Moldova & IMF IMF Activities Publications Press Releases

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Chisinau, April 2 ( INFOTAG ). International Monetary Fund's Resident Representative in Moldova, Mr. Tokhir Mirzoev, does not rule out the fact that the IMF assessment mission may not come to Moldova before the completion of the three-year cooperation program that expires in April 2013.

Talking to Infotag correspondent, he confirmed that he had a meeting with acting Prime Minister Vlad Filat last week, during which they discussed the eventual visit of a new IMF Assessment Mission to Moldova in April 2013.

"At the current stage, we are holding negotiations and are considering a possible visit of the IMF Mission to Moldova, in the current circumstances, namely, when the Government's powers are limited and when several decisions that do not comply with our agreements had been adopted," he said.

In his words, among these decision are: the unplanned increase in pensions, the introduction of a single tax in agriculture, the raise in civil servants' salaries, as well as the preservation of 12% of the VAT on the special accounts of agricultural and sugar producers, who will have to pay to the state budget only 8% of the VAT.

"It is not clear yet whether the country has financial possibilities to put into life these plans or not; what compensation measures will be undertaken for the state budget and wherefrom the money will come," he said.

In his words, the visit to Moldova of the IMF Assessment Mission and the allotment of the last tranche depends on the development of the political situation in the country and on the authorities' readiness to conduct a comprehensive dialogue on this and other matters.

Mirzoev also said that there are possibilities to extend the program, but to this end, serious grounds and a clear-cut position of the Moldovan authorities, towards the economic development prospects, are needed.

Infotag's dossier: Since 1993, Moldova has had the following arrangements with the IMF in support of the authorities' economic adjustment programs: Compensatory and Contingency Financing Facility (CCFF), Systemic Transformation Facility (STF), Stand-by arrangements (SBA), Extended Fund Facilities (EFF), and Poverty Reduction and Growth Facilities (PRGF) - from 2009 called Extended Credit Facilities (ECF). In 2009 Moldova has also benefited from a one-time SDR allocation amounting to SDR 117.71 million.

Total Fund credit and loans outstanding at the end of December 2012 amounted to SDR 398.2 million (about US$ 612 million).

Following the November 2012 visit, Moldova and IMF arranged to prolong the term of the current program, which expired at the end of 2012, for 3 months. Completion of the 6th assessment mission will enable Moldova to receive the last tranche of US$76 million, meant to maintain its monetary reserves. The Board of Directors of IMF was expected to assess the sixth review of the Program and adopt the resolution for allotting Moldova the last tranche till the end of April, 2013. The Three-Year Arrangement approved by IMF for Moldova on January, 29, 2010 provides backing at a total amount of 369.6 million of Special Drawing Rights (SDR) of which 320 million SDR or close to US$490 million has been allocated to Moldova. 50% of the loan is allotted under the Extended Credit Facility which provides the zero rate interest rate till the end of 2013, the 5.5 -year - long grace period and the 10-year-long maturity. The rest of the sum is extended under the Extended Fund Facility which stipu lates the interest rate equal to the basis rate of SDR, the 4.5 -year -long grace period and the 10-year-long maturity.

The first who spoke of IMF's shattered confidence in Moldova, was acting Deputy Premier, acting Minister of Economy, Valeriu Lazar, who said that "the Republic of Moldova behaved unfairly towards the International Monetary Fund." In his opinion, the relations with the IMF are back in the 2009 year, when the country had no agreements with the fund. The main reason for the dented confidence was the adoption of some legislative acts, without the consent of the IMF.

In retort, acting Prime Minister, Vlad Filat [a Liberal Democrat] named "speculative" the recent sayings by the Acting Deputy Premier, Minister of Economy Valeriu Lazar [a Democrat] that Moldova's relations with the IMF have allegedly deteriorated after the AEI authorities had passed some Laws without the Fund's blessing. Filat also said that an International Monetary Fund mission will come to Chisinau "in the nearest time".