Non-merging Moldovan towns face mandatory merger, loss of grants
Localities with fewer than 3,000 residents that refuse voluntary merger face mandatory consolidation by statutory decree ahead of the 2027 local elections, government officials confirmed.
While non-participating municipalities will forfeit direct transition grants, they will still enter a new decentralized fiscal framework starting in 2028, according to Alexei Buzu, Head of the State Chancellery.
Fiscal decentralization and local VAT retention
Under the proposed reform, the Moldovan government plans to allow local authorities to retain a direct share of locally generated revenue.
Finance officials are currently designing a mechanism to keep a portion of Value Added Tax (VAT) within the communities where it is collected, aiming to incentivize local economic growth and business investment.
"Once the new administrative map is finalized, we will enact legislative changes to ensure that a higher share of locally generated tax revenues remains in the community starting in 2028," Buzu stated on public broadcaster Moldova 1.
Phased financial incentives for voluntary mergers
The government has structured financial support for consolidating municipalities into three distinct stages, set to begin in September 2026.
Voluntarily merged localities will receive an initial grant in late 2026, followed by project development funding in early 2027. Following the 2027 local elections, merged municipalities will receive up to €102,000 (approx. 2 million MDL) annually for three years to cover transition costs.
Towns subjected to mandatory consolidation will receive no transition funding. Buzu emphasized that local mayors had ample time to choose voluntary integration with full financial backing.
Repurposing local municipal infrastructure
Addressing concerns over former town halls, officials confirmed that former administrative buildings will not be abandoned.
During the one-year preparation window leading into the 2027 elections, the government plans to convert former municipal offices into unified public service centers or community hubs. These facilities will centralize postal services, social assistance, and local administration.
Institutional opposition and autonomy concerns
The local administration reform aims to fix administrative fragmentation, enhancing the capacity of rural communities to absorb European funding and manage large infrastructure projects.
However, the Congress of Local Authorities from Moldova (CALM) has raised strong objections to mandatory consolidation. CALM officials warn that top-down administrative decisions risk eroding local autonomy and representative democracy.
CALM maintains that any municipal consolidation must remain strictly voluntary and undergo direct validation via local referendums before administrative changes take effect.
Translation by Iurie Tataru
