Moldova court says 200 mln euro loan from Russia violates law

The Moldovan constitutional court on Thursday forbade the government from taking a 200 million euro ($216 million) loan from Russia, saying the loan agreement violated the law.

The government's attempts to secure the loan have sparked a political row in the tiny Eastern European country ahead of a presidential election expected later this year. The government hoped the 10-year loan could partially cover this year's state budget deficit as Moldova is seeking external financing to support its economy during the turbulence caused by the coronavirus pandemic.

Sergiu Sirbu, a lawmaker from the opposition pro-European group Pro-Moldova, had petitioned the court to block the loan, after objecting to some of its conditions. Squeezed between European Union member Romania and non-EU Ukraine, Moldovan politics tend to divide between those who favour closer ties with the West and those who seek a strong alliance with Moscow.

President Igor Dodon, who has pushed for closer relations with Russia, called the court's decision a "strong blow to the millions of Moldovans who were expecting help from this money." The opposition says Russia's motivation in providing the loan is to support Dodon, who plans to run for a second term.

Opposition parties also say the loan agreement threatens Moldova's national security, in particular a clause that gives Russia the right to demand from Moldova the repayment of loans issued to Moldovan companies by Russian banks. ($1 = 0.9232 euros)

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