● MONDAY, November 2
World Bank provides US$80m for improving local roads in Moldova
The World Bank’s Board of Executive Directors approved a US$80 million financing to the Republic of Moldova for the Local Roads Improvement Project, which will support the Ministry of Transport and Road Infrastructure in rehabilitating and upgrading around 300 km of local roads. According to a press release of the World Bank, the funding aims to provide safe and sustainable local road accessibility to education, health and market facilities along selected corridors, with a focus on improving roads that will enable children from rural areas to better access consolidated schools - “hub schools” - resulting from the optimization of the school network. The project aims to address the country’s need for an efficient transport system that would facilitate citizens’ mobility, improved access to social and economic services, and greater trade in international and domestic markets.
EU supports development of risk-based supervision system for financial market of Moldova
The European Union has launched a new Twinning Project in the field of prudential regulation and supervision of the non-banking financial market in Moldova. The project is financed by the European Union to the tune of €1,3 million. According to a press release of the EU Delegation to Moldova, the Twinning Project “Development and consolidation of the National Commission for Financial Markets’ operational and institutional capacities in the field of prudential regulation and supervision” will be implemented by the Polish Financial Supervision Authority (KNF) to the benefit of the National Commission for Financial Markets (NCFM).
● TUESDAY, November 3
First five applicants for post of National Bank governor questioned within commission
The special commission for selecting candidates for the post of governor of the National Bank of Moldova on November 3 will question the first five applications. The next three contenders will be questioned on Friday, November 6. MP Stefan Creanga, who heads the commission, said one of the nine applicants withdrew from the contest. This is Sergiu Iachim, who submitted an application the first. The questioning of candidates is the last stage of the contest. The meeting is held behind closed doors. The commission will select at most two candidates who will be presented in Parliament. The MPs will choose one of these.
Road Fund expected to decline following amendment of state budget law
The Road Fund risks losing about 380 million lei, said experts of the Institute for European Policies and Reforms, who analyzed the bill to amend and supplement the 2015 state budget law. Under the bill, the amounts collected into the Road Fund from excise duties on oil products will represent 46.05%, down from 80% now. These excise duties and the road taxes are now among the main sources fuelling the Road Fund. “When the planned amendments are adopted, the country’s people will be more seriously affected by the poor quality of the roads that will be maintained with fewer funds, while the Government will risk losing the financing obtained from international financial organizations. The augmentation of the incomes of the Road Fund and the maintaining of the contribution of the excise duties at the level of 80% represent Moldova’s commitments assumed towards the international financial institutions through all the agreements for financing the rehabilitation of roads,” said the Institute’s expert Sergiu Tofilat.
Over 1m people visited Moldova’s pavilion at EXPO Milano 2015
The world exhibition in Milan, in which Moldova took part with an own pavilion, is over. According to the Moldovan Investment and Export Promotion Organization (MIEPO), Moldova’s pavilion during the six-month exhibition had been visited by over 1 million people. The number of visitors in October exceeded considerably organizers’ expectations, being at least twice larger than earlier. The MIEPO said that Moldova’s pavilion started to be disassembled on November 1. The works are carried out by the Italian construction company that set up the pavilion and will last until next March.
● WEDNESDAY, November 4
Rise in electricity and gas tariffs is inevitable, experts
The rise in the electric power and natural gas tariffs is inevitable, while the audit announced by the National Agency for Energy Regulation (NARE) is an attempt by the institution to improve its image. Such conclusions were formulated in the talk show “Politics” on TV 7 channel. Economic expert of the Institute of European Policies and Reforms Sergiu Tofilat considers that by this audit the NARE is trying to wash its hands. “I don’t think that the results of the external audit will lay at the basis of the adjustment of the electric power and gas tariffs. The Agency imposed a moratorium on the higher tariffs under the pressure of the street. It’s clear that the institution is controlled politically. This audit is only an attempt to improve its image. The external audit results are not mandatory for implementation,” he stated. Sergiu Ungureanu, energy expert within EBRD projects, said that for the results of the audit to be credible, the NARE must make public the data that were presented to the auditors. “We must know the costs so as to see if the rise in tariffs is justified. If there are presented losses that have nothing to do with the consumers, there is no legal basis for increasing the tariffs,” he stated.
Free trade with EU is a new chance for Transnistrian businessmen, analysis
The Autonomous Trade Preferences that have been used by the Transnistrian region expire on December 31. According to an analysis carried out by the expert of the Institute for European Policies and Reforms Iulian Groza, if the Deep and Comprehensive Free Trade Area (DCFTA) with the EU is not extended to Transnistria, the economic situation of the region could be seriously affected. Thus, the free trade with the EU is a new chance for the Transnistrian businessmen. “The Association Agreement with the EU will offer the businessmen from the region new opportunities, including for developing the region’s economy. The region’s exports to the EU in September represented about 30%, while to Russian - approximately 7.5%. However, the imports from the EU into Transnistria constituted about 8%, while from Russia – nearly 50%,” said the expert.
Customs Service to institute blue level clearance
The clearance procedures will be simplified. The acting Cabinet approved amendments and supplements to a previous Government decision on the electronic clearance of goods. These will regulate aspects of the electronic clearance of goods under blue level clearance that enables the economic entities to go freely through customs, without being subject to the required documentary and physical check. The check will be carried out later, based on the principle of selectivity, by reexamining the customs declaration.
Over 4,000 applications for subsidies received from farmers
The working group for drafting the regulations concerning the distribution of the agriculture subsidization fund for 2016 had its first meeting that was chaired by Minister of Agriculture and Food Industry Ion Sula. The farmers have so far submitted more than 4,000 applications for subsidies of about 551 million lei. Of these, subsidies to the value of over 6.6 million lei asked by 46 applications have been fully paid. Of the total number of 4,074 applications submitted, 1,350 were filed during several days before the deadline, which is a novelty. By these applications, the farmers asked for subsidies of 135 million lei. The 610 million lei allocated from the 2015 state budget was used to pay subsidies of about 209 million lei for 2014, based on 2,330 applications. A number of 1,671 applications for subsidies of 145 million lei were accepted for payment in 2015.
● THURSDAY, November 5
Insolvency practitioners to be monitored by special commission
The acting Cabinet approved the regulations governing the activity of the commission for authorizing and disciplining insolvency practitioners, whose constitution is envisioned in the Law on Authorized Practitioners that took effect a year ago. The regulations institute the normative framework concerning the authorization, organization and oversight of the professional activity of authorized practitioners. These supervise and administer businesses or individuals that are in the process of insolvency or dissolution.
Gagauzia to host first investment forum on Nov. 6-7
The first investment forum that will take place in the Autonomous Territorial Unit of Gagauzia on November 6-7 will bring together about 200 participants from eight countries. The two-day event includes debates on the investment potential in agriculture, infrastructure and industry, on innovations and energy efficiency and visits to a number of local companies. Gagauzia Governor Irina Vlah told a news conference that delegations from Turkey, Russia, Romania, Estonia, Ukraine and other states are expected to come to Comrat. The forum will center on the investment perspectives in the region, the priorities and impediments. There will be signed a number accords, including an agreement of cooperation between the authorities of Gagauzia and those of a number of Russian regions. The economic entities that will take part in the forum are expected to sign cooperation agreements between them.
Producer prices of agricultural products on the rise
The average selling prices of agricultural products at agriculture companies in the first nine months of this year rose by 13% compared with the corresponding period last year. The producer prices of vegetal products rose by 24%, of fruit and berries – by 73%, of sunflower (high quality seeds) – by 40%, of grapes – by 39%, of rape – by 38%, of wheat (high quality seeds) – by 22%, of corn (high quality seeds) – by 11%. The selling prices of vegetables decreased by 10%, of pumpkins – by 8%.
Fuel prices go down
The prices of gasoline and diesel fuel will decrease by about 0.25 lei/liter and, respectively, 0.30 lei/liter compared with the average price. Fourteen oil companies, five of which import fuels, notified the National Agency for Energy Regulation of their intention to reduce prices. Thus, the fuel prices started to decline on November 4 and will do so until this weekend. In a communique, the Agency says the average selling price of gasoline fell from 17.88 lei/liter to 17.63 lei, while the average price of diesel fuel – from 15.85 lei/liter to 15.56 lei. The calculations presented by the oil companies show the retail prices of gasoline and diesel fuel decreased following the decline in the purchase prices of these fuels.
Central bank revises up inflation rate for 2015 and 2016
The National Bank of Moldova revised up the inflation rate for this year and the next year. Thus, this year the average rate of inflation will be 9.7%, up 0.4 percentage points from the last June forecast. An inflation rate of 11.9% was projected for 2016, up 0.3 percentage points from the previous forecast. According to Governor Dorin Dragutanu, the inflation rate exceeded temporarily the upper limit of the central bank’s target inflation of 5% ±1.5 percentage points due to the depreciation of the national currency during the first ten months of this year and the rise in food prices. The new forecast took into account the planned increases in the electricity and gas tariffs and in the tariffs of other services.
External audit confirmed tariffs asked by energy companies
The results of the audit performed by the foreign company that verified the justifiability of the higher electricity tariffs asked by the energy companies revealed no essential differences between these and the audit reports of the given companies. Thus, the audit company practically justified the costs indicated by RED Nord, RED Nord-Vest, Moldelectrica and Union Fenosa. “The audit company analyzed and compared all the components of the electricity tariff in 2013-2015. There were identified small deviations, of 1 ban, but in this case Moldelectrica suggests decreasing the asked price by 1 ban,” said Oleg Popa, head of the Financial Division of Moldelectrica.
Grant of €15m ratified by Parliament
The legislative body ratified in two readings the grant agreement with the European Bank for Reconstruction and Development (EBRD), which provides for the rehabilitation of national roads. The grant agreement with the EBRD was ratified to continue the implementation of the lending agreement to the value of €150 million for the rehabilitation and construction of national roads signed in 2013.
● FRIDAY, November 6
EBRD predicts Moldovan economy will contract in 2015 and will stagnate in 2016
The European Bank for Reconstruction and Development (EBRD) sees the Moldovan economy contracting by 2 per cent in 2015 and stagnating in 2016, the Bank says in its latest Regional Economic Prospects report, published today. While Moldova grew by 4.6 per cent in 2014 and by 3.6 per cent year-on-year in the first half of 2015, downside growth risks for 2015 remain. These include significant vulnerabilities in the financial sector, lower remittances, tight monetary policy, higher inflation, weak performance of agriculture, regional economic downturn, challenges in budget execution due to lower external financial assistance, volatile domestic politics and substantial governance challenges.
Sergiu Tofilat: “We didn’t need audit on gas tariff calculations”
The audit on the calculation of the new natural gas tariffs cannot say how justified the costs used to determine the tariffs are, energy expert Sergiu Tofilat said after the public debate centering on the audit results. “The task of the audit company was to verify the correctness of the calculations. It is important to justify the costs incurred by the operator. But the goal of the audit wasn’t to determine the justifiably of the costs. Thus, the calculation base is not correct and the end result – the proposed tariff – is thus also not correct,” stated Sergiu Tofilat. According to him, the audit report does not indicate the authors, their experience and the certificates showing their qualification. The auditors only put the costs provided by the operators in the calculation formula, without verifying them. The operators can ask for the tariffs they want, but it is the National Agency for Energy Regulation (NARE) that decides the final tariff and it is important what costs it includes in the tariff and what unjustified costs it excludes.
Electric power tariffs will be higher from November 9
The Administration Board of the National Agency for Energy Regulation (NAER) considers there are no reasons for reviewing its decisions of July 17-18, 2015 by which higher electricity tariffs were approved. The Board stated its position as a result of the public debates held on the external audit reports on the new tariffs. Thus, the new tariffs approved by the NAER take effect on November 9, 2015. The end-users connected to the low voltage power lines of Gas Natural Fenosa Furnizare Energie will pay a tariff of 216 bani/kWh, those connected to the medium voltage power lines – of 195 bani/kWh, while those connected to the high voltage power lines – of 168 bani/kWh. The tariff for end-users served by RED Nord through low voltage power lines will be 223 bani/kWh, while for those served through medium voltage power lines – 202 bani/kWh.
No candidate for post of National Bank governor selected
The special commission for designating a candidate for the post of governor of the National Bank of Moldova chose no candidate. Liberal-Democratic MP Stefan Creanga, who heads the commission, said none of the examined candidate met the necessary conditions. On the other hand, Adrian Lupusor, executive director of the think tank “Expert-Grup”, who was a member of the special commission, said he considers that at least two candidates met the conditions. Ştefan Creanga said no candidate was selected because these didn’t meet the imposed conditions. The commission’s mandate ended in its last meeting and the MP thinks that the Head of Parliament will now take a decision as to the continuation of the contest or the modification of the method of selecting candidates. “I think the political crisis affected this contest too,” he stated.
● SATURDAY, November 7
Fewer tax inspections are carried out at companies
The number of tax inspections carried out at economic entities has continuously decreased. In a program on Radio Moldova station, Prisacaru said that the number of inspections at companies in 2013 came to 74,029, in 2014 – to 60,400, while in the first nine months of this year – to 40,156. “Thus, in a relatively short period of time, we managed to eliminate each fourth inspection,” he stated. The amounts collected additionally into the budget as a result of inspections rose from 653.04 million lei in 2013 to 1.2 billion lei in 2014 and to 1.19 billion lei in the first nine months of this year.
