Press release
The Opinion of the Ombudsperson, Mihail Cotorobai, on Government’s Liability Assumption for the Banking System Legislative Package
The Ombudsperson has acted ex officio on this subject, considering the strong rejection reaction of the public opinion, concerning these decisions, but also the potential fatal consequences on the fundamental human rights in the Republic of Moldova of the implementation of the provisions of the respective documents.
Following a legal assessment of the above mentioned laws, especially of the Law on the issuance of state bonds regarding the execution by the Ministry of Finance of the responsibilities derived from the State guarantees No 807 from 17 November 2016 and No 101 of 1 April 2015, the Ombudsperson concludes: their implementation will impact the fundamental rights of the citizens, especially the right to a decent standard of living guaranteed by Article 47 of the Constitution of the Republic of Moldova, Articles 1 and 11 of the International Covenant on Economic, Social and Cultural Rights, Article 22 of the Universal Declaration of Human Rights.
The Law on the issuance of state bonds provides that the state bonds shall be issues by the Ministry of Finance and submitted to the National Bank of Moldova at nominal value, at fixed interest rate, on a term of up to 25 years, of a total amount up to MDL 13.583,717 billion and an effective interest rate of 5 %. The amount of issued state bonds will equal the sum of emergency credits granted during 2014-2015 by the NBM to the three banks that subsequently went bankrupt: „Banca de Economii” S.A., BC „Banca Socială” S.A and BC „Unibank S.A”.
The Ombudsperson mentions that this document was developed in a lacking transparency environment, although it represents a major interest for the citizens of the country, and it was not submitted for approval to all relevant public institutions, including to the Ombudsperson. At the same time, the opinion of the National Anticorruption Center, which has mentioned the risks that this draft law imposes, was not taken into account. NAC states, inter alia, that “the document does not solve the problem per se and does not identify solutions to manage the debt”, also mentioning that this is a document that has the power to “severely impact the fundamental rights and interests of the citizens, guaranteed by the law”.
The Ombudsperson has also concluded that upon the development of the draft law the European Community legislation requirements and other international standards, establishing the main condition of ensuring the protection of rights, liberties, and legitimate interests of the citizens, of equality and of social equality of the population, were not taken into account.
The Ombudsperson believes that the implementation of the legislative package will disturb the realisation of the state budget revenue and expenses, the social insurance budget and the compulsory health insurance funds, which will lead to the restriction of the legitimate citizens rights. Moreover, the legislative package provides already reductions of the state social insurance budget expenses and of the compulsory health insurance funds for the current year.
At the same time, independent experts estimate that by virtue of these laws, NBM will annually collect from the state budget over MDL 1 billion, after transforming the state guarantees into internal debt, which will reduce the funds for social payments and allocations and other public expenses.
The conditions of issuing and redeeming the state bonds are also unclear, because they will be provided in the agreement to be further signed between the Ministry of Finance and the National Bank of Moldova.
Therefore, the Ombudsperson considers that the legislative package for which the Government has assumed liability before the Parliament does not comply with Article 5 of the Law on Legislative Acts No 780-XV of 27 December 2001, which stipulates that the defense of the rights, liberties, legitimate interests of the citizens, social equality and equity, as well as the compatibility with the European Community legislation, are a mandatory condition of all laws. Likewise, these laws do not observe the quality and predictability requirements of a law.
In conclusion, the Ombudsperson, Mihail Cotorobai, considers that the legislative package for which the Government has assumed liability before the Parliament needs to be reviewed, by involving broadly the society, in-field national and international experts to avoid the negative impact on the fundamental rights and liberties of the Moldovan citizens.
The Ombudsperson subscribes to the request submitted by an initiative group to the President of the country, Nicolae Timofti, which calls on the head of the state to refrain from promulgating the above mentioned legislative package.
If Nicolae Timofti does not approve this initiative, the Ombudsperson is willing to apply the provisions of the Law on the Ombudsperson No 52 to ensure the defense of the fundamental rights of the citizens.
3 October 2016