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Activity of Public Institutions

Parliament
Government
Presidency

Farmers will have to look for other niches to export phytosanitary products by Iurie Gotisan

Activity of Public Institutions

Parliament

1.1. Appointments

The Parliament appointed on June 15 Victor Cibotaru as first deputy governor of the National Bank of Moldova (BNM) and member of the Management Board, at the initiative of the BNM governor. Previously, Cibotaru has headed the commercial bank Moldindconbank.

Former Christian Democratic lawmakers Ion Neagu, Zoia Jalba and Valentina Cusnir have been dismissed from posts held in working bodies of the Parliament and international parliamentary delegations, at the request of the Christian Democratic People's Party (PPCD) faction. These deputies were excluded from PPCD faction on June 28 for violating the status and spoiling the image of the party.

1.2. Legislative acts

• Law on completion of legislative acts with regulations on community expertise. The Parliament has passed in the final reading the law requiring a community expertise of the national legislation, with the purpose to adjust legislative acts and other normative documents to principles and regulations applied in the European Union. The law does not establish, however, a concrete expertise mechanism, nor does it stipulate the allocation of the finances needed for this purpose, so that many shortcomings will be observed when it will be implemented.
• Law on modification of the Penal Code and Code of Penal Procedure. The adopted law is based on principles of the so-called restorative justice (restoration, remedying of damages, not punishment of minor at all costs) and revises the penal sanctions applied on minors, reducing the general maximum detention term for minors, rise of the number of educative restrictions, use of unpaid labour for the community's benefit for more offences, etc.
• Law on amendment and completion of the law on rehabilitation of victims of political repressions. The adopted document stipulates a mechanism of restitution of properties and compensation of value of properties that cannot be returned to victims of political repressions. The parliamentary opposition has proposed that the expenses for the implementation of this law be covered from the state budget, but the parliamentary majority insisted that the expenditures be covered from local and state budgets, with opposition factions and representatives of victims of repressions fearing that this situation will block the adequate and immediate implementation of the new regulations.
• Law on revision of Constitution. Lawmakers have past in two readings the law on modification of Article 24 of Constitution, with the purpose to exclude all provisions allowing the death penalty. One the new regulation takes effect; Moldova will abolish the death penalty definitively. It should be noted that the Parliamentary Assembly of the Council of Europe (PACE) is discussing in Strasbourg the complete abolition of death penalty in member states of the Council of Europe and the Moldovan Parliament wanted to have a certain contribution in this regard, hurrying up to adopt the necessary draft laws scheduled for another date.
• Law on modification of the law on National Bank of Moldova. It prohibits the crediting of the state and establishes a series of amendments recommended by international financial organisations. The law awards certain immunity to BNM governor and vice-governors, stipulating that they may be held, searched and arrested at the indication of the prosecutor-general only.
• Decision approving the report on execution of the 2005 state budget. The document voted by parliamentary majority approves the execution of the state budget comprising 9,062.1 million lei in revenues and 8,482.5 million lei in expenses, with a surplus of 579.6 million lei. The Government will ensure the publishing of the entire report on execution of the 2005 state budget report for 2005 in Monitorul Oficial. The PPCD faction did not vote the report and criticised the Government for how it has executed the budget, accusing it of inefficient expenses (for different investments incapable to bring profit), bad management of public funds (small taxes for renting of public goods), stagnated privatisation, reduction of exports and growth of trade balance. According to PPCD, the Government is incompetent in planning the real revenues, which have been "over expectations" in the latest period.
• Draft law on basic principles and mechanism regulating the entrepreneurial activity. The draft elaborated by Government was improved by the relevant parliamentary commission and experts, but a new document was presented to the Parliament and opposition lawmakers raised objections. All factions supported the general ideas of the document, but described the draft as "late" and "necessary for quite a long time." On the other hand, the draft was criticised for not containing some elements capable to ensure a free activity of entrepreneurs, protect them against controls and interference of state authorities and bodies. The document adopted in the first reading is based on a concept allowing the Parliament and the Government only to establish primary legal regulations on entrepreneurship, joined by some independent public authorities in charge with finances, securities, tariffs and regulations regarding telecommunication, energy, etc. The normative acts in the field will be published, while the second stage of the process of revision of regulations (the so-called "guillotine" procedure) will start on basis of effective legislative acts.
• Draft law on sustenance of small- and medium-sized business sector. The new law aims to substitute the Law # 112-XIII from 20 May 1994 concerning sustenance and protection of small business, an old document that requires essential changes of concept. Under the draft adopted in the first reading, the small- and medium-sized business sector will be made up of micro enterprises (with up to 9 workers, assets and annual sales worth maximum 3 million lei); small enterprises (with up to 49 workers, assets and annual sales worth maximum 25 million lei) and medium enterprises (with up to 249 workers, assets and annual sales worth maximum 50 million lei). Individuals practising entrepreneurial activity without being legal entities will be also considered subjects of small- and medium-sized business sector. The law proposes the indication of a series of enterprises which will not be covered by these provisions (leading economic agents; enterprises in which the state controls a large share; fiduciary companies, investment funds, financial-crediting institutions, exchange offices, etc. It proposes to regulate the activity of the non-commercial organisation for development of small- and medium-sized business sector. The draft contains superficial provisions on funds for sustenance of small- and medium-sized enterprises and state or local programmes aimed to support the activity of these businesses.
• Draft law on modification of some legislative acts on justice. The Parliament has passed in the first reading two draft laws seeking the modification of some regulations on status and activity of the judicial system, such as: the inclusion of three civil society representatives, entitled law professors in the judge qualification college; the periodical attestation of judges, once in three years, except for the judges holding higher qualification rankings; the introduction of disciplinary sanctions such as the "early attestation" and the "reduction to a lower rank"; the prohibition of an ex officio member (prosecutor-general, head of the Supreme Court of Justice and justice minister) to head the Superior Council of Magistracy; - the detailing and consolidation of the aleatory distribution of cases and continuity; - the conduct of proceedings in another language, with the condition that applications and legal documents are issued in Moldovan language only; - the video, audio recording of sittings with immediate transcription; - the right of the court head to create specialised panels for certain cases or categories of persons; - the organisational, technical-material and financial ensuring of courts, with the specialised contribution of directorate for judicial management in the apparatus of the Superior Council of Magistracy; - the availability of judicial commission by the Justice Ministry (not the Interior Ministry as at present); - the obligation to graduate from the National Institute of Magistracy for candidates to the post of judge, with some derogations; - the establishing of conflicts of interests for candidates to the post of judge; - the needed consent of the Superior Council of Magistracy for punishment of a judge under the Contravention, Penal or Civil Codes; - the patrimonial responsibility of the state for legal mistakes and right to regress against the judge who has committed a harmful judicial mistake with bad-will or grave negligence; - the enlargement of types of disciplinary breaches; the extension of competences of the Supreme Council of Magistracy and contestation of its decisions, etc.
• Draft law on completion of Article 4 of the law on healthcare. Under the document approved in the first reading, private medical-sanitary and pharmaceutical institutions will work in their private headquarters and rented hospitals, but "not in public medical-sanitary institutions." The Ministry of Health and Social Protection motivates the interdictions through appeals and requests of state medical institutions regarding their relations with private medical-sanitary facilities, observance of some unsatisfactory influences of activity of private and state businesses in the same building and cumulating of offices by employees of these services. The document was submitted in 2004, two years after the Parliament adopted its decision # 1395/17.10.2002 on findings of a control on execution of the law on minimum state-guaranteed free medical assistance, which empowered the Government and local public administration authorities to ensure some measures aimed at an efficient use of all rooms in state medical institutions and gradual exclusion of private economic agents from these institutions. The present situation registered when the draft law was passed in the first reading reveals that surfaces larger than 170,000 square metres are not used in public medical-sanitary institutions. Most of over 600 private health facilities rent place public institutions.
• Draft laws on modification and completion of the law on bar. One of the drafts passed in the first reading stipulates amendments resulting from recommendations of international organisations and justice reform strategy of Moldova. The key amendments refer to the creation of the commission for certification of the lawyer's work by the Bar (the commission is created now by Justice Ministry with the participation of elected attorneys), registration of officers of attorneys with the bar, and enlarged competences of the commission for ethic and discipline of the bar. Another draft proposed by a parliamentarian seeks the exemption of people who served more than five years as judges or prosecutors and ended their work "from non-imputable reasons" from professional training and qualification examination. Representatives of some parliamentary factions did not warm these proposals and labelled them as "lobbyist" and "discriminatory".

1.3. Parliamentary control. Declarations

Hearings

State of discipline and legality in army

Lawmakers have heard a report on control of military discipline and legality in the National Army. They ascertained better indicators, including on social and pecuniary welfare of military and their families, training of soldiers and military serving on basis of a contract. At the same time, the crime rate remains alarming and a higher gravity of offences committed by military is observed. Many military escape from units, while persons sentenced for contraventions and offences continue to serve in armed forces, they are promoted to post and rankings. Soldiers are rallied for private works incompatible with their status and military regulations. Many fields of military institutions and units are imperfectly used, a situation requiring a better management. The Defence Ministry acknowledges many of the invoked shortcomings and violations, but says that the army is "a mirror of society" and the situation is caused by objective and subjective factors typical to society in general. The Defence Ministry proposes the following solutions: prohibited recruitment of persons with antecedents; revision of the alternative service system, which is almost inapplicable; appropriate financing of the National Army; improvement of military record mechanism and limited issuing of identity acts to future soldiers, etc.

The examination was preceded by strong debates on correction and legality of a control based on an order of the speaker, whom the legislation does not empower with such competences. PPCD has raised most of objections, including related to control and promotion of draft decision on report, as this parliamentary faction was not represented in this control group. PPCD representatives said that the control aimed to create a negative image to the acting leadership of the Defence Ministry, but it spoiled the image of the army in general, an inadmissible situation under present conditions, when relations with the separatist authorities of Transnistria are tense.

Respect for human rights

The Parliament has heard the report of the Human Rights Centre on respect for human rights in Moldova in 2005 and a communication on activity of the Human Rights Centre drafted by the parliamentary commission for human rights. Lawmakers have adopted a decision on this report, signalling some difficulties in functioning of the Human Rights Centre caused by formal attitude of structures in central and local public administration towards appeals of ombudsmen on violation of human rights and fundamental freedoms, lack of efficient measures to ensure the financial and technical-material condition of the centre, and some faults in activity of ombudsmen regarding execution of the law on ombudsmen and provisions of the national action plan on human rights for 2004-2008. legislators invited ombudsmen to use more efficiently the right to lodge applications to the law court in order to defend the interests of petitioners; to take attitude toward violations and abuses in functioning of the judiciary system, to cooperate more actively with nongovernmental organisations that protect the human rights and fundamental freedoms; to table proposals on improvement of national legislative acts on human rights and fundamental freedoms; to strictly supervise the good functioning of democratic institutions of state, etc. The decision contains a series of instructions for Government, which will have to remedy the signalled shortcomings and to take measures to endow the centre and territorial branches.

Execution of the ECHR judgment

The Justice Ministry has replied an interpellation of Deputy Oleg Serebrian regarding the actions taken by Moldova to release political prisoners Andrei Ivantoc and Tudor Petrov-Popa, in line with the European Court of Human Rights' judgment. The deputy justice minister told the Parliament that "the Moldovan authorities have notified the Committee of Ministers of the Council of Europe with regularity regarding the actions taken to release the prisoners," "with the Government continuing its efforts with the purpose to fulfil its tasks by transmitting a May 15 order by prime minister that instructs ministries, departments and other state bodies to continue their efforts, including to raise this problem at meetings with counterparts from member states of the Council of Europe (CoE) and European Union (E.U.)." As regards some facilities for families of the two prisoners from Tiraspol, the Justice Ministry does not hold any information and asked other departments to present cogent data, "which are being collected and will be delivered in written form."

Questions and interpellations

PPCD Deputy Stefan Secareanu demanded at the end of the June 15 plenary session the re-evaluation of sittings on questions and interpellations because only 23 legislators were present in the sitting hall then.

PPCD Deputy Adriana Chiriac has asked the speaker and the prime minister to stop the escorting of their automobiles with security and traffic police cars because they block the traffic and challenge negative reactions from motorists and pedestrians. She noted that traffic police escorting and official suite have spoken harshly to motorists of cars in a street of Chisinau, including Chiriac who was accompanying a foreigner. Being unsatisfied that dignitaries did not answer her question and proposal, Deputy Chiriac has asked the Ministry of Finance to report on state budget expenses for security and transport of the prime minister and speaker.

PSL Deputy Valentina Golban has solicited the Tax Inspectorate to report on activity and payment of social taxes (state social insurance taxes) by Chisinau-based large commercial enterprises in 2000-2005. Earlier, AMN Deputy Valeriu Cosarciuc has said that the main commercial enterprises based in Chisinau had paid very low taxes to the budget, declaring officially annual revenues of maximum tens of thousands of dollars.

PCRM Deputy Arcadie Pasecinic has asked the Chisinau City Hall to report on reforms in municipal structures in charge with management of dwelling place. According to the lawmaker, the municipal housing management enterprises are being closed, while the municipality is willing to transmit the administration to associations of lodgers, which are not prepared to take over these functions.

Deputy Ivan Banari has asked the Government to report on enforcement of the governmental decision on implementation of the automatic information system called State Nomenclature of Drugs adopted earlier this year. According to the lawmaker and representatives of associations of pharmacists and small business, this decision makes many small pharmacies go bankrupt because of the dear endowment needed for further activity.

AMN Deputy Alexandru Lipcan has submitted an interpellation to the prime minister and justice ministry, invoking the violation of the right to private property. Lipcan invoked some buildings of the Moldovan University of Humanities, which was lifted from licence and now the police are trying to deprive the institution of higher learning of goods that it is claiming to own legally.

PPCD Deputy Stefan Secareanu has asked the State Service for Religious Denominations to report why it delays the registration of the Diocese of South Bessarabia, which is part of the Metropolitan Church of Bessarabia. Secareanu claims that the non-registration of a component of religious denominations may gravely affect the image of Moldova, which is still monitoring for not executing completely the ECHR judgment on Metropolitan Church of Bessarabia (the Moldovan authorities should adopt a new law on religious denominations).

Another PPCD lawmaker, Valentina Serpul, has asked the minister of education and the rector of the State University of Moldova (USM) to report on education of the director of the State Agency for Constructions, Igor Semenovker. According to information held by lawmaker, Semenovker has graduated from accountancy faculty of USM, but the archives of the university do not include data to confirm that this dignitary holds a higher education diploma.

Statements

Deputy Dumitru Braghis, leader of the Moldovan Party of Social Democracy (PDSM), has read a declaration reiterating previous proposals to improve situation in economy. He raised dissatisfaction that his proposals have been turned down and accused that the entire activity of the Government, majority faction and all state structures "aims to glaze the image of the governance and to hide real information about national economy." The PDSM leader fears that the Parliament is turning into a voting machine, without being told the economic situation, and it is attracted in promotion of projects that politicise opinions, challenge social confrontations aimed to distort the attention from urging problems of society.

PCRM Deputy Valeriu Calmatui has told the Parliament that certain opposition lawmakers try to present a negative situation only. He assured that higher gas prices will not strongly affect the national economy because the gas holds maximum 20 percent in economy. The Communist parliamentarian outlined that it will be clear what price Moldova will pay for the natural gas of Gazprom only after finalisation of negotiations and signing of a contract with the Russian giant.

PCRM Deputy Grigore Petrenco has read a statement invoking the appearance of "some forms of dangerous, anti-social extremism opposed to values of civilised Europe." Petrenco indicated an article titled "Acum 65 de ani cerul era al romanului" (The Sky Belonged To Romanian 65 Years Ago) published in the June 23 issue of newspaper Timpul, which spreads the war and invokes the superiority of a nation over another nation. He asked the Parliament to take attitude toward this problem and to disseminate the declaration to ambassadors of CoE member states and the U.S. Embassy to Moldova.

Government

2.1. Rules. Reshuffles

The Government has proposed the appointment of Alexei Tulbure to the post of extraordinary and plenipotentiary ambassador, resident representative of Moldova to the United Nations. Tulbure has recently been recalled from the port of resident representative of Moldova to the Council of Europe and this post is still vacant.

The Government has relieved PPCD Deputy Valentina Cusnir from the post of deputy director of the Moldova-Vin Agency at the request of the agency administration. Cusnir did not hand over her mandate of deputy in the due term and she was incompatible for this office.

2.2. Decisions

• Decision approving the action plan of the Government for the 3rd quarter of 2006. The executive intends to adopt national programmes, to promote draft laws on traffic security, protection of soils, monuments, etc., to the Parliament.
• Decision on medical expertise of vitality. The regulation of the republican council for medical expertise of vitality and instruction on ascertainment of invalidity was approved. Earlier, the chief of state, parliamentarians, the Prosecutor's Office and the Centre for the Struggle Against Economic Crimes and Corruption have invoked shortcomings related to expertise of vitality and high corruption rate in the system, findings that the central leadership of this institution did not deny.
• Decision on unit of analysis, monitoring and assessment if policies in specialised central bodies of public administration. The document issued on June 23, in line with the central public administration reform strategy obliges several ministries (of justice, agriculture, industry, transportation, education and health) to create some units of analysis, monitoring and assessment of policies. The document approves a framework regulation of the unit, which will hold the status of self-governing structural subdivision.
• Decision changing the names of some lycees. The executive has ordered the change of the names of high schools containing "Moldovan-English, French, Italian, German lycees" into "theoretical lycee". De facto, the changes suppress the word "Romanian" used for a long time to identify these lycees after 1991.
• Decision approving the note to the draft initiative on denunciation of the memorandum on normalisation of relations between Moldova and Transnistria. The Government has turned down a proposal of opposition lawmakers to denounce the 1997 memorandum, saying that the document was signed during negotiations and it is not an international legal act in terms of national and international legislation. Therefore, the document cannot be denounced like international treaties given the restricted legal validity.
• Decision approving priorities of the 2007 tax policy. The annual personal exemptions for individuals are expected to grow (from 4,500 lei up to 5,400 lei, while for maintained persons from 840 lei up to 1,440 lei). The reduction of income tax will be insignificant: from 8% down to 7% and from 13% down to 12%. The maximum tax is maintained at the level of 20% (for monthly revenue higher than 1,750 lei). Economic agents who place their money in commercial banks for more than three years or purchase securities maturing in over three years, businesses who make capital investments will be exempted from income tax.
• Decision on issuing of single printed forms for registration of certificates of birth, marriage or death. Thus, the Ministry of Information development will elaborate and implement a single system of registration of certificates of birth, marriage, paternity, and change of name or surname, divorce, death, adoption. The earlier issued certificates will be effective in continuation.
• Decision on support of young medical specialists. According to the approved document, graduates from post-university, secondary medical and pharmaceutical education employed in rural localities accordingly to assignment of the Ministry of Health and Social Protection will benefit of certain facilities in the first three years of work: a 30,000-leu single indemnity for doctors and 24,000 lei for nurses (paid in parts of 7,500 lei and 6,000 lei after the first month of work and at the end of every year of work); free residence offered by local public authorities for the period o work in their locality (compensation of the rent tax); monthly compensation of the cost of 30 kW of electricity and annual compensation of a cubic metre of wood and a ton of coal. It should be noted that it was earlier decided to offer the same facilities to young teachers, but this experiment was not summarised until now but media institutions reported that the authorities are disappointed with the effect of these facilities.
• Decision on allocation of finances. The Government has obliged the Ministry of Finance to allocate from the reserve fund of the executive and "from account of general revenues of the state budget by establishing the source to cover them when the 2006 state budget law will be modified":
  1. 3.8 million lei to the Ministry of Industry and Infrastructure for projection of the high pressure gas branch pipe Tocuz-Cainari;
  2. 1.09 million lei to the Ministry of Foreign Affairs and European Integration for renovation of offices inside the ministry;
  3. 33,900 lei to the Government's Apparatus to cover expenses related to the visit of baroness Emma Nicholson Winterbourne, member of the European Parliament, to Moldova.
• Decision on reorganisation of the State Guard Service of the Interior Ministry. The document stipulates the reduction of the service effective by 400 units in 2006 and 300 units in 2007 by dismissing personnel. Also, it calls for the reorganisation of the service into a state-owned enterprise founded by the Interior Ministry.

2.3. Sittings. Decisions. Declarations

Meeting at Gazprom

On June 22 Prime Minister Vasile Tarlev met Alexei Miller, head of the Management Board of the Russian giant Gazprom. According to an official press release of the Government, "the sides have tackled various sides of the bilateral cooperation at the meeting." Tarlev told Miller the measures taken by Chisinau Government to create a tax preference system for the implementation of investment projects in Moldova. The sides studied perspectives of participation of the gas giant Gazprom in implementation of investment projects in energy sector of Moldova. They decided to study and to work out by October a series of issues related to the signing of a long-term natural gas delivery contract for Moldova. The sides agreed "to jointly elaborate and coordinate by end of this month the conditions for delivery to Moldova and transit of natural gas in territory of the country in the 3rd quarter of 2006."A communication published on the website of Gazprom said that the sides have "examined the problem of signing of long-term agreements" while the price will be determined by "price formula". At the same time, Gazprom is planning to deliver gas to Moldova for 160 dollars per 1,000 cubic metres.

Dissatisfaction with situation in civil aviation sector

The prime minister has raised dissatisfaction with the situation in civil aviation sector and demanded the State Administration of Civil Aviation (ASAC) to report on activity held in the field in 2005 and in the first half of this year. Vasile Tarlev invoked the lack of an efficient cooperation between ASAC and subordinated enterprises, inefficient expenses, insufficient completion of the airship operator.

Preparation for winter

The governmental commission for the preparation of national economy for the heating season 2006-07 has heard a report on measures taken by relevant institutions. According to the report, many auctions have been held to acquire coal, while more than one billion lei has been foreseen in the state budget for heating sector, of which 320 million lei was already spent. The prime minister chaired the sitting and asked competent authorities to take measures in districts in order to preserve energy and to optimise expenses for energy resources. Vasile Tarlev demanded local programmes on energy conservation and reasonable use of unused spaces, as well as the finalisation by July 15 of auctions for acquisition of fuels needed by public institutions.

Activity of the Ministry of Foreign Affairs and European Integration

The minister of foreign affairs and European integration has summarised at a news conference the activity of the ministry in the first half-year. Andrei Stratan named the following accomplishments: Moldova's full rights membership to the South East European Cooperation Process; progresses inside GUAM; intensification of relations between Moldova and NATO. As regards tasks, he indicated the intensification of the dialogue with the European Union regarding the simplification of visa regime; cooperation in energy sector; monitoring of the process of coordination of the national migration management system; signing of an asymmetrical trade agreement with the E.U. Stratan firmly reiterated the European integration course of Moldova, saying that the Moldovan authorities will demand the signing of an association agreement with the E.U. after implementation of the Moldova-E.U. Action Plan.

Wine promotion

A sitting on promotion of Moldovan vine and wine production to foreign markets, convoked by Premier Vasile Tarlev, has decided to create special teams including representatives of special structures to promote this production in different countries. The results of recent exhibitions and promotions of Moldovan wines hosted by different countries, international and regional organisations come to support this idea. At the same time, the Moldova-Vin Agency is finalising special wine promotion programmes.

Situation of oil market

The prime minister has convoke a sitting with the participation of representatives of relevant state structures and companies importing oil products, which ascertained that the domestic market does not face a deficit of fuels. However, prices of fuels are established in dependence of fluctuations on international market, accordingly to principles of market economy and the prices cannot be maintained in an administrative manner. Representatives of oil companies have posted intention to import bio Diesel, but the normative framework and internal standards in Moldova must be adjusted for this purpose (state structures will take measures in this regard at the indication of Vasile Tarlev). The prime minister said that the Government is working to reduce the negative impact of higher gasoline and Diesel oil prices on economy, especially on activity of farmers, and a big hope for this purpose is invested in the Giurgiulesti oil terminal.

Sustenance of domestic producers

The Government hosted a sitting on activity of the working group created to assess problems of domestic producers, at the recommendation of the autumn 2005 forum themed Investment Climate in Moldova. Appreciating the activity of this group, the prime minister warmed proposals to apply customs duties for imports appropriately and "warned against need to continue with principledness the policy on reduction on bureaucratic barriers on way of entrepreneurs." Vasile Tarlev also indicated the "opportunity to reduce in continuation the groundless involement of control vodies in entrepreneurial activity, the number of authorisations and certificates needed by entrepreneur." The premier invited state and nongovernmental bodies to take joint actions in order to create conditions of work for domestic producers. Press services fell short of revealing whether the prime minister assumed these appreciations and calls for the further implementation or he told hi opinion to businessmen and representatives of state structures who attended the sitting.

3. Presidency

3.1. Decrees

The president of Moldova signed a decree on June 15, giving green light to applications of 14 citizens for the Moldovan citizenship and two decrees allowing 172 persons to renounce to the Moldovan citizenship.

On Friday, June 23, the chief of state signed a decree awarding the Honour Order to Mr. William Hill, head of the OSCE Mission to Moldova, for special merits in developing cooperation between the OSCE and Moldova, substantial contribution to consolidation of stability and regional security and intense peacekeeping activity.

The Moldovan president has also handed in the Civic Merit medal to Mr. John H. Winant, outgoing adviser for the U.S. Embassy to Moldova. The adviser for the U.S. Embassy was awarded the medal for substantial contribution to development and deepening of Moldovan-American collaboration.

3.2. Sittings. Decisions. Statements

Visit to Brussels

The Moldovan president paid a working visit to Brussels, Belgium, on June 21-22 and had a series of meetings with officials of European institutions, NATO and the Kingdom of Belgium. The talks mostly focussed on Moldova's European options; energy and economic security; Transnistrian settlement; deepening of cooperation.

The chief of state has met Deputy NATO Secretary-General Alessandro Minuto Rizzo and discussed the implementation of the Moldova-NATO Individual Action Plan. Voronin outlined that Moldova remains a neutral state, accordingly to Constitution, and the stance on entry in NATO will not change. The NATO representative said that the organisation and allied states will support in continuation the Moldovan authorities to implement the Moldova-NATO Action Plan. In particular, he reiterated the support of the Alliance for an unconditional fulfilment of the commitments on withdrawal of ammunition and weapons from Transnistria by the Russian Federation.

President Voronin and E.U. Council Secretary Javier Solana have discussed issues related to the implementation of reforms and latest economic developments registered in Moldova. Solana appreciated the signing of the agreement with the International Monetary Fund and the Paris Creditors Club. The sides also tackled measures for reformation of justice, human rights, consolidation of the state based on the rule of law, and relations of Moldova with neighbours, regional organisations and E.U.

Commissioner for External Relations and European Neighbourhood Policy Benita Ferrero-Waldner has highlighted good paces of fulfilment of the Moldova-E.U. Action Plan at a meeting with President Voronin. However, the European official recommended the Moldovan authorities to be more insistent in reforming the justice and mass media. Ferrero-Waldner noted that she supports the initiative of European Commission Vice President Franco Frattini to open an information centre of the E.U. in Chisinau to issue Schenghen visas, with the European Parliament being expected to make a final decision on this issue.

The Moldovan president has told a meeting with journalists that he does not regret the approach to the E.U. and Moldova must "do its best and as soon as possible to honour its commitments and to join the E.U." Voronin noted that economic and political actions of the Russian Federation are a consequence and a "price that we are paying for independence, integrity and sovereignty." As regards the E.U. visa problem for Moldovan citizens, Voronin outlined the unfairness that Moldovans will face after 2007, when Romania will join the E.U. Many Moldovans will enjoy facilities o enter the Schengen area with the Romanian citizenship, while others will be deprived of this right. In this regard, the Moldovan authorities hope to complete negotiations on facilitation of visa regime for Moldovan travelling to the E.U. and introduction of trade preferences for Moldovan wine exporters as soon as possible.

Dissatisfaction with anti-corruption struggle

Vladimir Voronin has raised deep concern with the level of coordination of activity of the domestic security service SIS and the Centre for the Struggle against Economic Crimes and Corruption (CCCEC) at a joint sitting of SIS and CCCEC colleges. The chief of state demanded the achievement of a set of proposals aimed to ensure a deep and efficient cooperation between CCCEC in preventing, discovering and combating corruption. In particular, the president highlighted the need to focus and to coordinate the efforts of SIS and CCCEC against the so-called big corruption: among state dignitaries, law and control bodies, legal institutions (but it was not said if the law enforcement bodies, the police, the security and anti-corruption services are also included). CCCEC and SIS must join their efforts till a legitimate finalisation of discovered corruption acts, it means till adoption and execution of final verdicts.

According to a press release, Vladimir Voronin said that the state will not tolerate corruption, regardless of posts and persons," and he demanded a urgent examination of opportunities to improve the legislative framework ensuring a control on dignitaries who will be promotes to posts (perfecting of legislation on public service, obligation of dignitaries and their families to declare their revenues and expenses, including if promoted to a post or transferred to other functions, etc.). In order to analyse the factors and conditions fuelling corruption, Voronin insisted on creation of a structure in CCCEC to make anti-corruption expertises of draft laws submitted to the Parliament, with the participation of specialists from different state structures, experts, civil society representatives, etc. It was proposed to analyse, generalise and regulate the punishing practice appropriately, to speed up the amendment of Constitution and legislative framework in order to allow the confiscation of property in case of corruption, terrorism, money-laundering, etc. The president recommended relevant authorities to stop the abusive hiding of public information as an efficient measure.

Sitting on situation in banking sector

According to the presidential press service, Vladimir Voronin convoked a working sitting on June 24 with the participation of heads of commercial banks and governmental decision-making officials, to examine the current situation in the national banking sector, impact of export restrictions on the Russian Federation's market and strategic actions aimed at sustenance and development of the vine and wine sector through financial-bank mechanisms. The governor of the National Bank of Moldova (BNM) has reported on relations between banks and economic agents working in vine and wine sector, concluding that commercial banks for not face a very complicated situation. According to estimates of BNM, credits released by commercial banks to this sector cover only 8 percent of assets and about 14 percent of the total volume of granted credits. The distribution of these credits in the sector is favourable: the production enlargement covers 20 percent of the volume of obtained credits, while circulating means 80 percent, the BNM governor noted. Heads of banks participating in sitting confirmed that the situation in the field is calm, but noted that some individual activities are needed very much in order to establish a further development strategy for businesses.

Ascertainment of shortcomings in implementation of pilot projects

While on a visit to Calarasi, the Moldovan president has visited the hospital in the locality, which is renovated and modernises within a pilot project. Vladimir Voronin found out that the medical-sanitary institution is cosmetically repaired, but this is not enough for a capital modernisation and renovation of the hospital, in line with the concept and tasks of the pilot project, so that he ordered the suspension of works until resources are identified and the state of things is settled.

Meanwhile, the chief of state has convoked a sitting on implementation of pilot projects aimed to strengthen the technical-material basis of medical-sanitary institutions in the district centres of Glodeni, Calarasi and Ceadir-Lunga. The chief of state raised big dissatisfaction with the implementation of the pilot project in Calarasi, where the repairing works conducted by authorities unfit the established criteria because of the shortage of funds, and they are not profound and quality. The chief of state indicated the inefficiency and uselessness of continuing the works accordingly to the established scheme, calling for the change of the concept and principles of implementation of pilot projects on consolidation of technical-material base of medical-sanitary institutions. Voronin ordered the elaboration of a set of new proposals and the revision of the existing mechanism of co-participation and co-financing by district public bodies and central authorities in pilot projects.

Control on building of Wine City

Vladimir Voronin has convoked a sitting on the Wine City building project and highlighted that the success of this project for the reputation of Moldova as wine producer and enlargement quality of vineyards or implementation of modern technological standards in wine making industry are important in the same measure. Besides the goal of exhibition, business and entertainment centre, the Wine City will attract tourists and will be included in the national tourism development programme. According to information released at the sitting, the building works could start next spring. According to the concept, the residents of the Wine City - wine enterprises based in country - will be accepted at a tender and they will construct a building for multiple uses, aimed to represent concrete businesses. A part of residents' funds will be invested in infrastructure of the Wine City, which will be an integral, functional body with modern engineering and communication networks. In this context, the chief of state has asked that contracts with future resident economic agents stipulate very strictly the conditions of activity within the project, in order to avoid any violation of the initial concept of Wine City.

Economic Policies

1. Real sector

GDP is diving...

The economic growth for the 1st quarter of 2006 (January-March 2006) exceeded 6% (about 6.2%). According to data of the National Bureau for Statistics (BNS), GDP accounted for about 8.45 billion lei (635.7 million dollars) in January-March 2006. This indicator was 8.2% in Moldova in January-March 2005 and 7.1% in 2004. Both the Government and the International Monetary Fund forecast a slower evolution of GDP for 2006, down to 6.5%.

Moldovan industry is regressing in continuation...

According to BNS accounts, the industrial production declined by about 7% in January-May 2006, compared with the similar period of last year, down to 7.8 billion lei. The reduction of industrial production was particularly marked by a crisis in wine making sector. The wine industry, which covers more than 13% of the Moldovan industry, declined by 38% in the first five months of this year and therefore reduced the overall industrial production by 7.3%.

At the same time, producers of distilled alcohol drinks have reported a 17% decline, oils and fat - 12%, tobacco products 21%, machines and equipment - 14%, editing and polygraph works - 10%, fruit and vegetable processing and canning - 7%. At the same time, some activities have grown in the period concerned, but this did not cover the declines in basic branches of national economy.

...but officials say that things will change in agriculture

In spite of all problems faced by agriculture, the Ministry of Agriculture forecasts a 4% rise of agricultural production for this year, anticipating the growth of some indicators in several sectors. According to forecasts, the livestock will grow the most - by 7.4%. The agricultural production was valued at 9.19 billion lei in 2005, by only 1% more than in 2004.

2. Tax policy

Government tables some amendments to tax policy for 2007...

The executive proposes among others that the annual tax exemption for individuals be 5,400 lei in 2007, compared with 4,500 in 2006, while the exemption for maintained people grow from 840 lei up to 1,440 lei. The cabinet of ministers has already approved some amendments and completions to the tax policy for 2007.

In addition, the Government has approved some amendments seeking, in particular, the reduction of income tax for individuals, adjustment of excise stamps for weak alcohol drinks to inflation rate. Also, the document exempts from income tax the economic agents that deposit their money in commercial banks for more than three years.

The state will encourage businesses making capital investments, and it will annul the VAT for building of residential blocks starting 2007. In this context, the new taxation system for different categories of real estate at their market value will be gradually implemented starting 2007. The government has excluded provisions on taxation from effective legislative acts, as they are part of the Tax Code.

3. Prices in inflation

Moldova is threatened by inflation clouds...

The inflation rate exceeded 7% in January-May 2006 after it was 5.5% in the similar period of 2005, growing up to 7.2%, as the monthly rate of 1.2% has revealed the highest price rise registered in May after 2002. This evolution was related to higher prices of food products, especially fruits and vegetables, as predicted by officials as well.

A bad news regarding inflation has come from oil market, where international rises have made domestic operators increase the gasoline and Diesel oil prices and they will likely do the same the next months. The state of things regarding inflation will be worse if the gas giant Gazprom increases the natural gas price for Moldova.

4. Banking sector

Banks in Moldova are capable to prevent a system crisis...

Although the exact size of loans released by domestic banks to wine makers (who are among biggest consumers of credits) is unknown, many analysts have hinted that the banking sector of Moldova could enter a system crisis after Russia has restricted the importation of Moldovan wines. However, many bank officials have denied these fears at a working sitting convoked by chief of state with heads of commercial banks last week.

Banks in Moldova hold enough resources to remedy any consequences of the crisis faced by wine sector after the Russian Federation has restricted the Moldovan wine exports. Even more, the National Bank governor has announced that the share of credits released by commercial banks to the wine and vine sector covers only 8% of their assets (more than 100 million dollars) or 14% of the total volume of granted loans. On the other hand, bankers decided that it is very necessary to take some intense individual measures with enterprises, aimed to establish a strategy on their further development, as well as bank assistance directions for the vine and wine sector.

Their assets grew by over 7.5% in period concerned...

The total assets of the Moldovan banking system grew by over 7.5% in the first five months of this year, up to about 19.37 billion lei (approximately 1.46 billion dollars). The assets have grown by about 35% compared with the similar period of 2005. Bonds of banking system have grown by 7.7% by late May, up to 16.15 billion lei, while the total normative capital of banks has risen by 7.3%, up to 3.08 billion lei.

According to BNM statistics, the total credits have grown by 12.73%, while total deposits have risen by 5.54%, up to 14.5 billion lei. At the same time, deposits have dropped by 119.8 million lei compared with late April, this being a consequence of some allegations that the banking system will face a crisis after the Russian Federation has restricted the Moldovan wines.

...while state's currency treasury is on the decline

At the same time, the currency reserves of BNM declined by over 9 million dollars (about 1%) in June, down to 636.2 million dollars (8.44 billion lei). According to data of the central bank, the currency reserves declined after the Government has honoured some external payments, due to interventions of BNM on currency market and oscillations of leu/dollar exchange rate.

The reserves have especially declined after they rose by 37.91 million lei in May, as the first part of about 17 million dollars from the 118.2 million dollars credit of the International Monetary Fund entered the account of the central bank and due to currency purchases of the National Bank on domestic market. The programme with IMF stipulates currency reserves in the amount of 750 million dollars for this year, by 152.6 million dollars more than in late 2005.

Report on activity of National Bank in 2005 released...

According to the report, BNM purchased foreign currency in the amount of 174.8 million dollars last year in a move to calm down excessive fluctuations of national currency. As a result, the state's currency reserves have grown by 127.1 million dollars or 27%, up to 597.4 million dollars in late 2005.

These operations have increased the monetary mass by over 31%, the supply of money in circulation by 23.5% and the bank reserves by over 50%. The monetary mass M2 increased by 36.7% last year, including deposits in lei by 47.7%. Deposits in foreign currency calculated in dollars have grown by 27.4%. Evolution of monetary mass M2 has increased the monetisation level up to 30.3%, compared with 25.4% in 2004.

The surplus of foreign currency on domestic market was the main problem of the state bank in 2005. The essential rise of the volume of remittances from abroad and the growth of collections from exports in 2005 should challenge an excessive appreciation of the national currency versus main convertible currencies. Under these conditions, BNM carried out a series of operations last year to purchase the surplus of currency through direct issues, in order to minimise the effects of the currency supply.

5. Labour market

Medium monthly salary on economy up by 27% in January-May...

According to BNS data, the medium monthly salary in January-May accounted for 1,515 lei and grew by 27% compared with the similar period of last year. The medium salary in the budgetary sector amounted to 1,282 lei in January-May 2006, while in the real sector of economy it accounted for 1,643 lei.

Employees of the financial-bank sector have earned the highest salaries in the period concerned - 3,583 lei, followed by workers in transportation and communication sectors - 2,385 lei, constructions - 2,008 lei, industry - 1,911 lei, public administration - 1,671 lei, etc. At the same time, employees of agriculture and forestry earned the least - 683 lei, fish breeding - 1,076 lei, education - 1,182 lei, healthcare and social assistance - 1,226 lei.

6. Foreign sector

Moldova seeks external help for wine crisis...

The International Organisation of Vine and Wine (OIV) proposes its assistance to Moldova and Georgia after the Russian Federation has restricted the wine imports. The three countries are signatories to the April 3, 2001 Agreement on creation of OIV and this document obliges OIV to mediate the conflicts if a signatory party appeals to this international organisation. The Moldovan and Georgian Ministries of Agriculture have recently appealed to OIV, raising concern with Russia's restrictions.

The OIV is an intergovernmental organisation of a scientific and technical nature or recognised competence for its works concerning vines, wine, wine-based beverages, table grapes, raisins and other vine-based products. The organisation was created on April 3, 2001 and has 41 member countries (inclusively Moldova, Russia and Romania) and 5 observer countries (inclusively Ukraine) and observer organisations (national and international vine and wine federations and associations).

Romania's entry in E.U. will poise trade balance with Moldova...

Romanian officials say that the January 1, 2007 scheduled entry of Romania in the European Union (E.U.) and the suspension of the free trade agreement between Moldova and Romania will poise the trade balance between the two states. The foreign trade between Romania and Moldova turned over about 412 million dollars in 2005, with a negative balance of 240 million dollars for Moldova. Moldova's exports to Romania totalled 85 million dollars, while imports turned over 326 million dollars.

The situation could change after January 1, 2007, as the Romanian export will be taxed in the same measure as other E.U. member states, while Moldova benefits of the GSP plus system which allows the exportation of about 7,200 names of products to the E.U. without paying customs duties. The new trade regime (if Moldova and Romania sign a bilateral agreement) will affect the bilateral trade at a first stage until situation will normalise and companies will get used to the new taxation system. Exports from Romania will be influenced most as they will be in a stronger competition with those of other European countries besides new taxes.

Once Romania joins the E.U. on January 1, 2007, Bucharest will withdraw from all free trade agreements, including with Moldova. Romania's entry in E.U. will mean the entry in a new legal framework of foreign commercial relations. Besides the Central European Free Trade Agreement (CEFTA), Romania has signed free trade agreements with Moldova, Turkey, Israel, Serbia-Montenegro, Albania, Bosnia and Herzegovina, and the European Free Trade Association. Chisinau says that the suspension of the free trade agreement with Romania will not affect the trade exchanges, being optimistic to obtain an asymmetrical trade regime with the E.U. in 2007.

Transdnistrian Conflict

EU, Ukraine will continue efforts aimed at Transnistrian conflict settlement

During his visit to Brussels on 21-22 June, President Voronin had a meeting with the EU High Commission for the Common Foreign and Security Policy, Javier Solana, during which the two also discussed the Transnistrian issue. According to a presidential press communique, Solana reconfirmed EU readiness to contribute to the identification of a political solution to the Transnistrian issue. Taking the opportunity, President Voronin thanked the high European official for the efforts made towards a settlement of the conflict and praised the results of the EU Border Assistance Mission.

During the same period, Boris Tarasiuk, Ukraine's Foreign Minister, visited Chisinau, where he discussed with Moldovan officials bilateral cooperation, including in settling the Transnistrian conflict. At a press conference on 26 June, Tarasiuk assured Moldova hosts that Ukraine's position on Transnistria or on the monitoring of the Ukrainian - Moldovan border will not change after the new Ukrainian Government is formed.

Tarasiuk accused Russia and the Transnistrian authorities of blocking the negotiations process, but said Ukraine hopes to find the necessary arguments to bring all the participants in the political talks back to the negotiations table, maybe even by July or August this year.

Asked about Ukraine's reaction to a possible independence referendum in Transnistria, the chief Ukrainian diplomat said the results of the referendum will not be recognised by Ukraine, as they will not be recognised by the OSCE and the EU. Tarasiuk ruled out any parallels between the situation in Montenegro and eventually Kosovo and Transnistria. "In our case, there are absolutely no legal foundations to raise the question of independence of Transnistria", he said.

Moldovan policemen detained in Tiraspol

On 14 June four policemen of the Bender Police Commissariat and one employee of the Moldovan Ministry of Interior were detained by Transnistrian security services in Tiraspol without putting any reasons forward.

The Moldovan Ministry of Foreign Affairs and European Integration called the incident a provocation from the break away secessionist regime. According to the MFAEI, at the moment of detention, the Moldovan policemen were in Tiraspol on for business and personal reasons.

Three of the five policemen were released on 17 June without any explanation. Moldovan Interior Minister, Gheorghe Papuc, was quoted by Infotag as saying that the three were tortured and administered psychotropic medication by the transnistrians.

The other two policemen were released on 26 June. According to sources from the Moldovan Reintegration Ministry, quoted by Info Prim Neo, the release was possible due to the intervention of the Russian Federation.

After the incident, the head of the Transnistrian security services, Vladimir Antiufeev, told the press the Moldovan journalists were in Tiraspol to kidnap Ivan Burgudgi to prevent him from running in the Baskan election in Gagauzia scheduled for end of 2006. Antiufeev said that although the Moldovan policemen were released, the criminal investigations against them will continue. He threatened that should Moldovan authorities' "criminal intentions" on Transnistrian soil continue, "we will use our weapons, including to kill".

Russian governmental delegation visits Tiraspol

On 21 - 22 June, a Russian inter-departmental delegation paid an official visit to Tiraspol. The delegation was led by the deputy Chairman of Russian Cabinet, Ghenadi Bukarev and consisted of representatives of the Russian Security Council, Foreign Ministry, Social Development Ministry, Pension Fund etc. According to Regnum.ru, which quotes sources from the Transnistrian information department, the aim of the visit was to develop the common protocol signed by Transnistrian leader Igor Smirnov and Russian First Deputy Premier Alexandr Jukov on 23 May in Moscow.

At the end of the visit the Director of Russian Department for the Ministry of Health and Social Development, Serghei Dontov, said that the main subject discussed during the visit was that of ensuring with pensions and other social benefits the Russian citizens living in Transnistria. According to Dontov, the Russian Government will in the next couple of months adopt a normative act in this sense and ensured his hosts that Transnistrian pensioners will start receiving their Russian pensions by end of 2006.

Asked about the legitimacy of these actions of the Russian Federation in Transnistria, Dontov referred to a Russian Constitutional Court ruling: "The legal status of a territory does not matter. The Constitution of the Russian Federation guarantees all Russian citizens, wherever they live, all forms of social assistance", Regnum.ru reported.

According to data of the population census conducted by the Transnistrian authorities in late 2004 (without the participation of the Moldovan authorities), about 56,000 Russian citizens live presently in Transnistria (about 10% of all population).

FSU unrecognised regimes found "intergovernmental" community

On 14 June in Suhumi, the capital of the break away region of Abhazia, took place the "summit" of the de facto leaders of the unrecognised republics of Abhazia, South Ossetia and Transnistria. At the end of the meeting, the break away leaders signed a Common Statement whereby they proclaimed the creation of the "Community for Democracy and Peoples' Rights". Qualified by observers as an "anti-GUAM", the self styled community of the "unrecognised" does not only provide for political and economic cooperation among them, but also envisions the creation of collective peacekeeping forces that could replace the Russian peacekeepers currently deployed in the respective regions.

"Today we showed once more to the entire world our intention to build democratic states. The fact that in any situation one has to take into account the opinion of the people has been confirmed during the press conference in Saint Petersburg by the Russian President Vladimir Putin [which took place after the Russian - Georgian summit on 13 June]. Our people have lived with Russia and will continue to fortify good neighbourhood relations with Russia", the Abhaz leader, Serghei Bagapsh, told the journalists, quoted by Kavkaz-press, during a joint press conference held at the end of the Suhumi "summit".

Asked by journalists if the "unrecognised" intend to make use once more of the peoples' right to self-determination, proclaimed by President Putin during the 13 June press conference, both the Ossetian and Abhaz leaders said their "peoples" have already made their choice in favour of Russia. Only the Transnistrian leader Igor Smirnov said that he intends to call for an independence referendum in Transnistria, in September 2006, during which the "Transnistrian people" will be consulted whether it wants to be with Moldova or with Russia, as well as with regard to the negotiations process with Moldova.

It is worth noting that the three "presidents" sighed the final text of their Common Statement after lengthy video talks with Moscow, on the second day after the meeting between Russian President Vladimir Putin with his Georgian counterpart Mihail Saakashvili. The main subject discussed during the meeting were the "frozen" conflicts in Abhazia and South Ossetia.

According to commentators, the aim of the Suhumi "summit" was in fact to neutralise whichever decision that could have been taken during the Putin - Saakashvili meeting. "Even if Russian and Georgian presidents would have reached an agreement, the unrecognised republics were to declare to the whole world that they will continue their course to independence and create a military block to protect themselves from aggression from neighbour states", the Russian daily Kommersant.ru wrote commenting on the Suhumi meeting.

Foreign Affairs

Republic of Moldova - Council of Europe

A Moldovan delegation headed by Deputy Speaker Maria Postoico has attended the ordinary session of the Parliamentary Assembly of the Council of Europe (PACE). PACE focussed on illegal secret detentions in Europe; affirmation of freedom of expression and respect for beliefs (case of Turkey). PACE will take an attitude towards countries which did not abolish the death penalty, rights of migrants, violation against women. A draft recommendation motion on support for development in the Black Sea area (cooperation between local and regional authorities) was introduced in the working procedure.

Republic of Moldova - European Union

The Chisinau authorities will ask the European Union to sign the association agreement after the implementation of the Moldova-E.U. Action Plan, with the purpose "to guarantee the irreversible course of European integration of Moldova." Deputy Premier Andrei Stratan has delivered these statements at a news conference at which he summarised the activity of the Ministry of Foreign Affairs and European Integration in the first half of 2006. The minister noted that negotiations between Moldova and the E.U. regarding a facilitated visa regime will begin at the end of this year.

Marianne Mikko, head of the European Parliament Delegation to the E.U.-Moldova Parliamentary Cooperation Committee, has invited the European Commission while on a visit to Chisinau to intensify the efforts for assistance of Moldova's European integration path. The visit of the delegation to Moldova demonstrates solidarity with this state and determination to support and to help Moldova solve its problems and the dependence on the Russian market, facilitating the Moldovan products to the E.U. market, Mikko said. The European dignitary outlined that Moldova has registered some significant progresses regarding the adoption of laws and adjustment of legislation to international standards (though they the emphasis should be on their quality and appropriate implementation), after her last visit in late 2005. There are insufficient progresses in fight against corruption at high level, respect for human rights, freedom of mass media, etc. As regards the Pasat Case, Mikko said that his health condition is alarming and he needs a proper medical treatment. Although they do not contest the judgment, the European parliamentarians consider that 10 years of detention is a too grave verdict for selling some aircraft to the United States, not to Iran. "Pasat is both a detainee for us and a test if Moldova respects the human rights and if the powers in the state are separated in this country," Mikko added.

The head of the E.U. Border Assistance Mission to Moldova and Ukraine says that an additional contingent of European customs officers has already been selected to enlarge the activity of the mission. General Ferent Banfi has delivered this statement at a meeting with Premier Vasile Tarlev. Banfi noted that actions are taken to open more territorial offices of the mission both in Moldova and in Ukraine.

Vice-President of the European Commission responsible for Justice, Freedom and Security Franco Frattini has proposed the opening of a centre in Chisinau to issue Schengen visas to Moldovan citizens. The initiative was launched at a meeting with President Vladimir Voronin and it will be raised for debates to E.U. member states in July.

The Moldovan president has met Mariann Fischer Boel, commissioner for agriculture and rural development of the European Commission, while on a visit to Brussels. Vladimir Voronin asked the European Commission to reduce the customs duties for exportation of Moldovan wines to the E.U. Commissioner Mariann Fischer Boel revealed that the E.U. could raise the problem of lower duties for Moldovan wines if the General Assembly of the World Trade Organisation examines this issue in particular at a September-scheduled meeting.

Republic of Moldova - Romania

Statements of President Traian Basescu

President Traian Basescu answered some questions on relations with Moldova while attending on June 23 a conference themed European Romania, Euro-Atlantic Romania, Romania in the Field of International Relations, organised by George C. Marshall Romania Association. Basescu said that the relations between the two countries are a priority for the Romanian foreign policy.

According to the stance of Romania that the Bucharest authorities promote in relations with European institutions and NATO, Moldova "must be taken to the group of Western Balkan countries from point of view of integration in the E.U. and it must not be quitted until Ukraine will be ready to join the E.U. "The Romanian effort in this regard will be consolidated when Romania will join the E.U. The Romanian president noted that analysing the number of residents of the Western Balkans and Moldova, it should not be a big problem from perspective of absorption of the E.U., but the "cultural variety" and "elements of consistent nationalism" raise certain problems. Bucharest promotes its policy under following auspices - the Romanian nation may reunify, at least at present, inside the E.U., the Romanian president added.

As regards the Transnistrian problem, Basescu stated that it remains difficult: "Unfortunately, neither Ukraine, nor the Russian Federation and Moldova wanted Romania to participate in negotiations. Of course, this fact may be correlated with the change of the name of the Romanian-French lycee into Moldovan-French, of the Romanian-English lycee into Moldovan-English. But what I impose myself to do is not to freeze the relations like it happened in 2000 due to the same issues." The Romanian president outlined that Moldova is an independent and sovereign state, with decisions that the Moldovan Parliament and Government make: "Starting from this premise, I am trying not to find motives of reaction capable to freeze the Romanian-Moldovan relations again," Basescu underlined.

As regards the legislation on diaspora, Basescu stressed that Romania has used too little its relationship with Romanians from everywhere and a much wider vision is needed. He stressed that despite the legislation on support of cultural activities of the Romanian community, a draft law on consolidation of relationship with diaspora does not exist, but such a law will exist until expiration of his mandate, if the Parliament and the executive support it.

Speaking about the border treaty between Moldova and Romania, Mr. Basescu said that the final version of this document drafted with the support of the E.U. will allow "a much relaxed situation."

Preparations for visit of Traian Basescu to Chisinau

Minister Mihai Razvan Ungureanu has said that Romanian President Traian Basescu intends to visit Moldova next autumn, an occasion to address the Moldovan Parliament for the first time. Details of the visit will be coordinated at the level of executive soon.

Economic cooperation

Bucharest and Chisinau hosted two exhibitions in June at which Moldova and Romania presented their economies. Moldovan firms have signed 380 contracts with partners from Romania and other states at the Bucharest exhibition. All 16 Moldovan wineries participating in the exhibition have signed business contracts with new partners. Food enterprises have signed contracts of intention and cooperation. The Chisinau exhibition has hosted more than 50 Romanian economic agents that presented industrial products and high technologies, food industry, cosmetics, footwear, ready0made clothes, textiles, equipment, etc.

Republic of Moldova - Russian Federation

Deputy Premier Andrei Stratan has told a news conference that if a state like the Russian Federation is willing to join the World Trade Organisation, it should meet the international trade rules and raise its objections beforehand. Stratan noted that Russia's embargo on some Moldovan products is a subject of political relations, caused by Chisinau's stance on Transnistrian problem, which troubles those supporting the separatist regime. He underlined that the Chisinau authorities are waiting for an official notification regarding the cause of the embargo, in compliance with international agreements signed between the two states.

According to a survey conducted by a Russian foundation for public opinion (formerly affiliated to ÂÖÈÎÌ), 45 percent of Russian citizens warm the prohibition of Moldovan and Georgian wines on Russian market. Many respondents admitted, however, that the interdiction has a political nature and aims to exert some political or economic pressures on states disobeying Moscow.

According to a communication of the Moldovan Reintegration Ministry, the policemen held by Tiraspol authorities have been released including with the participation of the Russian Federation.

Moldova in the world

The Moldovan enterprise Ascom attends an international food exhibition in Shanghai, China. Moldovan producers will exhibit 80,000 bottles of wines within six months Visitors to the exhibition will be able to purchase drinks in wholesales and retail sales. The Agri-Industrial Agency Moldova-Vin intends to open a permanent representation in the Chinese province of Yannan as part of a programme on promotion of Moldovan wines abroad.

More than 10 countries, including Slovakia, Poland, Romania, Ukraine, Germany, Belarus, and others have hosted tasting exhibitions and fairs of Moldovan wines.

Studies, Analyses, Comments

Farmers will have to look for other niches to export phytosanitary products
Iurie Gotisan, 30 June 2006

Chisinau and Moscow have failed a compromise at the recent negotiations on relief of exports of agricultural production to the Russian Federation. Although official statistics do not reveal the exact losses of Moldovan farmers, their consequences are negative however

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