Squandering EU Money: Auditors Slam Brussels for “Unjustified” Funding for Moldova

Written by | Friday, September 2nd, 2016

The European Court of Auditors yesterday (1 September) criticized the way the EU spends money in Moldova. Following the banking scandal that saw $1 billion disappear from the banking system, which corresponds to about an eighth of Moldova’s gross domestic output, EU funds as well as IMF’s and the World Bank’s aid for the country were frozen. The EU-Moldova relations are based on the European Neighborhood Policy (ENP) and the Eastern Partnership. Under both programs, the country was given €782 million in bilateral aid allocated to Moldova from 2007 to 2015.

Being Europe’s poorest country, Moldova received €37 per inhabitant in 2014 — the highest among the EU’s eastern neighbors. The 50-page report published by the Court of Auditors, however, says that the country is struck by rampant corruption and weak public institutions that have been top recipients of EU support since 2007. Auditors targeted the sector to evaluate whether the money actually helped to improve the institutions and public governance – they concluded that little progress and difference had been made.  The auditors also criticized the EU Commission, which should have responded faster when first signals of risks associated with the aid materialized.

“Programs were not sufficiently aligned to Moldovan strategies. The potential benefit of the programs was reduced by the fact that the Commission did not make full use of its ability to set preconditions for disbursement. Some specific conditions were fulfilled between program negotiation and the start of the sector budget support or were not directly measurable. The Commission could have been more stringent when assessing whether they had been fulfilled. Also, the granting of additional incentive-based funds was not fully justified,” the auditors concluded.

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