The European Union will withhold the last tranche of loans to Moldova over justice reform hold-up. The final installment is worth 28 million euros but because the Moldovan authorities did not fulfill the required conditions to support justice reforms, the EU will not redistribute the final amount. The EU is Moldova’s largest external donor, but payments have been frozen in the past due to slow reform progress. Brussels has reminded that a basic precondition for the financial assistance is a respect for the democratic process and the rule of law.
“The EU has closely observed the reform process and noted that the Moldovan authorities showed insufficient commitment to reforming the justice sector,” the EU delegation in Moldova said. “The Moldovan authorities have not fulfilled the EU’s conditions for receiving the last financial transfer under the justice reform program, which amounts to 28 million euros,” it said. The disbursement of other EU funding, including a 100 million euro macro-financial assistance package for 2017-2018, has also been on hold. Moldova’s Prime Minister Pavel Filip said last week that the country would not get any financing under the agreement this year. Despite this, Kisinev has this year introduced a new electoral law that the EU says could make the system more vulnerable to vested interests.
The Moldova’s economy grew 4.1 percent in 2016, recovering from a contraction of 0.4 percent in 2015 due in part to an economic crisis in Russia that impacted exports and remittances from Moldovans working there. Moldova, Europe’s poorest country, has been also hit by a corruption scandal that saw the equivalent of an eighth of its GDP stolen from three largest banks over the period of two years.