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Activity of Public Institutions

Parliament
Government
Presidency

Problem of exchange rate and currency market by Iurie Gotisan

Activity of Public Institutions

Parliament

1.1. Legal acts

Law on national ecological network. The law establishes the legal framework on creation and development of the national ecological network, the regime of protection and use of functional elements of the national ecological network, competences and obligations of public administration authorities in the area.

Law on emergency bodies. The law establishes the legal framework, principles of activity, attributions, competence and responsibility of emergency bodies, their status, place and role. The emergency system includes competent institutions in charge with protection of population, territory, environment and property in case of danger or emergencies.

Law on procurements. The document is considered important to improve the use of budgetary funds and prevent abuses in the field, corruption of administrators and contractors.

Law on aeronautic security. The law regulates the social relations linked to security and protection of passengers, aeronautic personnel, population, airship, installations and services of airports that serve the civil aviation against illicit interventions.

Law on public fields and their delimitation. Public fields are owned by state and administrative territorial units. The public property on fields may be of national and local interest, while the non-public fields of the state or administrative territorial units are part of the private sector of state or administrative territorial units.

Law on modification and completion of the law on administrative territorial organisation of the Republic of Moldova. The locality Fabrica de Zahar is created as part of the city of Falesti.

Law on modification of the law concerning economic law courts. Provisions allowing the prosecutor-general to present the annulling appeal are excluded.

Law on joining of the Republic of Moldova to international acts:

• The Protocol to the relative convention to the contract on international carriage of goods on highways;
• The United Nations Convention on Industrial Development.

Decision on participation of National Army military in post-conflict humanitarian international operations in Iraq. It approves the participation of 11 military of the National Army serving on a contract, using the equipment, munitions and weaponry they are endowed with and aircraft if needed be, for a 6-month term. The Government will establish guarantees and compensations for participating military.

1.2. Parliamentary control. Statements^[1]

Questions and Interpellations

Our Moldova Deputy Alexandru Lipcan has asked the Government and the Prosecutor-General to report the grounds of a demand of the state authorities seeking funds from economic agents.

Statements

The parliamentary faction representing the Our Moldova Alliance has released statements on:

• situation in agriculture;
• "confiscation of the power in Moldova by forces that are easily blackmailed."

Government

2.1. Appointments. Reshuffles

Ion Apostol was appointed director-general of the National Agency for Regulation of Nuclear and Radiological Activities. Previously, Apostol has served in the Interior Ministry.

Stefan Novac was relieved from the post of director-general of the agency for the protection of intellectual property. Although it was earlier reported that Novac was dismissed "for violation of laws on protection of state symbols and intellectual property," the governmental decision said that he was relieved from office "at demand" and indicates a date following the announcement made public after the sitting of the cabinet of ministers. In this context, prime minister has reprimanded Vladimir Molojen, minister of information development, Valeriu Mironescu, director-general of the Agro-Industrial Agency Moldova-Vin, and Sergiu Puscuta, chief of the State Tax Inspectorate "for inappropriate attitude manifested in the process of improvement of some legal acts."

Eugenia Goncear was relieved from the post of head of the National Committee on Adoption "in connection with a new job."

2.2. Decisions

Decisions approving some strategies and programmes. The Government has approved:

• The national strategy and the action plan on reformation of the residential child care system for 2007–2012;
• The national strategy on employment policies for 2007–2015;
• The decision approving the 2007–2009 programme on rehabilitation and social integration of disabled persons;
• The action plan on improvement of situation in the field of civil aviation.

Decision on creation of the agency for the management of national tourism areas. The agency will work in the Ministry of Culture and Tourism as an administrative body and it will have 9 employees.

Decisions on denunciation of some conventions:

• The convention on cooperation in the field of quarantine and protection of plants between Moldovan Government and Romanian Government;
• The convention on cooperation in veterinary sanitary field between Moldovan Government and Romanian Government;
• The sanitary-veterinary convention between Moldovan Government and Bulgarian Government;
• The convention on cooperation in the field of quarantine and protection of plants between Moldovan Government and Bulgarian Government.

• on prevention and combat of corruption;
• on ratification of the United Nations Convention against Corruption;
• draft decision of the Parliament approving the object proposed for concession and mandatory clauses of the contract on concession of activities of prospecting and exploitation of petroleum and natural gas deposits.

Decisions on allocation of funds:

• As much as 39.7 million lei will be allocated to the Chisinau City Hall to pay debts raised in 2006 for building social-cultural facilities (the Eternitate complex, reconstruction of the street Pan Halippa, reconstruction of fountains, trolley line, etc.). It should be noted that parliamentarians and director of the Agency for Construction and Territorial Development have earlier said that breaches and essential rises of expenditures without a legal coverage and without ensuring the quality of works have been admitted to build the facilities. Authorities and guilty persons did not reportedly take additional actions and measures.
• As much as 950,000 lei will be allocated to the Ministry of Local Public Administration for participation in building or purchase of apartments (the ministry has maximum 20 employees).

2.3. Sittings. Decisions. Statements

The Government has heard reports on:

• The results of budget collections in March 2007;
• The execution of state welfare budget in March 2007;
• The raising of mandatory health insurance funds in March 2007.

Prime Minister Vasile Tarler has convoked a working sitting on situation on pharmaceutical market and indicated the necessity of establishing a system to strictly record the quality of sold products and the price formation procedure. The premier outlined the importance of implementing the state nomenclature of drugs, which would allow a quantity-value record of imported and domestic medications. He also ordered an analysis of prices of drugs from market; a strict monitoring on process of acquisition of drugs by public medical-sanitary institutions in Moldova; examination of financial possibilities and raising of proposals on enlargement of the range of drugs compensated within mandatory health insurance; creation of a network of pharmacies and pharmaceutical facilities in every locality of Moldova to ensure the access of all citizens to medications, which will be sold for real prices.

Implementation of "Electronic Moldova" Strategy

The executive has heard a report on implementation of the national information society building strategy "Electronic Moldova" in 2006, noting that the goals of the strategy are accomplished in compliance with the action plan in the field. According to the document presented by Government members, goals of building the information society are being accomplished starting 2006 and a number of important measures have been taken:

• elaboration of the regulation on mechanism of implementation of the Action Plan "Electronic Moldova";
• start of the project "Implementation of the e-Governing Component" and elaboration of the electronic governing concept;
• elaboration of the draft concept of governmental portal;
• elaboration of draft laws on electronic communications, personal data, registers;
• elaboration of the concept of official page of Moldova (which is being tested starting December 2006);
• approval of the regulation on mode of publishing the information on official websites of public administration authorities (according to estimates by observers, none of pages of governmental institutions corresponds to all requirements);
• approval of the regulation on order of applying the digital signature in electronic documents;
• finalisation of the first round of the presidential programme "SALT" (the number of computers connected to Internet, their capacities, endowment with licensed software were not reported so far);
• launching of the project "Management of Public Finances" etc.

The nominative compensations for natural gas for household consumers is indexed by 9 percent on average and about 130,000 persons will benefit of these compensations, while the expenditure for this year will exceed 3.5 million lei. The Government has also approved the allocation of single compensations for connection of residences of some categories of people from rural areas to the natural gas pipe (1,500 lei for families of doctors, teachers and artists who work in villages and 750 lei for families with only one member working in these fields). The number of families who will benefit in 2007 is estimated at about 5,000 families and about 7 million lei will be allocated from the state budget for this purpose.

The shares of subsidising the production risks in agriculture have been increased up to 80 percent, with these changes aiming to encourage producers to insure their crops. About 15 million lei is allocated for this purpose (approximately 4 million lei was spent in 2006). The list of crops which will benefit of state-subsidised insurance premiums was extended (wheat, barley, vineyards, orchards, vine and fruit growing nurseries were included).

Presidency

3.1. Decrees

The chief of state has signed several decrees on citizenship-related issues, approving the regaining and awarding of Moldovan citizenship to 13 persons and allowing 165 persons to renounce to Moldovan citizenship.

President Vladimir Voronin has awarded the Labour Glory Order to parliamentarian Efim Agachi, member of the parliamentary faction representing the Democratic Party of Moldova.

3.2. Sittings, Decisions. Statements

Proposals for "Millennium Challenges"

The chief of state has chaired a working sitting on problems related to implementation of the Preliminary Country Plan and elaboration of Moldova’s proposals on participation in the last stage of "The Millennium Challenge Account". The participants held consultations on future actions for finalisation of organisational measures linked to implementation of the Prliminary Country Programme and elaboration of proposals for the Compact Programme in the due term, noting the satisfactory achievement of actions planned for the first quarter of 2007. The priority directions of activity include: the assessment of all national programmes, plans on prevention, combat of corruption and elaboration of proposals for correlation of their implementation with "The Millennium Challenge Account"; updating of the list of legal acts needed to implement "The Millenium Challenge Account"; intensification of actions for estimating and ensuring the co-financing of measures from the plan by Government; extension of planned actions; speeding up the creation of the civil council in charge with monitoring the Preliminary Country Plan; wide mediating of actions taken within The Millennium Challenge Account and establishing of a tight and permanent cooperation with civil society.

It is worth to note that the Action Plan on implementation of the Preliminary Country Plan of Moldova within the U.S. Millennium Challenge Account (approved under the Government Decision # 32 from 11.01.2007) stipulates the implementation of about 30 actions by April 1, 2007, but there is too little information about accomplishment and this fact raises doubts regarding their complete execution in the due term.

Presentation of economic initiatives

President Voronin presented his initiatives on improvement of economic situation to members of the cabinet of ministers on April 10:

• amnesty of capital (at demand and in exchange for a 5-percent tax to the budget);
• fiscal amnesty (amnesty of all types of state duties and taxes);
• annulment of the profit tax for all economic agents (use of the 15-percent share for payment of dividents only).

Transdnistrian Problem

Moldovan-Russian consultations on Transnistria

On 6 April the Deputy Prime Minister, Minister of Foreign Affairs and European Integration, Andrei Stratan, undertook an official visit to Moscow, where he met with the Russian Foreign Minister, Serghei Lavrov, and the Chairman of the State Duma Committee on Foreign affairs, Constantin Kosaciov. After the meetings, Minister Stratan showed confident that Russia will exert a constructive influence over the Transnistrian settlement process. "Russia is one of the key factors in terms of the Transnistrian settlement. And if we reach a solution to the conflict in the near future, of which we are certain, Russia will have a lot to gain politically. Thus Moscow will show its capacity to play a key role in solving "frozen conflicts" from the former Soviet Union, which will set an example for other cases", said Stratan in Moscow, quoted by Novyi Region Agency. Referring to the Moldovan-Russian bilateral relations, Stratan said that Moldova is interested to deepen partnership relations with Russia and that between the two states there is mutual understanding on a wide range of issues. At the same time, Minister Stratan mentioned that the European orientation of Moldova does not rule out friendship relations with Russia, and gave guarantees that Moldova does not intend to join NATO and will maintain its neutrality enshrined in the Constitution.

On the other hand, a communique of the Russian Foreign Ministry mentions that discussions between the Foreign Ministers of the two states took place in an "open and constructive" atmosphere and touched upon aspects of bilateral relations. With regard to the Transnistrian issues, the two sides stressed the need for a "compromise that would unblock the negotiations". According to the communique, Russian Federation reiterated its support for a political solution of the problem according to agreements reached by the "equal sides to the conflict" and on the basis of a "special, soundly guaranteed status" of Transnistria.

It is worth noting that in an interview on eve of the Moscow consultations, President Vladimir Voronin said that the Transnistrian problem will no longer be the determining issue in Moldova’s relations with Russia. According to Voronin, this is a wrong approach, and bilateral relations need to be built on the basis of pragmatic cooperation, the way these develop at the moment being much more productive.

A series of local and international media outlets published a number of versions regarding the contents of some possible agreements between Moldova and Russia on Transnistria, however none of these versions have been confirmed to date.

Budgetary crisis in the Transnistrian region

On 4 April the Supreme Soviet in Tiraspol a adopted an appeal to the Russian Federal Assembly asking for the "creation of conditions for unblocking the region and for ensuring the foreign trade activity of Transnistrian economic agents and provision of financial assistance to countrymen and citizens of Russian Federation residing in Transnistria". According to the Appeal, Russian support is necessary after the joint Moldovan-Ukrainian customs regime introduced on 3 March 2006 led to a critical socio-economic situation in Transnistria, huge economic losses, loss of markets and impoverishment of population.

The appeal comes at a time when Transnistrian authorities found themselves in a critical budgetary situation, lacking the necessary resources to cover the USD 100 million budgetary deficit after Russia stopped financial assistance to Transnistria. The Supreme Soviet adopted a series of amendments to the 2007 budget by reducing funding for "state" programmes on education, agriculture and constructions and reallocating these resources to social payments. The Transnistrian leader Igor Smirnov said that Transnistria’s budget was developed by taking into account Russian financial assistance and that although all the necessary decisions on granting Russian assistance for social programmes and the gaz debt have been taken there are still problems related to the "mechanism of granting" this assistance.

It is worth noting that on 6 April the Moscow based newspaper Kommersant published the commentary "Russia’s hand is tired of giving", according to which Moscow is tired of the "consuptionist" attitude of Igor Smirnov, who rejects any agreement with Chisinau, even one guaranteed by Russia, refuses to pay Transnistria debt for Russian gaz, and only continues to ask Russia for more non-reimbursable financial assistance. According to Kommersant, Moscow is so irritated by such behaviour of Smirnov, that it is ready to freeze its financial assistance to Transnistria and may even want to find a replacement for him.

Foreign Affairs

Republic of Moldova – Council of Europe

The European Court of Human Rights (ECHR) has passed two judgments against Moldova in the period covered by this issue of the journal Governing and Democracy in Moldova.

The applicant in the case Agricultural Cooperative Slobozia-Hanesei vs Moldova has complained to the ECHR the violation of its rights to a fair trial and protection of property. The Strasbourg-based Court found out the violation of the applicant’s rights, as a judgment allowing the plaintiff to recover an arrear from the state-owned enterprise "Moldtranselectro" was not executed for 58 months. Moldova was told to pay 1,943 euros (the equivalent of 23,557 lei on the day when the judgment was passed in April 2002) as pecuniary damage to the applicant.

In the second case Ovciarov vs Moldova, applicant Nicolai Ovciarov has complained in front of the ECHR the violation of his rights through cassation of a judgment in his favour. The ECHR established that the rights of the applicant to a fair trial and protection of property were violated. The Moldovan Government was told to pay 22,300 euros in pecuniary damages, 2,000 euros in non-pecuniary damages and 800 euros in costs and expenses to the applicant.

The Committee of Ministers of the Council of Europe (CMCoE) has restarted the examination of the case Ilascu and Others vs Republic of Moldova and Russian Federation in the period concerned. Its goal was to examine the actions that the accused states have taken to release prisoners Andrei Ivantoc and Tudor Petrov-Popa.

According to the press service of the Ministry of Foreign Affairs and European Integration of Moldova, Germany’s delegation reiterated on behalf of the E.U. Presidency the obligation to execute the ECHR judgments and called upon envisaged sides, particularly on the Russian Federation to take all measures needed for an immediate release of the two persons. We note that in spite of the July 8, 2004 ECHR judgment on release of Andrei Ivantoc and Tudor Petrov-Popa, the two prisoners still are in the detention of the separatist Tiraspol authorities and this fact undermines the credibility of the ECHR and of the CoE implicitly, according to the German E.U. Presidency.

Republic of Moldova – European Union

Consultations on visa issuance facilitation

Consultations between Moldova and the European Community concerning the facilitation of visa issuance Agreement took place in Chisinau on April 3. From the EU’s side in Chisinau were Jan de Ceuster, unit chief, the Directorate General for Justice, Freedom and Security (DG JFS), DG JFS expert Ron Hendrix and Stefan Schleuning, referent for Moldova in the External Relations Directorate General.

According to the press service of the Ministry for Foreign Affairs and European Integration of Moldova, experts of the European Commission have met with Moldovan Deputy Foreign Minister Valeriu Ostalep, at which the key goals of Moldova in the process of negotiations were reiterated. The ministerial press service noted that the sides considered proposals that Chisinau raised to the European Commission on March 16 and finalised the draft of the mentioned agreement for the next round of negotiations to be held on April 17.

Common Application Centre (CAC)

On April 4, the Government approved the decision on start of negotiations concerning the draft Understanding Memorandum on Cooperation between the Ministry of Foreign Affairs and European Integration of the Republic of Moldova and the Ministry of Foreign Affairs of Hungary in issues related to activity of the Common Application Centre in the Chisinau municipality.

On April 12, CAC opened in the Hungarian diplomatic representation in Chisinau to be tested and it will be formally inaugurated on April 25 in the presence of the deputy president of the European Commission, Franco Frattini, commissioner for Justice, Freedom and Security. According to Mihaly Bayer, Hungarian ambassador to Moldova, the CAC will issue Austrian, Latvian, Slovenian and Hungarian visas to Moldovan citizens at the beginning. The ambassador noted that starting May 2007 the CAC could issue Danish visas and Estonia could also join the centre on summer.

Republic of Moldova – Romania

Corina Vintan, spokeswoman for the Romanian Foreign Ministry, said that Romania has issued more than 20,000 visas to Moldovans this year. She noted that the online system introduced in December 2006 allows the daily appointment of 400 persons willing to enter/transit Romania. Romanian visas are issued within 3–4 days after application, Vintan said, adding that the urgent visa applications are examined the same day.

The Iasi Tribunal annulled on April 4 a judgment of the Iasi Court on creation of the Association Community of Moldovans from Romania (CMR). The association became known after three CMR representatives have visited Chisinau, met with Moldovan parliamentarians, President Vladimir Voronin and participated in a programme aired by national television Moldova 1. Vladimir Voronin stated to the news agency Moldpres after meeting the CMR representatives that the latter represent the Moldovan minority from Romania, which counts for 10 million persons, noting that this minority is discriminated in comparison with other minorities from Romania. Shortly after returning to Romania, the CMR leadership has released a communication saying that the organisation could dissolve, if the actions of the association are interpreted and used for political reasons. It seems that the CMR was dissolved de facto, as none of its representatives was present at the April 4 sitting of the Iasi Tribunal.

Republic of Moldova – Ukraine

Chisinau hosted the second round of consultations of the Moldovan-Ukrainian interdepartmental groups on April 5. The sides examined some issues linked to the Dnestrovsk Station; demarcation of the Moldovan-Ukrainian state border; recognition of property rights; organisation of the joint control at the crossing points of the Moldova-Ukraine border, etc.

Republic of Moldova – Russian Federation

The diplomatic relations between Moldova and the Russian Federation turned 15 on April 6.

On this occasion, President Voronin has stated to the interstate company MIR that the relations between Moldova and Russia are based "on rich traditions and an enormous development prospect." According to the chief of state, the good relations between the two countries worsened in 2003, due to some divergences linked to the Transnistrian problem. In this context, the president underlined that the building of bilateral relations in the light of the Transnistrian conflict only is not judicious. For this reason, cooperation with the Russian side in all directions and fields is needed to build fruitful relations with the Russian Federation. This way, Voronin continued, "the Transnistrian problem will become only a practice of fruitful relations between Moldova and Russia."

On the same occasion, Deputy Premier and Foreign Minister Andrei Stratan paid an official visit to the Russian Federation on April 6. His visit agenda included meetings with Russian Foreign Minister Sergey Lavrov; Valentin Kuptsov, deputy chairman of the State Duma; and Konstantin Kosachyov, chairman of the Committee on International Relations of the State Duma.

According to the press service of the Ministry of Foreign Affairs and European Integration of Moldova, the sides examined problems related to Moldova-Russia cooperation, including possibilities of a complete resumption of exportation of agricultural production and wines to the Russian market and the present situation of the Transnistrian settlement negotiations.

Some observers have described the statements by the chief of state and Stratan’s visit to Moscow as the projection of an attempt to remedy the relations with Russia, a try forced by Moscow’s trade policy on Chisinau.

The signing of a protocol on resumption of export of Moldovan vegetal products to the Russian market by Moldova’s Ministry of Agriculture and Food Industry and Russia’s phyto-sanitary quarantine service, in Moscow on April 11 could be an indirect result of this try. According to the press service of the Ministry of Agriculture and Food Industry, the exports to Russia will go via five checkpoints of the Bryansk city, while the Moldovan checkpoints are due to be established.

We recall that the export of fruits and vegetables was actually resumed on March 6 – April 6, 2007, but it was a testing period. A new agreement was needed to continue the export after April 6 and the sides signed it on April 11.

Republic of Moldova – Belarus

Moldova has resumed the wine exports to Belarus after about two months. The exports of wines in bulk defeat the bottled wines. The news agency BASA-press cited Belarusian reports that the Minsk-based sparkling wine plant received the first share of 48,000 decilitres of raw material wine from Moldova in early April. The Moldovan-Belarusian enterprise Moldbelvin, founded by AgroVin Bulboaca of Moldova and Belgospisheprom of Belarus, which control 80 and respectively 20 percent of the statutory fund, delivered the wines.

Republic of Moldova – Switzerland

Chisinau hosted the 3rd sitting of the Moldovan-Swiss intergovernmental commission for commercial-economic cooperation on April 3. The sides signed a protocol, pledging to jointly intensify the bilateral cooperation between Moldova and Switzerland, including by selling products and services, attracting investments and enhancing participation in private sector, particularly of small and medium-sized businesses.

Minister of Economy and Commerce Igor Dodon was quoted by Moldpres as saying that the trade exchanges between Moldova and Switzerland were valued at 31.4 million dollars in 2006 and rose by 45.4 percent compared with 2005. He noted that 26 Moldovan-Swiss enterprises are working in Moldova and Switzerland has granted technical assistance worth over 20 million dollars to Moldova, launching more than 64 projects in various fields, including agriculture and reorganisation of enterprises.

Studies, Analyses, Comments

Problem of exchange rate and currency market
Iurie Gotisan, 15 April 2007

The leu appreciated by nearly 4 percent versus dollar and more than 1 percent versus euro in the past three years. The appreciation of the leu versus euro and U.S. dollar seems to be excessive and unsustainable on long term and unbalances of economy could produce an abrupt depreciation soon

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