OREANDA-NEWS. October 15, 2009. It was said at the briefing by the Prime Minister Vladimir Filat emphasizing that the talks with the IMF are extremely important for Moldova as the situation in economy is very difficult due to the global financial crisis and wrong economic decisions of the previous authorities.

As for the access to the European Union’s funds, financial assistance from international organizations and donor states, including the US150 million credit promised by Russia, Moldova will receive it only if the Memorandum-Agreement is signed with the Fund. Vladimir Filat said the joint meeting of the Moldovan Government with representatives of the international financial organizations, donor-states and Embassies accredited in Chisinau was planned to be held on October 19 in Chisinau to discuss provision of foreign aid to Moldova.

According to him, the new Memorandum-Agreement is planned to be prepared for signing on October 26. Prime Minister didn’t say the amount of aid the Government expects to receive from the IMF but said that all details would be presented after signing of the Memorandum which will be published in press. Vladimir Filat said statements about the IMF conditioning signing of the new Memorandum with Moldova with revision of the age of retirement, reduction of employees of the public field, cut of social expenses and others were speculations.

He emphasized that no such conditions were laid down and the Fund was interested only in achievement of good macroeconomic results by the country, observance of the internal parameters of the budget, increase of public expenditure’s efficiency, strengthening of the financial discipline.

“But the social aspect is a priority for the Government of Moldova and we won’t admit reduction in social expenses, reduction of citizens as it results only in the growth of unemployment in crisis conditions. Moldovan citizens won’t suffer from signing of the Memorandum with the IMF. The society will know the content of this document”, Vladimir Filat stressed and added that the Memorandum would be signed if it meets interests of the country and its citizens.

At the negotiations Wednesday, the IMF Mission was informed of the reforms in the central public administration and further plans in this direction, of elimination of barriers in commerce, steps for economy liberalization, plans regarding introduction of alterations to the budget. Prime Minister said the Government would take the steps to cut the budget deficit to 11 from 16 percent of the GDP and emphasized that signing of the Memorandum-Agreement with the IMF would enable Moldova to receive access to the foreign financial assistance, overcome the difficult period and build a platform for the sustainable long-term economic development.

As Moldovan Government’s representatives said earlier, the country expects to receive credits in the amount of up to US500 million from the IMF after signing of the agreement. If no measures are taken, Moldovan budget deficit will amount of 16 percent of the GDP or 8.5 billion leis by the end of the year. The measures that have already been taken by the government will enable reducing these figures to 6.3 billion leis or about 11 percent of the GDP. After signing of the Memorandum-Agreement with the IMF, the Government also expects to receive financial assistance from the European Union, World Bank, US and Russian Governments in the amount of over 500 million dollars along with credits from the Fund.

The Government forecasts GDP reduction by 8 percent in 2009, while the IMF – by 9% in 2009 and a zero growth in 2010. The new program will replace the Funding Program within the framework of the Poverty Reduction and Growth Facility (PRGF) which expired on May 4, 2009. PRGF credits were provided at the annual rate of 0.5 percent for 10 years with the 5.5-year grace period on payment of the main amount of the credit. The amount of agreement of the PRGF with Moldova totaled about US168 million with about US 133 million of them actually provided to the country by now.