EU financial support to Moldova, aimed at strengthening the country’s public administration, has had only a limited effect, according to a new report from the European Court of Auditors. Moldova is the poorest country in Europe. Since 2007, it has been allocated EU aid amounting to €782 million which represents nearly €37 per inhabitant per year, the highest amount among the EU’s eastern neighbours.
But when the auditors examined budget support programmes in the sectors of justice, public finance, public health and water, they found only limited evidence of progress. External factors such as lack of political will from the national authorities explained some of the shortcomings. Others were due to weaknesses in the design and implementation of the programmes and projects audited.
“The EU faces significant challenges in implementing assistance for Moldova”, said Hans Gustaf Wessberg, the Member of the European Court of Auditors responsible for the report. “The combination of political and macroeconomic instability, weak governance and public administration significantly reduces the European Commission’s leverage to encourage reform”.
The auditors found that the Commission could have responded more quickly when risks associated with the support materialised. Programmes were not sufficiently aligned with Moldovan strategies and their potential benefit was reduced because the Commission did not fully use its power to set preconditions for payment. The Commission could have been more stringent when assessing whether conditions had been fulfilled and the granting of additional incentive‐based funds was not fully justified.
Project designs were generally found to be relevant and EU assistance channelled through projects was partially effective in strengthening the public administration. However, the scope and timing of projects was not always well coordinated with budget support programmes. Specific technical assistance for the development of administrative capacity did not start until months after the main budget support programme. Other technical assistance and twinning projects were not always used to prepare or support budget support programmes. While projects generally delivered the expected outputs, the results were not always sustainable due to a lack of political will and other external factors.
The auditors make a number of recommendations to the Commission for improving EU assistance to Moldova:
• use the early warning system more rigorously to prevent or mitigate risks;
• better link budget support programmes to national strategies;
• strengthen the use of conditionality and performance indicators;
• link additional incentive‐based funds more clearly to demonstrable progress;
• coordinate projects and Sector Budget Support programmes;
• ensure the sustainability of projects by more systematically assessing the capacity and political commitment of public authorities to sustain outcomes.