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Activity of Public Institutions

Parliament
Government
Presidency

E.U.-Moldova Cooperation Council (June 2007) by Sergiu Buscaneanu
Salaries correlate with productivity, too by Iurie Gotisan

Activity of Public Institutions

Parliament

1.1. Appointments. Dismissals

The Parliament has appointed 5 judges of the Supreme Court of Justice (SCJ), in particular, Ion Corolevschi, Svetlana Filincova, Nicolae Gordila, Mihail Macar, Ghenadie Nicolaev and Petru Ursache, at the initiative of the Superior Council of Magistracy (SCM). SCM has also proposed Dina Rotarciuc, judge of the Court of Appeal, but the parliamentary majority turned down this candidacy, saying that the SCJ Criminal College rejects this candidate. Representatives of the parliamentary opposition described the interference of SCJ as abusive and feared that by accepting this meddling, the parliamentary majority makes "one more step towards political control on the judiciary." However, Communist parliamentarians turned down the candidacy.

Mr. Nicanor Cojocaru was relieved from the post of judge of the Supreme Court of Justice, as he reached the accepted age limit. Cojocaru has served in the Moldovan judicial system for more than 30 years.

The legislature has declared a vacancy for the former membership of Victoria Musteata to the Board of Observers. The Parliament appointed Musteata in late 2006 for a 3-year term, but she has reportedly tendered resignation for "being busy". Earlier, Veaceslav Ionita has tendered resignation as member of the Board of Observers, saying that the board was not working adequately and some remunerations paid for sittings could be described as "corruption of members".

1.2. Legal acts

Law on savings and loan associations. It regulates the relations of association and building of savings and loan associations – non-commercial organisations with special status voluntarily created by individuals and legal entities associated on common principles, which accept savings from members, give them loans and provide other services (guarantees, deposits, consulting). These associations aim to support their members in order to improve their economic and sociation conditions.

Law on scientific-technological parks and innovation incubators. The law aims among others to create a legal basis to transform the results of scientitific researches and innovations into new or better products, services and processes, in order to enhance the competitiveness of goods and services, to help increase the labour productivity, reduce the production costs, boost the exports, attract investments, create new jobs for innovators and highly qualified scientists and scientific-didactic staff.

Law on modification of the Land Code. These modifications ban the sale and purchase of fields for social development of localities.

Laws on ratification of some international acts:

• The Restructuring Agreement between Moldovan Government and Japanese Bank for International Cooperation. The agreement stipulates the restructuring (by 2013) of a loan (worth more than 15 million dollars);
• The agreement between Moldovan and Russian Governments that regulates problems related to the internal state currency debt of the former USSR;
• The convention on future measures aimed to ban and combat the illicit import, export and transfer of property on cultural goods.

Decision on modification of the 2006–09 Legislative Programme. Under this law, the elaboration and promotion of the draft Pharmaceutical Code was postponed till 2009. The need of postponing was motivated by "introduction of two new abilities of the Drug Agency: the elaboration and promotion of the automatic information system called State Nomenclature of Drugs and the organisation of centralised drug procurements" and impossibility of respecting the established elaboration term.

Draft law on the Border Guard Service. The document adopted in the first reading aims to regulate aspects on status, destination, general structure, management bases and activity principles of the Border Guard Service in charge with border protection and appropriate control. The promotion of this draft is a priority of the European Union – Moldova Action Plan and developers assure that it meets the E.U. standards and regulations and it was "ccordinated with the E.U. Border Assistance Mission to Moldova and Ukraine, while its implementation "will not require additional expenses."

1.3. Questions and Interpellations. Motions. Statements

Questions and Interpellations

Deputy Valentina Cusnir has asked the Government and the Central Electoral Commission to report the use of finances from the reserve fund of the executive for the electoral campaign. He invoked actions like distribution of "gifts" (TV sets, carpets, awards, etc.) by ministers, central and local functionaries.

Our Moldova Alliance Deputy Alexandru Oleinic has asked the Government to report the execution of legislation that regulates the "fiscal amnesty". He noted that the enforcement of these regulations raises concerns of national and international organisations (IMF).

Our Moldova Alliance Deputy Veaceslav Untila has raised an interpellation to the Government, asking it to react in connection with automobiles with Transnistrian number plates. Untila fears that this is a fiscal evasion scheme used by those unwilling to pay legal taxes and duties to the state budget or those who cannot import cars younger than 7 years old.

Social Liberal Deputy Igor Clipii has asked the Ministry of Education and Youth to report the admission quotas for institutions of higher learning, legal principles and basis used to limit the right to own education on tuition fees.

Motions

A 15-strong group of parliamentarians (representing the Social Liberal Party, the National Liberal Party, the Democratic Party of Moldova, the Our Moldova Alliance, the Party of Socialist Democracy of Moldova and unaffilated lawmakers) have submitted a simple motion titled Freedom of Mass Media and Freedom of Expression Are Suppressed concerning the violation of freedom of mass media and expression by Government. The motion urges among others:

1. the prime minister: – to control the implementation of the law on access to information regarding the freedom of expression and freedom of mass media and control the implementation of the related chapter from the E.U.-Moldova Action Plan; to ensure the registration of brands Moldova Suverana and Nezavisimaya Moldova by AGEPI as property of closing state enterprises; to further grant these brands at a public auction; to control the respect for commitments on freedom of mass media and freedom of expression from the E.U.-Moldova Action Plan.
2. the Interior Ministry – to urgently settle and prevent assaults on journalists;
3. the Government – to stop the governmental economic-administrative meddling into development of media market: to award tax facilities, including VAT exemptions; to exclude mandatory subscription of subordinated institutions to some periodicals, etc.

Statements

The faction representing the Our Moldova Alliance has released a statement condemning the attempts of the Party of Communists to annul the results of elections in certain localities and to directly sabotage the creation of district and local public administration. It considers that the central government is openly conspiring this way against creation of local administration and invites all representatives of non-communist forces to strongly keep their stances towards any pressures and allurements of the Communists.

Government

2.1. Appointments. Reshuffles

The executive has appointed Mr. Nicolae Batrincea as deputy director-general of the Customs Service and dismissed Mr. Anatolie Barbarosie from the post of deputy director-general of the Customs Service "as the staffs were reduced."

2.2. Decisions

Decision approving the report on implementation of the 2006–08 strategy on sustained development of small and medium-sized businesses (SMB) in 2006 (decision pertaining to state etiquette). The Ministry of Economy and Commerce is asked to increase the efforts aimed to support the development of SMBs through concrete actions with a direct impact, so that to encourage a real rise of the number of jobs.

Decisions approving some programmes, concepts, strategies:

• the Action Plan of the Government for the 3^rd quarter of 2007;
• the Concept of the Judicial Information System for 2007–2008.

Decision approving the draft law on prevention and combat of money laundering and financing of terrorism;

Decision on allocation of funds. As much as 3.2 million lei is allocated from the fund for implementation of the reform strategy of the Central Public Administration "to cover the expenditures for creation and reorganisation of some institutions."

2.3. Sittings. Decisions. Statements

Administration of state-owned enterprises

The prime minister has convoked governmental decision makers to discuss a better management of enterprises with state capital, with talks focussing on the need to ensure a strict control on respect for legislation on management of fixed funds and payment of dividends by these businesses. Vasile Tarlev demanded an ample assessment of results of activity of state representatives in management boards of enterprises, ordering competent authorities to severely sanction the functionaries who fail their tasks and to dismiss them later.

Situation of some medical-sanitary institutions

Information regarding needs and future works has been released at a working sitting on renovation and modernisation of the Republican Emergency Hospital and the Tuberculosis Hospital based in Vorniceni. The premier ordered a schedule plan on some works aimed to create adequate conditions for a more efficient activity of the Emergency Service and stressed the importance of performing the planned works in the due terms by respecting the quality building parameters.

Presidency

3.1. Decrees

Moldova’s president has relieved from office his adviser with special missions Sergiu Mocanu "accordingly to his request."

Also, the chief of state has recalled Nicolae Dudau from the post of Moldovan Ambassador to Italy.

3.2. Sittings. Decisions. Statements

The action programme of President Vladimir Voronin has included only visits to other countries or activities pertaining to state etiquette in the period concerned:

• Visit to Belgium and Luxembourg (June 18–19);
• Visit to Moscow, the Russian Federation (June 22);
• Visit to Istanbul, Turkey (June 25);
• Visit to Rostov pe Don, the Russian Federation (30 June);
• Meetings with: Slovakian president (June 20); chairperson of the Russian Constitutional Court (June 20); Russian singer Iosif Kobzon (June 26); ambassadors of the E.U., U.S., European Commission, Council of Europe, OSCE, Russian Federation and Ukraine (June 28); Romanian prime minister (June 29); graduates from the Military Institute of Armed Forces Alexandru cel Bun (June 29).

Economic Policies

1. Real sector

Industry is still on the decline…

The industry is still on the decline. The industrial production was valued at 9.26 billion lei in the first five months of this year, decreasing by approximately 2 percent compared with the similar period of 2006. The industry rose by about 19 percent in May and this growth attenuated the handicap of decline of industry. The wine industry has generally dropped 2.5-fold after five months (covering only 5.4 percent of the total production), distilled alcohol drinks declined 2.1-fold, electricity and heating production and distribution decreased by 7.7 percent, engineering industry by 10 percent, tobacco industry by 7.3 percent. The Ministry of Economy and Commerce has anticipated a 9-percent growth of industry for 2007, but many experts doubted over this forecast.

…while agriculture could face a situation like in 2003

Nor the agriculture faces a better situation. Even more, the worst evil is that the current drought could compromise more than 30 percent of the annual agricultural crop. The drought could have serious effects, if the weather forecasts for this year become true. The unfavourable weather could reduce the profitableness of agriculture, limiting this way the capacities of farmers to finance their agricultural works in 2008. At the same time, prices of agro-food products could grow much, as the drought jeopardises the crops. For example, the agriculture declined by 14 percent because of the 2003 drought. The arid climate affected then most of cereals, vegetables, fruits and sugar beet crop.

Apparently, the situation is not so dramatic since the Government has said that it awards subsidies of up to 70 percent for purchase of insurances policies for crops. However, we fear that farmers face difficulties to gain these subsidies because they are not well-informed or the insurance system is not developed. Although there are enough working insurance companies on market, only some of them provide all services, but their costs are very high. In addition, they are not very interested to insure certain risks, particularly in agriculture. If these subsidies are allocated, they go to farmers who own large farm fields, not to small farmers who practice subsistence agriculture.

2. Financial-bank sector

Interests on bank credits grow in spite of lower inflation…

Interests on bank credits have increased in continuation, though the inflation rate tends to decline. The average well-balanced interest rate on credits in Moldovan lei released to individuals and businesses rose by 0.2 percentage points in May, up to 18.81 percent, while the interest rate on loans in foreign currency increased up to 11.01 percent. However, the interest rate on bank credits in lei changed insignificantly in five months of this year, up to around 18.5 percent. Also, the interest rate on credits in foreign currency has insignificantly changed, though the annual inflation rate declined from 12.9 percent in January down to 10.6 percent in May.

Commercial bank released credits in Moldovan lei worth 1.11 billion lei overall in May 2007. At the same time, deposits in lei totalled 19.94 billion lei and deposits in foreign currency recalculated in lei amounted to 7.93 billion lei. The average well-balanced interest rate on deposits in lei has decreased by 0.05 percentage points, down to 15.4 percent, while the average interest rate on deposits in foreign currency has increased by 0.06 percentage points, up to 5.9 percent.

FITCH Ratings agency updates the financial rating for Moldova…

The international ratings agency FITCH Ratings has updated the credit rating for Moldova from "stable" to "positive", following the economic growth and tax discipline in Moldova. At the same time, FITCH has reconfirmed the Long Term Issuer Default Rating "B-" and the Local Currency Long Term Issuer Default Rating "B" for Moldova and described the prospect of ratings as "stable". The updated ratings are due to some structural reforms implemented in Moldova and resumption of an agreement with the International Monetary Fund after three years.

At the same time, the agency has signalled a number of foreign risks that affect the short-term prospect, in particular, the Russian ban on Moldovan wine imports and doubling of gas prices in 2006. Moldova’s deficit of current account deteriorated significantly in 2006, exceeding 12 percent of GDP, the economic growth slowed down and the inflation has grown, and all these trends could change the FITCH decisions soon.

Transdnistrian Problem

Transnistrian issue on the agenda of the EU-Moldova Cooperation Council

The Transnistrian issue was one of the subjects discussed at the EU-Moldova Cooperation Council on 19 June, which was preceded by a working breakfast dedicated entirely to the Transnistrian issue. Below we present the key conclusions of the meeting on Transnistria, as formulated at the wrap up press conference held by German Foreign Minister, Frank-Walter Steinmeier, EU Special Representative for Moldova, Kalman Mizsei, and the President of Moldova, Vladimir Voronin:

• The Moldovan "package of proposals": Minister Steinmeier stated that the EU German Presidency has been informed and welcomes the fact that Moldova has initiated a bilateral dialogue with Russia on Transnistria, but has stressed that this dialogue needs to lead to the resumption of the "5+2" talks, within which any possible solution needs to be discussed. Kalman Mizsei stated in his turn that an in-depth discussion about the Transnistrian settlement prospects took place, within which the need for any solution to be tackled in the "5+2" format was stressed. Mizsei said he was informed of the package of proposals that Moldova submitted to its Russian partners on a bilateral basis in the autumn of 2006 and that he believed the basic elements of these proposals were "healthy" ones and formed "a good basis for negotiations", yet "negotiations need to take place in the "5+2" format".

• EUBAM and the Moldovan-Ukrainian regime: Kalman Mizsei reiterated the importance of the Mission for settling the Transnistrian conflict, and mentioned the President Voronin’s appreciation of this initiative. Likewise, Mizsei said that the EU continues to work with the Moldovan Government with a view to extend European trade preferences to Transnistrian companies, including the ones with a provisional registration.

• The peacekeeping mechanism: President Voronin said that this topic was not discussed at the 19 June meeting, but that "when the "5+2" talks are concluded it is necessary to "reorganise" the current peacekeeping mechanism from a military to a civilian one.

While in Luxemburg President Voronin met with EU CFSP High Representative, Javier Solana. According to Moldpres, the two "discussed in detail the Transnistrian settlement prospects", including from the perspective of the Voronin – Putin meeting on 22 June 2007.

One of the conclusions we can draw in light of the above is that the official Chisinau has informed its European partners about the contents of talks let with Russia in the past months, and, according to analysts, the latter seemed much more reassured with regard to the Voronin-Putin upcoming meeting on 22 June, as well as quite convinced by the good intentions and assurances received from President Voronin that the "5+2" format remains the only mechanism for discussing and approving any solution on Transnistria.

Voronin – Putin talks: 10 June – 22 June – 30 June

On 22 June President Vladimir Voronin had a new meeting with his Russian counterpart, President Vladimir Putin, at the latter’s residence in Novo-Ogarevo. According to an extremely laconic communique issued by the presidential press service, the two presidents "examined in detail the entire agenda of bilateral relations". The Transnistrian settlement was also considered, and the "importance of re-launching the negotiations process" was mentioned.

The meeting is the second Voronin-Putin one in June, and a third meeting took place on 30 June, at the informal summit of CIS Heads of State in Rostov on Don.

Despite this fervent presidential diplomatic marathon in the past months, the official Chisinau continued to abstain from informing the local public opinion about the contents of the Moldovan-Russian talks. Thus, the exact contents of these talks remains one wrapped in mystery for the local public opinion.

It seems though that the package of Moldovan proposals, the object of the Moldovan-Russian talks, has been presented to the partners from the "5+2" format, and between his meetings with Putin on 22 and 30 June, President Voronin invited the diplomats accredited in Chisinau to his residency in Condrita to inform them about the contents and progress thereof.

According to a presidential press service communique, in Condrita President Voronin informed diplomats about the "latest developments in the Transnistrian settlement process", mentioning the "efficient dialogue let in Moscow with the head of the Russian state, Vladimir Putin". Naturally, no further details about the exact contents of this "efficient dialogue" were released.

Transnistrian problem – priority of the National Development Plan

The draft of the National Development Plan – a framework document of "mid-term strategic planning" drafted under the aegis of the Ministry of Economy of Moldova was launched for debates on 26 June within an international conference. Among the five mid-term national priorities, the NDP defines the settlement of the Transnistrian conflict and the reintegration of the country and includes a separate component on this issue. The document proposes achieving a comprehensive and lasting solution of the Transnistrian conflict through efforts in two directions – the political and the socio-economic dimensions (see www.pnd.md). At the same time, the NDP proposes a number of measures aimed at creating a favourable context for a final political solution: complex democratisation and civil society development, demilitarisation and security, socio-economic reintegration.

Within the public debates on the provisions of the NDP regarding Transnistria, the multidimensional and comprehensive approach of the Transnistrian settlement laid out for the first time in a strategic development plan was welcomed. The other novelty is that the issue is recognised as one directly related to the socio-economic development of the entire Moldova. At the same time, civil society representatives noted the need to detail some of the proposed provisions, as well as to assess the feasibility of some of them.

Foreign Affairs

European integration

European Union – Moldova Cooperation Council

See the article E.U.-Moldova Cooperation Council (June 2007) published in this issue of the e-journal.

E.U. Council Presidency regarding general local elections in Moldova

The E.U. Council Presidency has published a document revealing its stance on the June 3 and 17 general local elections in Moldova. According to the statement, "Following the conclusion of the second round of the local elections in the Republic of Moldova, the EU Presidency notes with satisfaction that, all in all, they went off smoothly and that voters had been given a genuine choice between candidates and parties, even if the elections did not comply on all points with the international obligations entered into by the Republic of Moldova. With a view to future elections, the Presidency urges the Republic of Moldova to analyse the remaining problems, above all shortcomings relating to equal access for all candidates to the media, the orderly registration of all candidates, as well as the maintenance of the electoral registers and the vote counting, and to rectify them."

Bilateral cooperation

Republic of Moldova – Romania

While attending the GUAM summit in Baku, Azerbaijan, Romanian President Traian Basescu has reiterated the opportunity of ratifying the Adapted Conventional Armed Forces in Europe Treaty only after Russia honours its international commitments and pulls out its troops from Moldova and Georgia. The Romanian president has also called for participation of the OSCE, E.U. and U.N. in selecting international peacekeeping forces in the two states.

Romanian Prime Minister Calin Popescu Tariceanu was on an official visit to Chisinau on June 29. He met President Vladimir Voronin, his counterpart Vasile Tarlev and attended a Moldovan-Romanian business forum with the participation of approximately 50 businessmen from Romania and 30 businessmen from Moldova.

The Romanian official and representatives of Moldovan central authorities discussed investment projects implemented at three 330-kW interconnection lines, Balti-Novodnestrovsk, Balti-Suceava and Falciu-Gotesti, infrastructure projects, and considered the opportunity of creating a Development and Cooperation Fund of Romania to finance important projects for Moldova.

As regards the signing of a framework agreement between Moldova and Romania, a document that Chisinau is seeking for quite a long time, the Romanian premier hinted that such an act would be necessary but each side must be flexible, and the agreement must start from the premise of sovereignty and independence of Moldova and bilateral relations must be based on realities, particularly on future, on a common European future.

A technical cooperation protocol was signed between the Stock Exchange of Moldova and the Bucharest Stock Exchange after the economic forum.

Republic of Moldova – Russia

President Vladimir Voronin has met twice his Russian counterpart Vladimir Putin in the period concerned. The first meeting took place at the residence of the Russian president in Novo-Ogarevo on June 22 and the two presidents met the second time in Rostov-pe-Don on June 30, at the informal CIS summit. Earlier, the two presidents met at the CIS summit in Sankt-Petersburg on June 10 and President Voronin met the deputy secretary of the Russian Supreme Security Council, Yuri Zubakov, on June 15.

The many meetings are due to recent mysterious talks on the Transnistrian conflict. Little things are known about these talks because they are not transparent (See the "Transnistrian problem" chapter).

Besides the Transnistrian problem, the Moldovan and Russian presidents have discussed economic issues related to the Chisinau-Moscow relations, including the export of Moldovan wines to the Russian Federation.

After the Russian publication Kommersant has recently reported that Soyuzplodoimport could be the exclusive administrator of imports on Russian market, if Moldova resumes the wine exports to Russia, representatives of the Russian company denied this fact. They also denied the fact that Moldova shall cede some brands such as Belyi Aist to Soyuzplodoimport as a condition to resume the wine exports to the Russian market.

On the other hand, officials of Moldova-Vin Agency, which will administrate the alcohol exports to the Russian Federation, said that the negotiations on resumption of wine deliveries go on.

Multilateral cooperation

Republic of Moldova – Council of Europe

The European Court of Human Rights (ECHR) has sentenced Moldova in three cases in the period concerned. The ECHR has found out in the case Ciorap vs. Moldova the violation of the rights to a fair trial and private and family life. It told Moldova to pay 20,000 Euros in non-pecuniary damages and 2,000 Euros in costs and expenses to the applicant.

In the second case Botnari vs. Moldova, the Strasbourg-based Court has indicated the violation of the rights to a fair trial and to an effective appeal. The Moldovan Government was obliged to pay 2,000 Euros to the applicant in non-pecuniary damages and 100 Euros in costs and expenses.

The ECHR has found out the violation of the right to a fair trial in the third case Tocono and Prometeu Teachers vs. Moldova. It obliged Moldova to pay 3,000 Euros to the applicants in non-pecuniary damages and 2,080 Euros in costs and expenses.

Regional cooperation

Republic of Moldova – ODED – GUAM

The Azerbaijani capital of Baku hosted a meeting of presidents of the Organisation for Democracy and Economic Development (ODED) – GUAM on June 19. Prime Minister Vasile Tarlev represented Moldova at that meeting. The meeting brought together representatives of 25 states and international organisations such as the U.N., NATO, OSCE, and CIS.

The meeting agenda included topics related to political relations, sectoral cooperation development strategy, relations with other states and international organisations and handover of the ODED-GUAM Presidency.

The ODED-GUAM summit signed the Baku Statement indicating the need of sustained efforts to implement joint projects; the understanding memorandum on cooperation in nuclear and radiological security area between member states; the agreement on immunities and privileges; the cultural cooperation protocol between ODED-GUAM member states for 2007–2010.

Republic of Moldova – BSEC

Istanbul hosted a summit of the Black See Economic Cooperation (BSEC) Organisation leaders on June 25. Moldova was represented by President Vladimir Voronin. The summit marked the 15^th anniversary of the organisation and a jubilee statement was signed on this occasion.

President Voronin called for consolidation of democratic experience and strengthening of economic and social development of all BSEC member states at the Istanbul summit. Also, it was noted that Moldova supports the continuation of the process of consolidation of cooperation in diverse areas and it wishes the BSEC to use its potential in order to create a prosperous area, with a stable energy security and without unsettled conflicts.

Studies, Analyses, Comments

E.U.-Moldova Cooperation Council (June 2007)
Sergiu Buscaneanu, 30 June 2007

Luxembourg hosted the 9th Meeting of the European Union-Moldova Cooperation Council on June 19, 2007. President Voronin headed the group of Moldovan officials who attended the meeting

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Salaries correlate with productivity, too
Iurie Gotisan, 30 June 2007

The Government has plans to increase three-fold the salaries of budgetary workers by 2009, while the minimum monthly pay is expected to grow up to 400 lei; official statistics reveal that the things go in the right direction regarding the monthly advance of medium wage on economy

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