Moldova's central bank (BNM) on January 30 officially applied to join the Single Euro Payments Area (SEPA), the simplified payment integration initiative that enables countries in Western Europe to effect cashless bank transfers and direct debits in euros.
"Today's a historic day for Moldova -- it's the day that Moldova's National Bank (BNM) has made a clear and unequivocal statement that it wants to be part of European financial systems," BNM Governor Anca Dragu said after she signed the application at a ceremony in Chisinau.
SEPA, which currently groups 36 countries, was introduced in 2008 for credit transfers and for direct debit transactions in 2009 and was expanded in 2014 in all the countries that use the common currency, the euro, followed by its implementation in several non-euro European members in 2016.
By harmonizing standards in all SEPA countries and scrapping differences between national and cross-border payments, SEPA enhances the efficiency and competitiveness of European economies. Such a tie-in should benefit Moldova, one of Europe's poorest countries with a fledgling economy.
"A payment could be done in about 24 hours using this system," Dragu said, adding that SEPA would also slash the costs from the current 20-50 euros per transaction to only 2-3 euros.
"This will be a huge step for the economic system -- whether individuals or companies," she said, adding that once adopted, it would help the hundreds of thousands of Moldovans working abroad to send money home much more cheaply.
Under pro-Western President Maia Sandu, who came to power in November 2020, ex-Soviet Moldova has made ample efforts to distance itself from Moscow and integrate into Europe.
Moldova obtained the status of an EU candidate country in June 2022 and was given the green light to start membership negotiations in December.
Dragu estimated that it would take up to a year for SEPA to assess Moldova's application and another six months for Chisinau's actual connection to the system.
Dragu, a former Romanian finance minister and center-right lawmaker, was appointed by Moldova's parliament as the new central bank governor last month, the same day she was sworn in as a Moldovan citizen.
EU and NATO member Romania shares a common language and history with Moldova, most of which was part of Romania until the end of World War II.
Besides the 27 EU member states, SEPA groups the four member states of the European Free Trade Association -- Iceland, Liechtenstein, Norway, and Switzerland -- as well as the United Kingdom. Four European microstates -- Andorra, Monaco, San Marino, and the Vatican -- are part of the system on a technical level.