October 4, 2015 / 1:30 PM / 2 years ago

Thousands protest in Moldova against $1 billion bank fraud

CHISINAU (Reuters) - Around 20,000 Moldovans rallied in the heart of the capital Chisinau on Sunday, demanding the resignation of senior government officials and early elections over a $1 billion bank fraud that has hit living standards.

Anger over the swindle, which has weakened the local currency and driven prices higher, prompted the central bank chief to resign last month but leaders of the governing coalition have so far rejected calls to quit.

The protesters, calling for a new government and the resignation of President Nicolae Timofti who has presided over a pro-European Union leadership since early 2012, chanted: “Victory! Early elections!”

It was the largest gathering since tens of thousands gathered in the capital in early September, and activists pitched several hundred tents outside government buildings and vowed to camp out until their demands were met.

More tents were pitched on Friday, blocking traffic on Chisinau’s main avenue.

In the scam, $1 billion disappeared from Moldova’s three largest banks - roughly one eighth of Moldova’s gross domestic output.

Last November, the National Bank of Moldova took the three banks under special administration after they were reduced to insolvency by the hemorrhage of the $1 billion through a web of toxic loans, asset swaps and shareholder deals.

The money, however, had disappeared into off-shore accounts and has yet to be recovered.

The fraud has held up the disbursement of valuable budget support from the International Monetary Fund and the World Bank.

It has also tarnished the image of the pro-Europe ruling class for ordinary Moldovans, many of whom struggle by on a family income of about $300 a month, though many protesters carried pro-EU flags indicating they were not against the country’s policy of European integration.

Writing by Alessandra Prentice; Editing by Ros Russell

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