2007/259/EC: Council Decision of 16 April 2007 providing Community macro-financial assistance to Moldova

28.4.2007 EN Official Journal of the European Union L 111/69
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 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),
After consulting the Economic and Financial Committee,
Whereas:
(1) 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.
(2) In May 2004, the authorities of Moldova adopted an Economic Growth and Poverty Reduction Strategy Paper, setting medium-term priorities for government action.
(3) Moldova, on the one hand, and the European Communities and their Member States on the other hand, have signed a Partnership and Cooperation Agreement (2), which entered into force on 1 July 1998.
(4) Relations between Moldova and the European Union are developing within the framework of the European Neighbourhood 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.
(5) Moldova has substantial financing needs arising from a significant deterioration of its financial position.
(6) The Moldovan authorities have requested financial assistance on a concessional basis from the Communities, international financial institutions, and from 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 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.
(7) Moldova is eligible for loans and grants on highly favourable terms from the World Bank and the IMF.
(8) In these circumstances, Community macro-financial assistance to Moldova should be made available in the form of a grant, as an appropriate measure to help Moldova at this critical juncture.
(9) In order to ensure efficient protection of the Community’s financial interests linked to this macro-financial assistance, it is necessary to provide for appropriate 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.
(11) The Community macro-financial assistance should be managed by the Commission in consultation with the Economic and Financial Committee,