Moldova signs loan agreements with Russia and the IMF to combat the aftermath of the outbreak

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The Moldovan government has approved loans from Russia and the International Monetary Fund (IMF) worth $ 470 million to help reduce a growing budget deficit caused by the coronavirus outbreak.

The agreements were approved in a government meeting held online on April 21.

Prime Minister Ion Chicu said the two loans will help cover a rapidly growing budget deficit that is expected to double as a result of the outbreak and hit an estimated 7 percent of GDP. Moldova has so far reported more than 2,600 coronavirus infections and 73 deaths.

Criticized the $ 217 million 10-year loan from Russia at 2 percent annual interest, the opposition said it posed a long-term “hazard” as obscure provisions put the money in unnecessary projects for Russian companies favor.

Pro-European opposition leader Maia Sandu also warned that an article in the agreement signed in Moscow on April 17 guarantees the repayment of loans that private Moldovan firms have taken out from Russian banks.

Chicu denied the allegations, saying Moldova had “made no commitments that Russophobes vehemently accuse us of”. He said the loan was “a classic financing arrangement with no hidden clauses that would be detrimental to Moldova”.

Moldova has also signed a $ 254 million short-term loan agreement with the IMF. Both agreements require the approval of Parliament.

Chicu said he sent a letter to the European Union on April 17 asking for a € 30 million ($ 32.5 million) tranche to be paid out of the € 100 million ($ 108.5 million) Called for macro-financial assistance facility that the bloc has earmarked for Moldova.

Moldova, one of the poorest countries in Europe, initially received a 30 million euro tranche from the money in two installments in October and November.

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