Decision (EU) 2023/1165

What it is

to provide a further EUR 145 million in macro-financial assistance to Moldova. PROPOSED ACT: Decision of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: on 6 April 2022, the European Parliament and Council adopted Decision (EU) 2022/563 providing new macro-financial assistance (MFA) to Moldova for an amount of EUR 150 million, in medium term-loans and through a grant element. The MFA entered into force on 18 July for two and a half years. On 1 August 2022, following successful fulfilment of all policy actions agreed with the Union in the Memorandum of Understanding, the first instalment of EUR 50 million was disbursed. The European Parliament adopted by 561 votes to 43, with 20 abstentions, a legislative resolution on the proposal for a decision of the European Parliament and of the Council amending Decision (EU) 2022/563 as regards the amount of macro-financial assistance to the Republic of Moldova. The European Parliament adopted its position at first reading in accordance with the ordinary legislative procedure by taking over the Commission proposal. Russia's invasion of Ukraine had a strong primary and secondary negative impact on the Moldovan economy. As a result, the Moldovan economy contracted, and the uncertain economic climate has negatively affected investment and trade in general. The energy crisis, which intensified in 2022, combined with a fall in household consumption and investments, has put additional pressure on Moldova's public finances. In addition, the sharp rise in energy prices pushes for high inflation. Given that Moldova's balance of payments for 2023 continues to show a significant residual external financing need, which exceeds the resources provided by the IMF and other multilateral institutions, the Commission's proposal suggests increasing the current macro-financial assistance (MFA) of EUR 150 million by an additional EUR 145 million . With this proposed increase of EUR 145 million, the Union will make available to Moldova macro-financial assistance of up to EUR 295 million , with a view to supporting Moldova's economic stabilisation and a substantial reform agenda. Of this maximum amount, up to EUR 220 million will be provided in the form of loans and up to EUR 75 million in the form of grants. The assistance will contribute to covering Moldova's balance of payments needs as identified in the IMF programme. The Commission will make available the EU macro-financial assistance in five instalments, each comprising of a loan and a grant element. PURPOSE: to provide supplementary macro-financial assistance of EUR 145 million to Moldova. LEGISLATIVE ACT: Decision (EU) 2023/1165 of the European Parliament and of the Council amending Decision (EU) 2022/563 as regards the amount of macro-financial assistance to the Republic of Moldova. CONTENT: on 6 April 2022, the European Parliament and the Council adopted a decision providing EU macro-financial assistance to Moldova in the amount of EUR 150 million. With the present decision, this amount is…

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