Romania offers Moldova $65m economic aid to keep it solvent

Romania offered Moldova emergency economic aid and a loan of 60 million euros ($65 million) in hopes of preventing economic collapse and keeping the impoverished ex-Soviet republic on a proEuropean course.

Romanian Prime Minister Dacian Ciolos said that to get the money, Moldova will have to reform its justice system, fight corruption, sign a draft agreement for a loan from the International Monetary Fund, and appoint a new central bank governor.

"Romania is clearly by Moldova's side," added Romanian President Klaus Iohannis, who met with Moldova's Prime Minister Pavel Filip in Bucharest. "We want to support you on your European path and we are convinced that together we will find the best ways to do it."

The offer from Romania comes as Moldova stands on the edge of economic collapse following the disappearance of more than $1 billion from three Moldovan banks, one eighth of the nation's annual GDP.

The state had to step in to replace the funds that were stolen, leaving it tragically short of funds. Experts say that without outside help, the state could soon find itself unable to pay state salaries and pensions.

Anger over the fraud and other cases of corruption have fueled months of street protests in the capital, with demonstrators demanding early elections. A former prime minister, Vlad Filat, was arrested last year on suspicion that he took part in the fraud. He is awaiting trial and denies wrongdoing, saying the probe is politically motivated.

Filip, the sixth prime minister in a year, is also considered a symbol by many Moldovans of the nation's entrenched cor- ruption because of his ties to an influential businessman. Earlier this month, protesters stormed the Parliament to protest his taking office.

It is a situation that both Western powers and Russia are watching closely.

Though Moldova is small, with only 4 million people, its location - wedged today between the EU and Ukraine - has long given it geopolitical significance that transcends its size.

Both Russia and the West seek greater influence over Moldova's political and economic direction, and Romania, a NATO member that has cool relations with Moscow, very much wants a functioning pro-Western nation on its eastern border for security reasons.

Moldova has an association agreement with the EU aimed at encouraging economic links, and which some people in Moldova hope could lead to eventual membership.