Moldovan fragile tango between increasing external financing needs and strategic communication

22 June 2020

Executive summary

The magnitude and the cost of external financial support are directly linked to the ability of Moldovan political elite to manage challenges. The perception of external loans in English news is positive enhancing Moldova’s credibility on international level. However, financial assistance is repeatedly subject to public mistrust, excessive politicisation and manipulations on local front. Authorities do not assure proper transparency of the negotiation process, nor a strategic pubic communication about the value and conditions of external assistance. Moldovan governments’ long-term experience in performing closed-door preparations for financial support fuelled mistrust in authorities and often backfired.

Financing needs ill continue to increase amid negative reverberations of COVID-19 crisis. Moldova would need to attract at least USD 500 million for budget expenditures and at least USD 650 million for additional public investments in the following 5 years. The government might borrow at least USD 330 million from the IMF and EUR 100 million from the EU to finance its structural reforms. Moldova should not ignore the great value of the financial aid that comes in line with grants packages. The conditionalities related to EU financial assistance are opportunities and additional arguments in favour of long-time postponed reforms. Any crisis is also an opportunity to enhance a drastic reform process and focus on modernisation priorities. Bilateral loans shall be treated carefully, but in tandem with Eurobonds may become main vehicles to finance much-needed public investments. However, the engagement of civil society during the prioritisation process of reforms or national projects remains a challenge. Therefore, transparency and genuine public consultations are the chief cornerstones for successful external financial assistance considering constant political tensions.


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About the authors

Mr. Dumitru Vicol is a research analyst at an American bank in London covering financial markets of Central Eastern Europe Middle East and Africa since 2017. He is a member of the team that has been voted number 1 in several financial services surveys. Dumitru has also worked five years for major European banks in London, Paris and Dubai. His main focus is the development of investment strategies based on quantitative analysis, using econometric and machine-learning techniques, of monetary and fiscal developments, foreign exchanges and government bonds. Dumitru has been involved in projects related to the advocacy and development of financial instruments such as crowdfunding and diaspora bonds in Moldova. He is a graduate of the London School of Economics, Paris School of Economics, Sorbonne and The Academy of Economic Studies of Moldova.

Dr. Vadim Pistrinciuc is Executive Director of the Institute for Strategic Initiatives (IPIS) and former Konrad-Adenauer-Stiftung visiting fellow based in ECFR’s Berlin office. He was a member of parliament in Moldova from 2014 to 2019. He served as deputy minister of labour and social protection between 2009 and 2011, and was a senior political adviser to the prime minister between 2011 and 2013. He advised the prime minister on public administration reforms, political programmes, and political strategies. Prior to that, Vadim served as an expert, project manager, and consultant to projects within international organisations (United Nations Development Programme, UNICEF, and the International Organisation for Migration) in the areas of human rights, public administration reforms, anti-corruption, and social development. He holds a PhD in sociology from Moldova State University.

This policy brief was developed in the framework of the project „Policy bridges with the EU: Securing the Europeanisation process of the Republic of Moldova” implemented with the support of the Soros Foundation-Moldova. The views expressed in this publication are those of the authors alone and do not represent the views of the Soros Foundation-Moldova.



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