Activity of the Parliament on October 18–31, 2004

October 18–22, 2004

Draft budget for 2005 took the central stage during the aforesaid period. As usual deputies heard Minister of Finance and Minister of Economy; raised a number of questions. Later on, leaders of Parliament factions voiced their own positions on the draft.

Opposition pointed the lack of a sustainable strategy of economic development, whereas majority faction criticised insufficient funding of certain fields such as education and agriculture. Further, while opposition considered little funds were allotted to social sphere, majority faction on the contrary stated that funding to these areas rose considerably. Finally, following a tradition already, opposition factions refused voting the draft.

Draft Law on State Budget for 2005

The draft budget was passed in the second reading. It envisages an economic growth for the upcoming year with a GDP worth 36.5 billion Lei, as compared to 27.3 billion Lei in 2003 and an estimated 31.9 billion Lei in 2004. Economic growth shall be sustained in 2005 by ensuring macroeconomic stability, by boosting entrepreneurship, in particular:

Industrial growth worth 23.1 billion Lei, a 13% growth over 2004, while agriculture would grow by 7.8% as compared to 2004;
Increasing exports and gradual change of their structure by 180 million Lei as compared to this year; volume of imports covered by exports would surge from 57.7% estimated for this year to 5 8.2% in 2005;
Gradual depreciation of the MDL from 12.4 MDL/USD in 2004 to 12.7 MDL/USD in 2005;
Surge in the population’s income by 10% yearly;
Gradually reducing fiscal burden and extending the taxation base recently established by the Parliament in the Law no.224-XV of July l, 2004;
Boosting foreign and domestic investments;
Adjusting fiscal laws to European standards.

Law on Facilities for Investments

Via the said law, Parliament operated amendments to legal acts regulating enterpreneurship, so at to equal in rights foreign and domestic investors and establish favourable conditions for their operation.

In particular the law includes provisions on:

1. Customs facilities — exemption from the payment of the value of goods imported as to form and/or increase registered capital of the enterprise.

2. Fiscal facilities — exemption from the income tax (50%-100%) depending on the contribution to the registered capital of the enterprise;
- exemption from VAT of fixed assets that are part of the registered capital.

3. Privatisation facilities — granting equal opportunities on paying for privatized units.

Deputies rejected Government proposition to allow foreign investors to purchase and hold in their property agricultural plots.

October 25–29, 2004

High on the Parliament agenda that week was draft budget of social insurance for year 2005. The issue triggered many debates and brought tough questions to Government and majority faction. And this because the law is a key document when it comes to elections.

Opposition accused the ruling party or reducing social spending amidst surging GDP. In its turn, ruling party blamed opposition for not taking care of the social vulnerable groups when they had been in power, for accruing huge foreign debts. As a result Government now had to raise pensions from its own sources so as to ensure bare existence for the vulnerable strata.

Parliament also examined other pieces of legislation, some of which will be considered below.

Law on Governmental Agent at the European Court for Human Rights

The law seeks to make the enforcement of the obligations undertaken by the state in ensuring human rights when it adhered to the European Convention of Human Rights more efficient. Under Article 35 of the ECHR’s Regulation, contracting parties are represented by agents who may be assisted by councillors or lawyers. Contracting parties, i.e. countries members of the Council of Europe, have different approaches some have delegated this responsibility to Ministry of Justice, while others to the Ministry of Foreign Affairs. In Moldova, Governmental Agent shall be a member of the diplomatic service of the country.

The law regulates the status of Governmental agent and nomination procedure; responsibilities and principles of activity; rights and obligations; cooperation with national institutions and organisations.

On July 26, 2001 Republic of Moldova ratified European Agreement on persons taking part in the proceedings of the European Court for Human Rights thereby granting those persons immunity as regards declarations made orally or in written form in front of the Commission or Court.

Law on Real Estate

It regulates how real estate is formed based on the estate already in possession and registered in the real estate registrar. The law regulates ways to form real estate: separation; division; and merger. The law also outlines the registration and formation of agricultural plots, in case there are several nearby plots in property.

Law on Ratification of Agreement between the Government of the Republic of Moldova and the Government of Albania on Promotion and Protection of Investments

The law was adopted on the eve of Albanian President’s official visit to the Republic of Moldova. The Agreement outlines the legal principles that would bolster economic ties between the two countries and investments by natural and legal entities in the other country. Contracting parties engage to manage, use and distribute the investments from other Contracting Party and refrain from any discriminatory or unjust measures.

Draft law on state social insurance budget for year 2005

Albeit many opposition deputies claimed the budget was discriminatory as regards many budget lines, Government and majority faction proved by citing some figures that the draft law is much better than many others, especial those passed prior to 2001. The draft law was passed in the first reading.

For 2005 revenues worth 3485997.6 thousand Lei are forecasted, whereas expenditures worth 3485997.6 thousand Lei, i.e. 25% over what was budgeted for 2004.

Obligatory contributions to the social insurance fund are as follows:

27% of the wage and other remuneration payable by employers in view of social insurance of the persons employed under individual or work contract;
2% of the wage and other remuneration for the individual insurance of the employees;
20% of the wage and other remuneration payable by employers in agriculture in view of social insurance of persons employed to work the land and in animal husbandry;
natural entities owners of agricultural plots and natural entities renting agricultural plots based on a contract (except for pensioners and handicapped) shall pay 480 Lei annually;
individual entrepreneurs (except for pensioners and handicapped), lawyers, private notaries, Moldovan citizens working on a contract abroad shall pay 1,374 Lei;
pensioners and handicapped holding a licence shall pay 30% of its cost.

The draft law provides that failure to pay to social insurance fund shall be sanctioned by a fine equal to 0.1% of the arrears per day, including the day the arrears are paid.

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