Moldova. Analytics. Who can take advantages?
BSSB.BE globalriskinsights.com 11.11.2015
Moldova, a small country bordering Ukraine and Romania, has seen its government dismissed after weeks of protests in what has been called ‘Moldova’s Maidan’.
Although the EU is preoccupied with its internal refugee and migration crisis, another crisis is unfolding on its borders in Moldova. Political upheaval has embroiled an economy facing bankruptcy. The head of Moldova’s Central Bank already resigned.
On October 15, the Moldovan Parliament lifted the immunity of Vlad Filat, who was prime minister from 2009 – 2013, and he was arrested by Moldova’s anti-corruption bureau over a $1 billion fraud.
The opposition Communist and Socialist parties have filed a no-confidence motion against the government, accusing Prime Minister Valeriu Strelet of involvement with the corruption as well. On October 29th, the motion passed, ending a government that had been in office for barely three months.
For weeks, Moldovan protestors had taken to the streets of Chisinau to demand the now forthcoming early elections and the resignation of PM Strelet, angry at the current government’s lack of vigour in cleaning up the huge banking scandal that erupted in June.
Moldova’s strategic position and its political environment, split about evenly between supporters of the West and Russia, mean it can become a bone of contention between the EU and Russia on the Ukrainian model.
Moldova’s breakaway region of Transnistria adds a potentially volatile element to the mix, as it is Russian-leaning and has already formally asked if it could go the way of Crimea and be annexed to Russia. Russia has so far abstained from recognizing the self-proclaimed Republic, although thousands of Russian soldiers are in the region in a self-described ‘peacekeeping’ capacity.
The demise of the current government may well bring an end to the pro-EU course Moldova embarked upon in 2009. Both Strelet’s government1 and its predecessor2 (which was dismissed only three months before after being in office a mere 100 days itself) campaigned on a pro-EU platform. As these parties became associated with corruption and are felt to be failing on delivering much-needed reforms, the popularity of their pro-Russian opposition will grow.
It also allows the latter to establish a link between a pro-European course and corruption in the public mind.
Increased Russian influence
Fears of Russia sending in ‘little green men’ in Moldova as they did in the East of Ukraine last year are unfounded. Putin’s Russia is overstretched, as shown by its recent retreat from Eastern Ukraine, a move disguised by the concurrent expansion of activities in support of Syria’s dictator Assad.
The Crimea is proving to be an economic burden. Although the Kremlin is working hard to maintain an impression to the contrary, its economy is teetering due to a combination of Western sanctions and a continuing low oil and gas price.
The bigger risk is therefore more subtle. If the pro-European parties cannot form a new government within the next couple of weeks, new elections need to be held in which the pro-Russian parties are sure to gain seats, of which they only need a few to have a majority. It will be very tempting to Moscow to spend some money supporting the pro-Russian parties, as this provides a much cheaper (and democratic) alternative to expand its influence in Moldova.
Moreover, whereas the EU has removed the biggest carrots it has towards Moldova by ruling out EU membership in the nearby future and will not provide economic assistance until its banking system is cleaned up, Russia may promise immediate relief by removing its ban on imports of Moldovan fruits and wines to sweeten any policy-shift towards Moscow. Many Moldovans already favour deeper ties with Russia, its traditional export market.
Finally, and most importantly, a win for pro-Russian parties in new elections may well bring Moldova’s accession to Russia’s Eurasian Customs Union one step closer yet. This would decrease the likelihood of Moldova’s endemic corruption being tackled by bringing it into the former Soviet Union’s orbit. For geopolitical and economic reasons, it would be bad news for European officials and investors alike.
1 This was built on a coalition of the Liberal Democratic Party (LDP), the Democratic Party (DP) and the Liberal Reformists Party, three pro-European parties that came together to form the “Alliance of European Integration III”.
2 The preceding Gaburici (minority) government comprised the LDP and DP.