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    Does Moldova Have A Place in Europe

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    Виктор Гушовский
    1) The document summarizes a meeting discussing Moldova's place in Europe, its reforms since 2010 to improve relations with the EU, and ongoing challenges. 2) Key reforms included strengthening checks and balances, improving media freedom, and decreasing the budget deficit, but fully liberalizing sectors and attracting investment remain difficult. 3) Ongoing challenges include high energy prices, corruption, and reforming law enforcement. Moldova's future EU integration depends on continuing reforms.

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    Does Moldova Have A Place in Europe

    Uploaded by

    Виктор Гушовский
    56 views5 pages
    1) The document summarizes a meeting discussing Moldova's place in Europe, its reforms since 2010 to improve relations with the EU, and ongoing challenges. 2) Key reforms included strengthening checks and balances, improving media freedom, and decreasing the budget deficit, but fully liberalizing sectors and attracting investment remain difficult. 3) Ongoing challenges include high energy prices, corruption, and reforming law enforcement. Moldova's future EU integration depends on continuing reforms.

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    Does Moldova Have a Place in Europe

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    1) The document summarizes a meeting discussing Moldova's place in Europe, its reforms since 2010 to improve relations with the EU, and ongoing challenges. 2) Key reforms included strengthening checks and balances, improving media freedom, and decreasing the budget deficit, but fully liberalizing sectors and attracting investment remain difficult. 3) Ongoing challenges include high energy prices, corruption, and reforming law enforcement. Moldova's future EU integration depends on continuing reforms.

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    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    56 views5 pages

    Does Moldova Have A Place in Europe

    Uploaded by

    Виктор Гушовский
    1) The document summarizes a meeting discussing Moldova's place in Europe, its reforms since 2010 to improve relations with the EU, and ongoing challenges. 2) Key reforms included strengthening checks and balances, improving media freedom, and decreasing the budget deficit, but fully liberalizing sectors and attracting investment remain difficult. 3) Ongoing challenges include high energy prices, corruption, and reforming law enforcement. Moldova's future EU integration depends on continuing reforms.

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    of 5

    Meeting Summary: Russia and Eurasia Programme

    Does Moldova have a Place in Europe?


    Iurie Leanc
    Deputy Prime Minister of Moldova, Minister of Foreign Affairs and European Integration

    7 September 2011

    The views expressed in this document are the sole responsibility of the author(s) and do not necessarily reflect the view of Chatham House, its staff, associates or Council. Chatham House is independent and owes no allegiance to any government or to any political body. It does not take institutional positions on policy issues. This document is issued on the understanding that if any extract is used, the author(s)/ speaker(s) and Chatham House should be credited, preferably with the date of the publication or details of the event. Where this document refers to or reports statements made by speakers at an event every effort has been made to provide a fair representation of their views and opinions, but the ultimate responsibility for accuracy lies with this documents author(s). The published text of speeches and presentations may differ from delivery.

    Meeting Summary: Does Moldova Have a Place in Europe?

    In 2010, a coalition government inherited power in Moldova after eight years of communist rule. Under the previous regime, there had been no separation of powers, the so-called public television was a mouthpiece of the Communist Party, and the president enjoyed special economic privileges. Many young people were leaving the country and Moldova was an isolated state with suspended relations with the EU. With the budget deficit at 16.5 percent of GDP, Moldova was on the verge of collapse. Today, government is no longer a one-man show and various checks and balances have been put in place. The media environment is vibrant. After engaging the IMF, the new government managed to decrease the budget deficit to 2.5 percent in 2011. Over the past year, economic growth amounted to 8.4 percent, and there was an up to 60 percent increase in exports. Still, the government has not been able to liberalise all sectors or attract significant investment to the country. The situation is complicated by increasing energy prices. Recently, Gazprom increased the price of the gas supplied to Moldova by 24 percent. The judicial system remains corrupt, with its members protecting their own corporate interests. The reform of law enforcement agencies also poses a significant challenge. Moldovas chances for EU integration have also improved. A few years ago, no one in Brussels thought there was a possibility of Moldova heading towards integration. Despite the EUs reluctance and enlargement fatigue, there is a debate on this issue now. There is no mention of poor membership prospects for the Eastern Partnership (EaP) countries in the EaP review published in May. Moldovas future depends on the authorities ability to speed up reform and show that the events of 2009 were the beginning of a consistent and coherent process. Problems have arisen within the ruling coalition. If the government does not deliver on the economy, education, etcetera, the optimism brought by the last election will be replaced by disillusionment. The government should show that the situation in Moldova is different from that in Ukraine after the Orange Revolution; they should make sure that Moldova is a success story, on its way to becoming the stable and predictable country that the EU would like to see. There are hopes for the Free Trade Area agreement negotiations to start this year. Moldova would also like to see some progress on formalising the process of a visa free regime at this year's EU summit. The EaP principle of more for more should be applied more widely.

    www.chathamhouse.org

    Meeting Summary: Does Moldova Have a Place in Europe?

    Questions and Discussion


    A participant asked whether Moldova is interested in joining the eurozone. Mr Leanc replied that this question concerns a very distant future. At this stage, the most important issue for Moldova is to begin integration with the EU. Once Moldova becomes a candidate country, the EU will have a higher stake in the countrys development. Moldova already has a trade agreement with the EU. Does this not reduce the attractiveness of the Free Trade Area agreement in the eyes of the Moldovan government? The speaker said Moldova has an asymmetrical trade preferences agreement with the EU, involving quotas for Moldovan exports. The FTA remains attractive to Moldova as it would help improve the trade balance and attract investors. The next question was about reform of the judicial system. The government, in cooperation with EU experts, is currently preparing a comprehensive strategy outlining the goals, delivery timetable, and resources necessary. Subject to final approval by the EU, Moldova will receive 50 million to implement the reforms. Most people agree on the necessity of judicial reform in principle; but its implementation may face opposition from vested interests. Lack of banking sector transparency is among the problems of the Moldovan economy. Are the obstacles to reform political or technical? The problems are linked to the political situation. There are problems within the governing coalition; the coalition parties are sensitive about each others perceived interference in their portfolios. The coalition needs to agree on a list of assets to be privatised. Privatisation will not go ahead without the EUs consent. The country is vulnerable; its legal framework contains loopholes that make it difficult for some state agencies to function. A participant asked about developments in Moldovas relations with China. Mr Leanc replied that China displays a much more proactive attitude compared to 1991. China is interested in energy projects and loans, while Moldova is interested in China as an investor and trade partner, e.g. for wine exports. Is there scope for cooperation with other countries on a number of common law enforcement issues? The criminal activities flourishing on both sides of Dniester are among the issues to be discussed at the meeting between Vlad Filat (Moldovan Prime Minister) and Igor Smirnov (leader of the breakaway region of Transnistria) in Germany in September 2011. Due to the lack of political dialogue between Moldova and Ukraine before 2009, cooperation between their respective law enforcement agencies decreased to a

    www.chathamhouse.org

    Meeting Summary: Does Moldova Have a Place in Europe?

    dangerous level. The situation has improved since but more cooperation is needed. Financial crime remains a major issue. The discussion then turned to the Transnistrian issue. Mr Leanc said the government has successfully engaged Transnistria on some areas, such as business and sport. It has tried to show that its policy is pragmatic rather than ideological. However, the government has not been able to address the future status of Transnistria. Last year's meeting, led by Angela Merkel and Dmitri Medvedev, brought a breakthrough, and it showed that the EU can play an important role in the security and stability of the region. There is hope that discussion with these partners will help Moldova create the necessary preconditions for identifying a solution to the Transnistria crisis. A participant asked about Ukraine's role in the Transnistria peace process in the context of its approaching chairmanship of the OSCE in 2013. Mr Leanc replied that Moldova is interested in good relations with Ukraine. The two countries were recently able to move ahead after a period of stagnant relations. The two governments have achieved compromises on several difficult issues, such as border demarcation. Both Ukraine and Moldova are interested in integrating into the European energy network. Ukraine does have some leverage on the Transnistrian issue and its position is becoming more active. The next question was about the size and status of the Russian force in Transnistria. In Moldovas view, the presence of Russian troops is illegal and they must be withdrawn. The continued presence of old ammunition stockpiles on Transnistrian territory also poses a danger. Discussions with the Russian MFA continued, however, they have not yielded any results, although were somewhat more promising. A participant mentioned a recent incident at the Russian embassy in Chisinau when the Russian ambassador presented Vladimir Yastrebchak, the Transnistrian Minister of Foreign Affairs, as the head of the Foreign Office in Transnistria. The speaker said it was important that Russia should respect Moldovan sovereignty. What assets does Gazprom own in Moldova? Could Moldovan assets be traded for a lower gas price? In 2008, the Moldovan government and Gazprom signed a three-year contract that envisaged future price increases. The recent hike pushed the gas price to $400 per thousand cubic metres. The current government is interested in gaining access to at least one alternative source of energy in the next three to five years. Gazprom owns 51 percent of Moldova Gas and the distribution network. The speaker said he does not envisage sale of Moldovan assets in return for a lower gas price. Gas

    www.chathamhouse.org

    Meeting Summary: Does Moldova Have a Place in Europe?

    consumption in Transnistria also poses a problem. Transnistrias debt to Gazprom is expected to amount to up to $3 billion at the end of 2011. Once the Transnistrian issue is solved, this debt will become Moldovas debt, although the government had never consented to its accumulation. Moldova is keen to engage her Russian partners on this issue.

    www.chathamhouse.org

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