Opposition Lawmakers in Moldova Help Overturn Russian Loan with Unfavorable Terms
On April 23, the ratification of a $216 million Russian loan to Moldova prompted heated debate in the Moldovan Parliament between pro-Russian ruling lawmakers and their pro-Western counterparts from the opposition. Following ratification, however, a petition from the opposition resulted in the loan’s approval being blocked by the Constitutional Court, a ruling that was upheld on May 8.
The governing socialists, led by Moldova’s pro-Russia President, Igor Dodon, argued that the government has the immediate need to use half the loan to cover budget deficits resulting from the coronavirus pandemic. The remaining is reportedly to be used on infrastructure. Moldova is rapidly approaching a budget deficit that is estimated to be 7% of the country’s economic output.
Opposition members of parliament, however, viewed the 10-year loan as an attempt by Moscow to interfere in the upcoming presidential election, providing indirect help to the cause of President Dodon. Lawmakers also criticized an “obscure” provision that channels funds to “unnecessary” projects that seem to favor Russian companies. The loan also stipulated that the Moldovan government would act as state guarantor for all direct loans extended to private Moldovan companies by Russian counterparts.
As opposition lawmakers call for Dodon to renegotiate the terms of the loan, the Moldovan President characterized their opposition as a “deliberate attempt ” to provoke a crisis, bring people to the street, and return to power.” After the definitive ruling by the Constitutional Court on May 8th, President Dodon stated that he would be negotiating a new loan.