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25/09/2016

Romania releases first loan tranche to crisis-hit Moldova

Europe's East

Romania releases first loan tranche to crisis-hit Moldova

Romanian Prime Minister Dacian Ciolos, who will visit Moldova on Thursday.

[European Council]

European Union member Romania said Wednesday (24 August) it has paid the first tranche of a multi-million-euro loan to neighbouring Moldova, in a bid to prevent the ex-Soviet nation from economic collapse and help it maintain a pro-European course.

Earlier this year, the Romanian government pledged to lend Moldova 150 million euros to help it push through anti-corruption reforms after the nation was rocked by a massive scandal in 2015.

Bucharest said in a statement that a first “60-million-euro tranche of the financial loan” has now been released, after Moldovan authorities and officials from the International Monetary Fund reached a roadmap agreement on an economic reform programme in July.

The announcement comes ahead of a visit by Romanian Prime Minister Dacian Ciolos to Moldova on Thursday.

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Wedged between Ukraine and Romania, Moldova is often seen in terms of a tug-of-war between Russia and the West, especially after it signed a historic EU free trade agreement two years ago despite bitter opposition from its former master Moscow.

The country has been mired in political turmoil since the disappearance of $1 billion (888 million euros) from its leading bank in 2014.

The scandal sparked mass demonstrations early last year, eventually leading to the arrest of ex-premier Vlad Filat and the dismissal of the government in October.

Faced with hostile public opinion, the new pro-EU administration of Prime Minister Pavel Filip vowed to bring greater transparency to the finance sector — a key condition to secure a deal with the IMF and unlock crucial EU aid.

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The new government has a clear road map of what it has to do, developed together with its EU partners, Andrei Galbur, Deputy Prime-Minister, and Minister of Foreign Affairs and European Integration, told EurActiv.com in an exclusive interview.

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In addition to economic reforms, the government also introduced a series of political changes.

As a result, Moldovans will be able to elect their president in October through a direct vote for the first time in 16 years.

Previously lawmakers had chosen the head of state through a parliamentary supermajority.