2002/1006/EC: Council Decision of 19 December 2002 on providing further supplementary-financial assistance to Moldova

Council Decision
of 19 December 2002
on providing further supplementary-financial assistance to Moldova
(2002/1006/EC)
THE COUNCIL OF THE EUROPEAN UNION
,
Having regard to the Treaty establishing the European Community, 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:
(1) The Commission has consulted the Economic and Financial Committee before submitting the proposal.
(2) Moldova is undertaking fundamental political and economic reforms and is making substantial efforts to sustain its progress in transition.
(3) Moldova, on the one hand, and the European Community and its Member States on the other hand, have signed a Partnership and Cooperation Agreement, which entered into force on 1 July 1998.
(4) The authorities of Moldova have agreed with the International 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.
(5) 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 financial assistance up to EUR 15 million, in the form of a long-term loan.
(6) 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.
(7) The Moldovan authorities have requested financial assistance 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.
(8) The IMF, the World Bank, the Asian Development Bank and the European Bank for Reconstruction and Development 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 Independent States (CIS), aiming at, inter alia, providing increased financial support on a concessional basis to the poorest countries of the CIS, including Moldova.
(9) Moldova became eligible to highly concessional loans from the World Bank and the IMF, and is facing particularly critical economic, social and political circumstances.
(10) In these circumstances and without prejudice to the powers of the budgetary authority, 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.
(12) The Treaty does not provide, for the adoption of this decision, powers other than those of Article 308,