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Democracy and governing in Moldova
e-journal, year V, issue 92, March 19 – April 1, 2007
Activity of Public Institutions
Studies, Analyses, Comments
Activity of Public Institutions
The legislature has given green light to an initiative of the Superior Council of Magistracy and appointed Ion Muruianu, deputy chairman of the supreme law court, as chairman of the Supreme Court of Justice.
The Parliament ascertained the vacancy of mandates of Communist Deputies Galina Balmos and Albert Datco. The Constitutional Court validated the mandates of substitute candidates Vladimir Panfilov (who will be member of the legal commission for appointments and immunities) and Elena Parpalova (who will be member of the commission for social protection, health and family), the 70th and 71st candidates of the Party of Communists of the Republic of Moldova (PCRM).
Under a parliamentary decision, PCRM Deputy Anatolie Zagarodnii was appointed secretary of the legal commission for appointments and immunities.
1.2. Legal acts
Law on modification of Article 46 of the Election Code. It established that the electoral candidates benefit of the right to be suspended from their permanent offices during the electoral campaign. The Government promoted this initiative under the pretext that the recent norms of legislation would produce major budgetary expenses, but it should be noted that this text was included in Article 46 of the Election Code when it was adopted for the first time (in 1997) and it stipulated that: "The electoral competitors benefit of the right to be relieved from permanent offices throughout the electoral campaign and they are paid medium salaries from allocations for elections." In the effective formula adopted in 2005 (Law # 176-XVI), Article 46 (3) stipulates that the "Central Election Commission will pay the medium salary from allocations for elections, in accordance with remuneration documents presented by candidates, within three months since election day." Opposition lawmakers criticised the Government’s initiatives, saying that the estimates of the executive are unreal (these amounts count for tens thousands lei), while the lack of possibilities of remuneration throughout the campaign will make candidates who run public offices not to suspend their activity, so that administrative resources may be also used during the electoral campaign. It is worth to note that this draft law was adopted by violating the Parliament’s Regulation (Law # 430-XVI from 27.12.2006 enforced on 23.03.2007), with Article 63/1 stipulating that:
Law on modification of the Parliament’s Regulation. The amendment adopted at the initiative of Communist and Christian Democratic lawmakers explains the new Article 82 (2), which stipulates that plenary sittings of the Parliament, except for secret sittings, may be broadcasted live by national radio and television in compliance with the Broadcasting Code or at the Parliament’s initiative, under a decision of majority of present lawmakers. Most of opposition lawmakers and independent observers said that this amendment annuls the obligation to broadcast live the plenary sittings. This supposition was confirmed by a developer of the draft law, Iurie Rosca, who said during debates that this amendment is needed to stop the abusive interventions of representatives of some parliamentary factions, to limit advertising and public appearance of representatives of some parties that did not participate in electoral race independently.
- the draft law is debated in the first reading and delivered to the appealed commission or other competent commissions in charge with examining amendments of lawmakers, objections and initiatives of parliamentary factions, permanent commissions, decisions of Government, legal directorate of the Parliament’s Apparatus, as well as proposals of civil society representatives;
- lawmakers, permanent commissions and parliamentary factions will present the amendments to the appealed commission within 10 days since the draft was passed in the first reading, during preparation of the draft law for debates in the second reading;
- developers of amendments are accepted at the sitting of the commission for finalisation of the draft law. The commission will inform beforehand the developer about the sitting.
Law on registers. The law regulates the creation, maintenance, reorganisation and erasure of registers; legal relations developed in this process; functions of supervisors of registers. The provisions of this law will cover all types of registers, regardless of form of property or mode of keeping them. The registers will be created and kept on basis of distinct principles: legality; protection of the right of individuals and legal entities; protection of personal data of individuals; continuity; single identity; awarding of sanctioned access, etc.
Law on modification and completion of the law on administrative-territorial organisation of the Republic of Moldova. The territorial structure of the Cahul district was modified at the initiative of a PCRM deputy, with the village of Tudoresti being transferred from composition of the commune of Bucuria to the commune of Tartaul de Salcie. The Communist lawmaker motivated that "the village of Tudoresti was included in the village of Bucuria" from reasons unknown by public authorities and it is supposed that this was done from a "mechanic mistake". It was also said that in spite of legal regulations in force for many years, " the Tartaul de Salcie mayoralty kept and keeps all records on Tudoresti, but residents of the village are included in the additional list of this mayoralty at all parliamentary and local elections," though legally they are part of another entity.
Law on modification and completion of legal acts on activity of prosecutor’s office. The law derives from the legislative action plan on implementation of the Council of Europe’s recommendations and the European Union-Moldova Action Plan (ensuring of impartiality and independence of prosecutor’s office, consolidation of administrative capacity of this institution). It explains the regulations on hierarchy of rankings of prosecutors, terms of mandates of territorial prosecutors, includes new norms on social guarantees, immunities awarded to prosecutors to ensure the equilibrium between facilities granted to judges and prosecutors. The speaker said that by adopting this law, the Parliament finished the adoption of legal measures deriving from the CoE recommendations on judicial reform.
Law on modification of the law on salary system in budgetary sector. The approved document establishes three stages of implementation of salary rises, which the parliamentary majority has earlier suspended at the Government’s initiative. Under amendments, the salary of medical personnel and social assistants must grow by 30 percent on average, of scientists by 22 percent, cultural and sport personnel by 40 percent. Salaries of lecturers will grow by 50 percent, teachers from pre-school and extra-school education by 32 percent and teachers from secondary general education by 17 percent. Opposition lawmakers criticised the attitude of authorities in this field, describing previous and recent actions as populist, aimed at influencing the opinion of voters before elections. They criticised the proposed mechanisms, the lack of clear criteria to argue the salaries of different categories of employees, described the rises as insignificant in comparison with the resources needed for a decent living. Representatives of the parliamentary majority argued that the rises are not essential, given the budgetary problems produced mainly by restriction of exports to the Russian Federation.
Law on modification and completion of the law on physical education and sport. The law aims to modify the provisions on social protection of performance sportsmen, who will be paid life indemnities (in percent, depending on value of medals they gain). Athletes who are citizens of Moldova and gain gold, silver or bronze medals at Olympics, World and European Championships for seniors will fall under incidence of this law.
Law on completion of Article 7 of the law on free economic zones. The law stipulates that if the free zone (subzone) stops working or the status of resident is revoked before the free zone (subzone) stops working, the former resident will place the goods introduced earlier under customs regime of the free zone under another customs regime, in line with legislation in effect.
Law on modification and completion of the law on international treaties of the Republic of Moldova. The document approved in two readings stipulates that if the international treaty does not contain an authentic text in official language, its authentic text will be presented in Parliament in a foreign language and it will be translated into the official language and legalised by the Ministry of Foreign Affairs and European Integration of Moldova. Earlier, the translation and its certification were needed only to publish the text of the international treaty.
Law on modification of some legislative acts (simplification of the tax reporting system). It stipulates the simplification of the fiscal reporting system for individual enterprises which have maximum 3 workers, as well as for reporting of transfer of social insurance premiums and mandatory health insurance premiums. The document is a response to recent protests of holders of entrepreneurial patents, who invoke the reticence toward registration of individual enterprises, costs and complicated fiscal reporting procedures.
Law on modification and completion of the law on state social pensions. Under regulations, "the length of service that grants the right to a pension must cover the period of study for doctor’s degree in the post-graduate system, if this study was completed before this law took effect." The expenses for implementation are estimated at about 4.2 million lei for approximately 2,200 candidates to doctor’s degree registered at present.
Law on modification and completion of the law on publishing and enforcement of official acts. The document stipulates the publishing of a resume of the European Court of Human Rights’ judgments on Moldova in the official gazette Monitorul Oficial within one month since they become definitive. The composition of "resume" will be established by Moldova’s governmental agent to the ECHR, in spite of proposals of representatives of opposition factions who insisted on publishing of the whole judgments for a full information of all those interested.
Law on abrogation of the law on rent. It is considered that this act is out-of-date and invalid, as the new Civil Code was enforced. At the same time, a distinct law on rent in agriculture (198-XV from 15.05.2003), which aims to consolidate the farm land, is still in effect.
Decision on date of general local elections. The document tabled by representatives of all parliamentary factions established that the general local elections will take place on June 3, 2007. The mandate of acting councillors runs off on May 27, 2007, but its term is extended till the date when new bodies of local public administration will be created.
Decision on creation of the special commission for optimisation of legal framework for regulation of entrepreneurial activity. The commission was created to finalise and ensure the continuity of the process of optimisation of the legal framework for regulation of entrepreneurial activity, in line with the mechanism established under the Law # 235-XVI from July 20, 2006 concerning basic principles of regulation of entrepreneurial activity. The chairman of the Parliament will head the commission and most members of the commission represent the Communist faction. The special commission will examine reports and proposals on modification of legal acts that regulate the entrepreneurial activity, will issue the list of legal acts which will be abrogated. The commission will work out draft legal acts for modification and completion of legislation on entrepreneurial activity. The special commission "will be assisted by the World Bank’s Better Competitiveness Project, independent experts and the Business Consulting Council made up of organisations working in associative sector."
Decision on modification of fields of activity of permanent commissions of the Parliament. Under amendments, the legislative aspects and parliamentary control on touristic activities were transmitted from the commission for public administration, environment and territorial development to the commission for culture, science, education, youth, sport and mass media. This initiative came from the chairman of this commission, Communist Deputy Victor Stepaniuc, with experts describing it as faulty, though the tourism is linked to the territorial development and economic development, while the previous amalgamation of fields in the Ministry of Culture and Tourism was not preceded by serious analyses and the situation in both fields remains complicated.
Draft law on public fields and their delimitation. It seeks the delimitation of public fields of the state and public fields of the administrative-territorial units. Public fields are the fields owned by state and administrative-territorial units and the right to possess, use and control them belongs to the Government and local public authorities. These fields may be part of the public and private areas of the state, with the public fields being imperceptible and imprescriptible.
Draft law on modification of the law on economic law courts. It abrogates Article 38 (3) of this law, after the ECHR has condemned Moldova (case Asito vs Moldova), with the European court describing the right of the prosecutor-general to contest final judgments as a violation of the principles of a fair trial.
Draft law on completion of the Code of Administrative Contraventions. The Parliament has passed in the first reading some completions on sanctioning for violation of legislation on beekeeping. The minimum sanction counts for 10 conventional units (200 lei) and it is applied for non-registration of address of bee gardens with mayoralty, while the maximum fine is 200 conventional units (4,000 lei) and the object is confiscated; a similar sanction is applied for violation of some rules on importation of biological material with confiscation of the object of the administrative contravention (for swarms, queens)." Lawmakers said that these sanctions are exaggerated and may essentially affect the persons working in this field.
Draft law on modification and completion of legislative acts (harsher sanctions for violation of copyrights). The document passed in the first reading aims to modify the Code on Administrative Contraventions and the Criminal Code. Many lawmakers raised objections against exaggerated sanctions, extended rights of police bodies and, therefore, the speaker told the newly-created special commission for optimisation of the legal framework for regulation of entrepreneurial activity to study the draft.
1.3. Parliamentary control. Statements
The Parliament has modified the action plan for April-June, deciding to hold one sitting a week.
The parliamentary majority refused to convoke the interior minister for a plenary hearing in connection with abuses and breaches of democratic norms (abusive holding of some persons, journalists, sequestration of copies of some publications).
Also, it refused to invite Government representatives for a hearing on respect for copyright (use of pirated software, including by lawmakers and functionaries of the Parliament) and situation in winemaking sector.
Questions and Interpellations
Social Liberal Deputy Igor Clipii has asked the Government and subordinated bodies to report on:
Christian Democratic Deputy Stefan Secareanu has asked the Government and the Prosecutor-General’s office to take measures, so that economic agents pay for the grapes collected from population on autumn 2006 and to generally report the state of things in the field.
- Legality of some decisions on allocation of finances, under which expenditures in the amount of over one million lei for the travel of some dignitaries to other countries were covered from the reserve fund of the executive;
- Abuse of authority by policemen;
- Measures taken and planned for respect for legislation on respect for copyright, especially on software products.
National Liberal Deputy Vitalia Pavlicenco has submitted interpellations seeking:
Our Moldova Alliance Anatol Onceanu has asked the board of observers of TeleRadio-Moldova Company to examine the legality and compliance of activity of the interstate company Mirwith the Broadcasting Code and to establish if the programme "Rezonsans" aired by this company corresponds to principles of national public broadcasting.
- Control on legality of activity of the communal-dwelling directorate of the Chisinau City Hall. She invoked a collective petition of employees of this directorate, who accuse the administration of this subdivision of the City Hall of abuse, protectionism and corruption;
- Control on legality of dismissal of the chief of the municipal directorate for the protection of family and child;
- Reasons and legality of police’s actions of assaulting and holding representatives of the Liberal Party on March 27;
- Measures taken by the Court of Auditors and CCCEC in connection with some violations following a control on the state-owned enterprise Calea Ferata a Moldovei.
Christian Democratic deputy Valentina Serpul has appealed to the Central Election Commission to ensure the right to vote of citizens who have a permanent domicile in some fruit growing associations in the Chisinau municipality but their residence is not legally confirmed.
Deputy Valentina Cusnir has read the Appeal of the Extraordinary Congress of the Moldovan Union of Oenologists. The appeal evaluates the situation and problems in the field, asking the authorities to take a series of measures:
The Our Moldova faction has read a statement, raising concern and disagreeing with actions and intentions of authorities regarding stricter measures and legislation on migration, entrance and staying of foreigners in Moldova.
- To accept the Union of Oenologists as a professional organisation and mediator;
- To reduce the pressure of state bodies on economic agents working in viticulture and to transfer some administrative competences to representative unions;
- To annul the interdictions on exportation of wines in bulk;
- To simplify the procedures of certification of spirits and marking with state trademarks;
- To increase much the excises for vodka and other spirits for the rise of their prices on domestic market.
The parliamentary faction representing the Democratic Party of Moldova has released a statement on children without parents’ care, warning over the high number of children (about 35,000) who do not have parents to look after them (both parents left the country). The party asked the Government to take efficient measures in this field, notably to create a network of social assistants in all localities, to simplify the procedure of tutorship and guardianship, etc.
Deputy Vitalia Pavlicenco has presented statements:
- "Concerning corruption and injustice that dissolve Moldova as state." The authors accuse the authorities and warn that the political system, justice and other law bodies are most affected institutions;
- Concerning "assaults of Christian Democratic People’s Party chairman Iurie Rosca on political opponents."
2.1. Appointments. Reshuffles
The executive has dismissed Serghei Iatco from the post of director of the State Service for Religious Denominations. Although he was relived from office "at the demand," many experts link the dismissal to a recent ECHR judgment that sentenced Moldova for not registering the religious denomination "True Orthodox Church of Moldova". Competent representatives of the Service for Religious Denominations delayed the registration in spite of a final decision by the Supreme Court of Justice and it was supposed that the omission was linked to administrative influences from high-ranking officials.
The executive has appointed Vitalie Iurcu as director of the leading board of the National Agency for Energy Regulation, with a delay of several years. Iurcu has worked in private structures and USAID/Moldova.
Decision on indexation of social insurance conscriptions and some state social conscriptions. The document establishes the coefficient of indexation of conscriptions in 2007 at the level of 20.7 percent, given the annual rise of Consumer Price Index by 12.7 percent and annual growth of the medium salary on country by 28.7 percent in 2006. Starting April 1, 2007, the minimum indexed pension will be 361 lei – retirement pension for workers in agriculture; 406 lei – retirement pension for other beneficiaries of pensions; 196, 278 and 288 lei – pension for invalidity (3rd, 2nd and 1st degrees). Military pensions and state social allocations for some categories of citizens will be indexed by 12.7 percent only.
Decision on transmission of some fields. The document stipulates the free transmission of five fields covering more than two hectares in diverse sectors of the Chisinau municipality to the National Housing Service, with the declared purpose "to create conditions for resolving the problem of building social residences in the Chisinau municipality."
Decision on activity of the Agri-Industrial Agency Moldova-Vin in 2005–2006. The Government considers that the agency has taken some measures to accomplish the goals from governing programme and priority programmatic documents, ensuring the creation and improvement of the institutional framework needed to revitalise and develop the vine growing and winemaking complex. It notes the following accomplishments:
Following are the shortcomings:
- Elaboration of legislative and normative acts;
- More seeding materials;
- Planting of 9,700 hectares of vine in 2005–2006, with state subsidies worth over 170 million lei;
- Improvement of the spirits quality control system, creation of a specialised centre.
Decision approving the Government’s activity plan for the 2nd quarter of 2007. The plan contains three general chapters: – concepts, strategies and programmes; – draft legal acts; – draft normative acts. Thirty-nine actions and elaborations are planned overall.
- The existing technical-material base of vine growing nurseries cannot produce all necessary seeds;
- The goal of annually extending the vineyards by at least 10,000 hectares fails;
- The actions for the promotion of spirits and diversification of markets were inefficient;
- The process of adjusting the normative documentation to the European Union’s standards must be speeded up;
- The making of spirits has essentially declined because of Russia’s embargo (the making of wines decreased by 50 percent and of distilled spirits by 37 percent in 2006). The agency could not propose a strategy capable to reduce the negative effects.
Decision on rise of scholarships. Under the document, scholarships for students of universities and colleges will grow by 35 percent, up to between 285 and 365 lei. Scolarships of students of vocational institutions will be increased from 120 lei up to 200 lei, at the initiative of prime minister.
2.3. Sittings. Decisions. Statements
Sitting on development of districts
A republican sitting with the participation of heads of ministries, districts and city halls has focussed on social-economic development, execution of budgets and development of taxable base, spring agricultural works, sanitation and arrangement of localities, etc. The prime minister outlined the need of fulfilling all budgetary plans for 2007, including through efficient development measures and enlargement of the taxable base, welcoming the trends of increasing own incomes in the districts of Dubasari, Ocnita, Anenii-Noi, Floresti, Briceni, Orhei, the Chisinau municipality and raising concern with the decline of own revenues in the districts of Edinet, Glodeni, Taraclia, Calarasi. According to a press release, Vasile Tarlev outlined the "necessity of applying the Tax Code efficiently and transparently, in order to prevent the blocking of activity of economic agents, to establish programmes on payment of owed taxes and to combat illicit financial-economic activities in cooperation with competent bodies." The prime minister emphasised the efficient implementation of the national gasification programme, elaboration and implementation of the drinking water providing and sewerage strategy, ensuring with electricity, renovation of national and local roads, attraction of investments in territories among development priorities of districts.
Sitting of the National Commission for European Integration
The commission has evaluated the implementation of the Moldova-E.U. Action Plan, hearing a report on results of implementation of the plan in the first quarter of this year and priorities for the next period. The minister of foreign affairs and European integration described 2007 as a year of crucial importance for implementing the E.U.-Moldova Action Plan and gaining the quality of associated member of the E.U., indicating the existing shortcomings in this process. The signing of the visa facilitation agreement and gaining of autonomous trade preferences remain among basic goals of Moldova in 2007. The prime minister particularly noted the importance of a priority implementation of chapters of the Action Plan concerning respect for human rights and principles of the state based on the rule of law, reformation of the judicial system and struggle against corruption.
The chief of state has awarded the "Labour Glory" Order to:
The chief of state has signed a decree on creation of the national commission for preparation of publishing of the Moldovan encyclopaedia. Mariana Slapac, deputy chairwoman of the Academy of Sciences, was appointed chief of the commission and scientists, writers and artists, functionaries, parliamentarians are members of the commission. The action plan will be worked out within 3 months and the Government will approve and consider the possibility of financing the publishing of the work.
- to parliamentarian Oleg Mantorov, member of the administration of the Organisation for the Protection of Rights of Slavs VECE;
- to Tudor Tataru, director-general of the Creation Centre Satul Moldovenesc – Buciumul.
3.2. Sittings, Decisions. Statements
Concerns with human rights and health of population
Vladimir Voronin has convoked a sitting on optimisation of activity of the Moldovan Centre for Human Rights and growth of the role of ombudsmen. The participants exchanged opinions about actions needed to improve the services of this institution, work out a complex of legislative and institutional measures aimed to enhance the efficiency of the centre. The president also noted the need of updating the law on ombudsmen in compliance with E.U. standards, backing proposals saying that the national legislation must oblige public authorities to react promptly and adequately to appeals of ombudsmen, to help an operative examination and settlement of cases of violation of human rights and to contribute actively to respect for human rights and fundamental freedoms.
Moldova’s president has asked the Government to launch the procedures needed to sign the U.N. Convention on the Rights of Persons with Disabilities approved on December 13, 2006 and opened for the signing on March 30, 2007. According to the chief of state, the signing of this convention will mean that our country recognises the international principles of promotion and protection of rights of disabled persons.
President Vladimir Voronin has attended a conference on national health policy: importance and prospects, which focussed on the draft National Health Policy. The chief of state said that the document is necessary and welcome and it must become a mechanism of systemic approach of health problems and joining of inter-sector efforts for better lives and health of population from birth to old.
Generous donations for cultural institutions
The Moldovan president has visited the Republican Theatre Luceafarul to greet the staff on the World Day of Theatre and to give a modern car from state leadership. They discussed the stage of elaboration of projects on reconstruction of the theatre, with the chief of state calling for the radical and rapid renovation of the institution.
The chief of state, prime minister and minister of culture have presented the building of the former entertainment complex Moscova to the staff of the Eugene Ionesco Theatre, as the state authorities gave it to this cultural institution. Vladimir Voronin noted the opportunity of adapting the rooms of the building to needs of the staff and proposed the elaboration of a project on rearrangement of the building. The state has recently recovered the building because of considerable debts of former owner. The price of the acquisition was not made public.
1 To note that many representatives of vine growers and winemakers have asked the Government at the recent congress of Moldovan oenologists to award facilities and to modify the legislation in effect, saying that they cannot pay for the grapes acquired from citizens because of the Russian Federation’s embargo.
1. Financial-banking system
Assets of Moldovan banking reach 2 billion dollars…
According to data of the central bank, the total assets of the domestic system rose by 5.32 percent in January-February 2007, up to about 23.990 billion lei (1.91 billion dollars). The assets of commercial banks rose due to the growth of big and medium-size banks. It was based in turn on growth of foreign investments in the capital of Moldovan banks. Thus, the share of foreign investments in the capital of Moldovan banks rose by 1.18 percentage points in January-February 2007, up to nearly 64 percent and by 13.8 percent compared with the same period of 2006.
At the same time, the credit portfolio of commercial banks rose by 2.3 percent this year, up to 14.14 billion lei, while the balance of deposits grew by 4.7 percent, up to 18.05 billion lei. In comparison with the similar period of 2006, they have grown by over 38 percent and 31 percent, mainly due to capitalisation of banks. Total assets of the banking rose by about 27 percent on account of foreign investment inflows. The assets rose most in the last quarter of the year, notably by 1.8 billion lei, compared with nearly 3 billion lei in the 1st-3rd quarter of 2006.
…and they are comparable with assets of a medium-sized Czech bank
BCR Chisinau, which became meantime the daughter bank of the Austrian giant Erste Bank, has achieved the most spectacular growth of assets, notably by 178 percent. EximBank, purchased by Italy’s Gruppo Veneto Banca, ranked the 2nd place after registering a 55-percent rise of assets, followed by Mobiasbanca – 38.1 percent and Moldindconbank – 31.8 percent.
Share of insurance market in GDP grows, but below level of developing states…
At the same time, the share of Moldovan insurance services in GDP reached 1.43 percent in 2006 and rose compared with 2005, when it was 1.1 percent. However, it is lower than the level of developing states, not to mention the developed countries. In particular, insurance services in transition countries cover up to 3 percent of GDP, compared with about 6 percent of GDP in majority of developed states. The enforcement of the new law on insurance that the Parliament has recently re-voted will strengthen the insurance market. According to estimates, about 22–25 insurance companies could continue operating on market, compared with 32 in 2006.
Moldovans working abroad transfer more money to their country…
Currency transfers via formal channels accounted for about 855 million dollars in 2006, which is by 25 percent more than in 2005. Moldovan banks perform money transfers via the rapid systems Western Union, Unistream, SWIFT, Strada Italia, Trabex (Spain), Turciye Express (Turkey), Lider (former Vip Money Transfer), Rus Express (Russian Federation), Strada Italia, Banco Espirito Santo (Portugal). Moldova was ranked the 1st place in the World Bank’s standing, with migrants’ remittances covering nearly 20 percent of GDP, according to the report "Migration and Remittances: East Europe and the former Soviet Union." Moldova is one of biggest countries in the world in terms of emigration, World Bank experts estimated. Considerable remittances to Moldova facilitated the reduction of poverty of households and offered an essential exchange.
Besides all positive effects of migration correlated with remittances, constant remittances make the families who depend on emigrants are becoming more inert in seeking jobs or building individual business. The reduction of labour force inside the country is also a negative effect of emigration on domestic labour market. The reduction of labour force offer has also compromised some percentage points of the growth achieved in 2000–2005. Even more, the degradation of quality of human capital cannot be neglected. All these drawbacks must urgently find a place in Government’s agenda.
Share of total foreign debt in GDP is about 83 percent…
Moldova’s foreign debt has grown by about 757 million dollars (some 44 percent) in the past six years, up to 2,482 million dollars at the end of 2006. It covered about 83 percent of the GDP of 2006 (approximately 3 billion dollars). The total foreign debt, which includes the debts of governmental and private sectors, has annually grown by 10 percent on average, except for years 2001 and 2004, when it declined by more than 44 million dollars and, respectively, 39 million dollars, compared with the precedent years. The foreign debt rose more in 2006, notably by 402 million dollars (more than percent 19 percent), compared with 2005.
According to the National Bank of Moldova, the debt of the governmental sector dropped by nearly 100 million dollars (12 percent) in late 2006, compared with early 2001, down to 718.6 million dollars. At the same time, the governmental debt rose by more than 9 percent (60.6 million dollars), compared with 2005. The share of the governmental debt in the total foreign debt was around 30 percent.
…while deficit of current account is among highest in the region as share in GDP
At the same time, the deficit of current account of Moldova’s balance of payments rose by more than 65 percent in 2006, up to approximately 399 million dollars, holding over 13 percent of GDP (relatively high). According to preliminary data, the deficit of trade balance (which is the main component of the balance of payments) with goods and service accounted for about 1,597 million dollars.
Consultations of the mediators and observers in Vienna
On 21 March in Vienna took place a new round of consultations of the mediators on behalf of the OSCE, Russian Federation and Ukraine, and the observers on behalf of the EU and US, with the participation of the OSCE Chairman in Office, Spanish Minister of Foreign Affairs, Miguel Anhel Moratinos. The consultations concluded with the signature of a final statement in which representatives of the mediators and observers have called for the resumption of the negotiations in the "5+2" format as soon as possible. According tot the statement, both the mediators and the observers are concerned with the lack of dialogue between Chisinau and Tiraspol. At the same time, the signatories expressed their readiness to organise in the nearest future a joint meeting with the political representatives of the two sides.
We would like to remind that the negotiations round scheduled for 15–16 February 2007 did not take place because of "lack of consensus between participants", and that meetings in this format have ceased to be organised since February 2006. It is worth noting that during the first trip to Moldova of the new EU Special Representative for Moldova Kalman Mizsei he met with the Transnistrian leader Igor Smirnov who expressed his availability to resume the dialogue with the Moldovan authorities.
European commercial preferences for Transnistrian economic agents
On 17 March the Government of the Republic of Moldova adopted a series of amendments to the procedure of issuing certificates of origin to economic agents from the Transnistrian region. According to the amendments, the Transnistrian economic agents registered permanently or temporarily with the Moldovan State Registration Chamber will be granted certificates of origin of type "C", "A", "CT-1" and "EUR", which will allow them to enjoy the same commercial preferences granted by the EU to Moldovan economic agents. According to an information note of the Ministry of Reintegration, "the proposed amendments are part of the measures taken by the Ministry of Economy and Trade with a view to obtaining the Autonomous Commercial Preferences from the EU and are to contribute to the process of socio-economic reintegration of Moldova". According to the Ministry of Reintegration, at present 290 economic agents from Transnistria are registered with the Moldovan authorities: 124 on a permanent basis and 166 on a temporary basis. Among the Transnistrian economic agents registered permanently in Chisinau are the shoe factory "Tighina", textiles factories "Tirotex", "Vestra", "Intertentr-lux" etc. Temporary registration has been granted to the Ribnita Metallurgical Plant, Ribnita Cement Factory, "Moldavcabel" Factory, Electrical Power Station from Kuciurgan, Wine Factory "Buchet Moldavii" etc. In January 2007 the Moldovan Trade and Industry Chamber issued to Transnistrian economic agents 574 of certificates of origin, including 74 preferential ones ("T-1–63", "EUR-11").
International Conference on Transnistrian Conflict
On 26–27 March in Chisinau took place the International Conference "Settling the Transnistrian Conflict in the Context of Moldova’s Europenisation", organised by the Foreign Policy Association with the support of the PBF Project and the British Embassy Chisinau. The conference was attended by a series of Moldovan high level officials, representatives of EU institutions, OSCE, heads of diplomatic missions accredited to Moldova as well as renown experts from the EU, Ukraine, Russia, Romania, US and Moldova.
In his welcoming address to the conference participants, Chairman of the Parliament of Moldova, Marian Lupu, said that the last EU enlargement round has placed Moldova in a new regional context, the Transnistrian conflict being a source of instability for the whole European security system. Speaker Lupu welcomed the participation of EU as observer in the "5+2" format and the signature of teh EU-Moldova Action Plan as prerequisites for a viable partnership with a view to the Transnistrian settlement.
Lupu reiterated Chisinau’s position on the Transnistrian issue, founded on the principle of territorial integrity and non-violability of the borders. "The democratisation and demilitarisation of the region remain our stated priorities as the adopted approach to Transnistrian settlement", Speaker Lupu stated. He proposed a series of measures to attain these objectives: launch of an OSCE Mission to evaluate the situation of democratic institutions and inspect the military sites in Transnistria; honouring of Russia’s commitments assumed at the Istanbul OSCE Summit in 1999; transformation of the current peacekeeping operation into an international one to include military and civilian observers with international mandate; opening in Bender an EU Information Centre by the model of the centres in Chisinau, Balti and Cahul; strengthening of the civil society and supporting civic initiatives aimed at the democratisation of the region.
The EU representatives, including the Head of the EC Delegation to Moldova, Cesare de Montes, Head of the European Parliament Commission for cooperation with Moldova, Marianne Mikko, and the Senior Advisor for Ukraine, Belarus and Moldova in the Policy Unit of the Secretariat of the European Council, Pirkka Tapiola, strengthened the need to increase the attractiveness of Moldova for the citizens from the left bank of Nistru River by steeping up the European integration efforts and the democratic reform process. Pirkka Tapiola stated that the European Union will continue its efforts to identify a final and comprehensive solution to the Transnistrian conflict. The key principle of the settlement will be the respect for the sovereignty and territorial integrity of Moldova, and the European Union will not give up on this principle. According to the European official, "the final settlement model will not involve necessarily the status of autonomy, federal or confederal subject for Transnistria, key attention should be given to the delimitation of competences between Chisinau and Tiraspol". At the same time, any solution should be a viable one, and contribute to the European integration of Moldova and a life in dignity for people on both sides of River Nistru. Marianne Mikko in her turn expressed concern at the frequent violations of the freedom of the media registered lately in Moldova and the lack of sound civil society institutions. "Chisinau should understand that the process of Europenisation is not only about nice words, it’s also about passing laws, applying them, and imp0lementing the democratic reforms", stated MEP Marianne Mikko.
Republic of Moldova – Council of Europe
The European Court of Human Rights (ECHR) sentenced Moldova on March 27 in the case Istrati and others v Moldova for violating the right to freedom and security, the right to private and family life, using inhuman and degrading treatments. Applicants Viorel Istrati, Alexandru Burcovschi and Roman Lutcan have invoked improper detention conditions, lack of medical assistance and violation of the right to communicate with their lawyers in private. The ECHR told Moldova to pay 6,000 euros, 4,000 euros and 5,000 euros in pecuniary damages and about 4,000 euros in costs and expenses to the applicants.
The Moldovan Parliament amended the law on publishing and enforcement of officials acts on March 29. Under amendments, ECHR decisions and judgments against Moldova will be published in brief in the official gazette Monitorul oficial.
Republic of Moldova – European Union
The Berlin Declaration
The European Union (E.U.) marked on March 25 the 50th anniversary of the signature of the treaties that created the European Economic Community (EEC) and the European Atomic Energy Community (EUROATOM). These documents are also known as the Treaties of Rome because they have been signed in the Italian capital. They have really given a new route to post-war Europe, toward peace, prosperity, democracy and the state based on the rule of law. Now they are part of the visiting card of the E.U. The signing in Berlin of a European solidarity declaration (the Berlin Declaration), which summarises the main accomplishments of the E.U., outlines major challenges on way of the E.U. and establishes the future goals of this community, was the main event linked to the 50th anniversary of the Treaties of Rome.
On occasion of this anniversary, President Vladimir Voronin has signed a letter saying that the Republic of Moldova welcomes the Berlin Declaration and subscribes to the E.U. principles, declaring its irreversible adhesion to the E.U. values. This symbolical gesture was very necessary since Moldova is bidding to join the E.U. in its way toward prosperity and democracy. But Moldova will have to demonstrate that it is a reliable long-route partner, in order to make this gesture of symbolical adhesion credible. The implementation of the whole Moldova-E.U. Action Plan (EUMAP) could be a cogent proof in this respect. However, regrettable actions taken by police on March 27 throw doubts on sincerity of Chisinau, which easily allows the defiance of some values of the Berlin Declaration, though it subscribes to this document.
Sitting of NCEI
Minister of Foreign Affairs and European Integration Andrei Stratan presented a report on results of implementation of the EUMAP in the first quarter of 2007 and priorities for the next period, at a sitting of the National Commission for European Integration (NCEI) on March 27. Stratan noted that the signing of a visa facilitation agreement with the E.U. is a basic priority of Moldova in 2007. Elsewhere, Minister of Economy and Commerce Igor Dodon said in a report that Moldova is advancing in negotiations aimed to obtain the Autonomous Trade Preferences (ATP) and the Chisinau authorities have met all requirements of the European Commission in this respect. On the other hand, a group of experts of the European Commission who visited Chisinau in January-February to attend a meeting of the Moldova-E.U. Cooperation Subcommittee "Economy, Finance and Statistics" said that Moldova should do more to boost the credibility of the goods origin certification system, to improve the customs management and the auditing at exporting enterprises before gaining the ATP.
Joint visa issuance centre
Mihaly Bayer, Hungarian ambassador to Moldova, has recently said that the joint European visa issuance centre, which will formally open in the diplomatic representation of Hungary on April 25 to issue E.U. visas to Moldovan citizens, will accept visa applications starting April 12. This action aims to adapt the activity of the centre before the formal opening and to shortly remedy all deficiencies. We recall that this centre will issue Hungarian, Austrian and Slovenian visas at the beginning and Estonia, Latvia and Denmark will join the centre meantime. According to Bayer, Moldovans will have access to information on services of the centre round o’clock and the centre will finish and launch its website www.cac.md. The Hungarian ambassador noted that Moldovans apply for about 12,000 visas for Hungary, Austria and Slovenia a year, while the centre will be able to process about 50,000 visas a year. A communication by the European Commission Delegation in Chisinau has earlier said that the centre will be capable to issue at least 10,000 visas a year.
Opening of Pro Europe Centre in Balti
After the first centre Pro-Europe opened in Cahul on February 20, a second similar centre was inaugurated in Balti on March 30. Both centres opened with the support of the Representation of Eurasia Foundation in Moldova and the Ministry of Foreign Affairs and European Integration of Moldova. The centres aim to provide information on E.U., the European Neighbourhood Policy (ENP), implementation of the EUMAP and the process of European integration of Moldova. The centre opened after the conference on cooperation between local public authorities, civil society and mass media in the European integration process, at which the strategy on information and communication for European integration was launched for public debates. We will describe this document in a future issue.
Republic of Moldova – Romania
While the political relations between Moldova and Romania still are difficult, the economic ties seem to be different. The Ministry of Economy and Commerce has reported that commercial exchanges between Moldova and Romania rose about 1.9-fold in January-February 2007, compared with the similar period of 2006, up to 135.7 million dollars. Moldova exported goods worth 34.1 million dollars in the period concerned (1.7-fold more than in January-February 2006) to Romania and imported goods worth 101.6 million dollars (2.1-fold more than in January-February 2006). These figures deny previous estimates by experts who forecasted a decline of the trade between the two countries after Romania’s accession to the E.U. and cancelation of the free exchange regime. However, the significant rise of the deficit of trade balance with Romania up to 67.5 million dollars, compared with 29.4 million dollars in January-February 2007, should raise concern.
Republic of Moldova – Ukraine
Igor Colenov, director-general of the Border Guard Service of Moldova, and Nikolay Litvin, chairman of the State Guard Service of Ukraine, signed a plan on development of bilateral cooperation in 2007 at a March 22 meeting. The meeting also focussed on situation at the Moldova-Ukraine border and outlined the necessity of extending the information exchange between border guard services of the two states.
The State Administration of Civil Aviation has said in a press release that the exploitation of the Chisinau-Kiev flights by Moldovan and Ukrainian air operators is still uncertain. The sides met on March 23 and failed a compromise on number of weekly flights. The Moldovan side seeks six flights a week distributed equally, while Ukraine seeks ten flights a week. The existing dissensions between the two sides are expected to be settled at a new round of negotiations.
Republic of Moldova – Russian Federation
A parliamentary delegation of the Russian Federation headed by Aleksander Moskalets, deputy chairman of the State Duma committee on constitutional legislation and state building, visited Moldova on March 20–22. The Russian delegation visited Chisinau to attend a sitting of the Moldovan-Russian interparliamentary cooperation commission. That was the first meeting at this level after an agreement on parliamentary cooperation was signed in 2003. Also, Russian legislators met with President Vladimir Voronin and Prime Minister Vasile Tarlev.
The sides discussed many issues, including the Transnistrian problem, with the Moldovan side underlining that Moldova calls for a strategic partnership based on pragmatism and mutual understanding with the Russian Federation.
Moldovan and Russian legislators have adopted a statement at the sitting of the Moldovan-Russian interparliamentary cooperation commission. It stipulates that the sides will work out recommendations on settlement of existing problems in bilateral relations, including the Transnistrian conflict, at the next sitting set for September 2007. The recommendations will be raised to executive bodies of the two countries.
Republic of Moldova – Belarus
It was assured in the period concerned that Belarus will restart importing Moldovan wines soon and the Moldovan-Belarusian company Moldbelvin will be the only one in charge with deliveries of wines in bulk. The company was founded by AgroVin Bulboaca of Moldova and Belgospisheprom of Belarus. They own 80 percent and 20 percent of the statutory fund. According to Belgospisheprom director Leonid Senko, Moldbelvin will deliver wines in bulk to all consumers from Belarus.
Earlier, Iurie Mudrea, chief of the analysis and forecast service of Moldova-Vin Agency, has assured that "the [Moldovan-Belarusian] enterprise will not monopolise the exports of wines in bulk" to Belarus.
1 Declaration on the occasion of the fiftieth anniversary of the signature of the Treaties of Rome, 25 March 2007, Website of the German E.U. Council Presidency.
2 www.eurovisa.md or www.euvisa.md, or www.euvisacentre.md, or www.europeanvisacentre.md could be better names for this website.
Studies, Analyses, Comments
Fiscal revolution: for or against?
Iurie Gotisan, 1 April 2007
The Government has recently examined the draft tax policy of Moldova for 2008–2010, in which several scenarios of policies have been evaluated, including very bold ones on reduction of taxes
Quality revision of "conditions of political consensus"
Sergiu Grosu, 1 April 2007
Fifty-eight parliamentarians representing the Party of Communists of Moldova (PCRM) and the Christian Democratic People’s Party (CDPP) adopted on March 23 a law on modification of Article 82 of the Parliament’s Regulation, which was tabled (on March 19) by Communist Deputy Victor Stepaniuc and CDPP lawmakers Iurie Rosca and Stefan Secareanu