The Delegation of the European Union to the Republic of Moldova has issued a clarification on the issue of European Union Budget Support operations. The European Union underlines the importance of a governing coalition being formed as soon as possible. Upon assuming office, a new government should send without delay a request to the International Monetary Fund (IMF) for negotiations on a new IMF program. The approval of such a program would restore trust in Moldova’s macro-financial stability, and pave the way to the resumption of budget support disbursements under EU assistance, the EU Delegation says in a press release, quoted by IPN.
The EU Delegation says budget support payments are subject to the fulfilment of all conditions laid down in the agreements signed with the Government of the Republic of Moldova, in terms of sector policy objectives, macro-financial stability as well as respect of budgetary oversight and transparency principles.
Well-known issues around the Moldovan banking sector have raised concerns as regards macro-financial stability. In this context, the view of the European Union is that a program with the IMP would provide the guarantees that these concerns are being addressed.
European Union budget support payments can only be processed once the IMF program is approved. As a program cannot be requested by an interim government, this issue is an additional, serious reason to accelerate the on-going process of formation of a new governing coalition.
