Delegation of the European Union to the Republic of Moldova

The Republic of Moldova and the EU

22/11/2021 - 13:56
EU relations with Country

Overview of political and economic relations between the Republic of Moldova and the European Union.

The Association Agreement including a Deep and Comprehensive Free Trade Area provides for stronger political association and economic integration between the EU and the Republic of Moldova (further ‘Moldova’) and has created constantly growing trade between the partners since 2014. The EU’s assistance and support of democratic reforms have delivered tangible benefits to Moldovan citizens. Since 28 April 2014, Moldovan citizens benefit from visa free travel to the Schengen area.

On 27 June 2014, the EU and Moldova signed an ambitious and innovative Association Agreement, including a Deep and Comprehensive Free Trade Area (DCFTA). The agreement contains binding, rule-based provisions and provides for enhanced cooperation to promote political association and economic integration, going further than in traditional agreements and covering all areas of relevance. The Agreement was provisionally applied from 1 September 2014 until completion of the ratification process, which allowed the full application of the Association Agreement from 1 July 2016.

The EU considers the implementation of the Association Agreement as a key priority to consolidate and promote shared values and principles, notably democracy, the rule of law and human rights. Other priorities for relations with Moldova include strengthening state institutions, reforming the judiciary, improving business climate, ensuring respect for freedom of expression, improving health and social conditions and cooperating on issues such as border management, migration and the fight against trafficking, organised crime, corruption and money laundering.

The implementation of the Association Agreement is regularly monitored through Association Implementation Reports (the latest issued on 19 October 2021), and reviewed in several bilateral dialogue formats provided for under the Association Agreement:

The EU also cooperates with Moldova in the area of foreign and security policy. The agreement on establishing a framework for Moldova’s participation in EU crisis management operations was signed on 13 December 2012 (entered into force in July 2013). Since 2014 Moldova participates in the EU crisis management missions (EUTM Mali, EUMAM RCA) with officer currently deployed in EUTM Mali. Consultations on security and defense with Moldova take place since 2014 (last on 6-8 June 2018 in Chisinau) to discuss cooperation on tackling hybrid threats, cyber security, strategic communication, training and capacity building for Common Security and Defence Policy (CSDP) missions, support to security sector reform. Moldova is also an active participant in the Eastern Partnership Panel on Security, CSDP and Civil Protection as well as CSDP related courses, conferences and workshops.

The EU firmly supports a comprehensive, peaceful and sustainable settlement of the Transnistrian conflict based on the sovereignty and territorial integrity of the Republic of Moldova within its internationally recognised borders with a special status for Transnistria. The EU participates as an observer in the 5+2 negotiation process on Transnistrian conflict settlement. The EU finances confidence-building measures designed to support the settlement process by increasing confidence between Chişinău and Tiraspol through joint initiatives involving stakeholders from both sides. Confidence building measures have allowed 70 people from both sides of the Nistru River to set up businesses and create 350 jobs.

The European Union Border Assistance Mission (EUBAM) to Moldova and Ukraine was launched in 2005. The aim of EUBAM is to support Moldova’s and Ukraine’s efforts to effectively manage their common border and actively support measures contributing to the settlement of the Transnistrian conflict. Thanks to EU support, a modernised and quicker train operates between Chişinău and Odesa running via Tiraspol, which brings closer the two banks of the Nistru River. Link to the EUBAM website: https://eubam.org/

Mobility and people-to-people contacts

The visa liberalisation entered into force on 28 April 2014. The visa free regime with Moldova has been facilitating travel, business and people-to-people contacts.  It is an example of progress achieved on enhancing mobility with EaP partners.

According to the data by Moldovan authorities, from 28 April 2014 (the start date of visa liberalisation) until 31 December 2020, some 2.3 million Moldovan citizens made almost 9 million trips to the Schengen area under the visa-free regime. Moldova benefits from a Mobility Partnership with the EU as a framework for cooperation in the field of migration in areas such as legal migration, and the fight against irregular migration, including border management and the combating of trafficking in human beings. Around 12 initiatives are currently being implemented within the Mobility Partnership between the EU and Moldova. For more information see here.

The EU assistance in the area of higher education continued to be provided via Erasmus+. From 2015-20, nearly 3,700 students and academic staff benefitted from Erasmus+ academic mobility between Moldova and the EU. Under Horizon’s Marie Skłodowska-Curie Actions (MSCA) 2014-2020, 62 Moldovan researchers have received funding for training, mobility and career development.  

Deep and Comprehensive Free Trade Agreement

On 1 July 2016, the EU-Moldova Association Agreement with its Deep and Comprehensive Free Trade Area (DCFTA) came into full force. The agreement had been provisionally applied since 1 September 2014, and, since 2016, applies to the entire territory of Moldova. This preferential trade system has allowed Moldova to benefit from reduced or eliminated tariffs for its goods, an increased services market and better investment conditions.

In 2020, the EU remained the main trade partner of Moldova, accounting for 53% of its total trade (approx. 67% of total exports and 45% of Moldova’s total imports).

See also

EU-Moldova Association Agreement

EU-Moldova Association Agenda

EU-Moldova trade relations

 

Financial Assistance

EU is the biggest provider of aid to Moldova. Over the last 7-year period, Moldova benefitted from more than half a billion euro (€518.15 million) of grants in bilateral assistance, and had access to €200 million (loans and grants) under macro-financial assistance programmes. The European Neighbourhood Instrument (ENI) was the EU financial instrument dedicated to the Neighbourhood for the period 2014-2020. It has been replaced by the Neighbourhood, Development and International Cooperation Instrument (NDICI) – ‘Global Europe’ for the period 2021-2027. Programming of strategic priorities for EU support to Moldova for the period 2021-2027 is ongoing. The EU assistance is based on strict conditionality, and is linked to the satisfactory progress in reforms and the respect of the rule of law, effective democratic mechanisms and human rights.

As part of the Team Europe approach in response to the outbreak of the COVID-19 pandemic, the EU committed a total of EUR 127 million in bilateral grant support to Moldova to deliver protective equipment, strengthen the healthcare system, and support recovery. Moldova was the first European country to benefit from the COVAX Facility and the EU vaccine sharing mechanism, receiving more than 1 million doses of vaccines from Team Europe and from COVAX.  The EU also supports the rollout of the vaccine through bilateral and regional programmes.

On 2 June, responding to the request for support by President Sandu, the Commission announced an Economic Recovery Plan for the Republic of Moldova, which will mobilise up to €600 million over the next three years in macro-financial assistance, grants and investments, supported by blending and financial guarantees. The plan builds on five pillars: public finance management and economic governance; competitive economy, trade & SMEs; infrastructure; education & employability; and the rule of law & justice reform. The Economic Recovery Plan is subject to strict conditionality. Investments will be made based on a ‘more-for-more' approach: progress on structural reforms, in the field of justice and fight against corruption notably will be a prerequisite for financial assistance. As part of this support, EUR 36.4 million in budget support was disbursed on 28 September 2021 to mitigate the consequences of COVID-19 and support the polic reform.

In parallel, at the regional level, the EU has announced in July 2021 an ambitious Economic and Investment Plan for the Eastern Partnership to boost connectivity across the region and help countries recover socially and economically from the COVID-19 crisis. Specifically for Moldova, the Economic and Investment plan should mobilise about €1.6 billion of investments in the country to help notably reinforce business climate in Moldova, boost trade, increasing energy efficiency and connectivity, and invest in Moldova’s human capital.Moldova continues to benefit from a range of regional programmes covering economic development and market opportunities; strong institutions and good governance; connectivity, energy efficiency, environment and climate change; mobility and people-to-people contacts; and a number of cross-cutting issues such as gender equality, media freedom, and civil society.

In the period 2017-2020, Moldova has benefited from two macro-financial assistance programmes:

  • The 2017-2020 programme of EUR 100 million (EUR 40 million in grants and EUR 60 million in in medium-term loans at favourable financing conditions). The first instalment of EUR 30 million was released in October 2019. The second instalment of EUR 30 million was released in July 2020. The third and final instalment of the programme was cancelled, as the availability period of the programme ended in July 2020.
  • An EUR 100 million emergency MFA programme in the context of the COVID-19 pandemic was approved in August 2020 as part of a wider package to 10 enlargement and neighbourhood partners. The first disbursement of EUR 50 million was made on 25 November 2020, and, following significant progress made with respect to the fulfilment of the policy conditions, the Commission disbursed the second instalment of EUR 50 million in loans on 7 October 2021

All disbursements under the MFA are tied to the political pre-conditions regarding the respect of democratic mechanisms, the rule of law and human rights, as well as to Moldova's track record under the IMF programme and the fulfilment of the specific policy conditions (in such areas as public governance, financial sector governance, energy sector reforms and tackling corruption) laid down in the respective Memorandum of Understanding.

More on macro-financial assistance

See Also

EU-Moldova relations factsheet

 

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