print version

Activity of Public Institutions

Parliament
Government
Presidency

Public opinion in Moldova concerning Euro-Atlantic integration by Viorel Cibotaru
External deficits vs. deficit of economic stability by Iurie Gotisan

Activity of Public Institutions

Parliament

1.1. Appointments. Reshuffles

Dumitru Ursu, former first deputy governor of the National Bank of Moldova, was appointed Chairman of the National Commission for Securities (CNVM) at the initiative of the speaker. The CNVM chairman post has become vacant after the unmotivated dismissal of Ion Robu.

Ghenadie Morcov, deputy who was recently validated on the list of PCRM, was named member of the parliamentary commission for the social protection, health and family.

The Parliament took notice of the dismissal of Vasile Pascari from the post of judge of the Supreme Court of Justice.

Lawmakers who have been part of the so-called "Braghis Group" introduce themselves as members of the Party of Social Democracy of Moldova¹ at plenary sittings of the Parliament.

1.2. Legislative acts

Law for the completion of Article 6 of the Law # 1308-XIII from July 25, 1997 on normative price and mode of sale-purchase of land. The adopted amendments consolidate the previous legislative provisions that allow domestic businesses and individuals to purchase agricultural land. The present regulations of different laws (law on entrepreneurship and enterprises, law on investments in entrepreneurial activity, law on investments in entrepreneurship, law on normative price and mode of sale-purchase of land, etc.) contain orders allowing a non-uniform implementation. The interdictions for foreign capital enterprises are explained through protection of internal values of the country, but many experts consider that they are a serious obstacle on way of the rise of investments in Moldova's agriculture.

Law on Moldova's adhering to the convention on obtaining of the maintenance pension abroad. The international document establishes the principles and mechanisms of execution of decisions on payment of maintenance pension to citizens of participating states, documentation procedures undertaken for this purpose.

Draft law for the modification and completion of the Penal Code. The draft voted in the first reading seeks the revision of sanctions for some offences (theft, robbery, extortion, illicit trafficking in drugs, etc.), by reducing or modifying the minimum detention terms and establishing alternate punishments to detention in case of offences with a lower social danger. The document was drafted out at the recommendation of international institutions and control of the special parliamentary commission on situation of persons held in the preventive detention facility # 13 in the Chisinau municipality. It should be noted that the Parliament Decision # 370 from December 28, 2005 obliges the Government to work out and to deliver emergently to the Parliament legislative initiatives seeking better conditions of work for courts; modification and improvement of the proceeding mechanism for examination of penal cases with the purpose to optimise and to reduce the proceeding terms; institutional consolidation of the Justice Ministry; creation of an institution of judicial management, etc.

Draft law on pensions of officers of the Customs Service who applied for pension from August 24, 2000 to December 12, 2003. It proposes the introduction of some norms to regulate retroactively the pensions of some customs officers who had the right to retire accordingly to some previous legislative regulations, with reduced applicability but with extended facilities (age- 50 years, general length of work - 20 years, of which 12.6 years in the Customs Service). These persons (39 officers) have sued the Customs Department and were awarded victory, but the judgments have not been enforced until the prime minister issued an order allowing the National House of Social Insurance to establish and to pay pensions to these persons in compliance with the previous legislation².

1.3. Parliamentary control. Declarations

Hearings

The Ministry of Economy and Trade has reported on execution of the law on pay system in budgetary sector (Law # 355/23.12.2005). The Government motivates the delayed plenary implementation of the law through the need to adopt some governmental decisions to regulate the pay conditions for distinct categories, as well as through the need to rectify the state budget for distribution of the necessary quantum for all budgetary institutions. At the same time, the Government will ensure the payment of necessary recalculations from enforcement of this law to December 1, 2005, but without any indexations³.

The special commission for the control and monitoring of the process of restitution of bank deposits to depositors of the Commercial Bank Guineia and of the Concern Intercapital has ordered a urgent examination of penal cases versus former administration of the Commercial Bank Guineia regarding the stealing of very large amounts of money and misuse of authority. According to data provided by officials of the Justice Ministry, the third auction for the sale of a building in the town of Vatra, estimated at over 5 million lei, was named with the purpose to return the deposits of depositors of the Intercapital Concern.

Questions and interpellations

PPCD parliamentarian Vlad Cubreacov has asked public authorities to report on findings of controls conducted in the past five years regarding the economic-financial activity of the Metropolitan Church of Chisinau and Entire Moldova.

PSL parliamentarian Igor Clipii has disagreed with the answer of the Defence Ministry and reiterated his previous interpellation on legality of participation of military in reconstruction of the Military Glory Complex in Chisinau, considering that these are not measures of military-patriotic education. A representative of the Defence Ministry maintained his previous stance, saying that military attracted in reconstruction works exert patriotic educational missions accordingly to legal provisions.

PDM parliamentarian Valentina Buliga has asked the Government to re-examine a February 6, 2006 decision concerning the approval of the technical requirements on rooms and facilities were narcotic, psychotropic and/or precursor substances are stored, as most of medical institutions cannot ensure the established conditions because they are too drastic or even abusive. Also, lawmaker Buliga has asked the Government to speed up the elaboration and the presentation of a strategy on insurance of farmers with pensions.

Statement of the Moldovan Parliament on the Declaration of the State Duma of the Russian Federation

The document that lawmakers adopted on April 21, 2006 expresses concern in connection with the April 19, 2006 Declaration of the State Duma "Concerning the support for measures aimed to strengthen the state phyto-sanitary control on products imported in the Russian Federation," which supports a decision of the Russian sanitary authorities interdicting the importation and trading of Moldovan wines and cognacs in Russia that is not based on cogent evidence to justify the pretensions against quality of wine production. The declaration also indicates "the need to stop the attempts of some Russian political forces to give a political meaning to the situation, to present it as a deterioration of the traditional cooperation." Finally, legislators ask the Moldovan Government "to identify the best ways to overcome the impasse in the benefit of the Republic of Moldova and the Russian Federation."⁴

Declaration of the AMN faction from April 20, 2006

The parliamentary faction representing the Our Moldova Alliance (AMN) has quitted the plenary sittings of the Parliament and released a declaration saying that "the Parliament protects the interests of the Power, ignores the problems of the country and violates the rights of the Opposition." The AMN faction accuses the leadership of the Moldovan Parliament of ignoring the major interests of citizens and country and reserves the right to initiate the dismissal of the acting speaker.

Government

2.1. Reshuffles

The Government has appointed Ruslan Flocea as chief state adviser for first Deputy Premier Zinaida Grecianii.

Tudor Potirniche was assigned deputy director of the agency for material reserves, public acquisitions and humanitarian aids, while Victor Gincu was appointed administrator of the Free Economic Zone Otaci-Business.

Victor Feofanov was relieved from the post of deputy director of the State Archive Service at his demand.

2.2. Decisions

Decision for the approval of the land cadastre on November 1, 2005. The document contains information about legal status of fields, their quantity and quality parameters. According to available data, the agricultural fields count for 1.95 million hectares, about 58 percent of the total surface of the republic. Under the land cadastre, 1,300 limited societies and 378,000 farms and 147 production cooperatives work in agriculture (every production cooperative administrates about 900 hectares on average). The surface of agricultural fields was reduced by about 2,000 hectares; the surface of orchards has dropped by about 3,000 hectares after the land reform, while the surface of non-worked fields has grown by about 2,000 hectares.

Decision on single plans on admission of students in institutions of higher learning (cycle I), secondary specialised and vocational institutions in 2006. According to the document, institutions of higher education in Moldova will admit by 20 percent fewer students in 2006 (27,685 students and 20,000 of them will pay education tuitions) compared with 2005, but the number of students of institutions of secondary professional education will grow by 15 percent (90 percent of them will be financed by state). The plan for a series of specialties - social sciences, law, and economics - was reduced, in order to avoid a surplus of staff on labour market and with the purpose to educate staff for the real sector.

Decision for the approval of the regulation on sale of public shares at the Stock Exchange. Following will be the modalities to sell the public shares: organisation and conduct of Dutch auctions or introduction on sale through a limit-order (introduction of limit-orders for sale in the Automatic Integrated Transaction System (SAIT) of the Stock Exchange, in compliance with Rules of the Stock Exchange. The document defines a series of notions in the area and procedures of organisation and conduct of sales, selection of brokers, etc.

Decision approving the Code of Ethics and Conduct of police. The document includes the basic principles, objectives of activity of police, rights and limits of intervention of workers. It comprises provisions on control on activity of police by civil society. The code was drafted with the participation of experts of the Council of Europe, with the purpose to improve the conduct of policemen.

Decision on allocation of financial means for evaluation of the Savings Bank. The executive allocated 70,000 lei to organise a contest for the selection of an auditing company to evaluate the assets of the bank, in which the state owns 56 percent of shares. Certain experts consider that the assessment is a first step to prepare the privatisation of the only financial institution with major state capital.

Decision for the approval of some draft laws. The Government has approved and tabled to the Parliament draft laws on system of forced execution; on gambling; on denunciation of the Agreement on the status of the Economic Tribunal of the Commonwealth of Independent States (the authorities consider that this structure of CIS is inefficient and they have already recalled Moldova's representatives to the Tribunal).

2.3. Sittings. Decisions. Declarations

Concerns with optimisation of tariff policy

The prime minister has convoked a sitting with decision makers from Government, social partners and nongovernmental organisations working in business sector and discussed the promotion of a flexible tariff policy. Two working groups were created; the first one will elaborate proposals on modification of customs tariffs applied in Moldova, which will be established at a minimum level for importation of raw material and at a maximum level for goods made in the country. The second working group headed by representatives of trade unions will monitor the quality of products sold on market, including by organising mobile teams of control in every district of the country.

TV conference on situation of agriculture

The prime minister has held a TV conference with central and local public administration authorities on situation of agriculture, being informed that about 300,000 hectares have been seeded for the 2006 crop, while the low air temperatures last January have affected some of them (about 18,000 hectares). Heads of districts reported that the VAT reimbursement procedure implemented earlier this year develops efficiently and beneficiaries did not raise any objections until now.

Rise of scholarships

The cabinet of ministers decided on 26 April 2006 to increase the scholarships of students from institutions of higher and professional education by 20 percent. In addition, the executive established the size of three special scholarships: the scholarship of the President (470 lei), the scholarship of the Government (430 lei), the Gaudeamus scholarship (360 lei).

Economic activities without electronic cash register

The Government has approved a list of economic activities that may be practiced without electronic cash registers: trading of own agricultural products; sale of religious objects, periodicals and lottery tickets; urban transportation services; services based on entrepreneurial patent.

Declaration on restricted importation of Moldovan wines in the Russian Federation

The Ministry of Foreign Affairs and European Integration has released a declaration delivered by Moldova's delegation participating in an ordinary sitting of the CIS Council of Foreign Ministers. According to the declaration, "the actions of the Russian side have led to the suspension of importation and trading of wine production made in Moldova by the Russian Federation, taken unilaterally, without a preliminary notification." According to the Moldovan side, "such an evolution of events does not comply with the traditional reciprocal respect, with friendship relations, mutual understanding and reciprocally advantageous cooperation built throughout history between our states. The Moldovan side describes these measures of the Russian Federation as unfriendly over Moldova and very harmful for makers, importers and exporters of wine production, common vine growers, Moldovan economy in general, and finally for the traditional commercial-economic relations between the two states. The public statements on low quality wine production made in Moldova harm and undermine the authority of our country as producer of high quality wines, champagne and other alcohol production."

Moldova's offers for Gazprom

Prime Minister Vasile Tarlev has told a TV programme that Moldova had proposed the joint stock society Gazprom to participate in the construction of the gas pipe Drochia-Ungheni-Iasi, through which Moldova could additionally import 1.7 billion cubic metres of natural gas. The overall cost of the project is estimated at 50 million dollars. Tarlev also assured that Moldova does not intend to transmit the high tension lines to Gazprom in exchange for a long-term contract on natural gas deliveries.

3. Presidency

3.1. Decrees

The chief of state has recalled Efim Chilari from the post of Moldovan Ambassador to Uzbekistan, Tajikistan, Kyrgyzstan and India.

Under decrees published on 14 April, 2006, the Moldovan president has reshuffled functionaries of the presidential apparatus. Vasile Mircos was relieved from the post of chief of the Protocol Service of the President's Apparatus and Natalia Ipati replaced him.

3.2. Sittings. Meetings. Declarations

Concerns with wine exports

The Moldovan president convoked a sitting on 20 April 2006 to examine the situation related to the restriction of Moldovan wines in the Russian Federation. According to the presidential press service, the participants in sitting have established priority actions aimed to normalise the situation and to minimise the losses of domestic wine producers and state budget. They also discussed future measures that will be taken to diversify the sale markets for Moldovan wines and cognacs, their more active promotion on European markets and in China.

CPA reform

Vladimir Voronin convoked a sitting on 26 April, with the participation of prime minister and Government members, and discussed the present stage of the central public administration (CPA) reform. The chief of state said that the efforts to optimise the Government's structure and to reduce the central public authorities by 70 percent have registered some results: the central executive includes now 15 ministries and 13 national agencies, services and bureaus, compared with 16 ministries and 14 departments in January 2004; the personnel of central apparatuses of CPA bodies have been reduced by 1,603 persons or 39 percent. According to the president, the activities in the framework of the CPA reform:

• did not cover enough the institutions subordinated to ministries;
• the elaboration and implementation of a single mechanism for circulation of documents within the public administration system, which would also ensure a control on execution of decisions (e-governance concept, approval of a decision on official websites of public administration authorities) shall be one of important stages of the reform;
• draft laws on public service, status of public functionaries, CPA, Conduct Code of public functionary shall be urgently finalised.

Dissatisfaction with anti-corruption fight

Vladimir Voronin has told a sitting that the combat and prevention of corruption is unsatisfactory despite the existence of the necessary legal framework, despite the declared political will, drafted strategies and action plans. The chief of state considers that the combat and prevention of corruption did not become a constant concern of every head of state structures and the fight against this phenomenon becomes useless in such a situation. The serious concern of the president is fuelled by passive attitude of ministers, directors of state offices, services and agencies, other central public bodies towards detection and prevention of corruption in their institutions. Voronin was firmly decided to do his best in order to destroy the corruption and to turn the struggle against this phenomenon into an efficient and irreversible process, asking that:

• starting 1, June heads of ministries and other governmental structures deliver to the presidency monthly reports on specific measures taken to prevent and combat the corruption, as well as solutions, including proposals on improvement of legislation. If the analysis of these reports show that the developers did not reach an adequate agreement in this problem, necessary sanctions will be handed, while responsible officials of any level may be dismissed;
• the Government urgently propose amendments to the law on declaration and control of incomes and property of state dignitaries, judges, prosecutors, public functionaries, and other high-ranking officials. The amendments would establish the obligation to declare both incomes and expenses.

Dissatisfaction with internal trade

Chairing a sitting on the present situation of the internal trade and development prospects of this branch, President Vladimir Voronin raised dissatisfaction with the state of things, indicating the disastrous impact of the lack of a clear policy on functioning of internal trade on national economy. He said that Moldova lacks an organised, modern internal trade system based on principles of market economy and from that reason the national budget fails at least 2 billion lei a year. As a result, the chief of state has proposed the creation of a working group headed by prime minister to work out a short-term and perspective action plan on strategic, tactical and institutional development of internal trade, including the improvement of the existing legislative framework, introduction of a stricter financial, economic and technological control in the field.

It should be noted in this context that the law on internal trade was adopted in 1996 and last time it was modified in 2001. In 2003, the Government adopted a decision (#671 from 09.06.2003) aimed to improve the situation of internal trade. The Trade Department was created in early 2004 as central administrative authority, which promoted the state policy on internal and external trade, protection of consumers' rights and creation of favourable conditions for promotion of domestic goods on foreign and national markets. The department was dissolved in 2005 and the Ministry of Economy and Trade took over again the related tasks (the directorate for the internal commerce, services and consumer protection). The Government adopted Decision # 264 on 9 March, 2005 concerning actions aimed to improve the situation of commerce, approving an action plan on trade development and establishing tasks for competent central public authorities.

Economic Policies

1. Real sector

Decline of industry's pace turns into trend...

According to statistics, the Moldovan industry registered in the 1st trimester of 2006 the lowest rise pace in the past five years, notably 99.7%, compared with the similar period of 2005. The industrial production was valued at about 5 billion lei (380 million dollars). The rise in January-March 2005 was 3.2%, compared with 16.7% percent in the 1st trimester of 2004 and 12.8% in the similar period of 2003. The industrial production declined by 3.4% in March after it rose by 1.3% in the first two months of this year. The most pessimistic forecasts are being confirmed, the decline of industry is turning into a trend. This is a process capable to threaten the medium-term economic growth on background of other risks.

The processing industry is crossing a difficult period, including after the Russian Federation has restricted the importation of Moldovan wines. The wine industry declined by 7% in the 1st trimester compared with January-March 2005. The processing industry declined by 3% in the 1st trimester. The processing industry represented 61% of the total industry in the 1st trimester of this year. According to statistics, the decline of the processing industry has generated a reduction by 2.3 points of the general production index in industry, including wine making dropped by 1.3 points, tobacco by 1.0 points and beer by 0.2 points.

2. Public finances

Budget likely to fail revenues of about 600 million lei due wine crisis...

According to the finance minister, the budget could fail revenues in the amount of about 600 million lei (46 million dollars) if Russia does not withdraw the interdictions on Moldovan wine production the next 2-3 months. However, the impact could be more serious because the wine making sector is in deep connection with other branches such as glass plants, cardboard production, etc. According to data of the Agri-Industrial Agency MoldovaVin, wineries use 25 percent of their capacities needed to cover the exports to other markets than Russia. Russia absorbs more than 80% of Moldovan wine exports, while the annual deliveries are evaluated at about 300 million dollars. The wine exports dropped by 6% in January-February due to the uncertainty related to deliveries to Russia.

...while rise of gas price could lead to higher budgetary deficit and inflation...

At the same time, experts from the World Bank say that Moldova's budgetary deficit could grow by another 0.5-1% of GDP (200-300 million lei), if the price of natural gas imported from the Russian Federation rises up to 160 dollars per 1,000 cubic metres in the second half of the year. The government forecasts a budgetary deficit of 0.8% of GDP for 2006. The Republic of Moldova is very vulnerable to higher gas prices while an increasing trend of these prices could become true the next years. The natural gas counts for 2/3 of the consumption of fuels in Moldova and electricity for 10 percent only. The high prices will also exert a new pressure on current account deficit and inflation.

3. Financial-banking sector

BNM enforced new automatic system of interbank payments...

The National Bank of Moldova (BNM) has enforced the automatic system of interbank payments (SAPI), which is a system used to perform payments in Moldovan lei in banking sector in Moldova. SAPI is created from a discount system on raw base in real time (DBTR) for processing of urgent and high value payments and from the system of compensation with discount on net base (CDN), a system for processing of low value payments.

The regulation on automatic system of interbank payments stipulates the tariffs that the National Bank will raise for payments processed in SAPI and programme of operational day of SAPI. Thus, a 2.5-leu fee will be in effect for a document processed in the DBTR system and 1.25 lei for a document processed in the CDN system, except for invoices afferent to budgetary transfers lower than 1,000 lei processed in the CDN system, for which a 0.25-lei fee will be paid.

The implementation of this system aims to ensure the readjustment of the interbank payment system of Moldova to international standards and practices and to speed up the cash-free payments in Moldova. The new automatic system of interbank payments was implemented in compliance with the Strategy of the Government and BNM regarding the development of Moldovan financial sector in 2005-2010.

EBRD will grant 13.4 million dollars for trade facilitation in Moldova...

The European Bank for Reconstruction and Development (EBRD) will give Moldova more than 13 million dollars for export promotion, an amount allocated via the EBRD-financed Trade Facilitation Programme (TFP). This programme promotes the foreign trade with Central Europe, Eastern Europe and CIS.

The EBRD guarantees the import and export deals through TFP. At the same time, the EBRD grants short-term credits to importers and exporters from Moldova via commercial banks. The EBRD has signed 5 TFP projects worth 13.4 million euros with commercial banks Moldova-Agroindbank, Moldindconbank, Victoriabank, Mobiasbanca and Banca Sociala.

4. Business environment

Investments in free economic zones (ZEL) are on the rise...

According to a report by the Ministry of Economy and Trade, investments in free economic zones (ZELs) of Moldova have grown about 4-fold in the past five years. Thus, 72.1 million dollars has been invested in ZELs from 1995 to January 1, 2006, of which 11.7 million dollars or 16% in 2005. At present, Moldova has six free economic zones. The first zone opened in Chisinau in 1996, while the last ZEL opened in Ungheni in 2003.

ZAL Expo-Business-Chisinau absorbed 30.4 million dollars out of the overall investments, ZAL Taraclia - 13.4 million dollar, ZAL Tvardita - 10 million dollars, ZAL Valkanes - 9.6 million dollars. Investments in ZEL Ungheni-Business amounted to 8.3 million dollars, while investments in ZAL Otaci-Business accounted for 4 million dollars. ZELs focus on industrial production. Thus, the net sales of industrial production totalled 1.02 billion lei last year, of which production worth about 630 million lei was exported.

5. Labour market

Minimum pay in the Republic of Moldova is about 29 euros a month...

Moldova is ranked the last but one place regarding the minimum pay, respectively 28.98 euros a month, in a top that covers 28 European countries, worked out by the Federation of European Employers (FedEE). Moldova is ranked before Russia, which is ranked the last place in the top with a minimum pay of 23.48 euros, and after Ukraine (55.58 euros), Bulgaria (81.80 euros), Serbia and Montenegro (91.24 euros) and Romania (97.07 euros). Employees in Luxembourg earn the highest minimum pay - 1,503 euros. Luxembourg leads this top for a couple of years. FedEE notes that the minimum salary offers a standard of living which is close or even lower than the subsistence level.

FedEE took into account the remuneration of full-time workers over 23 years old in order to elaborate the top. On the other hand, FedEE operates with data for early 2004 which have been modified meanwhile as regards some countries, including Moldova. Thus, the tariff salary for the 1st-degree qualification [the lowest] was increased by 25 percent on August 1, 2005 through an agreement between social partners - trade unions, employers, government, up to 550 lei (35 euros). However, Moldova was ranked after most of countries.

According to official statistics, the medium salary on economy amounted to 1,424 lei (some 110 dollars) in January.



Source: FedEE

Every 5th youth has left for work abroad...

According to a study by the National Bureau for Statistics (BNS) themed "Youths on Labour Market", every 5th youth in Moldova works or looks for work abroad. It reveals that about 70% of the surveyed young people would like to work abroad, if they are provided this chance. Further, 35.8% of the surveyed youths would accept a qualified job, 38% would agree to work without any qualification, but for a high pay, while 26.2% would accept any job abroad. More than 40% of all interviewed persons intend to change their jobs because of low salaries. Every 11th youth wants to leave the country in case of dismissal. According to 70.8% of respondents, the creation of new jobs would be the most important action to improve the situation of youths on labour market and 18.2% indicated the creation of opportunities to get employed abroad. BNS conducted the study in 2005. It has interviewed youths aged 15-29 years, including about 55% from rural localities.

Government will create single data collection network for researches of household budgets...

At the same time, the Government has decided to create a single network to collect data on household budgets and labour force in order to improve the database on living standards of population and labour force market, a network stipulated by the Moldova-European Union Action Plan. As many as 150 investigators and 51 inspectors assigned to 200 selected localities will work in this network.

The National Bureau for Statistics (BNS) will have to draft a regulation on organisation and conduct of statistical researches on households. Thematic surveys on youth, education and healthcare will be conducted in parallel with studies on household budgets and labour force and they will help the monitoring and evaluation of poverty and execution of actions stipulated by Economic Growth and Poverty Reduction Strategy Paper.

Transdnistrian Conflict

The first anniversary of President Yushcenko's initiative

On 22 April was the first anniversary of the launching of Ukrainian President Victor Yushcenko's Transnistrian settlement initiative, "Towards settlement through democracy". On this occasion, on 20 April, Ukraine Foreign Minister, Boris Tarasiuk, held a press conference at which he summed up the results of the measures that have been taken as part of the Ukrainian initiative. Boris Tarasiuk stated that the situation in Transnistrian remains one of the key problems of national security of Ukraine, and ensuring regional security and stability is one of the priorities of Ukraine's foreign policy. According to Tarasiuk, for Ukraine the principles of a viable settlement is the community of democratic values, the rule of law, the respect for human rights and freedoms, as well as the respect for the sovereignty and territorial integrity of Moldova. Tarasiuk mentioned among the achievements registered within the Ukrainian initiative the enlargement of the negotiations format after the US and the EU joined it as observers, the resumption of the negotiations process, the launch of the EU Border Assistance Mission on 1 December 2005, as well as the introduction of the unified Ukrainian-Moldovan customs regime from 3 March 2006. "Ukraine will observe strictly its obligations regarding the customs procedures at the Ukrainian-Moldovan border," said Tarasiuk, mentioning at the same time the need for the Moldovan Government to improve the fiscal procedures applied in the case of Transnistrian enterprises and to provide additional guarantees for ownership rights in Transnistria.

Tarasiuk hailed the consultations of mediators and observers that took place on 19 April in Moscow to discuss the prospects of the "5+2" negotiations format, which was interrupted at the end of February. At the same time, despite the optimism of the Transnistrian official, the Moscow consultations produced little results, and the participation of the two parties was not possible due to the worsening of relations after the institution of the new customs regime.

On the other hand, although the Transnistrian authorities did not completely withdraw their support for the Ukrainian plan, they have questioned lately its validity, accusing Ukraine of having compromised as a mediator state after having instituted the "economic blockade" against Transnistria. The Transnistrian authorities seem ever more reluctant to accept the application of one of the key provisions, of the Ukrainian plan, the holding of democratic elections in the region under international monitoring. In a commentary published by the official news agency of Transnistria, Olvia-press, on the draft mandate of the international election assessment mission prepared by the OSCE Mission in Moldova, the Transnistrian "foreign ministry" qualifies the OSCE draft as one "running counter to the Transnistria's interests". This position is supported by the "deputies of the parliamentary commission for foreign policy and international relations", who rejected most of the provisions of the document, which they found in breach of the "sovereign right" of Transnistria to determine and organise elections on its soil.

Thus, although during one year since the launch of the Ukrainian initiative a series of important steps forward have been made, primarily due to the political change in Kiev and a greater EU involvement, the prospects of fully implementing the said initiative are dim after the position of Transnistrian authorities, heavily supported by the Russian Federation, has substantially radicalised after the introduction of the Moldovan-Ukrainian single customs regime.

Part of this scenario of radicalisation is the initiative launched at the "congress of all deputies" of Transnistria of 31 March to organise a referendum on the future foreign policy orientation of the region. The initiative has been taken over by the so-called "anti-blockade committee" of public associations which have proposed to the "Supreme Soviet" two questions for the referendum: one regarding the "accession of Transnistria to Moldova as an autonomy" and the other regarding the accession of the "Transnistrian independent republic" to the Russian Federation, which is the "lawful heir of the Soviet Union". The referendum, according to the recommendations of the "anti-blockade committee" is to take place, at the latest, at the same time with the "presidential elections" scheduled for the end of 2006. The Moldovan authorities stated earlier that in the event that such a referendum takes place, it will not be recognised either by Chisinau, or by the international community.

The customs regime at the Moldovan-Ukrainian border

Over 110 Transnistrian enterprises have registered to date at the State Registration Chamber of Moldova, ensuring around 90% of the foreign economic activity of Transnistria. 10 Transnistrian economic agents received activity licences from the State Chamber of Licensing of Moldova. Between 13 February and 14 April, the State Registration Chamber issued 299 certificates of origin and export licences to Transnistrian businesses, of which 251 were preferential ones, according to Moldpress which quoted a Ministry of Reintegration communique. At the same time, the Transnistrian economic agents registered in Chisinau do not export their goods to Ukraine, either of their own decision, or under pressure, as a gesture of protest against the unified Moldova-Ukrainian regime. This statement was made by the deputy Foreign Minister of Ukraine, special representative on Transnistrian issue, Andrei Vasilovskii, quested by Regnum.ru, who also said that the fact that so many enterprises have registered with the Moldovan authorities shows that slowly an understanding of the new rules is being reached.

On the other hand, during the reporting period a series of representatives of Ukrainian customs and border guard services have stated that the situation at the border has stabilised and the transit of smuggled goods over the border has substantially reduced. According to the Ukrainian border guards department, in January - March 2006 contraband goods worth 4.3 million Ukrainian Grivna were held. For comparison, during the same period of last year, smuggled goods worth 8 million Grivna were confiscated. Ukrainian officials have explained that the toughening of the border crossing regime makes difficult the smuggling of large lots of goods, however, petty smuggling, including by avoiding the customs check points, is still widely practiced.

Foreign Affairs

Republic of Moldova - Council of Europe

The European Court of Human Rights (ECHR) has sentenced Moldova in the trial "Macovei and others vs. Moldova". The applicants, six Moldovan nationals, have invoked the violation of fundamental rights through a judgment of the Supreme Court of Justice that confirmed the legality of a decision of the insurance company ASITO to cancel unilaterally the insurance contracts signed and honoured by applicants. The ECHR indicated the violation of Article 6 of the European Convention on Human Rights and Article 1 of the Protocol 1 to the Convention, obliging the authorities to pay pecuniary and non-pecuniary damages worth over 21,000 euros to the six nationals.

The permanent representative of Moldova to the Council of Europe (CoE) has addressed the Committee of Ministers of the Council of Europe regarding the restricted importation of Moldovan and Georgian wines in the Russian Federation. Ambassador Alexei Tulbure said that the Moldovan and Georgian authorities will "reach the conclusion that the decision banning the sale of all wines made in our countries has a political nature." The April 19 resolution of the State Duma that supports the restriction without any grounds in favour of these accusations confirms this fact. Tulbure noted that "Russia punishes Georgia and Moldova because it considers that they are in its zone of influence," feared that the "democratic stability" in the two countries "is in danger," while "Russia is trying to change the political agenda" from these countries. The CoE's Committee of Ministers decided to tackle these problems at its next sittings.

The Committee of Ministers has asked the Secretariat to work out a special report on the general situation of human rights in Moldova's breakaway enclave of Transnistria. The Committee of Ministers will estimate further the possibility to take concrete actions against violation of human rights and fundamental freedoms by the Russia-supported authoritarian Tiraspol regime.

Republic of Moldova - European Union

Marianne Mikko, chairwoman of the European Parliament Delegation to the Moldova-E.U. Parliamentary Cooperation Committee, has signed two declarations on Moldova.

The declaration "on Russia's embargo on Moldovan wines" expresses concern with the new proofs of economic pressures used for political purposes and strongly disapproves such tools of pressure.

The declaration "on activity of the E.U. Border Assistance Mission to Moldova and Ukraine" expresses satisfaction with the successful activity of the E.U. Border Assistance Mission to Moldova and Ukraine and welcomes the consistent implementation of the December 2005 customs agreement between Ukraine and Moldova.

Republic of Moldova - Romania

A sitting convoked by Moldovan president has discussed issues related to relations between the Republic of Moldova and Romania, draft basic treaty and border treaty between Moldova and Romania, as well as draft agreement on visa regime. According to the presidential press service, Vladimir Voronin has outlined that the signing of the basic treaty between Moldova and Romania, as well as of the border treaty will become an incontestable stake in consolidating the immunity of foreign policy on Moldovan statehood. The chief of state said that "it is clear to everybody that the basic treaty and the border treaty with Moldova are documents capable to become the most important investment of the foreign policy of Romania in the Transnistrian settlement, in consolidation of the regional security in the Black Sea basin. In this situation, the propagandistic insinuations of Tiraspol regarding the unavoidable inclusion of Moldova by Romania lose any ground and I hope that the Romania-phobia used by so many persons and which lays so many obstacles in relations between our nations will disappear at the same time."

On the other hand, the Bucharest authorities did not clearly speak out about prospects of the signing of a basic political treaty, with different sources saying that there are certain concerns only with the border treaty, while the Romanian Foreign Ministry considers that a Partnership Agreement "For Europe" shall replace the political treaty.

President Traian Basescu has assured that Romania is very interested that the E.U. examines Moldova in the framework of integration policy, in the same package with the Western Balkans, not within the good neighbourhood policy.

Republic of Moldova - Russian Federation

A delegation from the Moldovan Parliament visited Moscow on April 13-14 and met with officials of the State Duma, heads of competent committees, and members of the Moldovan-Russian friendship group. Members of the delegation headed by Eugenia Ostapciuc, chairwoman of the Communist parliamentary faction, said that the meetings took place "in a welcome and sincere atmosphere and they especially focussed on the need of a fair and civilised solution to the problem of the eastern districts of Moldova, promotion of agricultural production, and problem of wine deliveries to the Russian market.

The Russian State Duma adopted on April 19, 2006 a declaration supporting the measures of the Russian consumer protection service Rospotrebnadzor against importation of Moldovan and Georgian wines. The declaration invites the Moldovan and Georgian authorities "to take radical measures in order to improve the quality of goods, as well as to combat the making of counterfeited products."

Valery Nesterushkin, ambassador with special missions of the Russian Foreign Ministry, has said in an interview with RIA Novosti that Russia "is actively working to provide material assistance to Transnistria in continuation."

The Russian defence minister has stated to a Belarusian publication that the Russian Federation "will not cede to provocations and will continue the difficult peacekeeping mission in the former Soviet area." Sergey Ivanov noted that the Chisinau officials have conducted "a campaign aimed to discredit the Russian peacekeepers, demanding a new format of the mission," but Russia "will not quit its friends when they need its help, as the Russian peacekeepers only are capable to maintain the peaceful negotiation process."

Although it was initially announced that the delegation of the Moldovan Parliament will participate in the 100th anniversary of the Russian State Duma, that it will have a series of meetings with Russian officials and will address the parliament, the visit was cancelled at the last moment because Speaker Marian Lupu has caught flu. According to the diplomatic practice, the delegation attends the events if the invitations at ceremonies are accepted and the participation is confirmed, even if the initially appointed persons cannot take part. The cancellation of the earlier confirmed visits at the last moment for not very plausible reasons may be regarded as an unfriendly action.

Studies, Analyses, Comments

Public opinion in Moldova concerning Euro-Atlantic integration
Viorel Cibotaru, 28 April 2006

The Republic of Moldova adopted a political decision last year to develop its relations with the North-Atlantic Treaty Organisation at a new quality stage. Moldovan President Vladimir Voronin has formulated an official stance regarding the perspectives of relations with NATO while on a visit to Brussels

»»»

External deficits vs. deficit of economic stability
Iurie Gotisan, 28 April 2006

Everybody knows that the Moldovan economy is incapable to fight face to face with European economies. The trade deficit and current account deficit grow in a galloping pace every year, with analysts saying that this rise will continue the next years as well

»»»