October 6, 2017 / 11:48 AM / a year ago

Moldova will not receive EU funding this year - PM

Moldovan Prime Minister Pavel Filip addresses the 72nd United Nations General Assembly at U.N. headquarters in New York, U.S., September 22, 2017. REUTERS/Shannon Stapleton

CHISINAU (Reuters) - Moldova will not receive expected tranches of funding this year under a 100 million euro (£89.48 million) agreement with the European Union as it has not fulfilled the required conditions, Moldovan Prime Minister Pavel Filip said on Friday.

In June, the European Union agreed to disburse 60 million euros in loans and 40 million euros of grants in 2017-18 to help the ex-Soviet nation stabilise its economy and to promote reform.

“We won’t receive money in 2017, but we’ll definitely receive it next year,” Filip told journalists, explaining that Moldova had to fulfil 30 criteria to unlock the funding.

Finance Minister Octavian Armasu told Reuters the budget had foreseen Moldova receiving two tranches this year, but expressed confidence one would be disbursed in early 2018.

The EU has said a basic precondition for the financial assistance is a respect for democratic process and the rule of law.

Nevertheless Moldova this year introduced a new electoral law that a pan-European rights body ruled could make the system more susceptible to undue influence by vested interests.

Moldova’s economy grew 4.1 percent last year, recovering from a contraction of 0.4 percent in 2015 due in part to an economic crisis in nearby Russia that hit exports and remittances from Moldovans working there.

The country, Europe’s poorest, has also been rocked by a scandal that saw the equivalent of an eighth of its gross domestic product stolen from three of its largest banks between 2012-2014.

The World Bank and International Monetary Fund have forecast growth of between 4 and 4.5 percent in 2017.

Reporting by Alexander Tanas; Writing by Alessandra Prentice; Editing by Toby Chopra

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