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Activity of Public Institutions

Parliament
Government
Presidency

Forum of Community of Democratic Option by Igor Botan

Activity of Public Institutions

Parliament

1.1. Appointments

The Constitutional Court has validated the mandate of lawmaker of Victoria Dobrovolscaia, who attended the parliamentary elections as part of the Moldovan Party of Communists (PCRM). Dobrovolscaia is the 10th alternate candidate from the PCRM list who became legislator.

1.2. Legislative documents

• Law on state social insurance budget for 2006. The social insurance budget will include 4,504,000,000 lei overall, by over 28.5 percent more than in 2005. The single birth indemnity for uninsured mothers will account for 800 lei. The contribution of employers to the salary payment will count for 26 percent, while of employees for 3 percent. Private entrepreneurs and founders of private enterprises will pay a contribution of 2,013 lei. The monthly average pension will grow up to about 331 lei in 2006.

• Decision on the legislative programme for 2005-2009. The document contains a list of over 200 legislative documents that the Parliament will examine the next four years, in order to ensure the fulfilment of tasks and objectives of the governing programme, national strategies and programmes. Earlier, the Parliament adopted the June 16, 2005 Decision # 122-XVI, committing itself to award priority to examination of legislative documents on organisation and regulation of the process of adjustment of the Republic of Moldova's legislation to the community acquis."

• Law on modification of certain legislative documents regulating the regime of identity papers. The law stipulates the introduction of passports containing biometrical data (blood group, colour of eyes, and fingerprint at the request) in the national system of identity documents. The amendments call for annulment of the possibility to prolong the passports when their term runs off and issuing of new documents.

• Decision on approval of the budget of the National Commission for Securities (CNVM). The budget, which will be made up from taxes and fees collected by CNVM from subjects of the securities market for different procedures and authorisations, will include next year 8.2 million lei in revenue; 6.5 million lei in spending; while additional sources of about 2 million lei will remain available to CNVM for 2007.

• Decision on participation of military of the National Army of Moldova in the international operation in Iraq. This document gave green light to the participation of a Moldovan military contingent in the international humanitarian operation in Iraq, with necessary individual hardware and weaponry. This decision was adopted at a secret sitting, though this decision of the Supreme Security Council and a governmental decision on submission of the draft decision to the Parliament have earlier been made public. Members of some political parties represented in the Parliament reported that the Parliament has adopted this decision, and they disapproved "the hiding of talks on this topic from public opinion and citizens of the Republic of Moldova." No close sitting of the legislature took place in the past five years and the Parliament has adopted another two similar decisions on this topic (#276-XV from July 3, 2003 and # 57-XV from February 27, 2004) at public sittings.

1.3. Parliamentary control

• The Parliament has heard a report on activity of the executive, unveiled by Premier Vasile Tarlev, for the first time this year. The report contained information about social-economic indicators for the first nine months of this year. According to the prime minister, the executive has fulfilled most of tasks included in the governing programme, it achieved a certain economic growth (GDP rose by 8.5 percent compared with 2005), collected additional financial sources to the budget (more than one billion lei). However, the executive admits that the quality of economic growth is unsatisfactory, but motivates it through the unsettled Transnistrian conflict (lack of a single customs, economic, financial and bank area) and considers that the governmental team still has a potential which will be used.

  Representatives of opposition, who raised questions and spoke out about hearing of the executive, launched very bitter criticism against activity of the cabinet of ministers, saying that the governmental team is incapable to fulfil the tasks of Moldova at this stage and it should step down. The criticism envisaged, in particular:

  • the lack of perspectives of a sustained economic growth;
  • the preponderance of consumption economy;
  • the insufficient support for agriculture and production sector;
  • the persistent corruption in governmental structures, the lack of transparency in activity of executive;
  • the insufficient financing of healthcare, education and culture;
  • the blocking of external financing;
  • the irresolute foreign policy, etc.

  Representatives of the parliamentary majority appreciated the activity of executive positively in general, but demanded more execution discipline, modernisation, fulfilment of tasks established by legislative documents on time, efficient administration of public financial resources, avoidance to adopt illegal decisions, and presentation of draft laws to the Parliament in the due time.

• The parliamentary commission for human rights held a special sitting on respect for rights of detainees in the Republic of Moldova. It found out that the existing situation in this field unfits the international norms and requires several solutions: reduction of crowds in penitentiary institutions; health insurance; insurance with food; introduction of education measures and employment of former detainees. The signalled shortcomings are related to insufficient financing of the system of penitentiary institutions (44 percent of needs), old buildings of penitentiary institutions, which unfit modern standards for endowment of confinement places. About 250 million lei (19.5 million dollars) is needed to build a new preventive detention facility besides necessary spending for purchase of the field, while only 127 million lei (9.9 million dollars) was allocated this year for financing of the entire justice system.

• Lawmakers of the Alliance Our Moldova (AMN) and Social Liberal Party (PSL), (former member of the electoral bloc AMN) sought the start of the process of dismissal of Moldovan president, saying that he has violated the Constitution and legislation in effect through "his backbiting statements against opposition, meddling in the municipal electoral campaign in favour of certain candidates." Under provisions of Article 89 of Constitution, the Parliament can dismiss the Moldovan president with the votes of 2/3 lawmakers. At least one third of parliamentarians can initiate the dismissal. The parliamentary group of PSL includes three lawmakers, while the AMN faction comprises 16 deputies (after 7 parliamentarians of the Social-Democratic wing of AMN left the party last October, they did not announce whether they withdraw from the parliamentary faction as well, while the official website of the Parliament maintained the information about full composition of the faction). Respectively, the 26 mandates of supporters of the idea to start the procedure of dismissal are insufficient, while lawmakers from other parliamentary factions did not manifest readiness to support this idea, though some of them regretted the statements of the chief of state. However, even if the necessary number of initiators is gathered, they will have to appeal the Constitutional Court, the only competent court in charge with establishing circumstances that justify the dismissal of the president of Moldova.

• The commission for economy, budget and finance has heard the Ministry of Economy and Trade, Ministry of Finances and the National Bank of Moldova regarding the stage of implementation of the Economic Growth and Poverty Reduction Strategy Paper (EGPRSP). It was established during talks that some progress related to fiscal and finance management sectors was registered, but there are many shortcomings regarding industrial growth and macroeconomic perspectives, while indicators of a sustained rise are absent. Also, the commission outlined the need to resume a financing agreement with the IMF, which would generate positive processes for economic development of the country and would contribute to implementation of objectives indicated by EGPRSP.

Government

2.1. Reshuffles

The Government has proposed to recall Moldovan Ambassador to Romania Victor Zlacevschi. Zlacevschi was elected lawmaker in 1994-1998 as part of the Yedinstvo bloc, while in 1999-2001 he represented the parliamentary faction of the Moldovan Party of Communists. His appointment as ambassador to Romania in early 2004 was commented in contradictory because Zlacevschi did not have diplomatic education and experience needed by a representative to a country bidding for integration in the European Union and ready to maintain special relations with the Republic of Moldova.

2.2. Sittings. Decisions

• A working sitting convoked by prime minister focussed on the implementation of the "National Strategy on Building of Information Society Electronic Moldova". Vasile Tarlev has solicited an urgent accomplishment of some components, especially of the "E-government" subchapter. It is worth to mention that the action plan on implementation of the strategy stipulated the finalisation of several actions by late 2005, including:
  • the elaboration of a draft law on electronic communications in compliance with the new regulation framework of the European Union;
  • the elaboration of the draft law on combat of frauds through electronic means;
  • the improvement of legislative-normative framework on conditions of activity of foreign and domestic investors in IT sector;
  • the updating of the education law through introduction of the title on remote education;
  • the creation of the Centre of Information Technologies and Communications in Education;
  • the elaboration of the legislative-normative framework on creation and functioning of online scientific libraries;
  • the elaboration and approval of programmes on information of cultural institutions at all levels with the purpose to create a single information-cultural area;
  • the creation of an e-culture centre in the Ministry of Culture, etc.

  The "Electronic Moldova" strategy adopted in early 2005 aims to create information systems capable to assist processes of economic, political, administrative and social reform in Moldova. It must be synchronized with the implementation of EGPRSP and the national programme "Moldovan Village".

• The premier has discussed the problem regarding construction of housing for central public administration functionaries with a number of decision-making officials. Motivating that "the insurance of functionaries with dwelling places was neglected starting the 1990s and this thing has a negative influence on activity of the executive," the prime minister ordered the urgent elaboration of solutions in the field through construction of service residences and housing on basis of mortgage principles. A communication released on this occasion does not establish if the residences will be offered to functionaries for free or for pay and it should be noted that the national dwelling concept (approved through the August 5, 1994 Decision # 594 of the Government) and the housing market strategy (approved through the May 10, 1999 Decision # 416 of the Government) stipulates that the Republic of Moldova:
  • will pass from the principle of distribution of residences for free to the principle of their sale on housing market;
  • will change the role of the state in the field through transfer from the function of direct offeror of residences to the role of regulator of dwelling problem, that means of creation of conditions so that the private and cooperative sectors be in interdependence until appearance of the need of state's intervention with the purpose to protect socially vulnerable categories of population in the measure allowed by its means.

2.3. Decisions

• The Government has approved the nomenclature of paid-for services of institutions subordinated to the Ministry of Culture and Tourism. The document establishes the mode of collection and administration of special means raised by libraries, museums and other cultural institutions. The pay-for services will include among others:
  • ticket for museum (1-3 lei per person);
  • services of guide (from 50 up to 100 lei per group of visitors);
  • taking photos from exhibits (from 10 up to 150 lei);
  • expertise of a museum-related object (from 40 up to 195 lei);
  • use of the Internet in libraries (5 lei per hour);
  • violation of deadline for return of the borrowed object (penalty of 0.5 lei per day).

  The chief of the executive had earlier criticized the draft aimed to regulate this sector, and he ordered its withdrawal and improvement in a move to exclude several taxes and to establish the necessary fees in a reasonable size, by taking into account the economic possibilities of users of these services.

• The executive has proposed a 15-fold reduction of the real estate tax. This decision was approved after the evaluation of real estate in Moldova was completed and in connection with their planned taxation on basis of real market price. This decision determines a considerable rise of the size of tax that the owners of real estate will pay, and the Government wants to reduce the negative impact on taxpayers through its decision. Respectively, a 0.02-percent tax is proposed for the Chisinau municipality starting January 1, 2006, instead of the 0.3-percent tax. This way, the authorities will avoid the dissatisfaction of needier categories of population and will raise additional incomes from real estate sale-purchase transactions in which the subjects will have to indicate the real price, not the balance price, in line with cadastral estimation. In this context, however, the idea promoted by authorities, which calls for gradual implementation of the new taxation method, excluding the private houses worth hundreds of thousands of dollars in the Chisinau municipality from the first stage, is less explicable in this context.

• The Government approved a draft law on November 23, which calls for amendment of the state budget law for this year, increasing the budgetary revenues by 461 million lei and spending by 275 million lei. This rise is ensured from additional incomes for VAT for importation (330 million lei) and excises (110 million lei). The main included spending envisages complete investments (102 million lei), purchase of trolleys and buses for the Chisinau municipality (100 million lei). Also, the draft proposes the allocation of 246 million lei for implementation of the law on salaries of dignitaries and public functionaries in 2006. The state budget for 2005 will increase by over one billion lei together with the rise established last April, compared to the initial figures. It should be mentioned that many opposition parliamentarians indicated the existence of some internal reserves in the proposed budget when the draft budget law for 2005 was examined, and solicited the rise of incomes at the very beginning, but the parliamentary majority turned down this initiative including because of the forthcoming parliamentary elections, whose results were not completely predictable. The Parliament is to adopt this draft by late December, while the delaying of enactment of amendments may create difficulties for spending of some sources, especially of capital investments.

• Under a draft law worked out by Government, the foreign citizens and stateless people will be recorded through their introduction in the state register of population. Thus, the Border Guard Service will automatically register the foreign citizen for a 90-day term once he enters Moldova. At present, any foreigner who enters Moldova for a 90-day term has to get registered with territorial offices for record and documentation of population within three days after arrival. The effective provisions always represent a ground for applying of sanctions and fines against foreign citizens; allow the police, persons in charge with record of population and Border Guard Service to misuse authority. The public opinion tackles this problem for quite a long time, but the Government has decided to take some actions only after the chief of state said in an interview that the record of foreigners is one of the most corrupt activities of state bodies of Moldova.

3. Presidency

3.1. Decrees

The chief of state has awarded the Civil Merit medal to Valeriu Gurbulea, first deputy prosecutor-general. The medal was awarded for prodigious activity in the Prosecutor's Office bodies, merits for execution of legislation and high professionalism, in connection with the 40th birthday. Earlier, Gurbulea had held the office of secretary of the Supreme Security Council, a structure subordinated to the Moldovan president.

3.2. Sittings. Declarations

Participation in the forum of Community of Democratic Option (CDO)

Participating in the forum in Ukraine, Vladimir Voronin has launched several proposals on format of cooperation with the organisation. He said that the CDO must encourage the regional integration, must institute a parliamentary assembly, while member countries must continue to take over the European standards in the perspective of integration of some of them in the European Union.

Controversial statements

• The Moldovan president delivered a series of statements at a TV programme, which generated multiple comments of mass media and political parties.

• Vladimir Voronin said that he does not intend to step down from the post of leader of the Moldovan Party of Communists (PCRM), nor he has promised to depoliticize the office of chief of state. He noted that he needs the political support of his party. Later, several parliamentary parties have commented on this statement, saying that the chief of state violates the agreements reached on occasion of his election on April 4, 2005, by delivering such statements.

• However, the chief of state and PCRM leader confirmed that the process of reformation of the party continues, but this process will be long and the political platform will remain of the leftwing after an eventual reformation.

• As regards the elections for the Chisinau mayor-general post, the chief of state said that the Government and president support Vasile Ursu, independent candidate to this office, because "he cannot be indifferent over results of the scrutiny in the capital in his quality of president."

• Speaking about the latest judgment of the European Court of Human Rights (ECHR) vs Moldova, the chief of state said that these rulings are a result of a long examination of cases and they do not have a political nature, and the Government is to work out a draft law to establish the responsibility of judges who pass illegal rulings contested in the ECHR, in order to avoid a worse situation.

• Asked about a possible dismissal of the Government, Vladimir Voronin said that this topic is not considered, while the cabinet members were told only to optimise and modernise their activity, to take more resolute actions in order to ensure a qualitative economic growth.

• The chief of state regretted that the Bessarabian Metropolitan Church was registered in the Republic of Moldova in compliance with an ECHR judgment, saying that "the existence of two metropolitan churches of the same religion in a country is abnormal."

Implementation of the "SALT" Programme

The president has convoked the governmental administration and competent ministries to examine the implementation of the SALT Programme that he initiated in 2004. Vladimir Voronin solicited a detailed technical and methodological analysis of the programme and established the need to work out concrete methodologies for implementation of information technologies in education sector, drafting of educational programmes on different school subjects and teaching of informatics in schools. The sitting also discussed the problem of adequate costs for use of the Internet network, elaboration of single technical standards for installation of computers in schools and a mechanism for centralised technical service of equipment. The persons in charge with the implementation were told to mobilise their forces and to ensure a strict control on enforcement of all components of the programme.

More attention to social protection

Vladimir Voronin has attended a videoconference on social protection of population, with the participation of chiefs of districts and competent specialists of the Government. The chief of state expressed concern with the existing situation in the area of social protection of citizens, especially of people from rural localities, and solicited local public administration representatives to take operative actions in order to improve the state of things in this sector. In particular, the chief of state asked the chiefs of districts and rural localities "to ensure all citizens with heating," saying that "heads of public administration bodies in the territory will be sanctioned, if citizens lack coal or wood for the heating period of the year." Voronin solicited chiefs of districts to make a social documentation of every locality, which would include data on all categories of needy people: invalids, job seekers, lonely elderly, children who lack care. The chief of state indicated the opportunity to employ social assistants in mayoralties in the territory, who would permanently take care of disadvantaged people. It should be noted in the context that the functions of social assistants were not stipulated when the staffs of mayoralties were approved in 2003 (June 10, 2003 Decision # 688 of the Government), and local authorities and citizens from rural localities appreciated this thing negatively, but the president and Government aimed to ensure a considerable reduction of functionaries of local public administration then, in order to reduce the negative effects of the administrative-territorial reform. Thus, the situation established at present demonstrates that not all the measures undertaken to implement the administrative reform had a favourable effect on social situation of localities.

Central public administration reform requires new staff reductions

Vladimir Voronin convoked decision-making officials of the Parliament, Government and Presidency and examined again the basic tasks and directions of the central public administration reform. The participants decided that the reform be based on the "European model", underlining the need to create the Ministry of Local Public Administration at the first stage, which will be in charge with cooperation between local and central public administration bodies. The chief of state proposed that outcome of activity of the working group serve as ground for definition of principles of the next stage of reduction of staff of central public administration. To note in the context that the chairman of the commission for public administration, ecology and territorial development invoked at a recent sitting of the Parliament the need of an increased transparency of reformation process and involvement of legislative body in this sector, as only competent authority able to regulate the activity of local and central public administration. The idea to create a ministry of public administration was proposed when the acting cabinet of ministers was created, but the governing turned it down and awarded a part of territorial development functions to the agency for regional development.

Economic Policies

1. Prices and inflation

Prices of dwelling estate are on the permanent rise...

Prices of dwelling estate in the Chisinau municipality rose by about 30 percent in January-October 2005, almost two-fold higher than estimation of real estate analysts, who forecasted rises of 15-20 percent early this year. The causes of the rise remained the same: remittances from abroad continue to fuel the demand for real estate, which exceeds the growth paces of the supply.

As for example, a one-room apartment evaluated by real estate agencies cost 24,700 dollars on average in early November (by 28 percent more than early this year), a two-room apartment was worth 35,600 dollars (+26 percent), a three-room apartment cost 43,600 dollars (+28 percent), while a four-room apartment was worth 50,100 dollars (+21 percent).

On the other hand, experts say that the real estate sector will enter an amorphous period or a freezing of prices on winter, but they also admit possible slow price rises in dependence of the inflation dynamic.

Main factors that influenced the inflation in 2005:

• the price of crude oil on international markets;
• the rise of prices of food products, vegetables, fruits;
• and growth pace of consumption;
• rises of salaries.

Forecasts for 2006 are not optimistic because of:

• some unionist pressures, which will lead to eventual salary rises;
• the international price of crude oil;
• parity (relation) euro/dollar;
• some administrated price rises.

The inflation rate in October was 1.5 percent, while the cumulated inflation rate for January-October was 6.5 percent.

2. Labour market

Medium salary on economy rose by 19 percent in the first 10 months...

The monthly medium salary of a worker in the national economy (enterprises with at least 20 employees) accounted for 1,265.2 lei (100 dollars) in January-October 2005 and rose by 19 percent compared to the similar period of the precedent year. The average salary in the budgetary sector amounted to about 981 lei, while the medium earning in the real sector of economy accounted for 1,412 lei.

As usually, employees of the financial-bank system earned the highest salaries - 3,177 lei, workers in the electricity, heating, water and gas providing complex were paid 2,450 lei, builders earned 2,158 lei, while workers in transportation and communication sector earned 2,144 lei. The lowest salaries were paid to workers in the agriculture sector - 807 lei on average.

3. Financial-bank sector

An eventual economic crisis could gravely affect the bank system...

A report (Transition Report) released by the European Bank for Reconstruction and Development (EBRD) shows that Moldova and Ukraine run the highest risk to combine the weak bank system with macroeconomic crisis among former members of the USSR.

EBRD experts fear that these countries could be exposed the most to a grave bank crisis, which traditionally involves massive turnoffs and, eventually, assistance from the Government, if the growth pace slows down. However, the small volume of credits granted by banks and compared to dimensions of economies would ease the task of governments to help banks in case of a financial crisis.

Unlike Moldova and Ukraine, financial-bank institutions in Russia and Kazakhstan can increase their assets due to "dollars for petrol," which these countries could use to solve eventual problems in case of need.

Experts say that the lack of transparency is the main problem of banks in the region and almost all the 12 countries in the CIS area have an underdeveloped bank system and run different risks. The intensification of the bank control through reasonable administration and development mechanisms of the market must become a priority for central banks.

Moldova is ranked the 2nd place in the world as regards share of remittances in GDP...

According to the annual report of the World Bank Global Economic Prospects - GEP, the Republic of Moldova is ranked the 2nd place in a world top on share of remittances in GDP after Tonga, which holds a share of 27.1 percent.

The countries where remittances represent the largest share in GDP are: Tonga (31 percent), Moldova (27.1 percent), Lesotho (25.8 percent), Haiti (24.8 percent), and Bosnia-Herzegovina (22.5 percent). The officially repatriated amounts at the world level exceeded 232 billion dollars in 2005. The report developers suggest that remittances through informal channels could represent another half of the officially estimated amount.

Besides the growth of consumption of families of migrants the constant currency inflow of remittances may increase the estimation of a country in case of foreign credits, according to the report. "The remittances represent hardly earned revenue, which was taxed in most of cases and, therefore, they must not be taxed again, while governments must not consider them as a development aid," says the chief economist of the World Bank, Francois Bourguignon.

but they surround business so far...

According to a study themed "Remittances of Migrant Workers: Optimisation Opportunities" worked out by the International Organisation for Migration and the Food Security Programme of the European Union, only 1.5-4.8 percent of the money transferred by Moldovan nationals who work abroad is invested in business. More than 70 percent of remittances go to current needs: acquisition of household appliances, clothes, payment for public services, etc.

Remittances of Moldovan nationals who work abroad rose from 7.1 percent of the GDP in 1998 up to 27 percent of the GDP in 2004, and they exceeded 700 million dollars, according to official sources. The number of migrants included in the base of calculation is estimated at about 570,000 persons or 39 percent of the Moldovan population capable of work.

Taking into account the opinions of participants in the social dialogue Government-unions-employers, the study developers offer some recommendations aimed to attract remittances in investments by completing main legislative documents on migration with provisions to explain principles of state policy on remittances; establishing priority sectors of economy for investment of these financial resources, including construction of dwelling places; working out of the national explanatory and information system on possibilities of attraction of remittances; improving the fiscal policy and business climate in the country.

Transdnistrian Conflict

Launching of the EU Border Assistance Mission at the Moldovan-Ukrainian border

On 30 November in the Ukrainian town of Odessa, the EU High Representative for the Common Foreign and Security Policy, Javier Solana, and the EU Commissioner for External Relations and European Neighbourhood Policy, Benita Ferrero-Waldner, launched the EU Border Assistance Mission in Moldova and Ukraine. The launch included a launching ceremony and a press conference which were also attended by the Moldovan and Ukrainian Foreign Ministers. The objective of the mission will be to prevent smuggling, traffic and customs fraud at the Moldovan-Ukrainian border, including on the Transnistrian segment. The mission will be composed of 69 EU experts in customs and border police, and 50 Moldovan and Ukrainian customs officers. They will travel within mobile teams from one point to another and perform unannounced repeated controls (after the passing of the border) of transports and documents, as well offer advise and training to Moldovan and Ukrainian customs officers. The mission has a two-year mandate and will cost about 6 million euro. The headquarters of the mission will be in Odessa; it will have five field offices. The mission will work in close collaboration with the office of the EU Special Representative for Moldova which will be strengthened with border consultants in Kiev, Chisinau and Odessa.

According to a European Commission communique, on the eve of the launch Javier Solana stated that the mission is a follow up to the request by the Moldovan and Ukrainian presidents which "has shown their strong democratic commitment to European values", and that the mission will play an important role in the peaceful resolution of the Transnistrian conflict.

Commissioner Benita Ferrero-Waldner said during the launching press conference that the mission represents "a clear sign of the EU desire to have closer ties with its neighbour states" and that the mission will lead to "more stability and more possibilities for the settlement of the [Transnistrian] conflict in the future", according Infotag.

Boris Tarasiuk, Ukraine's Foreign Minister, mentioned that the launch of the EU Mission will lead to a boost of trust not just between Ukraine and Moldova, but also at the level of the entire European community. The Ukrainian official also mentioned that the mission is in line with the settlement proposals of the Ukrainian president Victor Yushcenko to solve the Transnistrian conflict through democratisation of the region.

The Transnistrian authorities were not present at the launch, because, as Minister Tarasiuk said, quoted by Infotag, Transnistria is not a party to the border assistance agreement signed between Ukraine and Moldova, on the one hand, and the EU, on the other. Although the mission is basically aimed at curbing illegal transports from Transnistria, the breakaway authorities have welcomed it saying that the mission will help them dismiss the accusations of smuggling against them and hence the reasons for economic blockades against Transnistria. However, the Transnistrian authorities have shown a number of signs of anxiety related to the launch of the mission, which will affect considerably the external trade of Transnistria. Thus, according to Kommersant.ru, on the eave of the launch, Transnistrian leader Igor Smirnov made a visit to Kiev under the pretext of a social event to convince the Ukrainian authorities to provide guarantees that the launch of the international border monitoring will not affect the current status quo. In parallel, the Transnistrian authorities have tried to toughen their position towards Moldova - the Speaker of the local parliament, Grigori Maracuta, stated recently that in the nearest future Transnistria might decide to refuse to participate in the talks with Moldova on the status of the region. At the same time, a Transnistrian parliamentary committee decided to cancel a number of legislative acts related to models of legal relations with Moldova.

It is worth noting that the presence of Benita Ferrero-Waldner and Javier Solana in Ukraine was connected to another important event - the EU-Ukraine Summit, the first one after the "orange revolution" from Ukraine last year. The significant results of the summit, notably EU's political decision to grant Ukraine the status of a market economy, which will open the way to Ukraine's accession to the WTO, made British Prime Minister, Tony Blair, also present at the summit, say that the summit has been the most successful ever and that it has upgraded relations between the EU and Ukraine to a qualitatively new level.

The EU-Ukraine Summit has confirmed and encouraged Ukraine's European aspirations, which makes Ukraine even more of a trustworthy EU partner in the Transnistrian conflict resolution efforts, including the successful deployment of the EU Border Assistance Mission. Ukraine's merit is already being recognised, in particular due to its proposals to solve the conflict through democratisation. Ukraine's regional role is becoming even more prominent as, on the day of the EU-Ukraine Summit, the leaders of a number of East European and Black and Baltic Sea region countries participated in the founding forum of the Community of Democratic Choice, an initiative launched by the Ukrainian and Georgian presidents last August to promote democracy and European values in the states of the region.

Elections to Transnistria's "Supreme Soviet"

According to the official news agency of Transnistria "Olvia-press", 185 candidates registered for elections to the regional legislative body, the "Supreme Soviet", scheduled for 11 December. The elections will not be recognised by the Moldovan Government, nor by the international community, and will not be monitored by international observers, not even on behalf of the CIS.

According to Olvia-press, which makes a sociological portrait of candidates, their average age is 47 - which makes the candidates younger than in previous campaigns, and their social status is "typical" of the past campaigns. Representatives of small and medium enterprises top the list (30 of 185), followed by executives of industrial and power sector enterprises (24), representatives of official structures (22) and the "executive" (22, of which 14 represent security structures, in particular the "defence and security ministries"). 38 of the current 43 "deputies" will run for a new mandate.

"Essentially the fight for the places in the Supreme Soviet will be led between two political forces: the executive power, impersonated by the pro-presidential bloc "Respublica" and the "Obnovlenie" movement, which is backed, according to experts, by the "Sherif" firm. The opposition, with small exceptions, has not put forward its candidates", reads a recent report in the Bender-based "Novaia Gazeta", one of the few independent newspapers from Transnistria. According to analysts, the candidates from "Obnovlenie" are the favourite ones. These supposedly represent a "new political class", which, according to a comment by Vitali Andrievski published on Regnum.ru, advocate for radical changes in the political, economic and social life of the Transnistrian region, are pragmatic and realistic, open to the outside world, and more willing to accept a compromise.

In the context of the current discussions regarding the democratisation of the Transnistrian region, the victory of such people in the upcoming elections would favour the emergence of some internal pre-conditions for the modernisation and democratisation of the region. One cannot overlook the fact through that what unites both the exponents of the "old guard" and this "new guard" of Transnistrian political elites is the struggle for the international recognition of Transnistria and the strengthening of its "statehood".

Foreign Affairs

The Republic of Moldova - E.U.

• International experts warn that the Moldovan authorities are behind in implementing the Moldova-E.U. Action Plan. Hilde Hardeman, chief of a European Commission delegation which visited Chisinau, said that there are some concerns over freedom of expression and mass media in the Republic of Moldova, improvement of investment climate. The British ambassador to Moldova told the sitting of the Moldova-E.U. Cooperation Committee on behalf of the British E.U. presidency that the European community "is concerned with situation of justice, recommending more transparency in juridical procedures." Bernard Whiteside invoked in this respect the holding of the mayor of a locality in Gagauzia, Mihail Formuzal, of Victoriabank chairman Victor Turcanu and former defence minister Valeriu Pasat.

• Charles Tannock, representative of the United Kingdom, has solicited the community authorities at a sitting of the European Parliament to make an offer of adhesion to countries which are or will become neighbours of the E.U. soon. Envisaging in particular the Republic of Moldova and Ukraine, the European lawmaker said that an eventual adhesion offer for these countries could create serious motivations for promotion of reforms in these states, where most of citizens already warm the entry in the European community.

The Republic of Moldova - Russian Federation

• Official representatives of the Russian concern Gazprom have announced estimated natural gas prices for the CIS members and especially for the Republic of Moldova. According to press reports, 1,000 cubic metres of natural gas supplied to Moldova will cost about 150-160 dollars starting 2006, compared with 80 dollars at present. The price rise was confirmed by the Russian ambassador in Chisinau, who denied the existence of any "political" reasons the way the Gazprom representatives did, saying that the decision is based on objective "economic" causes. The competent authorities of Moldova have discussed in Moscow the quantities of gas that Russia will supply to our country in 2006, but no official contract containing the price of gas was signed so far.

• The Russian Foreign Ministry has released a communication saying that Moscow categorically opposes the introduction of references on Russia's obligations to respect the commitments established at the 1999 Istanbul OSCE summit regarding the pullout of troops from the Republic of Moldova and Georgia in the final document of the OSCE Ministerial Conference. The official representative of the Russian Foreign Ministry said that "the main obligation established at the Istanbul Summit envisaged the reduction of the contingent of conventional armed forces in Europe and no progress from NATO member states is observed in this regard." In the context, Vladimir Isakov, deputy defence minister of the Russian Federation, said that the withdrawal of Russian ammunition from Transnistria will not restart this year, even if a political decision on resumption of evacuation is adopted. He motivated that at least one month is needed for dispatch of a trainload with ammunition because such actions require "the coordination of issues on transportation of explosive substances in Ukraine's territory and adoption of a decision in this regard by the Supreme Rada."

• The chairman of the CIS Committee of the Russian State Duma said while on a visit to Chisinau that the Republic of Moldova runs the risk to lose the status of strategic partner of Russia, if it pleads for integration in the E.U. According to Andrey Kokoshin, the Republic of Moldova must establish the strategic development vector first and the future Moldova-Russian relations will depend on this vector. It ill be difficult to the Republic of Moldova to establish strategic relations with the E.U. and the Russian Federation because "there is a competition between Brussels and Moscow," Kokoshin noted, invoking the example of Poland, whose relations with Russia have become colder after Poland's integration in the E.U.

• Exports of agri-food products to the Russian Federation dropped by almost 100 million dollars in 10 months of 2005. Officials of the Chisinau Ministry of Agriculture and Food Industry assured that the reduction of exports to Russia did not generate lower exports in general, because many businesses identified new sale markets (in Romania, Belarus, the Baltic countries, Ukraine, etc.) after institution of the embargo. On the other hand, organisations of exporters warned that the Moldovan exporters will lose 11-12 million dollars in 2005 because of the stop of exports of agricultural production to the Russian Federation.

The Republic of Moldova - Romania

• Romania will not introduce visas for citizens of the Republic of Moldova before its entry in the E.U., Romanian Ambassador to Moldova Filip Teodorescu has assured. The Romanian diplomat said that Romania is trying to establish a flexible basis for ties between the two states, considering the introduction of a maximal package of facilities for Moldovans. Teodorescu confirmed that the problem of drafting of the Moldovan-Romanian basic treaty will be tackled in the context of entry of Romania in the E.U., while the bilateral document will be based on community principles.

• The border authorities of Romania and the Republic of Moldova have signed a special protocol on exchange of information regarding supervision and control of the state border. The document calls for collaboration between sides in the area of management and training of human recourses, international relations and common assistance programmes. The sides also discussed problems related to joint border control, perspectives of cooperation for border guard, supervision and control, in order to combat illicit actions: illegal trafficking in persons, drugs, weapons, ammunition, radioactive and strategic material; clandestine migration, etc. A special plan on supervision and control on the Moldovan-Romanian border will be implemented in 2006.

Kiev Forum of Community of Democratic Option

• The Republic of Moldova participated in the constitution of the Community of Democratic Option and signed the declaration at the end of the forum that took place in Kiev, Ukraine, on December 2. Our country, represented by the chief of state, joined Ukraine, Lithuania, Latvia, Estonia, Romania, Macedonia, Slovenia, and Georgia, with the nine countries agreeing to establish cooperation for development and strengthening of democracy. The signed declaration calls for cooperation of signatory countries with international institutions and organisations, representatives of governments and civil society with the purpose to coordinate support for new democracies. Taking part in the works of the forum were representatives of 23 states, while the U.S. representative in the person of the deputy secretary of state declared a special plenary support for outlined goals. Russian mass media, political researchers and representatives of the Moscow authorities described the constitution of this community as a try to influence the policy of the Russian Federation in the region.

• Ukrainian President Viktor Yushchenko and Romanian President Traian Basescu told the forum that they would continue to support the settlement of the Transnistrian conflict by granting all the support needed for this purpose to the Moldovan authorities. To note in the context that Deputy Reintegration Minister Victor Postolache asked the E.U. at a meeting with representatives of the European Commission "to encourage Ukraine in respecting the 2003 customs protocol." The customs protocol stipulates the obligation of cargo exports through the Ukrainian border on basis of Moldovan customs stamps alone, but the Ukrainian authorities did not enforce it until now.

Studies, Analyses, Comments

Forum of Community of Democratic Option
Igor Botan, 6 December 2005

The Republic of Moldova participated in the constitution of the Community of Democratic Option (CDO) and signed the declaration at the end of the forum that took place in Kiev, Ukraine, on December 2

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