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Romania Holds Back On Loan To Moldova Until Reforms Made

Moldovan Prime Minister Pavel Filip (left) looks on while Romanian counterpart Dacian Ciolos addresses journalists at the end of their official meeting in Bucharest on January 26.

Romania’s Prime Minister Dacian Ciolos says the first tranche of a five-year-loan program that Bucharest offered to Moldova in 2015 will not be disbursed until Chisinau carries out reforms recommended by the International Monetary Fund (IMF).

Ciolos made the remark in Bucharest on January 26 during a joint press conference with Moldova’s newly appointed Prime Minister Pavel Filip.

The 60-million-euro ($65 million) loan tranche is part of a total 150-million-euro ($162.5 million) loan package that Romania agreed to provide to Moldova under a deal signed on October 7, 2015.

The loan program, which has a1.5 percent annual interest rate, was agreed upon when Moldova's government was led by then-Prime Minister Valeriu Strelet.

But Strelet lost a no-confidence vote at the end of October 2015 after revelations of large-scale fraud in the financial sector that led to the collapse of three large banks.

The IMF published its latest assessment of Moldova's economy on January 20, saying the "near term outlook" amid political instability and widespread corruption "is difficult."

It said deep reform is need needed in the financial sector along with "a comprehensive review" and "strengthened governance” of the banking sector.

Parliament approved Filip as Moldova’s prime minister on January 20 -- an appointment that prompted mass protests in the capital Chisinau.