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Activity of Public Institutions

Parliament
Government
Presidency

Activity of Public Institutions

Parliament

1.1. Legislative acts

Law on protection of inventions. The law establishes the framework needed to enforce international and community acts in the area, stipulates rights and obligations related to development, legal protection and exploitation of inventions. According to the document, rights on inventions are awarded and protected in Moldova under a brevet issued by the State Agency for Intellectual Property.

Law on transplantation of human organs, tissues and cells. It creates the legal regulatory framework on transplantation of human organs, tissues and cells, except for reproductive organs, embryonic or foetal issues, cells and organs, blood and derivatives. It stipulates the creation of the Transplant Agency, which will be controlled by the Ministry of Health and funded from state budget.

Law on ratification of the May 16, 2005 Council of Europe’s Convention on the Prevention of Terrorism. The ratification of this document is also stipulated by the European Union – Moldova Action Plan (EUMAP). Its ratification will strengthen efforts against international terrorism and other related crimes, promote a positive international image of Moldova. The convention will enter into force for Moldova the first day of the month following a three-month term after the adoption of the law on ratification.

Law on completion of Article 7 of the law on social protection of people affected by the Chernobyl disaster. It introduces a monthly pecuniary compensation for participants in the cleanup of consequences of the Chernobyl disaster to purchase food products that help eliminating radionuclide from their bodies. According effective norms, such food products cost about 850 lei per person and month, and 2.3 million lei will be additionally needed from the state budget a month (more than 28 million lei a year) to implement these provisions.

Law on modification and completion of the Code of Criminal Proceedings. Amendments aim to ensure the implementation of the law on international legal assistance in criminal matters and they concern provisions on extradition institution and other international legal assistance forms.

Law on modification and completion of the Execution Code of Moldova. Amendments stipulate the right of legal executor to restrict debtors from leaving the country for a certain term.

Law on completion of the law on procurements. Under amendments, the law on procurements will not be applied any longer in the field of contracts on printing of banknotes and issuance of coins and their carriage.

Law on modification of Article 24 of the Law on Government. The Ministry of Industry and Infrastructure was dissolved under this law.

Draft law on public function and status of public functionary. It stipulates duties of the public office, in particular, issuance of policy documents; elaboration of draft normative acts; enforcement of normative acts; elaboration of documents on enforcement and execution of normative acts; internal and external public control and audit; management of human resources in public service; planning, management and control of public funds; fiscal management; representation of interests of public administrations represented by public functionaries. The law will not be applied on public dignitaries; personnel recruited on basis of personal confidence in cabinet of public dignitaries; personnel of public administration in charge with secretariat, protocol and administrative duties, etc. Under the law, persons who "hold the citizenship of Moldova only" may bid for public offices.

Draft law on weaponry, ammunitions, explosive materials and substances. It regulates legal relations related to manufacturing, introduction and withdrawal from country, carriage, holding, arm possession, repairing, evaluation, bonus operation, rejection, other operations with weapons and ammunitions authorised in Moldova performed by individuals and legal entities; preparation, manufacturing, testing, holding, delivery, carriage, storage and use of explosive materials, substances and pyrotechnical products by individuals and legal entities. The law does not cover the regime and operations with military weapons, ammunitions, explosive materials and substances for armed forces, owned by state, administrated or used by Interior Ministry, Defence Ministry, Department of Penitentiary Institutions of the Ministry of Justice, Prosecutor-General’s Office, Centre for the Struggle Against Economic Crimes and Corruption, Information and Security Service, Border Guard Service, State Guard and Protection Service, Customs Service; nuclear weapons, ammunitions and explosive substances.

1.3. Parliamentary control. Statements

Hearings. Motions

The parliamentary majority has turned down a new initiative by the opposition (representing DPM, NLP, OMA, and LDPM) to organise hearings on the Transnistrian conflict.

Questions. Interpellations

Following a working sitting convoked by Parliament chairman, it was decided that the budget of the judicial system will be adopted under a Parliament decision starting 2009. The Superior Council of Magistracy jointly with the Ministry of Finance and Ministry of Justice will elaborate a draft budget of the judicial system for 2009 and will submit it to the Parliament, in order to approve it by the end of the current session.

Note by ADEPT: This idea is not an innovation but a try to respect the effective legislation for about 13 years:

• Under Article 121 (1) of Constitution, the Parliament approves the funds for law courts and they are included in the state budget.
• Article 22 (1) of the Law# 514/1995 concerning judicial organisation stipulates that the Parliament approves the funds needed for a normal functioning of law courts, at the proposal of the Superior Council of Magistracy, and they are included in the state budget.
• Article 4 (4) of the Law # 947/1996 concerning the Superior Council of Magistracy stipulates that the SCM is in charge with examining, confirming and recommending draft budgets of legal courts.

There is an unanswered question: why authorities do not want to respect norms of the laws they adopt? Although these norms are effective at present, their unclear formulation allows an interpretation and implementation accordingly to the general procedure: the Ministry of Finance recommends the budgets and it may accept or turn down demands, while the Government makes a final decision in this respect. The Parliament is constrained to modify them in the limits recommended by Government, and any rise requires a respective financial coverage but the Parliament lacks it. It was already observed that in spite of exclusive prerogatives, the Parliament cannot approve alone its own budget, and its size approved by the Permanent Bureau or legislature is reduced much in the draft budget adopted by Government. In all likelihood, the budget of the judiciary will have the same fate: the approved amount will not cover the needs and will be much smaller than demanded by SCM.

PCRM Deputies Vladimir Dragomir and Elena Bodnarenco have asked the Prosecutor’s Office to tell the Parliament the findings of investigations on privatisation of the Teodosiu Manor and sanctioning of the guilty persons, as well as to report who was chairing the Privatisation Department in the period concerned and if that person abused of authority in other cases.

Statements

The OMA faction has released a statement invoking corruption elements in sports management area. It indicated sports facilities which were not finished or were not completely renovated, others are replaced or there are plans to build trade centres instead of them. In particular, it denounced a recent governmental project on reconstruction of the Republican Stadium, clauses of an ante contract signed by Government, which guarantees some profitable affairs (construction of a trade centre; construction of two residential blocks and superposed parking sites; free granting of a 50-hectare supplementary field). These rights are granted in exchange for an investment of about 35 million euros, but this is a derisory price which damages public interests.

Another OMA statement accuses the PCRM of attempting on national dignity, promoting a false patriotism and says that the judiciary, prosecution and SIS are under the direct control of chief of state and the European integration has been a simulated option for seven years.

The CDPP faction has released two statements, with the first reiterating accusations against LDPM chairman Vladimir Filat regarding bribery of representatives of other parties and manipulation of public opinion. The March 7 statement repeats questions to law enforcement bodies, in particular, who finances the LDPM and what will be the impact of dirty money on political life? The second statement (released on March 13) demands the re-examination of the 1999 aircraft deal which involved Vladimir Filat. It says that a report by the investigative commission (created under the PD # 163-XIV from 15.10.1998) has found out that Vladimir Filat, who headed the Privatisation Department in the period concerned, violated the legislation. As law enforcement bodies did not take all necessary measures in that period, the CDPP asks the Prosecutor-General’s Office to check why necessary investigations did not begin.

Deputy Vladimir Filat has released a statement seeking parliamentary hearings on elaboration and implementation of European integration policies and an efficient and serious control on fulfilment of Moldova’s commitments.

Government

2.1. Appointments. Dismissals

The Government has appointed two deputy directors of the Centre for the Struggle Against Economic Crimes and Corruption:

• Andrei Ivancov will run the Operative Investigation Department;
• Vitalie Verebceanu will run the Prevention and Analysis Department.

Tatiana Vieru was appointed deputy director of the Licensing Chamber.

Dragos Vicol was assigned senior state advisor, advisor for Deputy Prime Minister Victor Stepaniuc.

Valentin Vizant was relieved from the post of director of the State Administration of Civil Aviation.

Under a decision by the Supreme Security Council, the Government was convoked for an extraordinary sitting and it dismissed Stanislav Gordea from the post of director of the National Regulatory Agency for Telecommunications and Informatics and reprimanded Minister of Information Development Vladimir Molojen.

2.2. Decisions

Decisions approving some regulations:

• Concerning subsidised insurance of risks and facilities in agriculture in 2008;
• Concerning registration of veterinary medications;
• Concerning privatisation of rented rooms;
• Concerning public acquisitions via the Commodity Exchange of Moldova;
• The methodology of calculation of basic insurance premium and rectification coefficients on mandatory civil responsibility insurance for damages produced by motor vehicles.

Decisions approving programmes, concepts, strategies:

• The 2008–15 programme on eradication and prevention of bovine enzootic leucosis;

Decisions approving draft laws:

• Concerning the legal status of adoption;
• Concerning the labour migration;

Decisions on allocation of funds:

• As much as 1,241,200 lei is allocated from the reserve fund of the Government to compensate losses related to tax exemption of owners of land fields located on the other side of the Ribnita-Tiraspol highway;
• As much as 70,000 lei is allocated from the same reserve fund to the central apparatus of the Ministry of Local Public Administration (for personnel, current and capital expenses). The 2008 budget of the Ministry of Local Public Administration accounts for 5,284,400 lei.

2.3. Sittings. Decisions. Statements

Implementation of action programme

The Government has heard a report on implementation of the action programme Modernisation of Country – Welfare of People in 2007, noting in a decision that:

• The GDP has increased by 3 percent in 2007, compared with 2006, up to 53.4 billion lei;
• Investments have grown by 19.9 percent (in comparable prices), compared with the same period of 2006;
• Exports have grown by 27.6 percent while imports by 37 percent;
• The domestic currency has appreciated by 1.9 percent versus U.S. dollar in 2007;
• Incomes worth 22.2 billion lei were raised to the national public budget in 2007, which is a 24.6-percent rise compared with 2006, while expenses accounted for 22.4 billion lei and increased by 24.4 percent;
• The medium monthly salary in national economy amounted to 2,063 lei in 2007 and it increased by 8.2 percent in real terms, compared with 2006. The average salary in the budgetary sector amounted to 1,625 lei, while in the real sector of economy it accounted for 2,229 lei. The medium monthly pension on January 1, 2008 amounted to 548.3 lei and it has increased by 24 percent, compared with January 1, 2007, while the real value of the pension has grown by 9.6 percent;
• The industry and the agriculture have regressed.

Priority tasks for 2008 include among others intensified prevention and struggle against corruption and economic-financial crimes committed by central public authorities; implementation of the "one-stop-shop"; combat of crimes and intensified anti-crime cooperation with civil society; development of telecommunication technologies; general measures to prevent sentencing by ECHR, etc.

Development of financial-bank institutions

A meeting convoked by prime minister has studied situation of financial institutions and banks, which has improved accordingly to the Moldovan Association of Banks and majority of indicators are on the rise. At the same time, bankers have signalled unsettled problems: the legislation on rights of banks guaranteed through a pledge should be updated; the e-governing system should be urgently implemented and an electronic information exchange system should be built; measures aimed to stimulate discounting via transfer with credit cards should be implemented; etc. Prime minister noted that the interest rate on credits is high so far, given the macroeconomic stability achieved by Moldova in the last years. All initiatives on optimisation of the banking system will be included in an action plan and implementation terms and functionaries in charge will be established.

Sitting of the National Commission for European Integration (NCEI)

Prime minister has chaired a NCEI sitting on development prospects of Moldova-E.U. relations. Minister of foreign affairs and European integration reported latest developments in the Moldova-E.U. dialogue and further priorities, reiterating the option to negotiate a new and more advanced legal status of relations with E.U. Prime minister stressed the need of ensuring a continuity of actions aimed to build constant relations of cooperation between Moldova and E.U., inclusively by continuing reforms. For this purpose, a priority action plan for 2008 will be finalised. The document will establish tasks of every institution in continuing reforms to modernise Moldova and implementing European standards, implementation terms and persons in charge.

Territorial sanitation

A sitting on sanitation of localities has heard a report by the Ministry of Environment and Natural Resources. According to the report, 2,682 illegal garbage sites were destroyed in 2007, another 163 were arranged and authorised, tens of hectares of parks, squares and bands near motorways were cleaned, 216 fields were selected to build new household waste depots. Prime minister was unsatisfied with the way a decision on planting of nut trees across public roads and railways has been implemented, warning minister of transportation and road management in this regard. He considers that central and local public authorities do not take practical actions to radically improve the sanitation. At the same, a stricter control on allocations from the National Environmental Fund and local funds is required, so that to be sure that beneficiaries of projects honour their commitments.

Updating governmental website

The updated official website www.gov.md was launched on March 3, accordingly to the Government Decision on Official Website of the Moldovan Government. The updated website will provide information, photos and video records, as well as online broadcasts. A column called online antechamber was launched to provide visitors with the opportunity to communicate with Government members, functionaries of ministries and departments. However, the website does not cover all draft normative acts examined by executive and other useful information which would enhance much the transparency and probity of the Government.

Visit to prisons

Prime Minister Vasile Tarlev has visited the prisons # 9 and # 16 in the Chisinau municipality and collected facts about these institutions, detention conditions and modernisation of the penitentiary system. He said that in spite of all actions, detention conditions in prisons should be improved, in order to adjust them to national and European standards. Tarlev noted that a state commission will revise criminal norms, in order to modernise and prevent jailing for not very grave offences, economic and patrimonial violations and depopulate penitentiaries.

Presidency

3.1. Decrees

Under a presidential decree, minister of reintegration, director of the Bureau for Interethnic Relations and presidential advisor for culture, education and science have been nominated members of the state commission for the organisation of the 650^th anniversary of the Moldovan State.

President Vladimir Voronin has awarded the Civic Merit medal for merits in elaborating information systems and contribution to implementing the project on introduction of passports with biometrical records, as follows:

• Ghenadie Belinschi, specialist at the Special Telecommunication Centre of the Information and Security Service;
• Dumitru Tintiuc, directorate chief in the Border Guard Service.

3.2. Sittings. Decisions. Statements

Developing cooperation with E.U.

Moldova’s president has convoked a sitting on implementation of the E.U.-Moldova Action Plan. It indicated progresses in implementing the EUMAP and additional actions which will be taken, as the European Commission is expected to examine a EUMAP assessment report in April. Vladimir Voronin underlined the need of honouring in the due term all commitments stipulated by EUMAP, in order to improve the situation in the following areas: freedom of the media, democratisation, human rights, investment climate and anti-corruption fight. An internal action plan on continuation of reforms to modernise and Europeanise Moldova will be implemented for this purpose, and it will stipulate concrete objective and terms for participating state institutions.

Modernising archives

While on a fact-collection visit to the State Archives Service and National Archives of Moldova, the chief of state was told difficulties faced by archivists and their institutions, in particular, small spaces; bad conditions to keep archives; low salaries; professionalism-related problems, etc. In order to improve the conditions of work of archives, the president proposed the elaboration of an action plan on modernisation and permanent development of this system. The plan shall stipulate the construction of a new block for the National Archives and opportunities to modernise archives by introducing new document archiving procedures (electronic archiving of files).

Interview published by Kommersant

The Transnistrian settlement and Russia’s participation in this process was the topic of the interview. The president of Moldova has stated the following:

• The Transnistrian conflict will be definitively settled soon;
• Forces halting the conflict resolution have disappeared because they had tenebrous financial interest;
• The Transnistrian conflict will be settled only on the basis of the Law # 173-XVI from 22.07.2005 concerning basic principles of the special legal status of localities from the left bank of the Dniester River (Transnistria);
• There is a need to adopt a statement on recognition of Moldova’s permanent neutrality, which shall be signed by all parties participating in the "Five-Plus-Two" negotiation process, except for Tiraspol;
• Vladimir Voronin is ready to negotiate with any person concerned;
• Transnistria will become an autonomy with wide competences of a republic, while Moldova will keep being a unitary state with two autonomous units – Gagauzia and Transnistria;
• Transnistria will keep its coat of arms, flag, official languages it needs;
• The draft law on Transnistria’s status contains many elements and positions from the Kozak Memorandum;
• Moldova could withdraw from GUAM because of the obscure perspective and absence of an economic interest in this organisation;
• In the event Transnistria reunites into Moldova, the 1.5-million-dollar debt towards Gazprom will be inherited by Moldova;
• The law forbidding the privatisation in Transnistria without Chisinau’s consent has already been abrogated.
  Commentary by ADEPT: The law on privatisation of enterprises based on the left bank of the Dniester River and Bender municipality (#338-XV from 14.10.2004) is still in force on websites of the Government and Parliament, no draft stipulates the abrogation or amendment of these regulations.

Economic Policies

1. Inflation and prices

Inflation rate breaks new records…

The inflation rate in February was close to expectations of the market, reaching 1.5 percent, and this may have a negative impact on economy in general. In spite of official statements by NBM that "the January inflation is something separated and it cannot be regarded as a change of the trend or beginning of a new inflation rise trend," the inflation has grown in continuation. So, our inflation forecasts made in precedent issues are becoming true.

According to recent data released by the National Bureau for Statistics (NBS), the Consumer Price Index (CPI) rose by 1.5 percent in February because of dearer gas, and the inflation rate for the last 12 months has grown up to about 15 percent, being a record in nearly two years. The February inflation was similar to the January rate and the cumulated rate for the two months was 3 percent. The inflation was fuelled most by a 2.4-percent price rise of food products (in particular of fruits, vegetables, meat, etc.), followed by a 1.8-percent growth of tariffs of public services (particularly water providing, sewerage, heating and electricity tariffs) and a 0.5-percent advance of prices of manufactured goods. The big share of food products in the CPI calculation (35 percent) maintains the inflation at high levels.

The inflation rate could be the same or even higher the next two months because of dearer energy agents, dwelling services and food products. The current dynamic maked recently the central bank increased the monetary policy interest by 1.0 percent, up to 17 percent. The March-April inflation could exceed the annual rate of 15 percent, and this could be a maximum level for this year, and it could calm down below 14 percent by the end of 2008. However, it will depend on the 2008 agricultural year and evolution of prices of energy agents imported from Moldova.

2. Banking sector

Commentaries on recent amendments to the law on financial institutions…

The Parliament has recently passed in the first reading a set of legal amendments which introduce a 100-million-leu (more than 9 million dollars) single quota for the overall normative capital of commercial banks. Thus, the National Bank of Moldova will allow financial institutions to work unless they hold a 100-milion-leu overall normative capital. These amendments aim to adjust the law on National Bank and the law on financial institutions to international banking standards, as well as to other effective legal acts. In fact, by increasing the normative capital of commercial banks, the central bank wants to make them respect European requirements and standards. In addition, this action aims to strengthen the domestic banking system.

But sometimes the central bank uses this tool in situations of potential crisis or instability of the system. Therefore, the monetary authority would do this for two reasons: either to boost the credibility of the system or to influence the capitalisation of some domestic banks which do not respect the NBM norms. However, such a situation was not observed on domestic banking market. The required minimum normative capital will not affect banks, as statistics released in late 2007 reveal that all 16 banks in Moldova have a normative capital of over 100 million lei.

At present, overall assets of the Moldovan banking system are estimated at about 33 billion lei^[1] (approximately 2.8 billion dollars) or nearly 62 percent of the GDP (2007). They are apparently enough, if compared with the number of country’s people, number of clients and given the complexity of the national economy. On the other hand, if comparing this indicator with those from other countries in the region, Moldova is ranked a last place (see Diagram 1). Even more, assets of Moldovan banking system count for 50 percent of all assets of Transilvania Bank of Romania, which is ranked the 4^th place in the top of Romanian banks as regards overall assets. Therefore, the domestic banking system is not capitalised enough in spite of positive statements.

Diagram 1. Bank assets in some European states, % of GDP (2007)



Source: NBM, NBR, ECB, EBRD, RST 2007.

3. Public funds

Progressive taxation system vs. single taxation quota…

A best fiscal level is rarely found in an economy; that means to satisfy the tax-payer on one hand and the state, which collects taxes, on the other hand. In other terms, what is the best fiscal system: that based on a progressive taxation, the one implemented in Moldova, or the single taxation quota applied in many European countries? The state budget share exceeds 30 percent of the GDP in Moldova. It exceeds 60 percent in the rest of Europe. The tax policy did not grow so far and this is called taxation basis. Although it was said two years ago that the Government was considering the perspective of introducing a single taxation quota for incomes of individuals, officials of the Ministry of Finance have recently called for the maintenance of the current progressive taxation system for revenues of individuals. Even more, the progressive taxation system will be maintained in 2009–2011, too.

The implementation of the single taxation quota proved in some countries such as Romania, Estonia, etc., that revenues covered most of expenses of the consolidated general budget. The necessity of implementing such a tax system in Moldova would result from variety of existing taxes, rather than from the high taxation level, which is medium compared with European Union, as various taxes harden their monitoring and collection to different budgets and maintain a quite large administrative apparatus. The single quota is attractive for being simple and comfortable due to its low costs. On the other hand, its implementation could increase the social polarisation, as people who are paid low salaries would suffer and those who are paid high salaries would be advantaged.

4. Foreign trade

Trade deficit – code red…

According to NBS statistics, the trade deficit – inequality between value of exports and imports – increased on all categories of products from the list of trade balance in January 2008. At the same time, the surplus declined in continuation for few categories of products for which exports were larger than imports, going in fact to a deficit. The January 2008 trade deficit was roughly 173 million dollars, and it increased by about 40 percent, compared with January 2007 (123.5 million dollars).

Imports in Moldova were valued at more than 261 million dollars in January 2008, and they exceeded by about 33 percent the January 2007 indicators (197.2 million dollars). Imports from CIS have increased by nearly 19 percent, while imports from the European Union have advanced by more than 42 percent. In January, Moldova registered the highest trade deficit with Russia (-36.3 million dollars), Ukraine (-25.5 million dollars), Romania (-18.2 million dollars), China (-13.4 million dollars), Turkey (-13.2 million dollars), Germany (-11.3 million dollars).

5. Currency

Leu reaches new records versus dollar…

The appreciation of the leu versus E.U. dollar reached the level of 1999–2000. The strong appreciation of the leu could calm down the inflation in the near future, compensating eventual higher prices of food products or tariffs for some public services. However, the appreciation of the leu advantages the National Bank on a short term, because it helps temperate the inflation but fuels the foreign deficit. If the leu continues to appreciate this way, foreign deficits will grow more (because a strong leu encourages massive imports) and the durability of the economic growth registered until now will be uncertain. The present trend could revert, that means the leu could depreciate and this would hit borrowers of foreign currency.

Cheaper imports and credits…

Imports could grow should the leu appreciate versus main reference currencies. At the same time, Moldova "may play this card" for its interest, should equipment and technologies be imported to cheaply modernise the economy. But cheaper imports could also disadvantage the national economy: larger imports of cheaper and better goods than Moldovan products would estrange clients from domestic producers who already face problems. On background of the appreciation of leu and lower interest rates on credits in foreign currency than on loans in lei, population and economic agents would choose this kind of credits without ensuring themselves against currency risk. Should the domestic currency depreciate, they would see their rates growing by the same percent. But the leu is unjustifiably growing.

6. Labour market

So far, Moldova is the European country with cheapest labour force…

A study by Technology Forecasters Inc. reveals that Moldova has the cheapest labour force in Europe. According to the study, a qualified Moldovan worker earned about 3,600 dollars in 2006, compared with more than 34,000 dollars paid to a worker in Germany, country with the dearest labour force in the European area. At the same time, the medium cost per hour in the E.U. (15 members only) was about 25 euros in 2006 and the average cost in the other 10 new E.U. members was about 7 euros, compared with 0.6 euros per hour in Moldova. The cheap labour force should make Moldova more attractive for international companies, but not many foreign enterprises come to Moldova so far.

Transdnistrian Problem

Parliamentary hearings by Russia’s State Duma

Members of the Russian State Duma insisted to react at all costs to the Kosovo case. They held parliamentary hearings on March 18, 2008 regarding "settlement of conflicts in the Commonwealth of Independent States and Russia’s appeal concerning recognition of independence of Abkhazia, South Ossetia and Moldovan Transnistrian Republic." Many Russian parliamentarians insisted during debates that the three separatist enclaves have been built on the basis of willingness of majority of their residents. In spite of diplomatic non-recognition, international relations cover them, as these regions are not under the jurisdiction of Georgia and Moldova for 16 years. But Russian lawmakers consider that litigations will be settled on basis of the negotiations, equality of the conflicting sides, without pressures and with respect for previous agreements, both in case of Georgia and of Moldova. They worked out an appeal to the Russian Government after hearings, launching practical recommendations. Russian parliamentarians made a difference between Moldova and Georgia during debates, stressing the inclination of the first towards loyalty and concession and the firmness of the latter. Main clauses of the appeal by the State Duma to the Russian Government are known: it seeks consultations aimed to find ways to recognise the independence of Abkhazia and South Ossetia; opening of Russian representatives from Transnistria, Abkhazia and South Ossetia; great intensification of economic and commercial cooperation with the separatist enclaves concerned; introduction of a simplified Russian border crossing regime for residents of the three separatist enclaves; opening of branches of the Russian Savings Bank in the three entities. The State Duma will adopt these recommendations at a March 21-scheduled sitting. Lawmakers representing the Russian Communist Party called for the recognition of independence of Transnistria, Abkhazia and South Ossetia. Russian communists consider that the recognition of the three separatist enclaves would be a signal to wake up Ukraine, which wants to join NATO in spite of the Crimea problem.

Theses of a speech delivered by Transnistrian speaker Evgeny Shevchyuk during Duma hearings

Shevchyuk has reviewed the Transnistrian problem during hearings in the State Duma. His speech was snivelling but it also accused and ridiculed Russia for having declared Transnistria as a region of its strategic interests and not daring to take adequate actions. He noted that:

• The State Duma has made more than ten decisions, appeals on Transnistria in more than 18 years of existence of Transnistria. It declared Transnistria as a "zone of strategic interests of Russia" at hearings held in 1995, 1996 and 1997;
• Transnistria has suffered after the "blockade" imposed by Moldova jointly with Ukraine and EUBAM, as well as after Russia’s reactions against Moldova;
• There are historical facts confirming the rights of Transnistria such as referenda it had held and encouraging reactions by Russian authorities towards referenda, signed memorandums and rights they would award to Transnistria;
• Approximately 200,000 people or 1/4 of residents have left the separatist region of Moldova after the State Duma had declared Transnistria as a "strategic zone of Russia";
• The international community should react to the fact that people in Transnistria earn lowest salaries, as this encourage the massive emigration of citizens;
• Approximately 7,000 residents left the Transnistrian region in 2007 only, including because of the lack of an adequate healthcare. Should things go the same way, the population of the region could decrease to 300,000 residents by 2015 (Transnistria has approximately 550,000 residents at present);
• The region faces a 30-percent inflation rate. For comparison, prices of elementary goods in Transnistria are comparable with those in Moscow and Sankt-Petersburg, though earnings of Transnistrians are threefold lower than of Russians. At the same time, basic food products are by 10–20 percent dearer in Transnistria than in Moscow, which is one of most expenses cities in the world;
• Romanian danger persists and statements by President Traian Basescu, particularly regarding plans to award the Romanian citizenship to all citizens of Moldova regardless their ethnic is a proof in this respect;
• Statements and attitudes saying that the pro-Russia orientation of Transnistrians is the cause of their sufferings are intensifying;
• Transnistria has more rights to independence than Kosovo does. The separation of Montenegro and Serbia could be a precedent for Transnistria. But priority is awarded to political benefit reasons rather than to Transnistria’s right. Russia sees a catholicon of the conflict resolution in negotiations on constitution of a federation with Moldova, so that the Kozak memorandum was elaborated. But this attitude makes hundreds of Transnistrians who are citizens of Russia feel themselves guinea pigs;
• Transnistrians have made a decision regarding their future at the 2006 referendum. However, the independence was not recognised and, therefore, a legal recognition of Transnistria is required for a normal development of the region, which refused to unite with Romania in 1991;
• The February 18, 2008 Duma statement on the declaration recognising the independence of Kosovo noted that this event creates premises for Russia to change attitude towards self-proclaimed republics;
• Given these facts and the social-economic situation in the region, Russia should take a set of actions in order to award commercial and other preferences to Transnistria.

Also, Shevchyuk has recommended the Duma to consider and make a decision aimed to find the "point" of instability and indeterminacy. It is hard to understand what Shevchiuk wanted to say, but it seems that he threatened over approaching "point" of the collapse of the Transnistrian regime.

Voronin-Smirnov controversy

On March 11, 2008, prior to hearings by the State Duma, President Voronin reiterated for Russian public, in an interview with the Moscow-based newspaper Kommersant, the facts it has said in a TV interview for Moldovan audience. He stated the following:

• There is not secret Transnistria settlement plan. A package of documents has been worked out and shared to mediators and observers, and it will ensure the settlement of the Transnistrian conflict;
• The package of documents recommended to negotiators meets the July 22, 2005 Law concerning basic principles of the status of Moldova’s Transnistrian region;
• The package of documents refers to the status of Transnistria; necessary guarantees; the withdrawal of weaponry from the region; the withdrawal of the Russian military presence; the civil peacekeeping mission;
• Transnistria will be awarded a wide autonomy within the effective constitutional framework of Moldova. Transnistria’s status will comprise elements from previous documents, including the Kozak Memorandum;
• A declaration in which participants in the "Five-Plus-Two" negotiation process, except for Transnistria, would recognise the neutrality of Moldova should be adopted;
• A "travel paper" will be needed to implement these documents, and if so, Transnistria will participate in the 2009 parliamentary elections;
• Russian authorities back these approaches and call for the resumption of the "Five-Plus-Two" negotiations;
• Moldova will not nationalise properties from Transnistria and it will recognise them if the privatisation was legal;
• The reunited Moldova should assume the 1.6-billion-dollar debts of Transnistria;
• The president of Moldova is ready to negotiate with Smirnov, in order to settle the Transnistrian conflict;

Two days later the same newspaper has published a reply by Smirnov. The Transnistrian leader hinted in a bantering manner that Voronin’s statements are fanciful. He stressed the impossibility of building a common state with Moldova, citing results of the September 2006 referendum. Also, Smirnov noted that all recent actions by President Voronin are linked to preparations for the 2009 parliamentary elections. He reiterated that Russia is firmly seeking an equal footing for the conflicting sides and a mutually acceptable solution.

Social problems

Transnistrian unionists continue to warn over eventual riots. They noted that the galloping rise of tariffs for communal services and prices of food and household products on background of the freezing of salaries may motivate Transnistrian residents to try defending their rights through alternative methods. The inflation in January was 4.2 percent while a 12-percent annual inflation rate was planned. Salaries of doctors, teachers and other budgetary categories are low, they earn between 50 and 100 dollars. They spend at least half of their earnings on food and another 30–40 percent on communal services. Under these conditions, doctors for example massively tender resignation. More than 1,000 doctors tendered resignation in 2007 and this number is doubling this year. In consequence, approximately 60 percent of Transnistrians have to seek healthcare in Chisinau or Odessa, Transnistrian unionists added.

Foreign Affairs

European integration

Presidency-hosted meeting discusses prospects of Moldova-E.U. relationship

The Presidency convoked on March 6 a meeting on prospects of Moldova’s relationship with the European Union (E.U.). Given the fact that the European Commission will assess in April 2008 the way Moldova has implemented the E.U.-Moldova Action Plan (EUMAP), the meeting established a series of tasks that shall be fulfilled before the EC report. In addition, competent authorities were instructed to elaborate and implement an "internal action plan" to clearly indicate concrete objectives and terms for public institutions with the view to continue the reformation process in a number of areas. The presidential press service did not indicate any term for the elaboration of this "internal action plan," but it could coincide with the period for which the European Commission has recommended the EUMAP extension.

E.U.-Moldova Mobility Partnership

The first formal E.U.-Moldova meeting on Mobility Partnership has been held in the period concerned. It brought together functionaries of E.U. institutions, and Deputy Minister of Foreign Affairs and European Integration Valeriu Ostalep and Deputy Interior Minister Sergiu Golovaci led the Moldovan delegation. The meeting tackled issues such as consolidation of institutional capacities in migration management area, programmes on comeback and reintegration of migrants, ensuring of social benefits, strengthening of ties with Diaspora, etc.

On occasion of the meeting, Mr. Ostalep has met Hilde Hardeman, head of unit at the European Commission’s External Relations Directorate-General. The meeting focussed on results of the Presidency-hosted sitting on EUMAP implementation and details related to organisation of the next meeting of the E.U.-Moldova Cooperation Council in Brussels on May 27, 2008.

9^th Meeting of EUBAM Advisory Board

The 9^th Meeting of the Advisory Board of the European Union Border Assistance Mission (EUBAM) to Moldova and Ukraine was organised in the period concerned. It noted that the Moldova-Ukraine border management and cooperation between Moldovan and Ukrainian customs and border guard services have improved.

As regards perspective tasks, it was noted the need of joint efforts to facilitate the legalisation of Transnistria-based enterprises, to adjust the border management legislation to European norms and to consolidate operative information exchange mechanisms between competent services of Moldova and Ukraine.

Bilateral cooperation

Republic of Moldova – Romania

According to Romanian press reports, the Chamber of Deputies of the Romanian Parliament has adopted a draft in the period covered by this issue of e-journal, which modifies the law on Romanian citizenship^[1]. The amendments aim to simplify the examination of applications for Romanian citizenship.

The draft introduces the following innovations:

• The awarding of the Romanian citizenship under an order by minister of justice;
• The replacement of the citizenship commission made of five judges with a commission made of legal personnel of the Ministry of Justice;
• Permanent meetings of the citizenship commission;
• The introduction of a six-month term to allow applicants to complete their dossiers in the event the commission establishes the absence of documents needed to settle the applications.

These amendments are argued by the big number of applications which are being settled by the commission for contestation of citizenship awarding norms (more than 34,000) and applications for awarding or regaining of the Romanian citizenship (more than 500,000 applications have been submitted to the Romanian Consulate in Chisinau only).

Republic of Moldova – Russia

Relations with Russia continued to be subscribed to latest intense Transnistrian settlement talks. Yuri Zubakov, deputy secretary of the Russian Security Council, visited Chisinau on March 6. According to official press services, his visit to Moldova aimed to facilitate the resumption of the "Five-Plus-Two" political negotiations on the Transnistrian conflict. As usually, press services did not report issues discussed at a meeting between Zubakov and Vladimir Voronin.

Elsewhere, the Ministry of Foreign Affairs and European Integration said that it will submit an official interpellation to competent Russian bodies regarding the case of Natalia Morari, a citizen of Moldova and reporter of the Russian newspaper The New Times, who was restricted access to the Russian Federation. Morari was accused of endangering the national security and the security of the Russian Federation. However, the journalist claims that this restriction is related to her professional service and one of her articles published in The New Times, in which she revealed informal financing schemes of the December 2007 electoral campaign for the Russian State Duma.