2002/1006/EC: Council Decision of 19 December 2002 on providing further supplementary-financial assistance to Moldova
Date: 2002-12-19
Institutions: Council of the European Union
Subjects: International Monetary Fund, Moldova, donation, financial aid, macroeconomics

L 351/76

EN

Official Journal of the European Communities

28.12.2002

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 19 December 2002

on providing further supplementary-financial assistance to Moldova

(2002/1006/EC)

THE COUNCIL OF THE EUROPEAN UNION,

(7)

Having regard to the Treaty establishing the European Commu-
nity, and in particular Article 308 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Whereas:

The Moldovan authorities have requested financial assis-
tance on a concessional basis from the International
Financial Institutions, the Community and other bilateral
donors. Over and above the financing from the IMF and
the World Bank a substantial residual
financing gap
remains to be covered to comfort the country's foreign
debt sustainability, strengthen the country's reserves
position and support the policy objectives attached to
the authorities' reform efforts.

The Commission has consulted the Economic and Finan-
cial Committee before submitting the proposal.

(8)

(1)

(2)

(3)

(4)

(5)

(6)

is undertaking fundamental political

and
Moldova
economic reforms and is making substantial efforts to
sustain its progress in transition.

Moldova, on the one hand, and the European Commu-
nity and its Member States on the other hand, have
signed a Partnership and Cooperation Agreement, which
entered into force on 1 July 1998.

The authorities of Moldova have agreed with the Interna-
tional Monetary Fund (IMF) on a macro-economic
programme supported by a three-year poverty reduction
and growth facility, approved in December 2000, and
have expressed their intention to subsequently continue
this programme in the context of a new appropriate
Fund Facility.

By Decision 2000/452/EC of 10 July 2000 providing
supplementary macro-financial assistance to Moldova (2),
the Council has made available to Moldova macro finan-
cial assistance up to EUR 15 million, in the form of a
long-term loan.

Moldova's foreign debt situation has become increasingly
preoccupying and the country is facing very high debt-
to-export and debt-to-central-government-revenue ratios.

The IMF, the World Bank, the Asian Development Bank
and the European Bank for Reconstruction and Develop-
ment
took the initiative in convening, on 20 April
2002, a ministerial meeting on an initiative in favour of
the low-income countries of the Commonwealth of Inde-
pendent States (CIS), aiming at,
inter alia, providing
increased financial support on a concessional basis to
the poorest countries of the CIS, including Moldova.

(9)

(10)

Moldova became eligible to highly concessional
loans
from the World Bank and the IMF, and is facing particu-
larly critical economic,
social and political circum-
stances.

the budgetary authority,

In these circumstances and without prejudice to the
powers of
the Community
macro-financial assistance to Moldova should be made
available in the form of a grant, as an appropriate
measure to help the beneficiary country at this critical
juncture.

(11)

This assistance should be managed by the Commission.

(1) Opinion given on 5 December 2002 (not yet published in the Offi-

cial Journal).

(2) OJ L 181, 20.7.2000, p. 77.

(12)

The Treaty does not provide, for the adoption of this
decision, powers other than those of Article 308,

28.12.2002

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Official Journal of the European Communities

L 351/77

HAS DECIDED AS FOLLOWS:

Article 1

1.
The Community shall make available to Moldova macro
financial assistance in the form of a straight grant with a view
to ensure a sustainable balance-of-payments situation and
strengthening the country's reserve position.

The assistance shall amount to a maximum of EUR 15

2.
million.

3.
The assistance will be managed by the Commission in
close consultation with the Economic and Financial Committee
and in a manner consistent with any agreement
reached
between the IMF and Moldova.

Article 2

The Commission is empowered to agree with the
1.
Moldovan authorities, after consulting the Economic and Finan-
cial Committee, the economic policy conditions attached to the
financial assistance. These conditions shall be consistent with
the agreements referred to in Article 1(3).

2.
The Commission shall verify at regular intervals, in colla-
boration with the Economic and Financial Committee, and in
coordination with the IMF, that economic policy in Moldova is
in accordance with the objectives of this financial assistance
and that its conditions are being fulfilled.

with the IMF in the context of the present Poverty Reduction
and Growth Facility or of any successor upper credit tranche
arrangement.

2.
Subject to the provisions of Article 2, the second and any
further instalments shall be released on the basis of a satisfac-
tory continuation of Moldova's macroeconomic programme
and not before three months after the release of the previous
instalment.

3.

The funds shall be paid to the National Bank of Moldova.

All

related costs

4.
the Community in
concluding and carrying out the operation under this Decision
shall be borne by Moldova, if appropriate.

incurred by

Article 4

At least once a year, and before September, the Commission
shall address a report to the European Parliament and to the
Council which will include an evaluation of the implementation
of this Decision.

Article 5

This Decision shall take effect on the day of its publica-
1.
tion in the Official Journal of the European Communities. It will
expire three years after the date of its publication.

2.

Council Decision 2000/452/EC is hereby repealed.

Article 3

Done at Brussels, 19 December 2002.

1.
The assistance shall be made available to Moldova in at
least two instalments. Subject to the provisions of Article 2, the
first instalment is to be released on the basis of a satisfactory
track record of Moldova's macro-economic programme agreed

For the Council

The President

L. ESPERSEN