PURPOSE: to provide Moldova with a macro-financial assistance in the form of a grant of up to EUR 45 million.

LEGISLATIVE ACT: Council Decision 2007/259/EC providing Community macro-financial assistance to Moldova.

CONTENT: the Council adopted a Decision to provide Moldova with macro-financial assistance of up to EUR 45 million with a view to supporting its balance of payments and alleviating the financial constraints on the implementation of the government's economic programme.

The authorities of Moldova are committed to economic stabilisation and structural reforms, supported by the International Monetary Fund through a three-year arrangement. EU-Moldova relations are developing within the framework of the European Neighbourhood Policy, which is expected to lead to deeper economic integration.

The proposed macro-financial assistance will be exceptional and limited in time, will complement support from the Bretton Woods Institutions, bilateral donors and the Paris Club, and will be conditional, in particular, on progress in the implementation of the IMF-supported Poverty Reduction and Growth Facility arrangement.

The Community macro-financial assistance shall be made available for two years starting from the first day after the entry into force of this Decision. However, 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.

The Macro-financial assistance shall be made available by the Commission to Moldova in three instalments. The first instalment shall be released on the basis of satisfactory 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. The second and third instalments shall also be released on the basis of satisfactory 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 and not less than three months after the release of the previous instalment.

The Commission is hereby empowered to agree with the authorities of Moldova the economic policy and financial conditions attached to the macro-financial assistance, to be laid down in a Memorandum of Understanding and a Grant Agreement. This Agreement and MoU shall provide for appropriate measures by Moldova related to the prevention of, and the fight against, fraud, corruption and other 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.

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 shall indicate the connection between the policy conditions, Moldova’s ongoing economic and fiscal performance, and the Commission’s decision to release the instalments of the assistance.

ENTRY INTO FORCE: 28/04/2007.

The European Parliament adopted a resolution drafted by Béla GLATTFELDER (EPP-ED, HU) broadly approving the proposed decision on Community macro-financial assistance to Moldova, subject to a few amendments. (For details of the amendments, please refer to the summary of 23/01/2007.)

The committee adopted the report by Béla GLATTFELDER (EPP-ED, HU) broadly approving the proposed decision on Community macro-financial assistance to Moldova, subject to a few amendments (under the consultation procedure):

- the payment of successive tranches of aid should be subject to progress in the transparency of Moldova's public finances, the application of macroeconomic and budgetary priorities advocated by the International Monetary Fund and respect for international democratic and human rights standards, including respect for minorities;

- the committee underlined the "exceptional" nature of an instrument such as macro-financial assistance and specified that the aim was to support Moldova's balance of payments "in the context of a severe deterioration of Moldova's trade and current account balances";

- the European Parliament's role should be enhanced: the Commission should regularly inform Parliament of the Economic and Financial Committee proceedings and supply the relevant documents; the Memorandum of Understanding and the Grant Agreement that the Commission will agree with the Moldovan authorities should be submitted not only to the Council but also to Parliament; there should be improved reporting to Parliament as regards the actual implementation of this aid instrument; and the Commission should submit to Parliament and Council an ex-post evaluation report no later than two years after the expiry of the implementation agreement.

PURPOSE: to provide macro-financial assistance to Moldova in the form of a grant amounting to a maximum of EUR 45 million.

PROPOSED ACT: Council Decision.

CONTENT: the Commission proposes to provide macro-financial assistance to Moldova in the form of a grant of a maximum amount of EUR 45 million with a view to supporting Moldova's balance of payments and the reserve build-up.

The proposed assistance will help Moldova alleviate the financial constraints on the implementation of its economic programme. It will also facilitate and encourage the authorities' efforts to implement reforms under the EU-Moldova European Neighbourhood Policy Action Plan and the Economic Growth and Poverty Reduction Strategy Paper.

The proposed macro-financial assistance will be exceptional and limited in time, will complement support from the Bretton Woods Institutions, bilateral donors and the Paris Club, and will be conditional, in particular, on progress in the implementation of the IMF-supported Poverty Reduction and Growth Facility arrangement.

The assistance will be made available in three instalments over a period of two years. The period of the implementation of the programme could be extended by one more year. The assistance will be managed by the Commission which shall agree with the authorities the specific economic policy and financial conditions attached to the payment of the grant instalments. Specific provisions on the prevention of fraud and other irregularities, consistent with the Financial Regulation, will be duly taken into account.

Such assistance would be financed from commitment appropriations in 2007, subject to final approval of the 2007 EC Budget, with payments taking place in 2007 and 2008.

For further information concerning the financial implications of this measure, please refer to the

financial statement.

PURPOSE: to provide macro-financial assistance to Moldova in the form of a grant amounting to a maximum of EUR 45 million.

PROPOSED ACT: Council Decision.

CONTENT: the Commission proposes to provide macro-financial assistance to Moldova in the form of a grant of a maximum amount of EUR 45 million with a view to supporting Moldova's balance of payments and the reserve build-up.

The proposed assistance will help Moldova alleviate the financial constraints on the implementation of its economic programme. It will also facilitate and encourage the authorities' efforts to implement reforms under the EU-Moldova European Neighbourhood Policy Action Plan and the Economic Growth and Poverty Reduction Strategy Paper.

The proposed macro-financial assistance will be exceptional and limited in time, will complement support from the Bretton Woods Institutions, bilateral donors and the Paris Club, and will be conditional, in particular, on progress in the implementation of the IMF-supported Poverty Reduction and Growth Facility arrangement.

The assistance will be made available in three instalments over a period of two years. The period of the implementation of the programme could be extended by one more year. The assistance will be managed by the Commission which shall agree with the authorities the specific economic policy and financial conditions attached to the payment of the grant instalments. Specific provisions on the prevention of fraud and other irregularities, consistent with the Financial Regulation, will be duly taken into account.

Such assistance would be financed from commitment appropriations in 2007, subject to final approval of the 2007 EC Budget, with payments taking place in 2007 and 2008.

For further information concerning the financial implications of this measure, please refer to the

financial statement.