Moldova & IMF IMF Activities Publications Press Releases

CHISINAU, April 17 (Reuters) - Moldova's parliament rejected a set of important privatisation laws on Monday, casting doubt on renewed international financing and threatening to trigger a government crisis.

As the Communist-dominated parliament was voting on the bills, thousands of students protested against the end to some of their benefits, throwing bottles, eggs and sticks at the mayor's office.

Prime Minister Dumitru Braghis told reporters after the vote the rejection of the laws could torpedo a visit planned for Wednesday by an International Monetary Fund mission.

Moldova, a former Soviet republic wedged between Ukraine and Romania, adopted a tight 2000 budget last week. Braghis said at the weekend the country could secure new loans from the IMF if it approved selloffs of lucrative wine and tobacco firms.

The IMF, Moldova's major creditor, suspended loans under a $200 million Extended Fund Facility last November after parliament rejected the same set of laws, eventually toppling the government.

The IMF resident mission in Moldova is expected to make a statement on Wednesday.

Braghis said the failed vote might prompt his government to resign.

"All options are possible, including this one," Braghis said. A cabinet meeting was scheduled for Tuesday.

The students protested against an order ending their right to free public transport, a measure included in the 2000 budget in line with IMF advice.

Officials have expressed concern that a failure to secure further IMF credits could further weaken the economy and make poverty even more widespread in the country of 4.3 million.

Moldova's government needs foreign loans badly as it has to spend some $100 million to service external debts due this year.