EU disburses €50 million in MFA to Moldova

The European Commission, on behalf of the EU, has disbursed €50 million in macro-financial assistance (MFA) to the Republic of Moldova. This disbursement is part of the €3 billion emergency MFA package for ten enlargement and neighborhood partners, which aims to help them respond to the economic impact of the COVID-19 pandemic. MFA support is provided through loans at very favorable rates, IPN reports, quoting a press release of the European Commission.

Paolo Gentiloni, Commissioner for the Economy, said that he was pleased that the European Union has disbursed a further €50 million in financial support to the Republic of Moldova. “This is a concrete demonstration of the EU’s commitment to helping Moldova respond to the economic and social impact of the COVID-19 pandemic. These funds, released following the fulfillment of agreed policy commitments, acknowledge the progress the country is making in implementing the measures needed to secure a more stable and prosperous future,” stated the official.

The first €50 million disbursement to Moldova under this MFA program took place in November 2020. Moldova has made remarkable progress to complete the policy conditions agreed with the EU for the release of this second and final €50 million disbursement under its current COVID-19 MFA program. These included important measures to improve public finance management in the health sector, fight against corruption, measures to strengthen good governance and the rule of law, as well as to improve the business climate.

Moldova also continues to satisfy the pre-conditions as regards the respect of human rights and effective democratic mechanisms, including a multi-party parliamentary system and the rule of law.

With this disbursement, the EU has successfully completed five out of the 10 MFA programs in the €3 billion COVID-19 MFA package, and disbursed the first tranches to all partners.

The Commission continues to work closely with the rest of its MFA partners on the timely implementation of the agreed policy programs.

MFA is part of the EU’s wider engagement with neighboring and enlargement partners and is intended as an exceptional crisis response instrument.

The decision to provide MFA to ten enlargement and neighborhood partners in the context of the COVID-19 pandemic was proposed by the Commission on 22 April 2020 and adopted by the European Parliament and the Council on 25 May 2020.

In addition to MFA, the EU supports the partners in its Neighborhood policy and the Western Balkans through several other instruments, including humanitarian aid, budget support, thematic programs, technical assistance, blending facilities and guarantees from the European Fund for Sustainable Development to support investment in the sectors most affected by the coronavirus pandemic.

The COVID-19 MFA program for Moldova is part of a comprehensive effort by the EU to help mitigate the economic and social impact of the pandemic and accelerate the recovery. This engagement is in accordance with the EU-Moldova Association Agreement, and with the overall Team Europe's support, which builds on joint efforts of EU Member States. Among others, Moldova was one of the first countries to benefit from the COVAX facility and the EU vaccine-sharing mechanism, with over 1 million doses of vaccines distributed across the country.

In addition, the MFA disbursement comes shortly after the release of €36.4 million grant of budget support as part of the EU Economic Recovery Plan for Moldova of up to €600 million for the next three years. In line with this plan and the Economic and Investment Plan for the Eastern Partnership, the EU will continue to support Moldova on its path to full economic recovery and further reform implementation.