In 2016 Moldova returned to direct voting for the president. The results of the campaign revealed the divide in the society between those in favor of deeper integration with EU and closer ties to Russia.
Domestic Policy: Polarization of the Society
In January 2016, the Cabinet of Prime Minister Pavel Filip was elected by 57 out of 101 MPs. However the authority of the new formed Government was questioned by the massive street protests as well as the rush of the voting procedure itself. Among others issues, this particular matter stood out and was cause for concern – the Parliament hearings lasted hardly half an hour. Officially, Filip’s Government had engaged in a reform process which promised closer ties to the European Union and full implementation of the Association Agenda. Nevertheless, the developments of the domestic reform agenda have brought few successes. This is related to technical issues rather than deep institutional progress in the field of anticorruption (according to Transparency International’s 2015 Corruption Perceptions Index[i], Moldova was ranked 103 out of 168 countries and territories surveyed in), justice and freedom of media (freedom of the press status is estimated by the Freedom of the Press 2016 Report[ii] as partially free) characterizing the democratic environment.
On March 4th, the Constitutional Court (CC) reintroduced direct voting of the president with a decision which repealed the amendments adopted on July 5, 2000 by the Communist ruling, empowering the Parliament to elect the president by 3/5 of MPs. The reasons presented by the CC referred to previous political deadlocks and alleged procedural violations in 2000.[iii] With no public consultation and participation of the legislative branch, the transparency and legitimacy of the CC has been significantly undermined.
In autumn, after two rounds of elections (October 30 and November 13) Moldovan citizens elected Igor Dodon, a pro-Russian oriented political leader as the third directly elected President of Moldova. Dodon, the former leader of the Socialist Party, had won the presidential elections by a margin of 4%, defeating his rival Maia Sandu, leader of the Action and Solidarity Party (52.11% – 47.89%).[iv] Regardless of insignificant media support and limited financial resources, Maia Sandu, former Minister of Education, managed to gather a large and impressive group of supporters by promoting a pro-European reform agenda.
Overall, the election results revealed the deep polarisation of Moldovan society divided merely by geopolitical factor and the confrontation between east and west development patterns. Moreover, the institutional shortcomings and violations registered during the elections emphasised the institutional fragility and intensified allegations of direct influences on the part of the oligarch Vladimir Plahotniuc, the country’s least popular politician, recently nominated as the head of the Democratic Party.
Economy: Development Assistance at the Edge
At the end of 2016, after a long process of negotiations, IMF Executive Board approved 178.7 million US-Dollar arrangements under the Extended Fund Facility and the Extended Credit Facility for Moldova.[v] Following this decision the European Commission resumed its budget support assistance providing the Moldovan Government with 45.3 million Euros under four programmes: Economic stimulation in rural areas (ESRA), European neighbourhood Programme for Agriculture and Rural Development (ENPARD), Public Finance Policy Reform, and Vocational Education Training. Regardless the financial and backing crisis which affected Moldova’s credibility, the Parliament ventured to approve in first reading the draft law on the liberalisation of capital and fiscal incentive (Draft Law no. 452). According to the Position Note presented by civil society experts the legislative initiative related to tax and capital amnesty could generate a higher risk of tax evasion, increase corruption and money laundering. Moreover, it undermines the rule of law, the integrity of the public sector and the banking system reform process required as prerequisites for the budget support assistance.[vi]
Foreign Policy: Road to European Integration
2014 saw the signing of the Association Agreement (AA) which included the Deep and Comprehensive Free Trade Area (DCFTA, June 2014) and the finalization of the visa liberalization process (April 2014). Moldova’s initial momentum has since reached a point of inertia regarding its road to European integration. This has manifested itself in several forms: the failed attempts to form a stable and credible Government, the fight between oligarchic camps and the concentration of power, the banking scandal as well as the selective justice procedures. The last point has led to a serious loss of trust as well as reassessment of relations with foreign development partners, especially the European Union (EU).[vii]
The banking crises ($1 billion theft) critically affected the country’s financial system and as a consequence led to the suspension of assistance from the International Monetary Fund (IMF), World Bank (WB), and EU.[viii] By the end of 2016, international financial assistance had been resumed only after complying with the pre-established conditionality and ensuring macro-economic stability.[ix]
[i] Transparency International 2015 Corruption Perceptions Index, https://www.transparency.org/cpi2015/
[ii] Freedom of the Press 2016 Report, https://freedomhouse.org/report/freedom-press/2016/moldova
[iii] Victoria Bucataru, Stagnation on the Road to Europe: Moldova after the Presidential Election, Nations in Transit, Freedom House, 12.12.2016, https://freedomhouse.org/report/special-reports/stagnation-road-europe-moldova-after-presidential-election#.WFvpFVV97IV
[iv] Presidential elections on October 30 and November 13, 2016, http://www.e-democracy.md/elections/presidential/2016/
[v] Press Release No. 16/491, November 7, 2016 http://www.imf.md/press/pressw/press-161107.html
[vi] Press release, “The legislative initiative on tax and capital amnesty carries high risks of corruption, money laundering and tax evasion”, December 19, 2016, http://www.expert-grup.org/en/activitate/comunicate-de-presa/item/1355-initiativa-legislativa-privind-amnistia-fiscala-comporta-riscuri-de-crestere-a-coruptiei/1355-initiativa-legislativa-privind-amnistia-fiscala-comporta-riscuri-de-crestere-a-coruptiei
[vii] Press release, Local statement on human rights – 15 December 2016, Delegation of the European Union to the Republic of Moldova, https://eeas.europa.eu/delegations/moldova/17367/local-statement-human-rights-15-december-2016_en
[viii] EU Budget Support for the Republic of Moldova – pending the fulfillment of several conditions, 8 July, 2015,
http://eeas.europa.eu/
archives/delegations/moldova/documents/press_corner/press_release_eu_budget_support_2015_07_08_en.pdf
[ix] Press release, “21st of December, 2016 – Today € 45,3 M of budget support assistance funds provided by the European Commission have reached the budget of the Republic of Moldova”, Delegation of the European Union to the Republic of Moldova, https://eeas.europa.eu/delegations/moldova/18141/eu-resuming-budget-support-assistance-republic-moldova_en
