World Economy

Moldova Faces Collapse

Moldova Faces CollapseMoldova Faces Collapse

Moldova’s government contends with widespread protests, as citizens grow furious with a system managed by oligarchs.

Financial supporters from the West have frozen financial assistance until Moldovan leaders address corruption. Moldova is an eastern European nation that neighbors Romania and Ukraine and is one of Europe’s poorest economies, according to Voice of America.

Although some Moldovans fear foreign interference from Russia and other powers, others feel that the primary problem threatening stability is corruption. Moldova’s broken system has united pro-European Union and Russian parties in combating corruption, but little progress has followed.

The poor country was plagued with a major scandal involving the disappearance of $1 billion from banks, which comprises one-eighth of the country’s GDP. No one knows where the funds went, but many suspect that oligarchs funneled the funds out of the system, forcing the government to issue refunds to banks.

Prime Minister Pavel Filip was appointed in January 2016, but some analysts do not believe the new prime minister will achieve monumental progress as he looks to the International Monetary Fund and Romania for help. Romania will not agree to a loan package unless the government tackles corruption and a tainted justice system, including an additional provision that requires Moldova to work with the IMF in solving major issues.

The government will have no choice but to comply, as the eastern European nation faces economic collapse without loan assistance.