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Activity of Public Institutions

Parliament
Government
Presidency

Quo vadis?.. by Igor Botan
Syntheses of 2005 and major financial uncertainties of 2006 by Ion Basiul

Activity of Public Institutions

Parliament

1.1. Appointments

The Parliament has re-elected Ala Popescu as chairwoman of the Chamber of Auditors and appointed new members of the supreme financial control body, in compliance with modified regulations of the law on Chamber of Auditors, which establish that three members represent the parliamentary majority and four members represent the parliamentary opposition. Two former members kept their mandates in the new composition - Cojocari Gheorghe and Cibotaru Mihai, appointed by the majority faction. Elizaveta Foca was elected as deputy chairwoman of the chamber (proposed by the PPCD faction), while Anatolie Ghilas, director of the Chisinau cadastral office (at the proposal of the PDM faction), Andrei Groza, department chief at the Law Faculty of the Moldovan Free International University (at the proposal of the PPCD faction; candidate for the 2005 parliamentary elections) and Sergiu Guja, member of the National Commission for Securities in 1999-2000 (at the proposal of AMN) were appointed to the other posts.

1.2. Legislative documents

• Laws on system of establishing of basic salaries in budgetary sector and salaries for public dignitaries. The law stipulates the unification of basic salaries and indemnities paid on account of state budget in one document, as well as gradual rise of salaries for certain categories of workers, in line with temporal stages established express.

• Concept on cooperation between Moldovan Parliament and civil society. The concept aims to establish principles and general mechanism of interaction between Parliament and civil society representatives, permanent consultations between these institutions. The decision on approval of this concept establishes the obligation to publish all draft legislative documents registered appropriately on the official website of the Parliament.

• Law on modification of Article 38 of the September 17, 1998 law # 137-XIV on electricity. Under the document, the electricity market in Moldova will be gradually liberalised, in rounds established by the National Agency for Energy Regulation, while the Government will coordinate the liberalisation until July 1, 2007.

• Decision on results of control on detainees from the penal investigation facility # 13 whose cases are being examined by courts. The special parliamentary commission that held this control has found out violations of legislation in effect and fundamental human rights. Lawmakers established that this situation is mostly due to the "failure of courts to respect the legislation in effect on examination of penal causes in reasonable terms," as well as "to the lack of a strict control of courts and competent authorities." The decision that the Parliament adopted after a secret sitting says that the activity of the Justice Ministry regarding insurance of detention conditions "does not correspond to requirements of legislation in effect," while the Superior Council of Magistrates is told "to conduct some controls on examination of cases of detainees from the penal investigation facility."

1.3. Statements

The speaker said that a new law on audiovisual will be drafted and adopted "in the first reading" during the spring session of the Parliament and it will be available later for public debates and will be delivered to the Council of Europe for expertise. It should be mentioned that the schedule of legislative actions aimed to respect the obligations and commitments towards the Council of Europe (adopted through the November 11, 2005 Decision # 284 of the Parliament) stipulates: - the finalisation of draft laws on amendment and completion of the audiovisual law and the law on TeleRadio-Moldova by late 2005; - expertise of these drafts by the Council of Europe in January-March 2006; - adoption of these laws in June-July 2006. A group of lawmakers representing the PCRM and PPCD factions submitted the draft audiovisual code as legislative initiative on December 21, 2005, but the document was not made public so far.

Government

2.1. Appointments

The Government has proposed the appointment of Mrs. Larisa Miculet as Moldovan Ambassador to Israel, while the chief of state signed a decree in this respect on December 28, 2005. Larisa Miculet had graduated from higher legal education. She worked in the prosecutor's office bodies starting 1979. She represented Moldova in the Stability Pact for South-East Europe Initiative (combat of organised crime field) starting 2001. In 2001, she bided for the office of lawmaker as part of the list of the electoral bloc Braghis Alliance.

The posts of Moldovan ambassador to Romania and permanent representative of Moldova to the Geneva-based U.N. office (Swiss Confederation) are vacant at present.

2.2. Decisions

• Decision on approval of the action plan of the Government for the 1st trimester of 2006. The document stipulates:
  • the approval of several national programmes and strategies (on education, state investment policies, electronic communications, etc.) in the period concerned;
  • working out of some draft legislative documents (on small- and medium-sized enterprises, mediation in civil causes, support for regional development; general security of products);
  • adoption of some draft normative documents (on technical expertise in constructions, land cadastre of state, model regulation of institutions of higher learning and scientific research, regulation on activity of diplomatic personnel in charge with commercial-economic relations);
  • analysis of activity of certain fields (multilateral negotiations within WTO, implementation of export promotion strategy, implementation of EGPRSP, Moldova-E.U. Action Plan, cooperation with the Council of Europe, etc.).

• Decision on approval of the strategy on reform of central public administration in the Republic of Moldova. The strategy contains several chapters on conceptual framework of the reform; principles of public administration reform; goal, objectives and subjective of the reform; components of reform; expected results; eventual risks of implementation of central public administration reform; monitoring of implementation. At the same time, the strategy implementation plan was approved and it contains the outlined objectives, planned actions, responsible authorities and terms for accomplishment. The information of participating subjects about execution of the strategy implementation plan will be presented to the reform coordination unit every trimester.

• Decision on the rise of salaries of teachers and employees of social facilities. The decision calls for the rise of salaries of teachers (by 40 percent) starting December 1, 2005, of personnel from kindergartens and schools, sanitary facilities, social assistance facilities, science, art, sport, and other budgetary facilities (by 20-60 percent on average), of military (by 30 percent starting January 1). The new rises will not be effective for specialised personnel subordinated to the Parliament, Government and President, nor for judges and prosecutors. The decision was adopted because of delayed enactment of the new law on salaries in budgetary sector and as a result of pressures of teachers who threatened to go in for strikes. Teachers from several districts said after adoption of this law that the rise would not improve the situation and a system of indexation of salaries in dependence of growth of the minimum of existence is needed.

• Decision on approval of the draft law on amendment of the law on mode of introduction and withdrawal of goods from Moldova by individuals. The Government proposes to allow citizens to withdraw up to 10,000 euros from Moldova without the permit of the National Bank of Moldova, as well as to introduce unlimited currency in the Republic of Moldova. At the same time, the legislation keeps the present provision on obligation to verbally declare currency introduced in country at customs stations, if the amount is not larger than 200 euros, as well as written declaration, if the introduced amount exceeds the indicated value. If citizens do not declare currency while entering the country, many penal causes are issued, invoking the committing of the crime stipulated by Article 248 of the Penal Code - Smuggling (which is punished with a fine between 150 and 300 conventional units or jail term of up to two years, while a legal entity pays a fine between 1,000 and 3,000 conventional units and it is deprived of the right to exert certain activity).

• Decision on activity of the Centre for the Struggle Against Economic Crimes and Corruption (CCCEC) for the implementation of the action plan on implementation of the national strategy on the prevention and combat of corruption. The executive established that the centre has filed 500 penal cases in ten months of 2005, including 316 (63 percent) related to corruption and 151 (30 percent) to economic-financial offences, while the damage in these penal cases is estimated at about 251 million lei (19.5 million dollars). The governmental decision does not contain data on the number of cases delivered to court, nor on cases examined by courts, solutions to these cases, while some data show that more than 30 million lei was raised to the 2005 budget due to measures taken by CCCEC. At the same time, the Government established the need to intensify in continuation the actions of prevention and combat of corruption, to enhance responsibility of public administration institutions in implementing the national strategy on the prevention and combat of corruption, to increase the transparency of their activity, including in relations with mass media. The centre was told to intensify the activities aimed to detect corruption-related actions of high-ranking officials and to implement a complex system of actions of cooperation with nongovernmental organisations and other representative groups of civil society by increasing the anti-corruption education of population.

• Decision on approval of the programme on water providing and sewerage services for localities in the Republic of Moldova until 2015. The decision is adopted with the purpose to restore and develop drinking water providing and sewerage systems, to provide some services of good quality to consumers, to solve problems related to reasonable use and maintenance of water resources. This programme contains estimates of current state of systems of water providing installations, reserves of exploitation of underground waters and their quality, as well as volume of works needed for modernisation and development. The amounts for implementation of this programme are estimated at over 5 billion lei (about 390 million dollars).

• Decision on the approval of the draft law on principles and mechanism of regulation of entrepreneurial activity. The draft approved by executive seeks the institution of some new regulations on entrepreneurial activity, so that the Parliament and Government be able to establish regulations for entrepreneurs. Other administrative authorities that will need new regulations will have to work them out and to present them to the Government for approval. This draft aims to introduce stable and transparent regulations on business, to limit the departmental interests that often create some useless obstacles in activity of entrepreneurs. The same draft proposes the introduction of some restrictions for abusive controls on economic activity, establishing that nobody can be controlled except for facts comprising elements of an offence or administrative contravention. The new law aims to continue and to deepen the process of liberalisation and deregulation introduced through the so-called "guillotine law", while the final goal of authorities is to encourage private initiative in business and to contribute to the rise of the number of employees, to extend the taxable economic base this way.

• Decision on the approval of the draft law on amendment of the law on patent of entrepreneur. The Government proposes a 30-percent reduction of the price of the patent of entrepreneur, with the condition that holders will pay state social insurance taxes individually. At present, holders of patents of entrepreneur in the Chisinau municipality must pay monthly taxes of between 30 and 600 lei, and these taxes are two-fold lower in rural localities. These single monthly taxes for patent include the income tax, tax for use of natural resources, tax for commercial facilities, territorial arrangement tax, tax for the right to provide passenger transportation services, as well as taxes to the state social insurance budget. Many experts estimate that the revenues collected by holders of patents exceed the paid taxes very much and a very small part of the real revenue goes to the social insurance budget, unlike the tax raised from salary or other entrepreneurial activity than the ones based on patent. Taking into account the fact that the social insurance system in Moldova is based on solidarity of contributions, the idea promoted by Government seems to follow pragmatic enough goals - though it is announced as a facility, this measure may turn into a heavier burden for payer.

2.3. Sittings. Decisions. Statements

• Prime Minister Vasile Tarlev has ordered the creation of a coordinating council to monitor the elaboration and implementation of projects on use of regenerating resources, which will be headed by Gheorghe Duca, chairman of the Moldovan Academy of Sciences. The planned activities call for identification of alternative energy sources through use of technical potential of solar, biomass, wind and water regenerating resources, choosing the projects with a high technical performance and optimal relation between expenditures and benefit. The council will also be in charge with drafting, promoting and implementing projects on production of vegetal fuel (from rape, sugar sorghum) for internal combustion engines.

• The Economic Council of the executive was convoked for a summary sitting and summarised the annual activities. The consultative body took notice of over 250 draft decisions and initiatives of the executive regarding economic activity, held the forum of businessmen within which the leadership discussed with representatives of domestic business. Expressing satisfaction with the activity of the council, the prime minister solicited its members to draft an action plan on struggle against contraband and liberalisation of shadow economy.

• The Government has started implementing a pilot project in several areas of the republic, in a move to test the new mechanism of awarding of normative compensations, based on the principle of checking of the level of need of social assistance. The project will be launched in the districts of Soroca, Orhei and Leova, as well as in the Rascani district of the Chisinau municipality in February 2006 and aims to choose the best method of granting assistance to socially needy people by testing some methods of selection of beneficiaries of normative compensations on basis of evaluation of overall revenue of the family. The social assistance system includes several types of compensations (13), and most of them are awarded on basis of the principle of category, without evaluation of incomes and real material condition of beneficiary families.

• The Government released a communique on January 2, 2006, on negotiations between the Moldovan delegation and the joint stock society Gazprom, after an extraordinary sitting that discussed the crisis that Moldova faced after the Russian Federation has stopped providing natural gas. It said that the Government has tried to negotiate with decision-making officials from the Russian Federation in the last two months of 2005, in a move to establish the market price of natural gas supplied to Moldova, but these negotiations failed. The executive indicated its stance at negotiations, outlining the factors that determine the standpoint of Moldova in this issue: ownership of the control package in the joint stock society Moldova-Gaz by Gazprom; conduct of a joint business and payment for entire current consumption; awarding of preferences for payment of VAT and rent taxes; payment of a 80-dollar price per 1,000 cubic metres by Moldova starting 1996. The Government concludes that the problem of Russian gas price has an exclusively political motivation (deviating from the stance of President Voronin on this topic this way), but it wants to continue the negotiations with Russian colleagues.

• Vasile Tarlev said that businesses "do not have ground to increase the prices of drugs," after most of pharmaceutical products became by about 8 percent dearer on January 1. According to the premier, the price rise is speculative and the executive will work out mechanisms to control the quality of these products and to regulate the mode of creation of their prices. On the other hand, importers and producers of drugs motivate the price rises through introduction of an 8-percent VAT on pharmaceutical products in early 2006 and raw material imported for production of drugs in Moldova. The imminence of price rise was also indicated when the Parliament has examined these laws, but the executive argued the need to introduce the VAT through rise of evidence, affirming at the same time that the measures of authorities would not allow higher prices in connection with the growth of VAT.

3. Presidency

3.1. Decrees

The president of Moldova signed on December 22, 2005 a decree on constitution of the commission for the drafting of the national security concept of Moldova and appointed himself to head it. The commission also includes representatives of the Parliament and Government, scientific institutions and civil society. The national security concept will be drafted by March 1, 2006 and the Parliament is to approve it later.

Also, the chief of state has created a national commission to draft the foreign policy concept of Moldova, headed by Deputy Premier Andrei Stratan, foreign and European integration minister. The commission that must draft the concept by March 1, 2006 includes representatives of the Government, Parliament and the same scientific institutions, education and civil society institutions that must draft the national security concept.

3.2. Sittings. Statements

Annual news conference

The president of Moldova summarised the key events at a news conference on activity in 2005 and commented on some problems that captured the attention of national and international opinion. According to Vladimir Voronin, the signing of the Moldova-European Union Action Plan in February was the key event of 2005, which outlined a certain vector for all further processes that took place in our country: parliamentary elections; creation of a "new majority of pro-European parties in the legislative body"; active cooperation between power and opposition; "new principle" tackling of tasks related to settlement of the Transnistrian conflict.

Voronin said that the authorities will continue the process of "debureaucratisation and liberalisation of economy," combat of corruption and shadow economy, and the essential elements for this purpose are: public administration reform (reduction of state administration and reduction of competences of functionaries, "moving of all ministries in one building"); implementation of the second stage of the "guillotine law" by extending it on documents of local authorities; promotion of a law on amnesty of capital of businesses; modernisation of functions of the Centre for the Struggle Against Economic Crimes and Corruption, so that this body "watch the liberal principles of Moldovan economy" and supervise the activity of state functionaries in the area.

The main accomplishments of the foreign policy plan include the cardinal improvement" of relations with Moldova and Ukraine, hope that these relations will develop and Ukraine will provide a plenary support to Moldova for settlement of the Transnistrian conflict and the basic treaty and border treaty will be signed with Romania. Speaking about relation with the Russian Federation, Voronin said that he hopes to eliminate the "deficit of sincerity and to overpass the misinformation barrier, which certain structures have artificially raised."

Appreciation of Government's activity

Participating in the final sitting of the cabinet of minister in 2005, the chief of state has positively appreciated the activity of the executive, saying that the most ambitious goals have been reached. Vladimir Voronin indicated among these goals:

• progresses related to reintegration of the country (international monitoring of the Moldovan-Ukrainian border, enlargement of the negotiation format, tackling of the Transnistrian problem at important international rostrums);
• accomplishments related to European integration (implementation of the Moldova-E.U. Action Plan; Moldova's inclusion in the Generalised System of Preferences (GSP+) and others);
• economic progresses (rise of GDP by 8.6 percent; positive results of implementation of health insurance, growth of population's incomes);
• accomplishment of a political consensus within Parliament, which contributes to the "efficient cooperation between presidency, legislative and executive.

Partial solutions to the natural gas supply problem

The chief of state convoked a new sitting on energy security of the country on January 15, 2006, with the participation of speaker, prime minister and representatives of the Government. In particular, Vladimir Voronin outlined the need of an acceptable solution to the natural gas supply to Moldova "based on two positions: acceptable price and transparency of the proper gas providing scheme." The Moldovan delegation has left for Moscow the next day after the sitting and reached an agreement with Gazprom. Thus, Moldova will receive Russian natural gas in exchange for 110 dollars per 1,000 cubic metres in the first trimester of 2006, in line with a temporary understanding. Commenting on this situation, Vladimir Voronin highlighted the importance to maintain some direct contractual relations with Gazprom, adding that "it is right to buy natural gas from producers alone."

Economic Policies

1. Prices and inflation

Inflation for 2005 fit limits forecasted by government

The inflation rate in December 2005 was 1.4 percent, while the cumulated rate in 2005 was 10 percent, a level that fit the limits forecasted by Government and the National Bank of Moldova (BNM). The consumer price index (CPI) for food products rose by 2.3 percent in the last month of 2005, CPI for manufactured goods grew by 1.1 percent, while tariffs for services provided to population increased by 0.4 percent. CPI for food products rose by 8.7 percent in 2005 compared with December 2004, prices of manufactured goods rose by 14.9 percent on average, while tariffs of services grew by 6.6 percent.

The Government estimates a 10-percent inflation rate for 2006, the same level as in 2005. BNM will have to sterilise its interventions in currency market due to strong inflow of foreign currency on domestic market, which has limited capacities of absorption, in order to avoid the rise of inflationary pressures that would be spread through increasing monetary aggregates.

The inflation in Moldova has not a monetary nature in general, being generated mainly by non-monetary factors and they could be manifested through a rise of world petrol prices in 2006, tariffs of services regulated by law, growth of purchase power of population, fuelled by rise of salaries, pensions and remittances from abroad.

2. Financial-bank system

Currency reserves of BNM exceeded 600 million dollars...

Reserve official assets of BNM turned over 601.02 million dollars early this year. As a rule, the National Bank plans its annual monetary-currency policy in order to maintain the currency reserves at an acceptable level needed to cover at least three months of imports. The currency reserves of BNM rose over 2-fold, from 268.5 million dollars in late 2002 up to 601.02 million dollars in early 2006.

Forward reserves and deposits held the largest share in the structure of convertible currency reserves as of late 2005 - about 394 million dollars, including 289.24 million dollars in banks with offices abroad, about 105 million dollars in other central banks, BRI and IMF. Another part of currency reserves is kept in securities - 203.4 million dollars.

BNM also completes the currency reserves mainly from purchases of currency on domestic market after massive remittances from abroad, as well as from profits obtained from investments.

...while assets of bank system for 2005 could account for about 1.4 billion dollars

The overall assets of the bank system in Moldova rose by 26.4 percent in 11 months of 2005, compared with December 31, 2004. This indicator accounted for about 16.81 billion lei (1.31 billion dollars) on November 30, 2005. Statistics of BNM show that the profitableness of assets on bank system was 3.31 percent, while profitableness of capital was 18 percent, as of November 30, 2005.

3. Foreign trade

...at the same time, trade deficit will register record level for 2005 (about 1.2 billion dollars)

The trade deficit of Moldova was higher in 11 months of 2005 than the level that the Government has estimated for the entire year and rose up to a record for the past 15 years - 1,055 million dollars.

The trade deficit exceeded the overall volume of exports by about 71 million dollars. The National Bureau for Statistics show that Moldova imported goods worth about 2.4 billion dollars in January-November 2005, while exports turned over about 985 million dollars.

The government fails so far to take actions aimed to discourage the rise of deficit. Exports rose by 11 percent in 11 months, while imports increased by 30.1 percent. The growth of national consumption fuelled by currency remittances from abroad is a cause of massive rise of imports.

The trade deficit of Moldova in the foreign trade with the CIS accounts for 308.8 million dollars, 369.6 million dollars with the European Union, about 156 million dollars with Central and Eastern Europe, 220.7 million dollars with other countries. The Government forecasts a 13-percent rise of exports and an 11-percent growth of imports for 2006.

Transdnistrian Conflict

Belgium takes over the OSCE Chairmanship in 2006

Frozen conflicts in the former USSR and organised crime will be the priorities of the Belgian Chairmanship of the OSCE in 2006, the Belgian Foreign Minister, Karel De Gucht, told the OSCE Permanent Council meeting on 12 January. Minister de Gucht expressed his hope that 2006 will be the year of "new opportunities" in relation to frozen conflicts and called for the resumption of negotiations on Transnistria, according to a press release from the OSCE. At the same time, the Russian electronic publication Regnum.ru, making reference to a BBC interview with Minister de Gucht on 11 January, quoted him as saying that there are few chances for the Transnistrian conflict to be solved in 2006. De Gucht will concentrate his attention on the Russian military presence in the region, but believes inefficient resuming the discussions regarding the fulfilment by Russia of the 1999 OSCE Istanbul Summit resolutions. According to Regnum.ru, Minister de Gucht has already discussed the problem of Russian troops and weapons in Transnistria with the Russian Foreign Minister, who showed open for discussions. At the same time, de Gucht said that one of the "complicating factors" is the position of Moldova, which insists on the model of unitary state, and showed inclined to support the idea of federalisation of Moldova, Regnum.ru reports with reference to BBC.

The new-elect Transnistrian "Supreme Soviet" starts activity

Evghenii Sevciuk will be the Speaker of the new "Supreme Soviet" elected in the 11 December 2005 ballot. Sevciuk, leader of the "Obnovlenie" Movement supported by big businesses from the region, was elected Chairman of the new-elect legislative body through the vote of 39 out of 40 deputies present. His opponent, the Speaker of all three former legislatures, Grigori Maracuta, withdrew his candidacy in the favour of the leader of the movement who got most votes and in order to "give the young a chance to accomplish themselves". Please note that in the parliamentary elections of 11 December 2005, which were not recognised by the Moldovan authorities, nor by the international community, the "Obnovlenie" Movement won 23 of the 43 deputy mandates in the "Supreme Soviet".

Evghenii Sevciuk is 37 years old and is considered to be close to the "Scheriff" Firm, the largest private corporation from Transnistria, for whom he worked before serving as deputy-speaker in the previous parliament. Known as the author of a series of liberal legislative initiatives, many observers have pointed to Sevciuk as the political leader who can be an alternative to the current leadership of Transnistria, while President Voronin called him the "most prospective" candidate for negotiations with Moldova. At the same time, one of the ideologists of the Transnistrian regime, "security ministry" officer, Dmitri Soin, called the current political setup of the "Supreme Soviet" as one of "consensus and compromise" among the key political forces of Transnistria, and which has not justified the expectations of the Moldovan Government that the "new" parliament will become a "hotbed of destructive opposition".

Notably on 30 December the Moldovan and Ukrainian Prime-ministers signed a Common Statement on the Regulation of Transit of Goods through the Moldovan-Ukrainian Border. According to the Statement, from 25 January will be introduced unified Moldovan-Ukrainian customs procedures, whereby only goods accompanied with documents bearing Moldovan customs stamps will be allowed through the border.

Along with the EU monitoring at the Moldovan-Ukrainian border from December 2005, this new measure is likely to cause important losses to the big Transnistrian businesses, in particular the Firm "Scheriff", which holds the largest share of import-export operations in Transnistria. As the existence of the unresolved conflict becomes less profitable for such big players, it is indeed likely that the politicians who represent their interests become readier to compromise and work towards a resolution to the Transnistrian conflict.

Foreign Affairs

The Republic of Moldova - Council of Europe

A report by the Council of Europe (CoE) secretariat on cooperation for adjustment of Moldovan legislation to the community norms indicates a series of shortcomings and an inefficient transparency level which is very needed in this process. The Strasbourg authorities are concerned mostly with independence of judiciary system, qualification of magistrates and execution of judgments. They are also concerned with situation of audiovisual, transformation of TeleRadio-Moldova into an authentic public institution, regulations on freedom of consciousness and religion. Also, European experts are unsatisfied with the mechanism of approval of draft legislative documents on these fields and lack of communications regarding the taking into consideration of international expertise for final adoption of many laws.

The Moldovan Government did not contest a judgment of the European Court of Human Rights on Sarban vs Moldova case (issued three months ago), a fact that determines the enactment of this ruling and its execution by Chisinau authorities. Earlier, Vladimir Sarban was released from custody and home arrest and he was obliged not to leave the residence locality.

The Republic of Moldova - European Union

The presidents of Moldova and Ukraine signed a joint statement to the European Union (E.U.) on January 3, 2006, tackling the problem of natural gas supplies by the Russian Federation. The two presidents described the actions of the Russian authorities as "part of a scenario of pressure and energy blackmail aimed to undermine the economic development of the two countries," while the prices demanded by Gazprom were "arbitrarily established." The E.U. was invited to assist the two countries in reaching the following goals:

• resumption of the process of negotiations between Ukraine, Moldova and the Russian Federation, with the participation of international experts;
• establishing of a transition period acceptable by sides for implementation of market principles within cooperation;
• establishing of the price of Russian natural gas and tariffs for gas transportation by applying European price formation methods;
• institution of a moratorium on gas prices and payments for gas transit until end of negotiations;
• insurance of guaranteed transit of Russian natural gas to European consumers in line with bilateral documents in effect.

We note that the Austrian E.U. presidency has already invited the Moldovan authorities "to resume the negotiations with Gazprom as soon as possible and to solve the problem of supply of natural gas from the Russian Federation," but it did not declare the participation of community authorities in this process.

Moldova was included in the Generalised System of Preferences of the E.U. (known as GSP+). This fact means annulment of customs duties and importation shares for a series of Moldovan goods. At the same time, the restrictions and taxes for some priority products made in Moldova, including wines, a number of agricultural canned products, remain effective.

The Austrian authorities delivered a series of statements on development perspectives of the community while taking over the E.U. presidency, making tangents with the situation in Moldova as well. Austria will pay an increased attention to countries in the Balkan area which do not have access to the E.U. yet, but this country is one of the most sceptical as regards the enlargement process, with many Austrians considering that a number of their problems, including unemployment, results from entry of several countries in the E.U." The Austrian president stated to mass media that he "excludes the possibility to admit the Republic of Moldova besides with Ukraine and Belarus in the E.U."

Speaking about perspective to accept Croatia, Macedonia and Ukraine, French Interior Minister Nicolas Sarkozy said that "no new enlargement of the E.U. should take place as long as new institutions were not adopted yet."

The Republic of Moldova - Ukraine

According to a joint statement of the Chisinau and Kiev prime ministers, the transit of Moldovan goods at the Moldovan-Ukrainian border will be based on the customs specimen of Moldova alone starting January 25, 2006. The Moldovan Government had adopted decisions needed in this regard long ago, but the Ukrainian authorities continue to admit the exportation of Transnistrian goods without legal origin and conformity documents in their territory, though they recognise these documents. This practice continues even after the start of the monitoring of the E.U. specialised mission to the Moldovan-Ukrainian border. In order to ensure the implementation of new agreements, the Moldovan Government must improve the mechanism of exportation and importation of production by businesses from eastern districts of the republic and modify its previous decisions in the area:

1. Decision # 1001 of September 19, 2001 on declaration of goods by businesses based in the eastern districts of the Republic of Moldova (it exempts all goods of Transnistria-based producers from payment for importation rights, as well as payment of a single tax of 0.2 percent for customs procedures).

2. Decision # 815 of August 2, 2005 on regularization of inflows of goods that represent the object of foreign trade activity of Transnistria (stipulates the keeping of evidence of Transnistria-based businesses that hold import-export operations by the State Chamber of Registration, after presentation of some documents and special requests, with temporary registration in the State Register of Enterprises, as well as awarding of certain origin certificates by the Chamber of Commerce and Industry of Moldova only to enterprises with permanent State Chamber of Registration.

Energy officials from Kiev said that a joint commission will be created by January 20, 2006 to deal with gas supply, including to Moldova. According to the Ukrainian officials, the exports will be ensured by a joint venture created by the Ukrainian society Naftogaz and RosUkrEnergo company. The needs of our country are estimated at about 3.4 billion cubic metres, while the new enterprise could ensure supplies of about 2.5 billion cubic metres both from Russian gas, and from gas from Asian countries (Turkmenistan and Kazakhstan).

Moldova in the world

Moldova was deprived of the right to vote in the U.N. General Assembly because of failure to pay financial contributions to the budget of the organisation. The 20 countries that did not honour the financial commitments towards U.N. include Georgia and Tajikistan, but these countries have restructured their debts and kept the right to vote. Officials of the Foreign and European Integration Ministry said that Moldova will transfer the debt (about 38,000 dollars) by late January and will regain the right to vote in the U.N. General Assembly this way.

The third 11-strong contingent of bomb experts of the National Army of Moldova left for Iraq on January 13, 2006 to participate in the international post-conflict mission. The Moldovan military exert their mission on basis of contracts and they accepted to participate in this mission voluntarily. Their mission is to destroy mines in the territory and to defuse explosive objects.

Studies, Analyses, Comments

Quo vadis?..
Igor Botan, 17 January 2006

Although the legislative elections in Transnistria took place more than one month ago, their eventual impact on the process of settlement of the separatist conflict remains unclear

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Syntheses of 2005 and major financial uncertainties of 2006
Ion Basiul, 17 January 2006

Year 2005 was one of the most difficult and provocative years. It began with the signing of the Moldova-European Union Action Plan

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