Other donors disapprove of lack of memorandum with IMF, analyst

Valeriu Prohnitschi, executive director of the Independent Analytical Center “Expert- Grup”, considers most of the bilateral or multilateral donors disapprove of the lack of a policy memorandum with the International Monetary Fund (IMF). “If a country does not have relations with the IMF, other international donors will not want to provide loans or grants to the given country,” the analyst said in an interview for Radio Free Europe, quoted by Info-Prim Neo. According to Valeriu Prohnitschi, even if the parameters required by the IMF are often restrictive, the objective reality obliges many states to sign contracts with this organization. Even ruling left parties ask the IMF for support when they face budget deficits. On the other hand, the IMF releases loans under more advantageous conditions than on the free foreign markets or financial markets. As to the IMF mission that is in Chisinau, the expert said the International Monetary Fund wants to be sure that the loans offered by it will be repaid and thus assesses a series of macroeconomic or structural conditions that a country must meet, including a controllable inflation, regulatory reforms, creation of official reserves, etc. Valeriu Prohnitschi said the relations between Moldova and the IMF were sinusoidal, with rises and falls. He reminded that during five years Moldova had no dealings with this organization, but the relations warmed up after the Filat Government was installed. The expert stressed that Moldova should not exceed its indebtedness capacity and expose itself to foreign dangers. “We should better reduce the internal risks and try to diversify them,” he said. The mission of the European Department of the International Monetary Fund led by Nikolay Gueorguiev will work in Chisinau until February 16. It will hold discussions with the authorities in the context of the second review of Moldova’s program with the IMF under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements