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Transnistrian Conflict on July 1–16, 2007

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European Parliament Resolution on Human Rights Violations in Transnistria

On 12 July 2007 the European Parliament voted unanimously a Resolution on human rights violations in Transnistria (Republic of Moldova). The Resolution takes note of the lamentable human rights situation in the Transnistrian region and “strongly deplores the lack of respect for human rights and human dignity in Transnistria, as reflected by the trial and detention of the Ilascu Group, the denial of the liberties of the population living in that area, ignoring the right to access to information and education, resulting in widespread trafficking in human beings and organised crime.” The European forum condemns the repressions, harassment and intimidations against representatives of the independent media and civil society organisations by the Transnistrian separatist regime. The European Parliament reiterates the commitment of the European Union to contribute to a lasting solution of the Transnistrian conflict and calls for a greater involvement of the EU in solving this conflict in its immediate neighbourhood, including the enhancement of the EU’s status to that of a negotiating partner.

The Resolution was initiated by the MEPs on behalf of Romania’s Democratic Party together with Ovidiu Gant of the Democratic Forum of Germans from Romania, and was supported by the European People’s Party and European Democrats Group. This is the third EP resolution on Transnistria in the past two years. Although the EP as an institution has a limited role in the formulation and delivery of EU’s Common Foreign and Security Policy, its statements have placed not once important issues on the EU’s foreign policy agenda.

It is worth noting that during the same period, the EU Special Representative for Moldova, Kalman Mizsei, referring to the Transnistrian settlement process while on a visit to Bucharest told the press there was no closed dictatorship in Transnistria, nor a monolith political structure. On the contrary, the region boasts political pluralism, a political opposition, ever stronger civil society organisations out of authorities’ control, and business executives holding other than the official views.

Budgetary crisis in Transnistria

The Transnistrian region is facing an acute budgetary crisis due to the cessation of financial assistance from Russia in 2007. The region’s 2007 budget was adopted with a deficit of about 83 mln. USD, which was to be covered by financial aid from Russia. However, in 2007 Russia stopped funding the region, and several budget lines have remained uncovered, including payments for pensions, salaries and transfers to local budgets. At present for these payments the region has gathered a debt of about 33 mln. USD.

On 11 July the supreme soviet in Tiraspol authorised a 14 mln. USD loan to the regional executive for the payment of pensions. The loan will be made from a special account created last year for the payments for consumption of Russian gas.

The decision to authorise the “state” loan was criticised by some representatives of the regional legislative, who warned that the utilisation of these funds might lead to incapacity of payment for the Russian gas and an eventual cut of Russian gas supply to the region.

The head of the Transnistrian legislative, Evghenii Sevciuc, commented in the following way the decision: “Clearly, we do not look very good in Gazprom’s eyes. This decision does not fit into any economic logic, because gas payments need to be transferred to Russia. But when one deals with two bad decisions, the one in the interests of citizens needs to be taken”.

As Tiraspol leaders’ demarches to the Russian authorities to resume financial assistance to the region have failed, Tiraspol will take a series of measures to cover the budget deficit from internal sources. Thus, the regional legislative is considering a package of legislative proposals envisaging a series of “unpopular” measures with a view to raise incomes to the 2008 budget. Among the proposed measures is the institution of a tax on real estate for physical entities and a 30% increase in income tax for legal entities.

These initiatives do not enjoy the support of the large enterprises from the region. According to a representative of the Ribnita Steel Factory, the enterprise whose contribution to the regional budget accounts for about 60% of budget revenues, the increase in the fiscal burden will only worsen the situation of functioning enterprises.

The tax raise will result in a certain increase in budget revenues, however it will not solve the difficult budgetary situation in the region altogether. Thus, a boarder economic stabilisation programme is being proposed, one to also include an overhaul of the current tax system.

Russian media earlier reported that Russia would stop its financial assistance to Transnistria as a result of its irritation at the “consumptionist” behaviour of Transnistrian leader Igor Smirnov, who rejects any agreement with Chisinau, even one backed by Russia, refuses to pay Transnistria gas debt to Gazprom and only continues asking for more non-reimbursable financial assistance from Moscow.

According to Transnistrian authorities, as of 1 January 2007 Transnistria’s debt for gas consumption to Russian Gazprom amounted to 1.3 billion USD, which is 2,400 USD per inhabitant.

June 16–30, 2007 July 17–31, 2007