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PRACTICALLY NONE OF THE PRIOR ACTIONS AGREED WITH THE IMF WERE MET IN FULL

The International Monetary Fund mission arrives Chisinau today with the scope of negotiating with Moldovan authorities measures that need to be implemented prior to resuming external financing of the Republic of Moldova. The mission will end on June 18.

Practically none of the prior actions agreed with the Fund were met in full by the Moldovan Government, this is the conclusion that we could see from the statements made today at a press conference by Edgardo Ruggiero, the resident representative of the IMF in Moldova. “One can not be sure that in the final analysis there will not intervene other changes”, said IMF resident representative.

According to Ruggiero, the current mission will review reduction of state and social budgets deficit as well as their balancing. A satisfactory version of the draft law on Pre-Shipment Inspection has been circulated to the Parliament but it still needs to be approved. Restrictions concerning certain types of products were so far eliminated on paper only.

Edgardo Ruggiero has mentioned that there appeared a number of new problems in IMF’s relations with the Government that approved a series of decisions implying additional expenditures. The most serious concerns are in connection with decisions on increasing pensions and benefits to veterans. This comes in contradiction to prior agreements made with the World Bank and IMF and endangering medium term stability of the budget.

Yet another problem, which was metaphorically named by Ruggiero “calcatul pe grebla” [stepping on rake] lies with changes and amendments suggested to the Law of entrepreneur patent envisaging much austere conditions for the activities displayed by the businesses. According to Ruggiero, this Law will lead to further expansion of shadow economy. At the same time, the system of identifying origin of goods is rather inefficient and favors illegal practice of exporting to Western Europe products declared as being of Moldovan origin although practically imported into Moldova from its neighboring countries.

Edgardo Ruggiero has stated that if IMF will not resume external financing to the Republic of Moldova, the Government will loose important amounts agreed upon with other donors and included into the Law of Budget. From the financial standpoint, taking into account long lasting stagnation of such an important source of budget revenue as privatization, the Republic of Moldova will not be able to make it through the year, says IMF resident representative in Moldova.

Likewise, IMF mission will discuss with the Moldovan authorities the cost of new administrative-territorial arrangement. Chisinau authorities believe that new arrangement will help to make considerable savings, while IMF’s own estimates show that territorial reform implies considerable extra costs. “All is quite simple, it will be necessary to install new phone lines, to buy new cars for a large number of new mayors, to make new seals, to repair and equip mayors’ offices, etc. Decentralization makes sense only if it really brings services closer to population. Under Judets arrangement in a small country like Moldova these were sufficiently close. Council of Europe has discussed at large the issue of judets as compared to districts, so I will abstain from repeating it once again”, concluded Edgardo Ruggiero, IMF’s resident representative in the Republic of Moldova.

REPORTER.MD