Joint commission for decentralization resumes work in Moldova: local public administration reform, investments' financing on agenda of discussions

The local public administration reform, fiscal decentralization, strengthening local autonomy and financing infrastructure projects in voluntarily amalgamated localities have been the main topics discussed at a meeting of the joint commission for decentralization. Chaired by Prime Minister Vasile Tofan, the commission resumed its activity following its last meeting on April 22, 2025.

The PM emphasized the importance of maintaining dialogue between central and local public administrations through the platform of the joint commission, which ensures the equal participation of both sides in consultations on decentralization policies. Vasile Tofan noted that this cooperation was particularly important in the context of local public administration reform, a complex process that requires the identification of common solutions to strengthen local authorities.

“A strong local administration needs three essential things: people, competencies, and financial resources. We must have local authorities with enough employees, equipped with the necessary competencies and resources to address the problems of their communities,” the prime minister said.

The participants in the meeting addressed the progress in preparing the legislative package on local public administration reform, including the process of consulting on proposals and opinions submitted by local authorities.

Another topic discussed concerned the mechanism for financing infrastructure projects in voluntarily amalgamated localities. For the period 2027–2028, investments estimated at approximately 3.49 billion lei are planned, from which 161 groups of voluntarily amalgamated local authorities will be able to benefit. Participants discussed the conditions for accessing the funds, the way of calculating the financing and the schedule for preparing and implementing the projects.

Starting from next December, the discussions with local authorities will be initiated through the Regional Development Agencies, in order to identify priority projects. In early 2027, the process of preparing and submitting projects will begin, while the implementation of the investments is scheduled to start during the same year. The funds may be used to modernize local roads and bridges, expand water supply and sewerage networks, improve public lighting, enhance the energy efficiency of public buildings, renovate schools, kindergartens and other public institutions, as well as improve local public services.

Another topic addressed concerned the impact of fiscal policy and changes to the remuneration system on the budgets of local public authorities. According to the calculations presented, the cumulative impact of the fiscal changes is estimated at approximately 770 million lei in favor of first- and second-level local public authorities. The Finance Ministry is to examine the individual calculations for each local authority, together with representatives of local authorities, including to identify the need for additional transfers.

Measures to simplify budgetary procedures for investment projects carried out during more years were also discussed. The Finance Ministry is preparing amendments that will facilitate the continuation of projects and the use of financial resources from one budget year to the next, including for investments financed from local budgets.

During the meeting, representatives of local public administration also raised issues concerning the financial autonomy of local authorities, the predictability of budgetary resources and the need for financing mechanisms adapted to the capacities and needs of communities.

Following the discussions, the participants agreed to resume the activity of the sectoral working groups, with each group meeting at least once before the end of the year. In addition, before the legislative package on local public administration reform is submitted to parliament, further discussions will be organized through the platform of the State Chancellery.

The next meeting of the joint commission for decentralization is scheduled for March 2027.