Germany plans to give Moldova 40 million euros ($40.2 million) in direct budgetary support to help protect the poorest people in Europe's poorest country from breakneck inflation, Germany's foreign minister said.

Moldova, a country of 3 million sandwiched between Romania and Ukraine, has taken in more refugees from Russia's invasion of Ukraine than any other country in proportion to its population.

"This small democratic republic has done everything possible to help refugees from Ukraine," said Annalena Baerbock at a donor conference in Bucharest.

"The Foreign Office and Development Ministry will give 40 million euros in budget support," she added.

The support must still be approved by the German parliamentary budget committee, she said.

The European Union last month accorded both Moldova and Ukraine the status of candidates for membership, in what was widely interpreted as gesture of support for two countries that are reeling from the consequences of what Russia says is not a war but a "special operation".

The war has contributed to spiralling inflation across the region and the world, further harming Moldova's already fragile economy. Baerbock said Moldova needed more help to develop renewable energy sources to free it from Russian energy "blackmail". ($1 = 0.9956 euros) (Reporting by Thomas Escritt, Editing by Miranda Murray and Kim Coghill)