State aid schemes: billions of lei for distortion of competition

The amount of state aid granted in 2016 was 5.6 billion ROL, which is 4.2% of GDP, which is far too high compared to international practices. This high volume of public resources directed from the budgets of central and local authorities to private entities under conditions of transparency and low efficiency raises some questions. But in the case of state aid, the line between the correction of market failures and the distortion of competition is very thin, the IDIS Viitorul expert, Diana Enachi, stated in the show "15 minutes of economic realism".

"The objective of the Competition Council is to reduce the level of state aid to 1% by 2020. For comparison, in Romania the amount of state aid granted in 2016 was 10,4% of RON - 1,5% of GDP", explained Diana Enachi.

In the Republic of Moldova, in the structure of the state aid distribution, according to the forms of granting in the period 2011-2016, the largest share was the fiscal facilities - 77.74% of the total value of the state aid. Most state aids are in the nature of giving up budget revenues.

The worst state aid problems in the Republic of Moldova are aimed at their efficiency and transparency. Therefore, we do not have a mechanism to monitor and control the efficiency of public money granted in the form of State aid to see how the beneficiary's economic situation changed after the aid was granted. And, with regard to transparency, it is regrettable that although we have a State Aid Register, it is intended exclusively for the authorities. In Romania and other European countries, state aid registers are open data platforms and provide information such as value and category of state aid, beneficiaries, industry, and grant period to any user.

In conclusion, Diana Enachi said that according to EU practice it is necessary to reduce the level of state aid. The indicator should be less than 1% of GDP without compromising support measures to correct market failures.

The show is made by IDIS "Viitorul" in partnership with Radio Free Europe.

For further details, please contact the press officer, Victor URSU, at the following address: or at 069017396.