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Deficiencies of EU assistance for Moldova: position of European Commission


https://www.ipn.md/index.php/en/deficiencies-of-eu-assistance-for-moldova-position-of-european-commission-7978_1029414.html

The European Commission assures that the banking frauds committed in Moldova affected the depositors in Moldova, not yet the money of the EU taxpayers, IPN reports, quoting Dionis Cenusa’s OP-ED “EU assistance for Moldova: local realities vs. operational efficiencies of EU” that was published on September 5, 2016. The Commission reacted thus to a European Court of Auditors’ report on the EU financial support to Moldova aimed at strengthening the country’s public administration. The Court’s general conclusion is that this support was partially effective in strengthening the public administration, in particular owing to a lack of political will and the EU’s slow reaction to risks associated with the EU support.

In response to the conclusions of the European Court of Auditors, the European Commission and the European External Action Service said the budget support for Moldova was stopped until this fulfills the general conditions related to macroeconomic stability and budget transparency. The Commission also reiterated that the agreement with the IMF is an essential condition for resuming budget support.

The Commission contradicts the Court as regards the aligning of the EU support with local strategies. It explains that the situation in Moldova is volatile owing to internal and geopolitical factors. That’s why the Commission tends to be flexible and distances itself from superficial approaches. In the same connection, the Commission notes that the budget support provided by tit combines a number of interdependent elements (financing actions, institutional capacity, political dialogue and performance indicators).

The Commission also reacted to the Court’s objections concerning the application of the ‘more for more’ principle. It specified that the decisions to offer stimuli were taken based on internal analyses and with the approval of the EU member states (which can block such decisions if they consider them inopportune or risky).

The Commission stresses that it applies stricter measures to attenuate risks associated with the provision of budget support in accordance with the new approach of May 2012: eligibility criteria concerning transparency and surveillance, official risk assessment process, including more rigorous criteria on public finance management.

The Court’s report brings back into focus the banking frauds that were revealed in November 2014. The European Commission explains that the first decisions to suspend the budget support for Moldova were adopted in December 2014. Among the decisions adopted then were those to review the methods of providing support in 2015 and to introduce additional risk mitigation measures. Consequently, the budget support for 2015 was reduced substantially compared with the previous years.

In its response, the Commission also reminds that the signing of an accord with the IMF was set by it as a key condition in July 2015 for resuming budget support.

The Commission says the Moldovan authorities, together with the international partners, cooperate with a view to establishing a mechanism for recovering all the stolen funds. Moreover, it assures that the banking frauds affected the depositors in Moldova, not yet the money of the European taxpayers.

The European Court of Auditors selected four areas for auditing: justice, public finance, public health and water, whose value amounts to €218.6 million.