03 july

Myths and truths about Association Agreement: small businesses

“The Association Agreement will lead to Moldova’s loss of sovereignty”, “The Association Agreement will further enflame Russia-Moldova relations”, “Consumer prices will increase as a result of the the Deep and Comprehensive Free Trade Area”. These are only some of the most spread hypotheses about the Association Agreement with the European Union. Are they true theories or just myths? IPN aimed to find out the answer from a number of independent experts and officials working in the addressed areas.

“Small businesses will be hit the hardest by the reform following the signing of the Association Agreement with the EU”.

The president of the Small Business Association Eugen Roscovanu said the assertion that the small and medium-sized enterprises (SMEs) in Moldova are not ready to cope with the European legislation, which provides for loyal competition without corruption and nepotism, is not true. “The bureaucratic system of Moldova is very biased and difficult and protects only the interests of large companies. When the European legislation is implemented in Moldova, the situation of many SMEs will improve,” stated Eugen Roscovanu.

He noted that in the EU the relations between the economic entities are strictly regulated and do not affect the SMEs. “In the EU, if you supplied goods to a supermarket and they were sold, this supermarket must make the payments for the supplies within 10 days. If it doesn’t do it in this period, it is fined or can be even closed. In Moldova, the payments for the sold merchandise are made in two or even six months. By then the small businesses can go bankrupt,” said the president of the Small Business Association.

According to Eugen Roscovanu, in the EU there are many systems that proved their efficiency and that, if they are applied in Moldova, will enable the small entrepreneurs to breathe easier as they will be able to defend their rights and disloyal competition, bureaucracy and corruption will be eliminated.

On its website, the Delegation of the European Union to Moldova says the EU has been paying increasing attention to the needs of SMEs and businesses at large in the process of forming the DCFTA, to ensure ownership of the reforms and mitigate their impact on small businesses. This is also reflected in the corresponding implementation project focusing on SMEs' competitiveness in Eastern Neighborhood countries, including Moldova. The East Invest project directly targets Business Support Organizations and SMEs which have the potential to develop mutual cooperation and investment relations with similar businesses in the EU. The project will soon enter into its second phase. SMEs in Moldova are also helped through the SME Finance Facility which provides loans to SMEs which would otherwise have difficulties in accessing funding for its operations in a commercial bank.