumulation of debts at Air Moldova

The independent think tank Expert-Grup calls on the authorities to investigate the way in which the debts accumulated at Air Moldova airline. In a position note on October 4, experts of the Center said it seems that Air Moldova was intentionally managed inefficiently so as to bring it on the verge of bankruptcy and to privatize it at a low price. An investigation by competent institutions, such as the National Anticorruption Center, can show if the company accumulated debts as a result of difficult conditions and increased competition on the market or as a result of the intention of some groups of interests. According to the experts, the communication about the privatization creates the impression that the authorities didn’t aim to attract investors. The documents related to the tender contest weren’t translated into a foreign language and the privatization was announced only through official press releases placed on the website of the Public Property Agency, not speaking about the very short period offered to potential investors for analyzing the documents. The experts consider the poor financial performance led to the over-indebtedness of the company. During only five years, Air Moldova accumulated new debts of over 625 million lei. The legal entity that took over the company was founded in August 2018 and has a share capital of 500,000 lei. It is not known if the company that is 49% owned by Blue Air Aviation and 51% owned by two private individuals has the funds needed to clear the debts of Air Moldova and how swiftly these should be settled.

NBM will continue to appoint temporary administrator as many times as need be

The National Bank of Moldova will be able to extend, in an exceptional way, the period during which a temporary administrator will work at banks as many times as need be. This is provided in a bill to amend the law on the remedying and resolution of banks that was adopted by Parliament in the final reading on October 4. The temporary administrator will be named for at most a year. The National Bank, as the competent authority, will determine to what extent the conditions for keeping a temporary administrator and for justifying such a decision before shareholders were met. According to the bill authors, Democratic MPs Andrian Candu and Sergiu Sârbu, now this period can be renewed in an exceptional way when the conditions concerning the appointment of a temporary administrator continue to be met. The current legislation does not say for how many times the work of a temporary administrator can be extended.

Facilitation of obtaining of work permit brings savings to investors, study

The foreign investors annually save up to 21 million lei as a result of the facilitation of the obtaining of work and stay permits in the Republic of Moldova, shows a study carried out by the International Finance Corporation that forms part of the World Bank Group. The reform promoted in the field envisions the simplified obtaining of the work and stay permits for highly qualified foreign workers, assigned workers, persons holding administrative posts, employees of companies from the list of investors of national importance and workers whose job can be found on the list of priority occupations for the labor market of the Republic of Moldova. According to the Government’s press service, the IFC study shows the number of documents required when submitting the file to the state authorities and the period of time needed for processing applications for permits were reduced. The applications can be now filed by the employer before the foreign worker arrives. Before the reform, the foreign worker was to come to Moldova to submit the application and to remain here to personally present additional documents if these were requested. Employment in that period was banned. Now the migrants who work in the Republic of Moldova and want to move to a new job based on a new contract can extend the temporary stay without being obliged to leave the county and to enter it again by presenting a new package of documents.

● FRIDAY, October 5

Banking performance rankings for August

Moldova Agroindbank, followed by Mobiasbancă and Moldindconbank, topped the rankings of commercial banks with the best performance in August. These excel in terms of profitability and market indicators, accounting for about 85% of the profit made in the sector and for 60% of all the banking assets. The rankings were compiled by experts of the independent think tank “Expert-Grup”. According to the experts, the main financial and prudential indicators of the commercial banks at the end of August remained constant, as during the previous few months. Even if new requirements for determining the level of capital and credit risk exposure took effect, the capital adequacy ratio remained at an appropriate level, of about 28.5% for the whole banking sector, with oscillations of 19.8% to 63% at individual level. The liquidity of the banking sector remained much higher than the regulated limits, reaching 56%. This means that over half of banks’ assets consist of liquid assets (state securities, NBM certificates or mandatory reserves). In such conditions, the banks continued to make profit. This rose to 1.2 billion lei at the end of August, being negatively influenced by the losses calculated by one bank, Eximbank.

GUAM states to exchange information about goods transported by air

The GUAM member states will cooperate in combating customs frauds associated with transactions with goods transported by air by exchanging information based on an interdepartmental protocol. The document was signed by the customs heads of the GUAM member states in Chisinau on October 5. According to the Customs Service of Moldova, through this protocol the sides will be able to better secure the commercial operations so as to prevent eventual damage to the economic interests of the represented states. During the first eight months of this year, the commercial relations between Moldova and the GUAM partner states intensified. To Ukraine alone, Moldova exported goods to the value of almost US$ 125 million, an increase of 46% compared with the corresponding period last year. Imports from this country rose by 34%. Imports from Azerbaijan increased significantly, about four times. Trade with Georgia also grew. Imports from this country in the period rose by 50%, while Moldova’s exports to Georgia by 22%.

Sellers of home appliances to set up electronic waste collection points

The business entities that produce or sell electronic and electrical equipment will be obliged to set up electronic waste collection points. The announcement was made by Minister of Agriculture, Regional Development and Environment Nicolae Ciubuc. “During the next three months, all the business entities that produce and sell electronic equipment and household appliances will be included in a database that will enable to monitor the collection mechanism. The database will enable to compare the sales of each operator and the quantity of collected waste so as to see if the entity gathered enough electronic waste,” the minister told a news conference. The operators will be obliged to collect a volume of waste of at least 5% of the sales and will benefit from particular environmental tax concessions. The producers and importers are to stimulate the population to yield the used devices.

Oleg Voronin allowed to raise shareholding in FinComBank to 50%

Oleg Voronin, one of the founders of FinComBank SA, obtained the preliminary consent of the National Bank of Moldova for increasing his shareholding in the bank to 50%, IPN reports, quoting a press release of FinComBank .“FinComBank is a bank with a majority domestic capital and this fact gladdens us and stimulates us to further make effort to realize the national investment potential so as to foster the country’s economic development,” stated Victor Hvorostovski, president of the Administration Board of FinComBank. Oleg Voronin is one of the five founders of FinComBank SA. Since 2010 he has headed the bank’s Administration Board.

Moldovan carriers could stay for over 90 days in Ukraine

The Moldovan carriers will be able to stay for over 90 days on the territory of Ukraine without violating the migration legislation. A protocol to the agreement on international road communication between the Government of Moldova and the Government of Ukraine, which was signed on March 20, 1993, was signed on the sidelines of the GUAM Summit held in Chisinau on October 5. The signing of the protocol was preceded by an extended format meeting of the delegations of the two states and was followed by a news conference given by the Prime Minister of Moldova Pavel Filip and his Ukrainian counterpart Volodymyr Groysman. Pavel Filip said the extension of the period of stay is designed to support the passenger carriers that repeatedly requested to solve the given problem that endangers their activity. In the meeting, the sides noted the significant progress made in the political and economic sectors, with concrete actions being taken in the recent past. As to other existing problems, the Premier said not all the frontier posts at the border with Ukraine have common checkpoints yet. The functioning of the Dnestrovsk hydroelectric power station is also being discussed and it was agreed that solutions in this regard will be identified by this yearend.