The International Monetary Fund has approved the disbursement of a second loan tranche to Moldova worth $21.5 million, citing stronger-than-expected growth. EURACTIV Romania reports.
In November, the IMF finalised a three-year-long loan programme for Moldova worth about $178.7 million, $36 million of which was made immediately available to the poor Eastern European country.
The Washington-based fund said in a statement on Monday (1 May) that “growth has returned and authorities remain committed to sound economic management”. It also predicted 4.5% growth this year.
The IMF also added that “The program is broadly on track, enjoys strong country ownership, and is supported by the firm commitment of policymakers to sound economic management.” The rest of the loan will be distributed via semi-annual reviews.
In 2015, Moldova was plunged into economic and political crisis when around $1 billion went missing from the country’s banking system. The scandal robbed Moldova of nearly one-eighth of its economic output.
On 12 April, the European Council agreed to help Moldova with €100 million of EU aid as a supplement to the IMF’s contribution and other multilateral programmes.
A total of €60 million will be provided in the form of loans and the rest in grants. The aim is to help Moldova achieve economic stability and implement its reform agenda.
The Council said the programme would be subject to monitoring by the European Commission and the European External Action Service. Any money granted would also be dependent on Moldova respecting the rule of law and human rights, as well as democratic norms like a multi-party parliamentary system.
Assistance would be governed by a memorandum of understanding between Moldova and the Commission. This could be a stumbling block, as the country’s Moscow-leaning president, Igor Dodon, has previously threatened to tear up an association agreement with Brussels.
The plan now needs to be signed off by the European Parliament, before finally being put to the Council once again, where it will need a qualified majority in order to be put into action.