print version

Activity of Public Institutions

Parliament
Government
Presidency

Noisy start of parliamentary session by Sergiu Grosu
"Economic competitiveness is a heavy burden for Moldova" by Ion Basiul

Activity of Public Institutions

Parliament

1.1. Appointments. Dismissals

Deputy Speaker Maria Postoico was appointed one of the 20 deputy heads of the Parliamentary Assembly of the Council of Europe (PACE) on basis of the rotating principle practiced by PACE. Postoico is part of the united leftwing group in the PACE.

The parliament has declared as vacant the mandate of lawmaker of Moldovan Communist Party (PCRM) faction member Victor Mindru, deputy who tendered resignation in connection with appointment as deputy minister of health and social protection. The mandate of PCRM Deputy Mihail Camerzan will be also declared as vacant soon, as he was named as ambassador to Portugal.

1.2. Legislative documents

• Decision for modification of the regulation on use of money from the agriculture sustenance fund. The decision establishes the possibility to award budgetary subsidies to businesses working in agriculture sector which took credits from commercial banks or different loan associations in 2001-04 and did not reimburse them in the due time or failed to pay all interests. The regulation says that agricultural producers who fulfil these obligations till December 31, 2005 can benefit from budgetary subsidies.

• Law on importation of an automobile. The importation of a specialised medical automobile (mobile machine for burning) manufactured in 1989 for needs of the traumatology hospital in Chisinau, without any right to sell it later, is allowed as exception through derogation from provisions of the November 20, 1197 law # 1380-XIII on customs duty.

• Law for completion of Article 38 of the law on acquisition of goods, works and services for needs of the state. The law stipulates facilitary legislative conditions for enterprises of Moldovan associations of blind, disabled and deaf people. Under the law, task forces for acquisitions will be able to apply a preferential margin of maximum 15 percent for goods, works and services of these enterprises while evaluating and comparing the offers.

• Draft law for modification and completion of the law on prevention and combat of money laundering and financing of terrorism. The draft adopted in the first lecture calls for creation of an electronic database on suspect deals and other bank transactions which fall under incidence of the law on combat of money laundering (# 633-XV from November 15, 2001), as well as liberalisation of control on transactions of non-residents through Moldovan bank cards.

1.3. Appeals

Lawmakers from the parliamentary opposition formulated questions and appeals to the cabinet of ministers and subordinated institutions at the first sitting from the autumn-winter session. Under legislation, the questions and appeals will be answered the next Thursday of the parliament's sitting or within two weeks, when detailed information is requested.

• The Democratic Party of Moldova has asked the parliament administration to create a special commission in charge with cooperation with representatives of the Supreme Soviet of Transnistria.

• An appeal of parliamentarian Vitalia Pavlicenco invokes some violations committed by energy officials and protection of interests of enterprises controlled by the separatist regime in Tiraspol. In particular, it said that the Ministry of Industry and Infrastructure, National Agency for Energy Regulation (ANRE) and enterprises subordinated to these institutions have admitted the supply of electricity for lower prices to the Ribnita-based metallurgical plant.

• Oleg Serebrian, chairman of the Social Liberal Party, solicited the Foreign and European Integration Ministry to react to a statement of the head of the Transnistrian foreign department, Valeriu Litkai, whom Romanian press reports have quoted as saying that the relations between the unrecognised Transnistrian republic and the United States are better than relations of Moldova with the U.S., motivating that Transnistria-based enterprises fulfil orders for the U.S. Military Department.

• An appeal of Deputy Igor Clipii seeks detailed information why judges were not confirmed in offices in 2003-05, non-confirmation which resulted with reorganisation of tribunals into courts of appeal.

• Deputy Dumitru Ivanov asked the executive to provide information about abuses of the Ministry of Education, Youth and Sport, which decided to close up a professional building school in the Chisinau municipality. The executive passed a decision demanding the transmission of the headquarter of the school concerned to the pedagogic college Alexei Mateevici, as the college was expelled from its headquarter in September and the cabinet of ministers transmitted it to the Moldovan Institute of International Relations (IRIM), an institution created and headed by former education minister Valentin Beniuc.

  To mention that the executive created IRIM in 2003 with the purpose "to ensure Moldova with high quality staff in international relations sector," but the annual contingent of students solicited by state-owned budgetary institutions of higher learning, international relations specialty, does not exceed 40 persons, a contigent that the Moldovan State University and other experienced educational institutions can train. In addition, the demand for teachers, staff trained by the Alexei Mateevici college, is much higher, especially in rural areas.

Government

2.1 Appointments

The cabinet of ministers appointed former defence minister Boris Gamurari as Moldovan ambassador to Poland on October 4. Now Gamurari holds the office of deputy manager-general of Lukoil-Moldova company.

Also, the executive named Moldovan Ambassador to Belgium Victor Gaiciuc as Brussels-based Moldovan ambassador to Luxembourg.

The cabinet reconfirmed Ion Moraru as deputy director-general of the National Bureau for Migration.

2.2. Sittings. Decisions

Public administration reform - with international support alone

Premier Vasile Tarlev has met with a group of international experts who will assist the executive to make a functional analysis of central public administration authorities and to draft a reform strategy of the central public administration. These measures are part of the action plan on functional analysis, elaboration and implementation of the strategy concerned on basis of the July 15, 2005 governmental decision. The executive is to approve the strategy by late 2005 after competent national and international structures including the World Bank examine it. The Swedish International Development Agency (SIDA) and UNDP/Moldova have coopted the international advisers.

To mention that the Moldovan president said last spring, when the current executive was created, that the new governmental team is reformed on basis of modern public management principles. However, the reform was limited at modification of name of central authorities, merger of several independent departments in ministries, and massive reduction of the number of employees, measures which were not preceded by economic-institutional expertise, nor they had an adequate transparent nature.

Implementation of EGPRSP

The prime minister chaired a working sitting on implementation of the Economic Growth and Poverty Reduction Strategy Paper (EGPRSP), with the Economics and Trade Ministry saying that it starts implementing the objectives and tasks stipulated by EGPRSP, especially the 2005-09 Activity Porgramme of the government and sectoral action plans. It was noted that most of macroeconomic indicators register positive trends, and some forecasts included in EGPRSP "have even been exceeded."

According to the prime minister, the success of EGPRSP depends on efforts of entire society and the organisation of some regional forums was solicited for this purpose, in order to evaluate the impact of implementation of EGPRSP on every settlement. Also, the premier solicited a more active participation of civil society and local public administration in implementation of EGPRSP.

State budget over-executed

The Finance Ministry told the October 4 cabinet sitting that the state budget was executed 107.4 percent regarding revenues in January-September 2005. Incomes in the amount of 5.606 million lei (about 445.2 million dollars) were raised to the state budget in nine months, or by 1.830 million lei or 48.5 percent more than in the similar period of 2004. As much as 38.6 million dollars was transferred from the budget for the state foreign debt service.

According to data for January-August, customs revenues accounted for 3,456 million lei (274.4 million dollars). About 200 million lei (15.9 million dollars) was raised in net income of the National Bank of Moldova, while the revenue from a grant offered by the European Commission within the Food Security Programme for Moldova amounted to over 140 million lei (some 11.2 million dollars). Also, incomes from activity of real economy (production, direct taxes and non-customs fees) count for only ¼ of the total of budgetary revenues.

2.3. Decisions

The number of documents needed for entrepreneurial activity is still high enough in spite of a considerable reduction

The executive has approved the list of authorisations and certificates issued by administrative bodies for start of business activity in Moldova. According to the list, 125 documents for confirmation will be in effect, and more than 70 of them will be issued for free. The document establishes that a tax for permits and certificates will be in effect only if the legislation stipulates it, while the general term for issuing of documents must be maximum ten working days.

Also, the cabinet of ministers approved the register of official documents regulating the entrepreneurial activity, documents issued by executive, central specialised bodies of public administration, and other central administrative authorities. According to the register, the 27 administrative authorities will work in compliance with more than 420 normative documents, while another about 100 normative documents were abrogated because they are abusive or unfit the market economy principles.

The executive passed these decisions for implementation of the December 16, 2004 law # 424-XV on revision and optimisation of normative documents regulating the entrepreneurial activity (the so-called "guillotine law"), a law aimed at reform of state regulation of entrepreneurial activity. Most of businessmen participating in the recent investment forum in Chisinau described the guillotine law as an efficient measure for reduction of bureaucratic barriers on way of business, but warned that its implementation is delayed.

Financing of parties from state budget

The executive approved a draft law on financing of political parties and electoral campaigns, which will regulate the modalities of financing of parties and other social-political organisations (including during electoral campaigns), control of financing, restrictions and sanctions for violation of necessary legal orders.

The draft says that the state will subsidize the activity of parties every year with a total amount of maximum 0.02 percent of state budget incomes for the reference year (as for example, this amount would be maximum 1,936,000 lei for 2006)

Three budgetary subsidies will be in effect:

Basic - worth 1/3 of the total state subsidy, a subsidy which will be equally distributed to political parties with representatives in parliamentary factions;

Proportional - worth 1/3 of the state subsidy, a subsidy proportional with the number of mandates of every political party in legislature;

Arrear - worth 1/3 of the total state subsidy, a subsidy for all political parties which participated in electoral campaign but did not win mandates proportionally with the number of gathered votes.

The draft also comprises provisions on granting of interest-free credits for electoral campaigns; conditions and mode of reception of donations during electoral campaigns; limit of donations which can be received in a fiscal year; interdictions for foreign financing of electoral competitors; transparency and control of funds, etc.

This draft law was worked out at the recommendation of the Council of Europe, being mainly inspired from a similar law of Romania adopted in 2003, and more than half of its provisions are part of the draft that the Chisinau executive has approved. To mention that the executive delivered a new draft law to the parliament in 2000 regarding parties and social-political organisations, a draft adopted in the first reading that calls for financing of parties from the state budget. The reasons why this draft was not adopted remain unknown so far, and its examination should be normally resumed in a package with the recent initiative of the executive.

Free social apartments

Under a governmental decision, socially vulnerable categories of population will have the possibility to obtain housing for free, while construction of residences will be financed from state and local budgets, bank and mortgage credits, as well as foreign grants.

Although an exact term for finalisation of constructions is announced - 2011, no potential cost and volume of residences were established so far. However, the Chisinau Municipal Council will distribute the residences. Mass media has recently mirrored the scandal related to distribution of social apartments in a block built by municipal authorities, with the list of beneficiaries including functionaries of the Chisinau City Hall and local council, prosecutors, law enforcement agents, and other persons who are not part of very needy categories. The minimum construction cost of a block with 50-60 apartments is about 1.5 million dollars.

3. Presidency

Staff policy

President Voronin has attended the sitting of the Interior Ministry, outlining the accomplishments related to holding of organised criminal groups and reduction of crime rate in general. Also, the chief of state expressed dissatisfaction with the staff policy of the Interior Ministry, underling that shortcomings in this sector result with growth of crime rate among policemen, misuse of authority and corruption.

The illegal activity of police is manifested through misuse of authority, torture, inhuman and degrading treatments against held people. According to Voronin, the situation in this sector cannot be tolerated anymore, while the Interior Ministry administration is told to take urgent measures.

The improvement of legislation, in particular, of the law on police, whose provisions are old and run counter international principles that regulate the activity of law enforcement bodies is one of immediate priorities.

Talks with State Duma representatives

Vladimir Voronin received members of the group of lawmakers for relations with the Moldovan parliament of the Russian State Duma. The Moldovan president expressed optimism that the visit will contribute to a better information of state structures of the Russian Federation over political, social-economic situation in our country, strategic development tasks of Moldova.

According to Voronin, the failure to settle the Transnistrian crisis is the only serious obstacle on way of use of potential of Moldovan-Russian cooperation, while destructive forces from the Russian Federation and Moldova, pretentions of the Tiraspol regime which lack ethnic or juridical justifications are interested in perpetuation of this barrier.

To mention that President Vladimir Voronin said in an interview with the radio channel BBC that the Moldovan authorities are ready to get through the economic and political pressures of the Russian Federation, giving up energy resources from Russia and exports of Moldovan wines to this country, if needed.

Speeding up consolidation of agricultural fields

The chief of state told the sitting of the Ministry of Agriculture and Food Industry that the period of implementation of the state land consolidation programme drafted by this ministry is too long. According to the concept, the land consolidation process will last at least 15 years, proposing the consolidation of fields owned by families first, followed by consolidation of fields of agricultural farms.

Independent experts came with different opinions in this regard, supporting the consolidation process but with the condition that it will be followed by large investments in agriculture, training of experienced specialists and promotion of a state policy aimed to provide a real assistance to agricultural producers. In parallel, parliamentary opposition representatives criticized the agriculture policy of the government at the beginning of the autumn session of the parliament, describing the promotion of consolidation of agricultural fields at regional and local levels as harmful.

Working visit to the Baltics

The Moldovan president paid official visits to Latvia, Lithuania and Estonia on September 26-29. He had meetings with presidents and speakers of the three Baltic States. The talks focused on bilateral cooperation, partnership in the European integration sector, settlement of the Transnistrian conflict, and cooperation with NATO within the Partnership for Peace Programme.

Under an agreement of foreign ministries, Moldova will open an embassy in Riga by late 2005, and our country intends to open diplomatic missions to all members of the European Union in perspective.

Economic Policies

1. Prices and inflation

Inflation could be 8-10 percent or a little bit higher...

According to preliminary data, the inflation rate in September was 1.2 percent. A 4.9-percent cumulative inflation rate was recorded in January-September. The consumer price index (CPI) of food products dropped by 0.3 percent, CPI for manufactured goods rose by 2.8 percent, while tariffs of services provided to population increased by 0.7 percent.

Taking into account the governmental annual inflation target, we think that it could be 8-10 percent or a little bit higher at the end of this year, compared with 12.5 percent in late 2004. Consumer prices rose by about 12 percent from August 2004 to August 2005, and the growth was mainly generated by rise of administrated prices and oil price on international market.

The National Bank of Moldova (BNM) adopted last June a synthetic indicator of inflation - basic inflation - which is used as basis to draft monetary-valutary policies, macroeconomic forecasts, and to reduce the price rise level.

2. Financial-bank system

Officials say that bank sector needs revolutionary reforms...

"The Moldovan bank system must be reformed as soon as possible, in line with laws on market economy, while bankers must implement these reforms in a revolutionary manner, so that to reduce interests down to 15 percent in lei and 9 percent in foreign currency," said Premier Tarlev at the end of the forum of businessmen "Investment Climate in Moldova"¹. According to data of BNM, the average interest rate on bank credits in lei was 18.7 percent and 10.7 percent for loans in foreign currency in August. Interest rates on credits in national currency declined by about 2 percentage points this year, while rates on loans in foreign currency dropped by about one percent.

On the other hand, Mike Davey, regional director of the European Bank for Reconstruction and Development (EBRD), said that the domestic bank system is closed and rigid and the lack of known international or regional banks is visible on market. "BNM argues that the bank sector is open for foreign investments and 52 percent of properties belong to foreign firms, but they are registered in offshore zones," the EBRD official noted. "Moldova is part of few countries in Europe where the presence of some serious foreign banks is not felt. There are no other serious financial institutions in Moldova except for EBRD and Western NIS Enterprise Fund", Davey estimated.

3. Labour market

Government promises to increase salaries...

Passing some amendments and completions to the draft law on system of calculation of basic salaries in budgetary sector, the executive plans to double the minimum salary, from 200 lei (15.8 dollars) up to 400 lei (31.8 dollars), starting December 1. In addition, this draft law calls for growth of medium salary in budgetary sector by about 33 percent next year. Thus, the salary of teachers will grow by about 40 percent, wages of doctors will increase by 25 percent, social assistants by 33 percent, and farmers by 50 percent.

The cost of this draft is estimated at about 4.3 billion lei (341.43 million dollars). According to data of the National Bureau for Statistics (BNS), the medium salary of a budgetary employee counts for 981 lei (77.9 dollars), while a worker in real sector earns 1,520 lei (120.7 dollars). Workers in agriculture sector earned the lowest monthly medium salary in January-August - 583 lei (46.3 dollars). The medium salary of teachers accounted for 875 lei (69.5 dollars), while doctors and social assistants earned 986 lei (78.3 dollars). The highest salary was registered in the financial-bank sector - 3,430 lei (272.3 dollars).

4. Foreign trade

Russia stops imports of Moldovan wines...

Moldova did not relieve yet the exportation of vegetal and animal products to Russia. Even more, the customs service of the Russian Federation has stopped issuing excise stamps for Moldovan wines. Under these conditions, exports could drop a lot compared with last year and, respectively, the presence of Moldovan wines on Russian market would be essentially reduced, a fact confirmed by Russian press reports as well.

About 80 percent of Moldovan wine exports go to the Russian market. The Russian Federation imports more than 2,500 sorts of wines from Moldova, while 60 percent of wines consumed by Russia in 2004 were made in Moldova. Moldova exports wines and cognacs worth over 250 million dollars to the Russian Federation a year.

...while trade deficit is on a continued rise

The trade deficit is on a free rise, while situation of exporters is worsening. This situation lasts for several months and no signs of improvement are available. Data released by BNS recently show that the trade deficit for January-August is by some 40 percent higher than the value of the same period of 2004.

As for example, the trade deficit turned over 705.2 million dollars in eight months of this year, since imports rose by 30.8 percent while exports grew by 11 percent. Many economists say that the trade deficit could turn over 1.1 billion dollars by late 2005, if this trend remains stable.

5. Business environment

Corporate tax in Moldova is one of the lowest taxes in the region...

Many foreign investors who shared their experience at the Chisinau forum Moldova Exposed to the World Business said that Moldova holds great investment opportunities but investors still face some obstacles on way of their business such as fiscality, ambiguity of legislative framework, etc.

However, we do not believe that fiscal burden is hard for investors, since the 18-percent tax is one of the lowest taxes in the region. These are institutional pressures, rather than exaggerate fiscal pressures. Moldova does not face a deficit of laws, and even more, we can speak about a legislative inflation, a deficit of fair interpretation of laws in justice system which is often regarded as corrupt and bureaucratic, as well as about a chronical deficit of execution of judgements.

As for example, reports of the World Bank show that about 80 percent of interviewed enterprises in Moldova describe the judiciary system as "unfair, expensive, corrupt, and incapable to impose respect for law." Elsewhere, many investors consider that justice in Moldova is unsecure for them, since courts protect only state institution and state.

Government should stop concessions and fiscal vacation...

On the other hand, the Government should stop concessions and fiscal vacations, restructuring or freezing of debts of enterprises. The elimination of firms with arrears will increase the crediting and, respectively, the investments will also grow. Closure of non-performant societies could create a "virtuous circle" in which the rapid development of economy will give an impulse to financial intermediation in real sector.

In addition, specialists say that elimination of firms with arriars will increase the competition in real sector and will improve financial performances of viable firms. Thus, banks will be able to reduce risk margins and to lower interests. In their turn, enterprises will have access to cheaper credits, loans which are so necessary for investments in production processs.

Insurance system for business is underdeveloped...

On the other hand, we must admit that the insurance system for business is underdeveloped, though a sufficient number of insurance companies work on market, since only few of them provide a wide range of services, and their costs are very high. In addition, they are not very interested to insure certain risks, especially in agriculture.

Issuing of documents is not very operative...

The low operativeness of the document issuing procedures at customs stations needed for exportation/importation operations, insufficient equipment and training of customs officers and, not the last, the high share of goods imported without paying all duties or what we name contraband are some obstacles on way of foreign investors. As for example, the West needs only three days to issue documents for importation of production, and only two days for importation. Instead, we need many days or even weeks.

Many goods are illegally imported for a low price and quality, creating an unfair competition for local producers. Real competition principles must be ensured or free entrepreneur in Moldova is limited only with trading in streets or at stalls. In addition, the problem of uncontrolled border (Transnistria). According to informal sources, the volume of foreign investments allocated to Moldova the past several years is estimated to be smaller than value of international trafficking in drugs or smuggling of goods which penetrate our country.

Bureaucracy and small salaries harden implementation of reforms...

Bureaucratic elements and low salaries of functionaries involved in legislative regulation process is a cause which hardens the implementation of regulation reform or "guillotine" law. Earlier, the granting of paid-for services (regulation taxes, payments for expertise, instructions, issuing of certificates) was a source of extra-budgetary income for most of public regulation authorities, while the implementation of "guillotine" or regulation reform limits these sources and possibilities of functionaries to raise additional revenues. This situation creates clear reasons for participants to delay it.

6. Moldova in the world

Moldova faces shortages regarding economic competitiveness...

The World Bank has approved the financing of the project "Improvement of Competitiveness in Moldova", drafted at the initiative of the Moldovan government on basis of the Economic Growth and Poverty Reduction Strategy Paper (EGPRSP). The financing will count for 9.8 million dollars, of which half will be released as preferential credit under IDA (International Development Agency) conditions, while the other half will be allocated as grant.

The project aims to enhance competitiveness² of enterprises through a better business environment; modernisation of Metrology, Standardization, Testing and Quality System (MSTQ); development of quality and control insurance mechanisms at level of enterprise; facilitation of access to financing. The project will encourage the creation of a competitive market environment with the purpose to maintain the macroeconomic stability, economic growth, and creation of jobs, as well as growth of competitiveness of national enterprises at local and international levels.

Transdnistrian Conflict

The European Union and the US have been invited to join the Transnistrian negotiations process as observers - this was decided during the consultations between representatives of the parties in conflict and of the mediators on behalf of the OSCE, the Russian Federation and Ukraine that took place on 26-27 September in Odesa. The status of observers has been defined in a OSCE Protocol regarding the rights and obligations of the observers in the negotiations process. According to the protocol, the observers have the right to participate in the official meetings, take the floor during those meetings, and ask questions. They may be asked questions by the other participants in the talks. They cannot however sign any documents discussed adopted within the talks and cannot participate in the decision making. Thus the new format is an asymmetrical one, and as such is called "5+2".

Also in Odesa the sides agreed to resume the negotiations process on 27-28 October in Chisinau and Odesa, in the new "5+2" format. "We have managed to move from the dead point the huge machinery that is the negotiations process and that has not been going for more than a year", summed up the results of the consultations for the press Ukraine's special representative for the Transnistrian issue Dmitri Tkaci. According to Tkaci, in Odessa the sides discussed issues related to the Moldovan-Ukrainian border monitoring, the international monitoring of the military-industrial complex of Transnistria, as well as the prospects of organising democratic elections in the region. In addition, in Odesa the Russian representative handed in to the participants a document with Russia's proposals on the Transnistrian issue.

The latter seems to be a new Russian settlement plan, which, according to the head of the Transnistrian foreign department, Valeri Litkai, will be the main subject on the agenda of the negotiations round on 27-28 October. While the Moldovan press has remained quiet about the contents of the new plan, Litkai told the press in Tiraspol it is a "serious and elaborated document that has emerged as a result of four months of consultations with all sides". According to the same source, the document contains about 75% of the Kozak Plan and about 15-20% of Yushcenko's proposals, and takes over almost entirely the basic elements of the Kozak Plan. Asked about the reaction of the Moldovan side to the plan, Litkai only said that it does not correspond categorically to the contents of the documents with regard to Transnistria adopted recently by the Moldovan Parliament.

Although right on the eve of the Odesa consultations the Moldovan President Vladimir Voronin said Moldova will agree to return to the negotiations table only if the EU and US join the negotiations process as full fledged members, the Moldovan side showed generally happy with the results of the Odesa talks. During a meeting with the EU Commissioner for External Relations and Neighbourhood Policy, Benita Ferrero-Waldner, who was on a visit to Chisinau on the occasion of opening of a European Commission Delegation to Moldova, President Voronin said the participation of the EU and the US as observers in the Transnistrian settlement process is an achievement Moldova has sought for many years. Voronin has expressed hope that through the joint efforts of the Moldovan authorities and the international community the moment of reintegration draws close and assured his guest that Moldova will do its best to work constructively and efficiently with all participants in the negotiations.

On the other hand, the head of the Transnistrian ‚foreign ministry', Valeri Litkai, explained the fact that Tiraspol accepted to invite the EU and the US to join the negotiations format through the "change in the geopolitical situation around Transnistria", notably the change of view on this issue in Kiev and in particular in Moscow. According to Litkai, by agreeing to include the EU and the US in the negotiations, Moscow is trying to avoid the situation when these two prevented the implementation of the Kozak Plan back in November 2003. The inclusion of the EU and the US in the negotiations, is expressly provided for in the new Russian settlement proposal, Litkai also said; by taking part as observers, the EU and the US will be on board with what is happening, and this will deprive the Moldovan side of the possibility of playing the card of Russian-Western contradictions in its favour. In addition, Litkai said that the participation of the EU and the US in the negotiations will allow these to be informed correctly, from the primary source, about the course of events, and not through the prism of the Moldovan position. "For the time being, things go in a clear direction for us", Litkai concluded the position of the Tiraspol administration on the results of the Odessa consultations.

In another development, on 7 October in Palanca the EU Commissioner for External Relations and the Neighbourhood Policy, Benita Ferrero-Waldner, the Moldovan Foreign Minister, Andrei Stratan, and the Ukrainian Foreign Minister, Boris Tarasiuk, signed the trilateral EU-Moldova-Ukraine Memorandum of Understanding for the EU's Border Assistance Mission. "The purpose of the Mission is to build capacity for border management, including customs, on the whole Moldova-Ukraine border. This will help prevent trafficking in people, smuggling of goods, the proliferation of weapons and customs fraud", Commissioner Benita Ferrero-Waldner said at the event. According to her, the mission will start its activity on 1 December 2005 and will consist of 50 experts from the EU Member States. These will work within mobile groups, which will carry out unannounced visits at any police, customs or fiscal point, will formulate recommendations on improving their activity, will provide advice and on-the-job training for the Moldovan and Ukrainian officers. " We want to help you manage your border in a more modern and efficient way. This will also make an important contribution to reaching a solution to the Transnistria conflict. Resolving that conflict will be a tremendous victory for peace, security and stability in our common neighbourhood. We must all work hard to achieve it", the European Commissioner declared during the ceremony of signature of the trilateral memorandum.

Foreign Affairs

Inauguration of the European Commission Delegation and signing of the agreement on monitoring of the Moldovan-Ukrainian border

The European Commission Delegation to Moldova was inaugurated on October 6 at a ceremony with participation of the European commissioner for external relations and neighbourhood policy, Benita Ferrero-Waldner. Ambassador Cesare De Montis will head the delegation.

The foreign ministers of Moldova and Ukraine along with the European commissioner for external relations and neighbourhood policy signed on October 7 the memorandum on introduction of a European Union mission at the Moldovan-Ukrainian border. Starting December 1, 2005, Ukraine and Moldova will accept European experts to undertake unforeseen inspections at the border, in order to implement this memorandum.

Special attention of the Council of Europe (CoE) for Moldova

The Parliamentary Assembly of the Council of Europe (PACE) adopted on October 4 the resolution and recommendation on the report on monitoring of Moldova's commitments. The resolution says that the country has advanced significantly on the path of democratic reforms but a number of important commitments have not yet been met in a satisfactory manner. PACE said that the priorities should be the improvement of the functioning of democratic institutions; the independence and efficiency of the judiciary; ensuring freedom and pluralism of the electronic media; the strengthening of local democracy; the raising of economic performance coupled with good social protection and the fight against corruption and trafficking in human beings and organs, modification of legislation on elections, on parties, improvement of the mechanism of international expertise of legislative documents. Also, PACE opts for a peaceful settlement of the Transnistrian conflict, with respect for Moldova's territorial integrity and sovereignty, organisation of free and democratic elections in the region.

Representatives of the Moldovan parliament described the resolution as the best one since Moldova's adhesion to the CoE (1995). The Moldovan speaker has told the CoE secretary-general that the Moldovan legislature adopted the schedule of legislative measures which will be taken to honour all the commitments towards CoE, and the document will be delivered to CoE in October, while this term will be coordinated with representatives of all parliamentary factions and Moldovan government.

The adoption of resolution and recommendations of PACE coincided with the second ruling of the European Court of Human Rights (ECHR) on Moldova. The first ruling gave green light to some of demands of Chisinau City Hall secretary Vladimir Sarban and the manager of a municipal enterprise, Constantin Becciev. ECHR sentenced Moldova for violation of the rights stipulated by Articles 3 (prohibition of torture) and 5 (right to freedom and safety) from the European Convention on Human Rights.

Further, ECHR set public hearings for December 13, 2005 on the case of journalists from the Moldovan Television vs Moldova, in order to discuss the admissibility and appeal. The appeal seeks the recognition of violation by Moldova of the right to free expression stipulated bt Article 10 of the European Convention on Protection of Human Rights by imposing censorship at National Television.

ECHR has passed 23 judgements condemning Moldova until now, with the government being communicated another 200 appeals. The Chisinau authorities have executed all these judgements, except for the ruling on Ilascu group, a decision which remains unfulfilled regarding release of detainees from Tiraspol.

Relations with the Russian Federation remain uncertain

The mission of Russian experts who should arrive in Chisinau in the first half of this month to evaluate the vegetal products for exportation to the Russian Federation did not take place. The Russian side has notified the competent authorities that the mission is postponed or possibly annulled in general.

The situation of exports of alcohol production to the Russian Federation remains uncertain, too, though the official authorities of Moldova and officials of the Russian customs service dismissed the appearance of artificial obstacles on way of exportation of Moldovan wines and cognacs.

According to estimates of Russian wine importers, the share of Moldovan wines on Russian market declined by almost 7 percent in January-August 2005. President Voronin also confirmed this fact, as he told a TV programme that the reduction of exports has a deliberate nature, being aimed to diversify the sale market of alcohol production and reorientation of inflows to the Scandinavian and Asiatic countries.

Belarusian support

Premier Vasile Tarlev has paid a working visit to Belarus. Tarlev had meetings with Belarusian President Alexander Lukashenko and Premier Sergey Sidorsky. The sides discussed aspects of bilateral cooperation, possibilities to open Moldovan-Belarusian manufacturers of tractors and trolleys. Also, Tarlev sought the elimination of bureaucratic barriers on way of exportation of fruits and vegetables from Moldova and asked the Belarusian side to consider the possibility to sell oil products to Moldova for a lower price. Moldova will import 20,000 tons of Diesel oil from Belarus this year and some 150,000 tons in 2006.

Studies, Analyses, Comments

Noisy start of parliamentary session
Sergiu Grosu, 11 October 2005

The parliament started the second annual session on October 6 after a vacation of more than two months

»»»

"Economic competitiveness is a heavy burden for Moldova"
Ion Basiul, 11 October 2005

Moldova continues to hold the red light in Europe and the world because it does not have competitive advantages, advantages based on a modern work

»»»