ECO-BUS WEEKLY DIGEST 18- May 24. Most important Economy & Business news by IPN
● MONDAY, May 18
First payment made by National Bank enters state budget
The first payment of 218 million lei from the National Bank of Moldova was transferred to the state budget last week. Following amendments made to the legislation, the central bank transfers a part of its profits in order to compensate for the losses caused by the bank fraud. After the working meeting of senior state officials, Prime Minister Ion Chicu said that owing to this transfer, the sum paid by the people for recovering the stolen funds will be lower.
Measures to support business entities operating in tourism industry
The Government placed a 540-day moratorium during which the tourists cannot ask to be refunded the payments they made for scheduled vacations before March 17, 2020. The travel agencies pledge to refund the money to the tourists who do not want to reschedule the vacations until December 31, 2021. According to Minister of Justice Fadei Nagachevski, the business entities operating in the tourism industry are unable to refund the money to clients during the period of time stipulated by the legislation owing to the crisis caused by COVID-19.
Changes approved to regulations concerning method of organizing work
During the public health emergency, employers will be able to temporarily change the workplace of employees, without signing an additional agreement to the contract, if it is impossible to provide work at the place organized by the employer, says a bill to amend the Labor Code that was approved by the Cabinet. The bill regulates the method of organizing work from a distance. The salary earners will be able to sign individual work contracts that will enable them to work according to a special program.
● TUESDAY, May 19
Annual inflation rate will continue its downward trend, NBM report
The annual inflation rate will continue its downward trend in the next period, which is mainly determined by the disinflationary pressures associated with aggregate demand and lower prices for oil products and raw materials on international market. At the same time, these pressures will be mitigated by weather conditions and the adjustment of the value of the national currency against the main reference currencies. The impact of possible distortions of distribution channels and supply remains uncertain, says Inflation Report No. 2 that was approved by the Executive Board of the National Bank of Moldova. Starting with the first forecasting quarter, the annual inflation rate will continue to decline until the end of this year to a minimum level of 3.5 percent in the fourth quarter of 2020 and the first quarter of 2021. Subsequently, it will increase slightly in the second quarter of 2021 to a maximum level of 4.6 percent, after which it will decrease again.
Budget deficit is projected at about 20bn lei this year, PM
Prime Minister Ion Chicu said the 2020 state budget deficit is forecast to rise to about 20 billion lei, as opposed to 16 billion lei projected after the last amendments made to the budget. The new forecasts follow the decline in the revenues collected into the budget with the declaring of a state of emergency in the middle of March. He noted that sources for financing this deficit are to be identified or particular costs will be excluded. A sum of 4 billion lei was to be covered with the Russian loan. As the law to ratify the lending agreement was declared unconstitutional, the Russian side was asked to open new negotiations. No response has come yet.
Air Moldova: Government blocks company’s work
Representatives of Air Moldova said the government blocks the airline’s activity. The administration of Air Moldova decided to raise a loan from a foreign bank so as to pay for the services from which it benefitted. Among the creditors of Air Moldova is Avia Invest. This way, a sum of €2 million was transferred to the company’s bank account at BC “Moldova-Agroindbank” SA. According to Air Moldova, the bank blocked yet the money without providing a plausible legal reason, while the invoked motives are completely unfounded from legal viewpoint.
● WEDNESDAY, May 20
Igor Dodon: Moldova wants to extend interaction with EEU
The Republic of Moldova aims to continue and to extend the interaction with the Eurasian Economic Union (EEU) and the cooperation agenda, President Igor Dodon stated in the broad meeting of the Supreme Eurasian Economic Council that was held online. He noted that the cooperation projects in the agro-industrial sector and the ensuring of food security in the EEU countries hold special interest, IPN reports. President Dodon highly appreciated the negotiations on Moldova’s accession to the Eurasian Development Bank (EDB) opened this year. In the negotiations, there were agreed the potential cooperation areas, such as the agro-industrial complex, road infrastructure, energy, promotion of mutual trade. The Head of State also spoke about Moldova’s tendency to successfully complete the negotiations with the EDB and to launch the first investment projects.
Avia Invest pays off debts to Civil Aviation Authority
“Avia Invest” SRL fully repaid the debts of 22.6 million lei to the Civil Aviation Authority, covering also the costs for servicing the debts. The announcement was posted by the company on its official website. “Consequently, the procedure for declaring “Avia Invest” insolvent and all the pressure exerted on the company should be stopped immediately,” wrote the company. Prime Minister Ion Chicu reacted. “The investor understood that the debt to the state should be paid. We are not in July 2019 and debt rescheduling plans with the state cannot be agreed”, he posted on Facebook.
There is no bee honey consumption culture in Moldova, statement
The Republic of Moldova does not have a bee honey consumption culture as the European countries have. In those countries, the honey is mandatorily served at breakfast at health resorts and not only, while in Moldova there are persons who hadn’t tasted honey up to a particular age. The existence of such a culture like in the European countries would stimulate the demand on the domestic market, president of the National Beekeepers Association of Moldova Ştefan Condratiuc. Ștefan Condratiuc, noting that the state policies should be aimed at ensuring the saturation of the domestic market and at supporting beekeepers so that they are competitive in terms of prices and on the foreign market. According to the National Bureau of Statistics, the yearly average consumption of bee honey in 2019 was 0.7 kg.
Cabinet approves road repair program
The Cabinet on May 20 approved the road repair program. Over 1.3 billion lei will be allocated this year for the repair of national, local, communal public roads and streets. According to the Ministry of Economy and Infrastructure, the national public road repair subprogram to the value of 250 million lei envisions the extensive repair of 86 km of roads. A sum of 1.1 billion lei was earmarked for the subprogram to repair and maintain national, local, communal public roads and streets. 906 km of road in about 900 localities are to be improved as part of this subprogram.
● THURSDAY, May 21
Regular flights remain suspended until June 30
The suspension of the regular and regular charter passenger flights is maintained until June 30, the Civil Aviation Authority has said, making reference to a decision taken by the National Extraordinary Commission for Public Health. At the request of air operators, the Civil Aviation Authority will authorize non-regular flights and occasional charter flights. Information about these flights will be published on the institution’s website. Before purchasing plane tickets for a non-regular flight, the passengers are recommended to check if the given flight was authorized on the Authority’s website.
Parliament ratifies agreement with IDA for COVID-19 Emergency Response Project
The legislative body ratified the financing agreement between the Republic of Moldova and the International Development Association (IDA) for implementing the COVID-19 Emergency Response Project that was signed on April 28, 2020. Moldova will get a €52.9 million loan from IDA. According to Minister of Health, Labor and Social Protection Viorica Dumbrăveanu, the project seeks to take effective and timely action to respond to the COVID-19 pandemic by strengthening the country’s national healthcare system and mitigating social risks.
●FRIDAY, May 22
Period for refunding money for scheduled vacations prolonged
The period for refunding the money paid by clients for scheduled vacations when the contracts are terminated before the trip starts was extended from 14 days to 540 days by a bill adopted by Parliament on May 21, IPN reports. According to the bill author, Socialist MP Adrian Lebedinski, the proposed measure will offer the tour operators affected by the COVID-29 pandemic the possibility of fulfilling their contractual obligations, including of refunding the money to clients who asked or will ask for a refund. The measure applies only to the contracts signed during October 2019 – March 17, 2020, when a state of emergency was declared. The bill was drafted following proposals formulated by the National Association of Travel Agencies in connection with the multiple requests to annul the vacation packages. At the same time, the foreign partners of national travel firms refuse to pay back the collected money during a period shorter than 540 days. In such conditions, the Moldovan travel agencies are in an objective situation of impossibility of refunding the money to clients during the period stipulated by the national legislation and risk being engaged in court disputes.
Ungheni-Chisinau gas pipeline to be finished by August 1 this year
The Ungheni-Chisinau gas pipeline will be completed by August 1, 2020, director general of Transgaz Ion Sterian announced in a meeting with Minister of Economy and Infrastructure Sergiu Railean. Ion Sterian said that since the start of 2019 until present, works were carried out on all the seven lots adjoining the construction, the linear pipe being already about 90% built. The construction works on the gas pressure regulation and measurement stations are close to completion. Two compressor and regulation stations in Siliștea and Onești, located on the Romanian side, will be modernized soon. Also, there will be installed two gas pressure regulation and measurement stations in Ghidighici and Tohatin. “By August 1, 2020, we are ready to put the Ungheni-Chisinau gas pipeline into operation. At the current stage, 1.5 million cubic meters of gas a day could be supplied through the pipeline. Towards December 1, we will be able to ensure the transportation of 2-3 million cubic meters of gas a day. After the compressor and regulation stations in Gherăești is set up, on January 1, 2021 we could transport 4 million cubic meters of gas a day to the Republic of Moldova ,” noted the director of Transgaz.
Carriers seek resumption of international road passenger transport services
The Employers Association of Carriers and Auxiliary Services asks the Government and the National Extraordinary Commission for Public Health to annul the decision to suspend the international regular, special regular, occasional and taxi road passenger transport services until June 30. The carriers say that the state of emergency declared in Moldova in connection with the novel coronavirus lasted for two months, until May 15. The maintaining of the international transport restrictions after the state of emergency for an additional period of a month and a half goes beyond any logical and legal limit, generates only difficulties and will inevitably lead to the collapse of the transport system and the bankruptcy of the legal entities working in the sector. According to the Association’s findings, before the pandemic 70% of the passenger transport was operated by illegal ways. Now this figure stands at 99% of the volume of international road transport.
Moldovan leu by about 2.4% stronger than dollar in April
The Moldovan leu in the course of April appreciated by 2.4% on average against the US dollar. It even cost 18.1541 USD/MDL as opposed to 17.7209 USD/MDL in March. According to the values at end-April, the leu appreciated by 1.5% against the dollar. The National Bank of Moldova said the European common currency accounted for 77.2% of the value of the net supply from private individuals. In April, the degree of covering the net demand for currency from business entities by the net supply of currency from private individuals was 64.3%, as against 42.7% in March. Compared with the previous month, the net supply of currency from private individuals decreased by US$22.8 million (-23.6%), while the net demand for currency from business entities by US$111.7 million (-49.3%).
