OREANDA-NEWS. September 30, 2010. Another pre-election season starts in Moldova. The last meeting of the parliament of 18th convocation, where the deputies should heard the report on the activity of the government for a year, was cancelled, acting President of Moldova Mihai Ghimpu dissolved the parliament, and Prime Minister Vladimir Filat had to report on the results of the government for a year of work to the mass media and a part of the Cabinet. However Prime Minister noted that he didn’t intend to reply to the remarks of the Alliance for European Integration sounded about him the day before at the meeting, and came to sum up the first year of work of the government, headed by him.

- Year ago Moldova was in deep crisis, and the delay in implementation of anti-crisis measures by the previous government intensified the slump in economy. Thus, last year of work for acting government was difficult, but we managed to return hope for worthy future and better life to the citizens, - Vladimir Filat said. – The major document that the government elaborated and started to implement on a priority basis became the Program of Stabilization and Restoration of Economy for 2009-2010.

The first, and apparently the last year of work of Filat’s government started with excitement typical for that period. The largest stir was caused by the negotiations started between the Cabinet of Ministers and external donors, and the IMF in the first place. As a result, already in January 2010 the Memorandum-Agreement with IMF for 2010-2012 on financial assistance to the amount of USD590 million and on access to the additional amount of USD180 million for financing of budget need was approved by the Board of Directors of the Fund. “Government succeeded in normalization of relations with external partners for development, enabling to receive the financial assistance during 2010 by four times more than in 2008 (USD785 million),” – Prime Minister noted.

Urgent measures on reduction of budget deficit allowed to decrease the budget deficit from 15% in GDP structure in September 2009 to 6,4% in GDP structure – as at the end of 2010. At present 5,4% of GDP volume falls to the budget deficit, while 7% index was planned. In January-August 2010 the budget revenues amounted to 10,12 billion lei. It’s a little more (by 0,1%) than the indices planned and by 20,8% more as compared to the same period of 2009. The budget expenditures for this period amounted to 11,59 billion lei, increasing by 13,1% as compared to the same period of 2009.

While on the subject of entrepreneurship, Vladimir Filat noted the facilitation in the process of authorization and licensing of entrepreneurship and certification of products. New mechanism of pricing for medicines was implemented, liberalization of meat and non-ferrous metals markets was carried out, list of socially-significant goods was enlarged. Moldova received another USD24 million under the Credit Agreement with the International Development Association to improve the competitiveness of the Moldavian companies. 30 economic agents received the equipment totaling to 48 million lei under the auspices of the Japanese government. 1200 young entrepreneurs more received the financial assistance for implementation of 82 projects.

Government simplified the procedure of imposing of VAT at the zero rate of goods, brought to the customs territory of Moldova in the customs regime, created a Free Economic Zone Balti. A package of documents, contributing to the liberalization of electrical power market, was adopted. Struggle against the contraband continued, the control at the border strengthened, and the customs proceeds since the beginning of the year increased by 28% against the same period of 2009.

A whole list of amendments was filed to a number of documents of tax legislation at the initiative of Filat’s government. For example, the cash settlement standard among the economic agents was increased from 1 thousand lei up to 100 thousand lei per month. Since September 1, 2010 the threshold for registration as VAT-payer has been increased from 300 up to 600 thousand lei.

At the same time, starting from January 1, 2012 the zero rate for reinvested earnings of juridical persons will be cancelled. Besides, the limit of expenses for voluntary insurance, accepted for deduction for tax reasons, is annulled as well. Up to now the deduction of these expenses was limited by the amount of insurance premium, practically paid in the relevant tax year.

Fine for incomplete and/or improper drawing up of tax-account documentation reduced from 500 to 200 lei for every case (not more than 5 thousand lei within a single inspection). Besides, the penalty for non-indication or incorrect indication in the bill of lading and/or tax invoice of the purchase price of socially-significant goods was imposed. Its amount makes up 10% of the cost of transaction with such goods, but not more than 500 lei.

Very important event on the way of European integration of the country and expansion of opportunities of Moldavian companies on the European markets Premier called the initiation of negotiations on the Association Agreement with EU, of the process of dialogue on liberalization of visa regime from June 15, on creation of a Deep and Comprehensive Free Trade Zone. Vladimir Filat reminded that on March 24 in the course of the consultative group of donors the partners for development undertook to render assistance to Moldova to the amount of USD2,6 billion.

According to Vladimir Filat, the relations with Russia restored in full – the list of fruit and vegetables exporters consists of 140 economic agents, and the export of wine products continues. Since the beginning of the year the deliveries of Moldavian wine to Russia increased by 38% as compared to the same period of 2009 and amounted to USD40 million in monetary terms. New indicator of wine quality is implemented in Moldova upon the recommendation of Russia; however the authorities recommend the wine-makers to expand the outlets.

Since the beginning of the year the contract on state subsidy assistance have been concluded with more than 700 agroproducers, the total amount of the contracts accounts for 76,7 million lei. Premier also noted that in January 2010 they signed the agreement on full financing of the projects in agriculture and restoration of roads from the funds of the Millennium Challenge Corporation to the amount of USD262 million. At the same time, since the beginning of the year the excises for import of luxury cars increased, as well as the tariff for road use. As a result, the road fund of the country increased twice as much – up to 582,1 million lei, reaching 1% in GDP structure of Moldova.

Vladimir Filat noted that following the results of January-June 2010 the average salary in the country amounted to 2877,8 lei or by 6,8% more than the indices of 2009. The minimal guaranteed wage rate in the real sector increased from 900 up to 1100 lei per month. Teachers’ salaries in the educational institutions of all levels increased by 24% at the average. At the same time, according to Premier, the next growth in salaries is planned for January 1 and September 1, 2011. The amount of lump-sum allowance in child birth increased by 300 lei: up to 1,7 thousand lei – for the first child, and up to 2 thousand lei – for every next child. The monthly allowance for care of child up to 1,5 years old for the uninsured persons increased from 150 lei up to 250 lei. In 2010 the allowances for the insured mothers amounted to 656,7 lei per month at the average or by 37% more than in 2009.

Summing up the statement, Filat noted that Moldova managed to stop the recession and the real sector of economy in January-June 2010 amounted to 5,6%. “We implemented the important structural and social reforms, created the foundations for reforming of justice and internal affairs bodies. We provided the normal conditions for operation of the democratic institutions. These are the concrete measures, bringing the specific results,” – the head of the Cabinet of Ministers added.

In the course of the press conference Vladimir Filat announced that the government, headed by him, won’t go into retirement and will continue working, pursuant to the applicable legislation. “We have a highly topical program on various fields, and we are to do much,” – Filat noted. Of course, the Parliament dissolution will adjust appreciably “the program” of the government for the next few years, however the Cabinet still may have time to surprise not only the parliamentary opposition, but the colleagues in the Alliance as well.

The most important question that will emerge before the new Cabinet of Ministers – whether to follow the policy of Filat’s government or to return the ship by 180 degrees. The new Premier practically should answer the question: whether to continue the collaboration with international financial organizations – first of all with IMF – or not. The first variant, apparently, means the extension of external support; the second one – most likely will result in economic collapse of the country.

In any case, the IMF mission will come to Moldova not in October, as it was planned, but in December – at the best, or in January 2011 – in reality; in order to communicate with the new government, on the policy of which the fate of the country will depend more than ever.