2007/259/EC: Council Decision of 16 April 2007 providing Community macro-financial assistance to Moldova
Date: 2007-04-16
Institutions: Council of the European Union
Subjects: EU aid, Moldova, economic stabilisation, financial aid, macroeconomics

28.4.2007

EN

Official Journal of the European Union

L 111/69

(Acts adopted under the EC Treaty/Euratom Treaty whose publication is not obligatory)

II

DECISIONS

COUNCIL

COUNCIL DECISION

of 16 April 2007

providing Community macro-financial assistance to Moldova

(2007/259/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community, and in particular Article 308 thereof,

establishing the European

Having regard to the proposal from the Commission,

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

After consulting the Economic and Financial Committee,

Whereas:

(1)

(2)

The authorities of Moldova are committed to economic
stabilisation and structural reforms, supported by the
International Monetary Fund (IMF) through a three-year
arrangement under the Poverty Reduction and Growth
Facility (PRGF) which was approved on 5 May 2006.
On 12 May 2006, the Paris Club creditors agreed to a
restructuring of Moldova’s bilateral official debt on the
Houston terms.

In May 2004, the authorities of Moldova adopted an
Economic Growth and Poverty Reduction Strategy
Paper, setting medium-term priorities for government
action.

(3)

(4)

(5)

(6)

(7)

(8)

Moldova, on the one hand, and the European Commu-
nities and their Member States on the other hand, have
signed a Partnership and Cooperation Agreement (2),
which entered into force on 1 July 1998.

Relations between Moldova and the European Union are
developing within the framework of the European Neigh-
bourhood Policy, which is expected to lead to deeper
economic
integration. The EU and Moldova have
agreed on a European Neighbourhood Policy Action
Plan identifying short- and medium-term priorities in
EU-Moldova relations and related policies.

Moldova has substantial financing needs arising from a
significant deterioration of its financial position.

financial

institutions,

The Moldovan authorities have
requested financial
assistance on a concessional basis from the Communities,
and from other
international
bilateral donors. Over and above the financing from
the IMF and the World Bank, a substantial residual
financing gap remains to be covered to improve the
country’s balance of payments, strengthen the country’s
reserves position, and to support the policy objectives
attached to the authorities’ reform efforts.

Moldova is eligible for
favourable terms from the World Bank and the IMF.

loans and grants on highly

circumstances, Community macro-financial
In these
assistance to Moldova should be made available in the
form of a grant, as an appropriate measure to help
Moldova at this critical juncture.

(1) Opinion delivered on 14 February 2007 (not yet published in the

Official Journal).

(2) OJ L 181, 24.6.1998, p. 3.

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Official Journal of the European Union

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(9)

of

to

order

efficient

the
protection
ensure
In
Community’s financial
interests linked to this macro-
financial assistance, it is necessary to provide for appro-
priate measures by Moldova related to the prevention of,
and to the fight against, fraud, corruption and any other
irregularities affecting this assistance. Provision should
also be made for controls by the Commission and
audits by the Court of Auditors.

(10)

The release of the Community macro-financial assistance
is without prejudice to the powers of
the budgetary
authority.

soundness of Moldova’s financial arrangements, administrative
procedures, and the internal and external control mechanisms
which are relevant to the assistance.

3.
The Commission shall verify at regular intervals, in colla-
boration with the Economic and Financial Committee and in
coordination with the IMF, that economic policies in Moldova
are compatible with the objectives of the assistance and that the
agreed economic policy and financial conditions are being satis-
factorily fulfilled.

(11)

The Community macro-financial assistance should be
managed by the Commission in consultation with the
Economic and Financial Committee,

1.
The Community Macro-financial assistance shall be made
available by the Commission to Moldova in three instalments.

Article 3

HAS DECIDED AS FOLLOWS:

Article 1

The Community shall make available to Moldova macro-
1.
financial assistance in the form of a grant of up to EUR
45 000 000 with a view to supporting Moldova’s balance of
payments and alleviating the financial constraints on the imple-
mentation of the government’s economic programme.

The Community macro-financial

shall be
2.
the Commission in consultation with the
managed by
Economic and Financial Committee and in a manner consistent
with the agreements or understandings reached between the
International Monetary Fund (IMF) and Moldova.

assistance

3.
The Community macro-financial assistance shall be made
available for two years starting from the first day after the entry
into force of
if circumstances so
require, the Commission, after consulting the Economic and
Financial Committee, may decide to extend the availability
period by a maximum of one year.

this Decision. However,

Article 2

1.
The Commission is hereby empowered to agree with the
authorities of Moldova, after consulting the Economic and
economic policy and financial
Financial Committee,
conditions attached to the macro-financial assistance,
to be
laid down in a Memorandum of Understanding and a Grant
Agreement. Those conditions
shall be consistent with the
agreements or understandings referred to in Article 1(2).

the

2.
financial

During the implementation of

the Commission shall monitor

the Community macro-
the

assistance,

2.
The first instalment shall be released on the basis of satis-
factory implementation of the economic programme supported
by the IMF under the Poverty Reduction and Growth Facility
and of the EU-Moldova European Neighbourhood Policy Action
Plan.

satisfactory implementation of
IMF under
the

The second and third instalments shall also be released on
3.
the economic
the basis of
Poverty
supported by
programme
Reduction and Growth Facility and of
the EU-Moldova
European Neighbourhood Policy Action Plan, and on the
basis of any other measures agreed with the Commission as
set out in Article 2(1), and not less than three months after
the release of the previous instalment.

the

The funds shall be paid to the National Bank of Moldova.
4.
The final recipient of the funds shall be the Ministry of Finances
of Moldova.

Article 4

The Community Macro-financial assistance shall be imple-
mented in accordance with the provisions of Council Regulation
(EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial
Regulation applicable to the general budget of the European
Communities (1) and its implementing rules. In particular, the
Memorandum of Understanding and the Grant Agreement with
the authorities of Moldova shall provide for appropriate
measures by Moldova related to the prevention of, and the
fight
irregularities
affecting the assistance. They shall also provide for controls
by the Commission, including the European Anti-Fraud Office,
with the right to perform on-the-spot checks and inspections,
and for audits by the Court of Auditors, where appropriate, to
be carried out on the spot.

corruption and other

against,

fraud,

(1) OJ L 248, 16.9.2002, p. 1. Regulation as last amended by Regu-
lation (EC, Euratom) No 1995/2006 (OJ L 390, 30.12.2006, p. 1).

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Article 5

By 31 August of each year the Commission shall submit to the European Parliament and to the Council a
report, including an evaluation of the implementation of this Decision in the preceding year. The report
indicate the connection between the policy conditions set out in Article 2(1), Moldova’s ongoing
shall
economic and fiscal performance, and the Commission’s decision to release the instalments of the assistance.

This Decision shall take effect on the day of its publication in the Official Journal of the European Union.

Article 6

Done at Luxembourg, 16 April 2007.

For the Council
The President

H. SEEHOFER