If the Republic of Moldova does not receive the macro-financial assistance from the EU, if this is suspended as the European Parliament recommended last week, Moldova’s budget deficit for this year will double, economic expert Sergiu Gaibu stated in the program “People’s Council” on 10TV channel, IPN reports.
According to him, the budget deficit is now about 5 billion lei. If the macro-financial assistance is not provided, this will rise to over 10 billion lei. “The government will have to review the budget and to rebalance it. Most of the times, they partially solve the problem with internal refinancing and partially with state securities. They could find a foreign financing alternative or could review some of the expenditure positions,” stated Sergiu Gaibu. He noted that the costs will probably not be reviewed given that it is an electoral year. The suspended assistance included budget support that had no direct connection with particular projects.
Economic expert Sveatoslav Mihalache wondered what will happen to Moldova’s exports if the relations with the EU are deteriorated. According to him, the Republic of Moldova now depends on the EU market. The country’s budget also depends on the exports that go to the EU. “Our exporters have redirected their operations from the CIS market to the European Union. We saw this during the past few years and the effect is beneficial to the Republic of Moldova,” stated the economist. According to him, the suspension of the macro-financial assistance creates a number of risks for the future.
On July 5, the European Parliament adopted a resolution by which it recommends the European Commission to suspend any foreseen payments of macro-financial assistance and budget support to Moldova. The MEPs consider any decision on the future payments should be taken only after the planned parliamentary elections and on condition that these are held in accordance with the internationally recognized standards and are assessed by specialized intentional organizations.
