ECO-BUS WEEKLY DIGEST December 06 - 12. Most important Economy & Business news by IPN
● MONDAY, December 06
Draft fiscal and customs policy for 2022 given second reading
The lawmakers annulled the tax of 2.5% on mobile phone services as from January 1, 2022 in a move to help mobile phone carriers accelerate the implementation of roaming with the EU member states. This is provided in the draft fiscal and customs policy for 2022 that was given a second reading.
● TUESDAY, December 07
Agricultural producers with 2 ha of land will be entitled to subsidies
The number of producers who will be able to ask for subsidies from the national agriculture and rural development fund will increase together with the introduction of the notion “micro-agricultural producer” in the legislation. The bill was given a first reading by Parliament, IPN reports.
The micro-agricultural producer is the one that owns up to two hectares of arable land. So far, only small producers (2-10 ha of farmland), medium-sized producers (10-75 ha) and large producers (more than 75 ha) were entitled to subsidies.
The bill will be discussed with associations of agricultural producers and will be then proposed for approval in the second reading, said the chairman of the commission on agriculture and food industry Vladimir Bolea.
In 2021, the national agriculture and rural development fund was 1.1 billion lei.
Octavian Armașu: Thanks to reforms, banking sector is viable and stable
Thanks to the reforms carried out in the banking sector, this field is currently viable and stable, with an adequate financial architecture and with high-quality banking services, the Governor of the National Bank of Moldova (NBM) Octavian Armașu stated in a meeting with Katarina Mathernova, Deputy Director General of the Directorate-General for European Neighborhood Policy and Enlargement Negotiations of the European Commission.
According to a press release of the central bank, Octavian Armașu stressed that due to these results, but also to the monetary policy measures taken by the NBM, it was possible to support the population and the national economy during the pandemic.
In this connection, welcoming the progress made by the NBM in reforming the banking system Katarina Mathernova underlined the importance of continuing reforms to ensure financial stability in the Republic of Moldova. She reiterated that the European Union is near Moldova, including by providing new macro-financial assistance.
The officials also discussed Moldova’s accession to the Single Euro Payments Area (SEPA). In this regard, it was noted that the participants in the process are analyzing the accession criteria and the steps that are to be taken for making this commitment.
Poultry and cattle farming close to collapse. Solutions proposed by responsible ministry
In Moldova, poultry and cattle farming was brought to its knees and the few business entities operating in this sector risk being unable to sell their products as the meat and milk selling prices are low, Valentina Barbei, the deputy head of Ștefan Vodă district, stated in a discussion of Minister of Agriculture and Food Industry Viorel Gherciu with heads of district agriculture divisions and producers from the animal breeding sector, IPN reports.
Measures should be taken to remove the monopoly on the veterinary medicines market. As some of the necessary medicines are not authorized in the country, the producers have to look for such medicines that are smuggled from Romania.
According to the Ministry of Agriculture’s data, the domestic sector provides only 25% of the necessary quantities of beef.
● WEDNESDAY, December 08
Dumitru Budianschi: Net salary of ministry of finance is 14,670 lei
Minister of Finance Dumitru Budianschi said the salaries in the public sector in 2022 will increase slightly after the minimum salary was raised. The salaries of a number of categories of employees, among whom the drivers and employees of the pscyhopedagogical sector, will rise in 2022. The official admitted that the pays of MPs and ministers will also rise.
“We must act based on the realities. The country has only these revenues. We do not generate more than 50 billion lei for the state budget. This is what we guarantee. The subject concerning doctors’ pays is within the remit of the Ministry of Health, not of the Ministry of Finance. As far as I know, the pays of doctors were raised the previous years. The frontline doctors have had bonuses to salaries during the pandemic. There are many speculations about the salaries of ministers and MPs. I get a net salary of 14,670 lei. I think the Premier’s pay is by about 1,000 lei higher,” stated Dumitru Budianschi.
External public audit in natural gas sector to be conducted in 2022
The Court of Auditors in 2022 will carry out an external public audit in the natural gas sector. A bill proposed by PAS MPs provides that the audit will be conducted at relevant joint stock companies, public law entities and at other legal entities affiliated to them to determine compliance of financial transactions, costs and capital investments, IPN reports.
The audit mission will be conducted with derogation from the law on the organization and functioning of the Court of Auditors and the law on joint stock companies, which provides that the audit can be performed at the entity of public interest and the company in which the state holding exceeds 50% of the share capital. The state holding in the share capital of such companies is under 50% and the Court now has limited powers for conducting an external public audit.
Government approves raising of EIB loan for energy efficiency project
The Cabinet authorized the taking out of a €30 million loan from the European Investment Bank for implementing the Moldova Energy Efficiency Project, IPN report.
As part of the same project, the Republic of Moldova will raise a sovereign loan of up to €30 million from the European Bank for Reconstruction and Development. The EBRD loan will be co-financed by an investment grant of €15 million from the EU’s Neighborhood Investment Platform and a grant of €500,000 from the Eastern Partnership Technical Assistance Trust Fund.
Government endorses filling stations moratorium
The Government has formally endorsed a bill that introduces a six-month moratorium on permits to construct new filling stations.
Andrei Spînu, Minister of Infrastructure and Regional Development, said the six months period is needed so that the authorities can develop clearer rules as to how and where filling stations can be built.
Andrei Spinu also said that there was an unequal application of fees for issuing licenses for the import and wholesale of gasoline and diesel and for the import and wholesale of liquefied gas. So as not to prevent the access of small operators to the market, it has been decided to abolish the fixed fee of 260,000 lei. Instead, a general license fee of 3,250 lei will be applied.
Energy Community Secretariat to open Chisinau office soon
The Energy Community Secretariat will soon open an office in Chisinau, Infrastructure Minister Andrei Spinu posted on Facebook after discussing with Artur Lorkowski, the new director of the Energy Community.
The Energy Community has provided considerable support to Moldova over time. The Energy Community Secretariat supported our country in transposing the EU energy legislation. There are also future commitments, both from the Moldovan authorities and from the Secretariat, to create a transparent and fair energy market in Moldova.
● Thursday, December 09
Price of gasoline COR 95 falls under level on day of institution of new rules
For December 10, the National Agency for Energy Regulation set the price ceiling for gasoline COR 95 at 20.04 lei/liter, which is under the level when the new rules of forming fuel prices were instituted.
In the recent past, the highest price of gasoline COR 95 decreased by 1.84 lei/liter, while of standard diesel fuel by 1.65 lei/liter.
Chisinau–Bucharest train route available again from December 12
According to Moldova’s Railways, the Chisinau-Bucharest train until December 31 will run two times a week, with departure in Chisinau on Thursday and Sunday at 5:20pm and in Bucharest on Monday and Friday at 7:20 pm. As of January 2, the train will run three times a week, from Chisinau on Tuesday, Thursday and Sunday and from Bucharest in Monday, Wednesday and Friday.
The international train routes were suspended in March 2020. The Chisinau-Odessa train restarted to run on August 28, 2021. Moldova’s Railways said it is making effort to also restore the train routes to Moscow or Saint Petersburg.
Dependence on remittances and share of informal economy worsen economic problems
The way in which the pandemic affected Moldova’s economy was conditioned by structural characteristics, primarily by the powerful dependence on remittances from abroad and the share of informal economy. “The state is weak financially and this weakness is due to underdevelopment and to very low fiscal compliance,” Minister of Labor and Social Protection Marcel Spatari stated in an event staged to present the study “Phenomenon of informal economy and employment in the context of COVID-19 pandemic”.
The study was conducted by the Independent Think Tank “Expert-Grup”, being commissioned by UNDP Moldova.
Marcel Spatari said the industrial activities dependent on international value chains expand in Moldova. Many of these employ people officially and pay all the taxes and contributions, but most of the activities are yet with a rather small value added and Moldova should tend to increase the productivity of industries integrated into international value chains.
The legal framework on labor relations and the weakening of the trade unions’ capacity do not enable salary earners to negotiate higher pays. Moldova is in a chronic paid labor crisis. The pandemic limited the state’s capacity to intervene during the last three years. The minimum guaranteed salary in the real sector increased modestly as the state could not help the economy and this limitation of the rise was seen as indirect compensation, unlike other states that could help the economy directly.
Last year, over 45,000 persons lost their job or were significantly affected by the reduction of working time in April-May, when the restrictions were harsher. The Government didn’t provide support to the economy to the extent to which other governments did, but the problem was not the lack of political will, but the absence of mechanisms and instruments. Now the Ministry of Labor and Social Protection created such a mechanism. There is a mechanism for subsidizing jobs and the application forms for employers will become available by the end of this week, stated the minister.
The problem of informal labor affects the budgetary balance and the system of social insurance of the Republic of Moldova. “The social insurance system is in a deficit every year. There is a great demand on the part of society for higher pensions and benefits, such as the childcare benefit. We must make sure that we have the resources to cover these rises that are necessary for the population,” said Marcel Spatari.
He noted that short-term compensatory measures are needed for companies that cannot be competitive if, for example, the cost of labor grows significantly. “However, as a macro-economic idea, it is normal to allow the firms that are not competitive to gradually disappear so that they do not keep the employees on low salaries or in informal activities.”
According to the data presented in the event, the shadow economy in Moldova currently represents about 25%.
● FRIDAY, December 10
Sky extends fleet with two more planes
After not even a year of the launch of its operations, the airline HiSky announced the purchase of two more Airbus planes that expanded its fleet to five aircraft. Together with the signing of the new leasing contracts, HiSky becomes one of the operators with the largest and youngest fleets in Moldova and the region, IPN reports, quoting a pores release of the company.
● SATURDAY,December 11
Maia Sandu rejects law to increase salaries of CC judges
President Maia Sandu on December 10 sent back to Parliament the law to amend a number of normative documents concerning the budgetary-fiscal legislation for 2022 for the reason that the Government’s appraisal of the amendment regarding the pays of judges of the Constitutional Court was absent.
According to the presidential press service, President Sandu decided to send back Law No. 204 of December 6, 2021 because the amendment concerning the pays of employees of the Constitutional Court that the law contains wasn’t endorsed by the Government.
Andrei Spînu: In 2023 we will be connected to European electricity market
Deputy Prime Minister Andrei Spînu leaves for Romania to discuss the possibility of purchasing a large quantity of fuel oil. Fuel oil needs to be bought as Termoelectrica in October used a considerable amount of such fuel from the state reserves. While in Bucharest, the Moldovan official will have meetings with representatives of the Ministry of Energy of Romania with whom he will consider the possibility of connecting Moldova to the European electricity network.
Andrei Spînu said that he will make an official visit to Romania next week and the ensuring of Moldova’s energy security will be the key topic of discussion. Moldova intends to procure fuel oil from Romania for supplementing its state reserves.
The official denied the accusations that they contracted a suspicious Indian company to build the Vulcănești-Chișinău high-voltage power line. He assured that the Indians will honor their contractual obligations and will build the 158 km long line on time.
“Currently, we are almost 100% dependent on the Kuchurgan Power Station. The tender contest to choose a contractor was initiated last autumn. This was held under the supervision of the World Bank, according to very rigid operational standards and manuals. We verified this company using international verification instruments. The projection works started and in three years we will have this line. I will make sure that the project is completed,” stated Andrei Spînu.