Council nearly doubles the EU’s financial assistance to Moldova to a total of €295 million
The Council today decided to nearly double the amount of macro-financial assistance to Moldova which it had agreed to provide a year ago. In April 2022, it had adopted legislation which enables the EU to help Moldova financially with €150 million. It increased this amount today by €145 million which means that a total of €295 million will be available to Moldova.
The Union’s macro-financial assistance aims to support the economic stabilisation and the structural reform agenda of Moldova, supplementing resources made available under the IMF’s financial arrangement.
“Moldova can continue to count on the EU. We will continue to support Moldova, also financially. Given the current circumstances, it is appropriate that we double the funds which we make available to Moldova.”
Elisabeth Svantesson, Minister for Finance of Sweden
Of the maximum amount of €295 million, the EU will provide up to €220 million in the form of loans and up to €75 million in the form of grants.The assistance shall contribute to covering Moldova’s balance-of-payments needs as identified in the IMF programme.
There are considerable negative effects of Russia’s war in Ukraine on the Moldovan economy. Given that there is still a significant residual external financing gap in Moldova’s balance of payments for 2023, over and above the resources provided by the IMF and other multilateral institutions, the Council considered it necessary to increase the Union’s macro-financial assistance provided to Moldova. That increase is, under the current exceptional circumstances, considered to be an appropriate response to Moldova’s request for support to its economic stabilisation, in conjunction with the IMF programme.
This decision will enter into force on the third day following that of its publication in the Official Journal of the European Union.
Background
The EU and its member states stand united in their unwavering support for Moldova.
Moldova was granted EU candidate status in June 2022.Already before being granted EU candidate status, Moldova received financial assistance from the EU under the European Neighbourhood Instrument. This assistance is now increasing.
The EU is helping Moldova in parallel with the International Monetary Fund (IMF) programme for Moldova of 20 December 2021 under the Extended Credit Facility/Extended Fund Facility arrangement. In May 2022, as a result of the growing financing needs stemming largely from the effects of the war in Ukraine on the Moldovan economy, the IMF also adopted a decision to increase its financial support to Moldova.