Moldovan bank crisis shows abuse of power by politicians - American Institute in Ukraine (AIU)
WASHINGTON, May 21, 2015 /PRNewswire-USNewswire/ -- The following is being released by the American Institute in Ukraine (AIU):
"The Moldovan [bank] crisis involves the abuse of power by politicians of several parties—including those running the country's shaky pro-EU minority government—for the purpose of siphoning funds from a number of Moldovan banks, notably from Banca de Economii Moldova (BEM)" says James George Jatras, former U.S. diplomat and manager of the American Institute in Ukraine's (AIU) Eastern Partnership Initiative
Former U.S. diplomat and manager of the American Institute in Ukraine's (AIU) Eastern Partnership Initiative, James George Jatras, has warned that the current bank crisis in Moldova "bodes ill" for Moldova's European integration and writing for the opinion page of the leading U.S. business news Website, Forbes.com, Jatras writes: "[Moldova does not] suggest a climate conducive to investment and economic growth, where an entrenched ruling clique exercises unlimited influence on the judicial system, law enforcement, and investigatory bodies. What normal investors will come to a country where first they are offered for sale illiquid assets officially and falsely certified to be sound, then are deprived of them, and then are blamed for their illiquidity?"
Jatras cites the "the shamelessness of Moldovan politicians' maneuvers in covering their tracks and trying to blame private investors for the loss of funds" as no less staggering than the larceny itself. "Only now, after months of noisy public recriminations, is the truth beginning to dribble out. Many high-ranking officials called before Parliament have been compelled to admit that BEM's looting lasted for years, well before the private investors got involved. National Bank Governor Dragutanu was explicit in reporting that 'Since 2007, BEM has been sustaining losses for hundreds of millions of lei. How did they accumulate? From commissions for bad loans.… [that were] were provided both till 2009, and in 2009-2013'—that is, the year when BEM's shares began to be sold to private investors. In turn, the Prosecutor General of Moldova, Corneliu Gurin, declared at the same parliamentary hearings: 'Thefts in BEM began not in 2014 and not even in 2013. They occurred long before these events, and in 2009 they increased considerably,'" writes Jatras.
In his commentary, Jatras argues that Moldova's Banca de Economii was emptied out long before the scandal became public late last year: "The reality is that BEM's losses are the result of consistent plundering over 20 years or more. The absurdity of officials' accusations against investors would be amusing if not for the rot this episode exposes at the core of what many deem a leading candidate country for EU integration. Indeed, not too long ago, Moldova was considered (accurately or not) well ahead of other countries like Ukraine and Georgia precisely in the area of rule of law and regulatory (including financial) reform to meet European standards."
The "Eastern Partnership Initiative" (EPI) is an informational and educational program of the American Institute in Ukraine (AIU). The EPI program seeks to promote open discussion and analysis of the EU's Eastern Partnership (EaP) with former Soviet republics, including Moldova, and the social, economic, political, and security consequences for those countries, for Europe, and for the United States. As with AIU overall, EPI reflects the diversity of opinion that exists among Americans regarding issues relevant to the EaP countries and to their relationships with the United State and with their European neighbors. Such diversity allows for a better informed debate among the people of the EaP countries about the future of their countries, which benefits both them and the United States, as well as Europe. AIU is a privately funded U.S. nonprofit organization and neither receives, solicits, nor accepts funds from any government.
Forbes: "The Unfolding Financial Crisis Threatens Moldova" http://www.forbes.com/sites/realspin/2015/05/20/the-unfolding-financial-crisis-threatening-moldova/
Contact: American Institute in Ukraine (AIU), James G. Jatras, +1-202-375-1007, [email protected]
SOURCE American Institute in Ukraine
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