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Activity of public institutions

President
Government

Trade Unions and the Social Dialogue in Moldova by Nicolae Suruceanu
European Integration Conception - at last … by Mariana Argint

I. Activity of public institutions

1. President

President Voronin has invited the EU to get involved in the Transnistrian conflict resolution process

On 11-12 September 2003, the International Conference "Frozen Conflicts in Europe" was organised in Chisinau by the Moldovan Foreign Ministry within the programme of actions of the Moldovan Chairmanship of the Committee of Ministers of the Council of Europe. According to a statement made later by President Voronin, the conference was intended as "a strategic part of the efforts of the Moldovan authorities to internationalise the Transnistrian conflict" and solve it.

In his opening speech to the conference, President Voronin invited the European Union to get involved in the Transnistrian conflict resolution efforts and expressed his hope that this initiative will be supported both by the guarantor states and the Transnistrian side. It appears that an eventual EU involvement in the Transnistrian conflict resolution is one of three elements of the universal formula for solving frozen conflicts proposed by President Voronin to the conference: internationalisation of the efforts at resolving the conflict, isolation of the forces benefiting from the conflict, and democratisation of the societies in conflict.

The idea of an EU involvement in the resolution of the Transnistrian conflict was supported by a number of top Moldovan officials, including the Moldovan Foreign Minister Nicolae Dudau, the Minister of Reintegration Vasile Sova, the Deputy Speaker of the Moldovan Parliament Vadim Misin etc., and was commented upon by several foreign diplomats attending the conference.

Thus, Rudolf V. Perina, US State Department Special Envoy for Conflicts in Eurasia, confirmed the US support for an eventual involvement of the EU in the resolution of the Transnistrian conflict, to which Perina believed the EU could have an important contribution. On the other hand, Aleksandr Grishko, the Head of the Department for European Co-operation under the Russian Foreign Ministry, said that as long as the current format of negotiations is working well, it wouldn't be the case to disturb its activity by talks about some issues of "procedure", and that an eventual EU involvement in the Transnistrian conflict settlement should envision post-conflict economic rehabilitation.

During a press conference held at the end of the conference, the Moldovan Deputy Foreign Minister Ion Stavila warned that "it is premature to venture ourselves into a discussion on President Voronin initiative", which is rather just an idea that has yet to be explored and discussed with all the stakeholders before it is made official.

Whatever the nature of President Voronin's initiative, the message did reach Brussels and Javier Solana, the High Representative for the EU Common Foreign and Security Policy, called the Moldovan President on September 16 to assure him that the UE is willing and ready to support Moldova's efforts at resolving the Transnistrian conflict, which is a common EU and Moldova objective.

Meanwhile, the news portal European Information System reported, with reference to diplomatic sources, that the prospect of an EU peacekeeping operation in Transnistria is unlikely in the near future as a number of EU Member States believe that such operation can only be considered when a political agreement on the conflict is reached. Recognising the key role that Russia is playing in this issue, the European diplomats regard with much prudence the initiative of the Moldovan Presidency to solve the conflict through the federalisation of Moldova and the institution of a new constitutional regime.

Gagauz Yeri has to become a subject of the future federation, says President Voronin

During a meeting that President Voronin had with members of the People's Assembly (the Gagauz legislative body) on 17 September, he declared that while drafting the new Constitution, the Joint Constitutional Commission "should grant the Gagauz Autonomous Entity a place to fit its status" and that in the future asymmetrical federation "Gagauz Yeri should be, along with Transnistria, a subject thereof", a status which, Voronin said, is de facto recognised in the Moldovan Constitution.

Earlier in the week, a group of Gagauz deputies met in Tiraspol with members of the Transnistrian Supreme Soviet (legislative body) to discuss the possibility of participation of the Gagauz deputies in the activity of the Constitutional Commission.

A month ago, 18 out of the 29 Gagauz deputies signed a statement in which they declared their discontent at the fact that the Gagauz Autonomy was excluded from the talks on the future federation.

We would like to remind that last summer the Moldovan Parliament introduced a special article in the Moldovan Constitution which consecrated the status of Gagauz Yeri and granted it additional powers, including the right to initiate legislation along with the Moldovan Parliament, President and Government.

CIS Summit in Ialta

President Voronin attended the Summit of the Commonwealth of Independent States (CIS) on 18-19 September in Ialta, where he met with his Ukrainian and Russian counterparts. During the meeting with the President of Ukraine Leonid Kucima, the two presidents exchanged views on the issues included in the agenda of the Summit, and discussed bilateral co-operation, including the issue of Moldovan properties on Ukrainian territory. The two presidents also touched upon the Transnistrian issue and President Kucima reaffirmed Ukraine's support for a political resolution to the conflict to safeguard the territorial integrity of Moldova.

The Transnistrian issue was also addressed during the meeting between the Moldovan and the Russian presidents, who committed to "breathe new life" into the conflict resolution process. The two also discussed issues related to the political and economic co-operation between Moldova and Russia.

The CIS Summit in Ialta resulted in the signature of a number of documents of economic nature, including a joint statements of the heads of states setting the priority task of the CIS to institute a free trade area that will later evolve into a single economic area.

At the same time, at the end of the Ialta Summit, President Voronin showed sceptical with regard to the prospects of the CIS, and stated that from now on Moldova would take firmer action towards the European Union. "What happened [in Ialta] does not inspire much optimism. I have always said that Moldova will not become the tomb of the CIS, however, after what happened in Ialta, the prospects of the CIS are clear. The ideas about a possible modernisation of the Commonwealth have been abandoned for good," said the Moldovan President.

2. Government

Relations with foreign donors

The Permanent Representative of the International Monetary Fund (IMF) in Moldova, Edgaro Ruggiero, refuted a recent report in a Moldovan media outlet that the IMF would not resume funding to Moldova before early 2005, when a new parliament is to be elected. Ruggiero called the report an attempt at politicising the relations between Moldova and the IMF and stated that the IMF policies on Moldova are determined by its economic policies rather than the political colour of its government. At the same time, Ruggiero said that IMF might resume funding to Moldova in the first half of 2004 and that an IMF Mission is to come to Moldova this autumn to asses the readiness of the Moldovan Government to further promote market economy reforms as well as the role it is going to assume in the Moldovan economy.

Meanwhile, the World Bank has turned down the request by the Moldovan Government to extend by six months the Loan Agreement SAC-III, which expires on 30 September and from which Moldova has only received one instalment worth US$10,6 million out of the total value of the loan of US$30 million. Moldova was to receive the second instalment of the loan in December 2002, but the WB blocked it due to the inconsistency of the economic policies of Moldova and its failure to fulfil all the conditions for funding. Last summer, the WB put forward some additional conditions to unblock the loan, but the Moldovan Government did not fulfil them either. Under the current circumstances, the Government will have to negotiate with the WB a new credit for structural adjustments.

Tariffs

The Government gave up the idea to set up the Agency for the Protection and Development of Competitiveness by merging the National Agency for Regulations in Energetics with the National Agency for Regulations in Telecommunications and Informatics. In exchange, the Government will set up a separate agency for the protection of consumers, but will first consult the international creditors about it. It has to be reminded that the Government's intention to merge the two agencies last summer was criticised both by local analysts and the foreign creditors as an attempt by the Government to institute control over the fees on electricity and natural gas.

On the other hand, Prime Minister Tarlev recently declared that the Moldovan executive will influence the prices on oil products through a state enterprise that will import these products directly from the producers, without intermediaries. According to Tarlev, the state will safeguard competitiveness in the market, but will at the same time make sure that the prices on oil products stay stable.

Trade Unions - Government

The Government decided on 17 September to raise by 15% the wages of budget employees working in education, healthcare, social assistance, science, culture, arts and sports, as of 1 September 2003. The wages of the rest of budget employees will be raised by 15% starting 1 December 2003.

The Government adopted this decision following the conclusion of negotiations with the trade unions, which ended in Government's failure to meet the unions' demand to raise wages by 50%. Despite this, the unions will not go on strike as they had announced earlier. In exchange, they will demand that the Government provide for funds for new wage raises in 2004.

Compulsory health insurance scheme

The Government took a series of measures with a view to introduce the scheme of compulsory medical insurance in Moldova starting 1 January 2004. The scheme was introduced on 1 July 2003 as an experiment in Hincesti District. According to preliminary assessments, the scheme has worked well, although not smoothly. Thus, the Government instructed the relevant ministry and the National Company for Compulsory Medical Insurance to set up an inception fund for the introduction of the scheme nation-wide in 2004 and ruled that all credit debts of public healthcare institutions be paid off by 1 November 2003. In addition, the Government ruled that the compulsory medical insurance policies be distributed, the fees for healthcare services be published and the mechanisms of supplying hospitalised patients be worked out.

II. Transnistria

The Joint Constitutional Committee

During the period covered here, the Joint Constitutional Commission (JCC) met twice and continued to work on the chapter on citizens' rights and freedoms. Although the JCC members did not reach a compromise on issues such as citizenship, education and social insurance, the JCC co-chair from the Transnistrian side Evgheni Shevciuk said those divergences were not essential and expressed his hope that at the next JCC meeting the chapter would be adopted entirely. The sole essential divergence, according to Shevciuk, is the one on the article proposed by the Transnistrian side on the right of the citizen to resistance. The article was rejected by the Moldova side which found it likely to encourage extremism and arbitrary opposition to decisions by state institutions.

At the same time, Igor Smirnov, the leader of the Transnistrian administration, said within a meeting of the Supreme Soviet, Transnistria's legislative body, that the Transnistrian side should in no case block the negotiations with Moldova in order not to loose for all the status of equal partner in the political dialogue with Chisinau. During the same meeting, Evgheni Shevciuk, reiterated the position of the Transnistrians to create a contractual federation (i.e. a confederation) and mentioned that the divergence between the two sides on the format of the future federation might seriously complicate the activity of the JCC.

Telecommunications war

A real telecommunications war started on 9 September between the two sides of Nistru River. At first, the mobile telephone communications in Transnistria, run by the sole GSM provider in the region, Interdnestrcom, was blocked after an enterprise of the Moldovan Ministry of Transports and Communications had installed a transmitter for digital television in Causeni, a town close to the right bank of Nistru River. The transmitter jammed the mobile communications network in Transnistria, which uses illicitly frequencies allocated for digital television. Interdnestrcom called the incident an attempt by the Moldovan authorities to stop its activity and accused Chisinau of "launching an information war against all users in Moldova and Transnistria". In response, as of 9 September, Interdnestrcom has blocked the telephone entries from Moldova to Transnistria.

The Deputy Director of the National Agency for Regulations in Telecommunications and Informatics Stanislav Gordea stated that, in fact, the jamming on 9 September of the Transnistrian mobile telephone network was caused by the Company Moldtelecom, the provider of fixed telephony in Moldova, which blocked the international traffic terminal to prevent further financial losses that it has been incurring as a result of the illicit use of its network by Interdnestrcom. The latter has declined repeatedly the offers of Moldtelecom to conclude agreements on interconnection under non-discriminatory and mutually advantageous conditions. The Agency declared its availability to find a compromise on the issue provided that the Transnistrian businesses register in Chisinau and get licences for fixed telephony. Then, the Agency will grant them licences for both international and mobile telephony.

At the same time, the Transnistrian Minister of Telecommunications Vladimir Beleaev called upon the Moldovan authorities to avoid further confrontation with Transnistria on telecommunications and expressed the availability of the Transnistrian side to start negotiations on the issue on the condition that both sides stop jamming each other. At the same time, it seems that Transnistria does not accept the justifications of the Moldovan side and continue to regard the installation of the transmitter in Causeni as an intended action of the Moldovan authorities to jam the mobile telephony in Transnistria.

At present, between Moldova and Transnistria there is no telephone connection since on 13 September the Transnistrians have blocked completely the telephone traffic from the left to the right bank of Nistru River in an action of "legitimate defence" against the intimidation by the Moldovan side.

Withdrawal of Russian troops and ammunition

On his return from Vienna, where the Head of the OSCE Mission to Moldova presented a report to the Permanent Council of the OSCE on the process of evacuation of Russian weaponry from Transnistria, Hill said in a press conference in Chisinau that the technical conditions for Russia to withdraw its weaponry by the end of 2003, according to the deadline set at the OSCE Ministerial Council in Porto, still exist. However, Russia needs to resume as soon as possible the process of withdrawal, which was blocked by the Transnistrian authorities more than one month ago.

Russian President sends official on mission to Transnistria

The Deputy Head of the Russian President Administration, Dmitri Kozak, met on 14 September with Igor Smirnov and other Transnistrian officials, with whom he discussed "the role of Russia as guarantor state" in the resolution of the Transnistrian conflict. It appears that the visit by the Russian official to Transnistria has not been incidental, as he proved to be tasked by President Putin with a special mission of mediator in the Transnistrian conflict. Kozak made this public during the CIS Summit in Ialta, following the meeting between the Moldovan and Russian presidents there. In an interview with the Russian electronic newsline Gazeta, Kozac stated that his mission will be "to assist Moldova and Transnistria in the process of developing the system of federal relations between the two", and that Russia's interest in the conflict is determined by its concern for the ethnic Russian who live in the region and who are affected by the conflict.

III. Foreign affairs

European integration

The National Commission for European Integration approved on 16 September the National Conception of European Integration of Moldova. The basic objective set forth in the Conception is "to identify the role of Moldova in the integrationist processes in Europe". The Conception envisions Moldova's intention to become a member of the EU by following the path of the Western Balkans i.e. joining the Stabilisation and Association Process by 2007. By the end of September, the Conception will be sent to the European Commission for expertise and then the Parliament will adopt the Strategy of European Integration of Moldova.

Visit to Belgrade

Nicolae Dudau, Moldova's Foreign Minister, paid an official visit to Serbia and Montenegro in his capacity of Chairman in Office of the Committee of Ministers of the Council of Europe. In Belgrade, Minister Dudau met with a number of Serbia and Montenegro officials, with whom he discussed issues related to the new state's pre- and post-joining Council of Europe commitments, as well as issues related to the bilateral co-operation between Moldova and Serbia and Montenegro, including within the Stability Pact for South Eastern Europe and other regional and sub-regional initiatives.

Moldova - Kazakhstan

Between 16-17 September, the President of Kazakhstan Nursultan Nazarbaev paid an official visit to Chisinau where he signed a number of intergovernmental treaties with Moldova and a joined statement with President Voronin. In a press conference held by the two presidents, President Nazarbaev stated his support for re-establishing the commercial partnership between Moldova and Kazakhstan based on market economy principles and mutual economic interests. He invited Moldovan investors to place capital in the economy of Kazakhstan, which has lately registered an annual GDP growth of 10%. During the visit, the two presidents agreed to create more favourable conditions for co-operation between businesses from the two states, encourage joint Moldovan-Kazakh enterprises and enhance co-operation in the agricultural, food industry, transports and other fields. In addition, the Joint Moldovan-Kazakh Commission for Commercial and Economic Co-operation examined on 15 September the possibility of a joint agreement on direct supply of Kazakh natural gas to Moldova. At the same time, Moldova stated its interest to increase the supply of natural gas from Kazakhstan, which costs US$ 61 per thousand square meters compared to US$80 that Moldova pays for one thousand square meters of gas supplied by the Russian Group Gazprom, the major supplier of natural gas to Moldova.

Chinese communists in Chisinau

During the period covered here, a delegation of the Chinese Communist Party paid a "friendship" visit to Chisinau, where they met with a number of Moldovan top officials, members of the Communist Party of Moldova, including President Voronin. During the meetings the two sides repeatedly stressed the ascending nature of the Moldovan-Chinese relations and the fruitful political dialogue between the two countries over the past three years since the Communist Party of Moldova came to power.

IV. Studies, analyses, comments

1. Trade Unions and the Social Dialogue in Moldova
by Nicolae Suruceanu

This autumn announces to be "hot" in terms of socio-political events. It is thus natural for one to wonder about the likely behaviour that the Moldovan trade unions are going to adopt given the general trend in union movements to become more active in autumn and spring. One thing that is certain is that whatever the union actions, they will not be related in any way to the events that have been announced by some Moldovan political parties and movements for this autumn.

The actions of the unions will rather be related to the tensioning of the socio-economic situation of the population and the ensuing real danger of further decline in the living standards in Moldova. These will be due to the increase in prices on basic products, bread in the first place, which are the principal indicators for calculating the minimum consumption basket, the increase during this year of fees on electricity and the intention of the monopolist suppliers to further raise them, the galloping increase in the inflation rate that will exceed the rate forecast by the Government and is expected to reach 17% by the end of the year.

The value of the minimum consumption basket, a sure indicator of the living standard, is currently worth more than 600 lei and has increased by 8% compared to last year. The average salary, which stands currently at 818 lei, does not cover the minimum consumption needs, and, as a result, the overwhelming majority of the population lives under the poverty line. According to data from the Department for Statistics and Sociology, about 78% of the population earn less than the minimum consumption basket. Under these circumstances, the unions' mission is to take rapid measures to stop any further decline in the living standards of wage-earners.

At present, two national - inter-branch trade union associations function at the national level in the Republic of Moldova: the Confederation of trade unions of Moldova (CTUM), which joins around 450, 000 employees from the agricultural and non-production sectors (social sphere, public administration etc.), and the Confederation of Free Trade Unions "Solidaritatea" (Solidarity) (CFTU), joining around 200, 000 employees from the production and services spheres.

The issue of ensuring decent and duly paid wages is of key importance to the trade unions, as wages are the only source of income of the majority of Moldovan citizens.

Hence, it was to be expected that the trade unions representing the state budget employees, especially the ones working in the education system, be unhappy with the results of the negotiations, as the raise of wage tariffs produced as a result of these last year did not lead to an increase in the real value of wages and was "swollen" by the continuing increase in prices on mass consumption produces and services.

Unlike in the past two-three years when the unions claimed doubling the salaries and started strikes at the beginning of the financial year when the state budget for that year had already been adopted, this year the unions have synchronised their actions with the drafting and debating of the state budget for 2004 by various ministries. At the same time, the unions have warned the Government through the mass media that they would start a national strike should the Government fail to double the wages.

However, the negotiations ended with the firm position of the Government to raise wages by as much as 15%. It is up to the unions now if the collective conflict heightens and wins the support of employees.

In a completely different position are the unions from the production sphere (members of the CFTU), whose main partner in the negotiations over wage tariffs in the real sector of the economy is the National Confederation of Employers. Over the past three years, the CFTU has secured a continuous increase of wage tariffs, and the tariff wage for category I wage earners in entities enjoying financial autonomy has reached 340 lei.

The social partners- Government - Unions - Employers - have agreed to launch in the near future talks with a view to draft a new Collective Labour Contract at the national level, which will also include negotiations over the new wage tariffs for 2004. Notably, the unions will demand establishing a minimum guaranteed wage per country depending on the value of the minimum existence basket, so that starting 2007 the minimum wage can not be below the consumption minimum.

Apart from raising salaries to a level to fit the real costs of labour force, the industrial unions also seek to change the structure of wages in the production sphere in such a way that the value of the guaranteed tariff wage, which is currently worth 30-40% of the overall wage, be upgraded to at least 70% thereof, and the remainder of the wage be made up of raises and bonuses. Thus, the wage earners will be entirely dependent on the employers, who can change the variable part of the wage at any time.

If the value of wages in the budgetary sphere depends on the means allotted for this purpose in the state budget, the value of wages in the real sector of the economy is determined primarily by factors such as the stimulation and protection by the state of autonomous producers, relieving the fiscal pressure on them, creating new and stable jobs, professional upgrading of wage earners, ensuring secure work places etc.

Differently put, the state has to get involved more actively in the process of creating favourable conditions for business activities and loyal competition, and the values of wages may be determined through collective talks between wage earners and employers, which talks need to be encouraged by the state.

The unions believe that the collective talks are one of the most efficient and important means of improving the situation of wage earners in terms of fair retribution of labour, job stability and secure work conditions. For these reasons, the unions, taking into account the new socio-economic conditions, have channelled their activity towards negotiating the collective labour contract at all levels: enterprise, branch and national levels.

The topicality of the social partnership in Moldova is obvious and is expressed through the refusal by the social partners to revert to confrontation and their commitment to constructive co-operation, based on principles of equality and mutual trust. This stimulates stability and guards the social peace in the society.

The unions, together with the employers, are currently engaged in various tripartite structure of social dialogue - the administration boards of the National Agency for Social Insurance, the National Company for Health Insurance, the National Agency for Labor Placement etc. - and their task is to represent the interests of the wage earners and employers in these structures.

In circumstances where the shadow economy if proliferating, many wage earners work illegally. In addition, given that the gap between offer and demand on the labour market has deepened, the adoption of the new Labour Code is of major importance. The Code provides all necessary premises for changing the centralised regulation of labour relations to a contractual one.

In this sense, the unions are to play an important role within the social partnership and will thus make full use of their rights to protect the wage earners in the labour market.

The unions believe that their place is where the legal framework for the new labour relations is being drafted and adopted, so that they can effectively defend the rights and interests of the employees and at the same time advocate for an optimal balance of interests of the sides to the social dialogue. In this sense, the Labour Inspection has been recently created in order to control the observation of relevant laws together with the unions.

The social dialogue can win the trust of labour people only when there is guaranteed social peace based on the fair distribution of income, secure working conditions, well functioning national economy, accountability of public institutions etc.

The social European model that we are trying to follow (due to the clear-cut European option of the political leadership of Moldova) involves building modern and functional relationships at the national level and in every field of economic activity. Starting from the assumption that the role of unions in the European integration process must be an active one, the unions will soon draft a strategy which will include a series of conditions/criteria specific to the union movement in Europe.

In unions' view, the current state of the social partnership in Moldova is inefficient for the following reasons: the assumed obligations are not fulfilled, the activity is poorly organised, the responsibility lacks, the unions lack the capability of putting forward well-founded demands, carry out talks and carry out the agreed deals.

One of the forms of pressure of the employers over the Government is exercising the right to collective actions. They can attain their objectives only under certain circumstances: the demands are realistic and well founded, the current laws are strictly observed, there is solidarity among all employees and employers and they act in a transparent way so that the society is aware of the causes of conflicts and the reached outcomes.

Obviously, the period of ten years of transition has not been enough for the unions to become a strong actor within the social partnership. However, this period of time has been enough for them to understand that the socio-economic problems can only be solved at the negotiation table and not by masses of people gathered in the street.

2. European Integration Conception - at last …
by Mariana Argint

The Government has finally prepared the draft of the "Conception for European Integration of the Republic of Moldova". Its discussion and more accurate definition are yet to come.

This is a very belated document. And it is also unclear why it is called "conception" instead of "national strategy" as in other countries? Thus, it was November 1993 when President Mircea Snegur sent a letter to the European Commission Chairman Jack Delore proposing to stir up the formation of political and legal grounds for relations between the Republic of Moldova and the European Union (EU). In 1994, the Commission assessed the situation and acknowledged the positive changes in Moldova - the first multiparty parliamentary elections, the new Constitution, liberalization of the economy and financial macro stabilization, and democratization of societal relations.

This was followed by the signature of the Partnership and Cooperation Agreement (PCA) between the EU and Moldova (1994) and its coming into effect (1998), which was an official recognition of Moldova as an EU partner for political dialogue and legal and economic cooperation.

This agreement though, unlike the EU "association agreements" with the Central and Eastern European countries, by no means was a prelude to further accession to the EU. It was rather meant to Europeanise our young state and bring the quality of its state system, economy and social life as close as possible to the Copenhagen criteria of the EU (1993) for new eventual EU members.

Unfortunately, the EU-Moldova agreement has been implemented slowly over 1998-2000, and the fault was mostly ours. As strange as it may seem, despite the new emphases emerging every year in policy and practice of the country's transformation, the agreement has never underwent any adjustments. Both parties - Brussels and Chisinau - admit that the PCA potential has not been used in full measure. Last year, at last, it was decided to concentrate the cooperation in five areas: legal harmonization, customs and cross-border cooperation, fighting criminality, examination of approaches towards interaction of the parties within the Free Trade Area, and investments.

Over the past decade Moldova nonetheless preferred staying within the so called "grey zone", a zone of geopolitical uncertainty. But even in this situation the country has already received aid worth more than 240 million euro from the EU within the framework of TACIS and other programs. In addition, it has been announced that another 50 mil euro will be alotted to Moldova for 2003-2004. These funds are meant for macroeconomic support, social assistance, stimulation of private sector and export, as well as for reformation of the administrative and judiciary systems.

At present, though, Moldova's leadership puts the question more assertively - it has declared that European integration is an external policy priority of the country. According to President Vladimir Voronin (January 2003, during a meeting with the diplomatic corps), "the Moldovan leadership perceives European integration as a three-dimensional process. Firstly, this is a path to reintegration of Moldova itself based on modern legal standards. Secondly, European path means for Moldova modernization of the country's economy based on universally recognized mechanisms functioning in Europe and in the world. Thirdly, European integration means formation and development of our political institutions, reformation of public administration with strict delimitation of functions and powers proper to a democratic state with market economy".

The President expressed himself even in a more clear cut way on Independence Day, 27 August 2003: "the program of Moldova's European integration is the main strategic document for us, which is superior to all party programs and current tasks of all power branches".

These are our intentions. The Government is convinced that there are no fundamental contradictions between the pro-CIS and pro-EU policies. Apparently after the CIS Summit hosted in Yalta on September 18-19, Moldova's belief in CIS was shattered significantly, whereas in the EU, on the contrary, was strengthened.

However, European Commission has a more clear position on this: in the mid-term perspective Moldova has no chances of becoming an EU member. In a more distant future this is not excluded. Possibilities of this will grow as the country connects to the processes of stabilization and association in South East Europe. The EU has recently declared that it was ready to work out a plan in 2004 of priority EU actions for Moldova.

European choice is a strong incentive for Moldova, since it is this choice that provides the country with both democracy and institution-building, internal stability and external security.

Moldova today is a partitioned state located at the periphery of the uniting Europe, whose existence is complicated by the frozen Transdnistrian conflict. Efforts to reunify the country within a "common state" will enable Moldova to use the Transdnistrian issue as a good argument: conflict resolution would not be sustainable unless backed up by perspectives of EU integration, by promises, for Transdnistria as well, to take advantage of the benefits of political and economic association with European Union.

Proposing new and new initiatives along the European direction (as also regards settlement of the Transnistrian conflict), we should not slacken efforts to realize political and economic clauses of the EU-Moldova PCA. What can PCA give to Moldova as regards approaching Europe? This includes:

• Creation of joint bodies (including at the higher level) to examine all problems related to partnership and cooperation between the RM and EU;
• Formation of the "functioning" legal environment through approximation of Moldovan legislation to the EU one;
• Accustoming to universally recognized rules of international trade;
• Gradual transition to normal conditions of competition, which in the end should raise the economy's efficiency;
• Financial assistance of the EU in developing key sectors of our country, which helps implement economic and social reforms.

One of the priority directions of the PCA implementation is the creation of a free trade area between Moldova and EU. It is important to mention that since at present Moldova still cannot assume obligations to create an area of free trade with the EU (due to the underdeveloped competitive environment and administrative capacities), the EU is willing to consider new possibilities of providing Moldovan goods with access to the market within the framework stipulated by the WTO.

Now, the most realistic for Moldova is its participation in processes of sectorial integration with the EU. This means ensuring Moldova with autonomous trade preferences followed by the Free Trade Agreement, infrastructure development, border control etc.

Speaking of Moldova's European vector, one should consider both "pros" and "cons" of such orientation. Indeed, it could be already in the near future when Moldova as a new neighbor of the EU will be able to count on enhanced financial and technical assistance, facilitated visa regime and access to new markets.

At the same time, given Moldova's slowness, some of these advantages may turn into problems.

Thus, for instance, transition of the united Europe to common norms and standards will undoubtedly facilitate movement of goods throughout its market. With this in mind, Moldova should provide "euro-harmonization" of its standards and requirements and the conformity assessment procedures. Sluggishness will sharply worsen the access of Moldovan products to European markets, especially foodstuffs.

Another important aspect is attracting foreign investments into the country. And this requires urgent improvement of the country's investment climate; otherwise, after the EU enlargement, it will be our neighbors - the new EU members - who will become the main recipients of European subsidies and technical assistance programs. It is not excluded it will be the new members' economies that the EU will encourage investments into, leaving the "tardy" Moldova outside this activity.

The process of Moldova's rapprochement with Europe requires a lot of effort and time. Therefore, it is not rare when the question arises: is EU membership an absolute necessity for Moldova? To answer this question, a more detailed analysis of the impact of EU policies (Common Agricultural Policy, Social and Labor Market policies, Standard and Costs in Environmental Protection etc.) on our national interests is necessary.

According to President Vladimir Voronin, "the enthusiasm of all branches of power is now focused on European integration". But this enthusiasm (!) also requires a wider public support. It is still unstable. According to opinion polls, the population favors EU and CIS almost equally. Taking this into account, the two-level EU policy concerning Moldova is important - at the level of the Government and the civil society. This will be the case when in our country the notion of "integration" will link closer to such notions as "democracy" and "development".

Ultimately, all of us need a democratically stable Moldova, integral from the political, social and territorial points of view. And its approach to Europe will undoubtedly enhance the external positive impact upon the quality of governance, business and living in our country.