Weekly Roundup

April 10 - April 16

Welcome back to Moldova Matters! In this weekly roundup we will check in with the top stories of the week in Politics and Economics. Subscribe to Moldova Matters to get our Weekly Roundup and other content sent right to your email!

Political Crisis - is the End in Sight?

On Thursday, the Constitutional Court sided with President Sandu and agreed that due to the Parliament having failed to form a new Government, the Constitution requires the President to call for early elections. This case was closely watched this week and culminated dramatically with President Sandu herself appearing in the Constitutional Court to present her case. Following this decision, the President must issue a decree dissolving Parliament and setting a date for new elections which must take place more than 60, but less than 90 days from the issuing of the decree. This ruling marks a major win for President Sandu and her former party, PAS, which sought elections as a Presidential campaign promise and as a mechanism for removing the political gridlock. This week, even the Council of Europe and Members of the European Parliament weighed in, stressing that giving the people a vote is the only way out of the current impasse. President Sandu says that she will soon sign a decree dissolving Parliament and setting the date for elections, quote “Early elections are imminent, they cannot be avoided. The time has come to put an end to one of the most corrupt Parliaments in the history of the Republic of Moldova.”

What about the State of Emergency?

Recall, Moldova entered a State of Emergency from April 1 to May 30th and that according to the Constitution, there can be no elections during a State of Emergency. The PAS Party is challenging the State of Emergency in the Constitutional Court which will have to rule on whether an Interim Government can call a State of Emergency at all. Further, they may express an opinion on whether the emergency was real, or simply politically manufactured. In an interview this week the Interim Prime Minister acknowledged that there was no case for a 60 day state of emergency and that it was a Parliamentary initiative used for political purposes. States of Emergency are not meant to be Parliamentary actions but be done on the Government’s responsibility. Furthermore Mr. Dodon has previously asserted that an Interim Government has no right to declare a State of Emergency, before changing his tone and encouraging this one to pass. As such, there is likely to be a very interesting debate in the Constitutional Court on the issue. 

So What Happens Next?

Once President Sandu sets an election date, we may have to wait for the Constitutional Court to rule on the State of Emergency to know whether it should expire naturally or be canceled. Mr. Dodon has laid out another scenario though where Parliament refuses to acknowledge the latest ruling of the Constitutional Court. This would set up an even deeper Constitutional Crisis in which the popular President and Constitutional Court face off against a deeply unpopular Parliament. One that even Mr. Dodon agrees must be dissolved…. Just not right now. It seems Mr. Dodon’s options are narrowing considerably. Elections are coming, the only question is when exactly. 

Elsewhere in Politics - The Kidnapping Plot Thickens

The recent kidnapping of Ukrainian ex-judge Nicolae Chaus, discussed in depth in last week’s Weekly Roundup, has turned into a domestic political issue in Moldova. While investigations and Parliamentary commissions meet to treat this as both a criminal and national security issue, Mr. Dodon has chosen to use it as an attack vector against President Sandu. He claims that the President was aware of the kidnapping and complicit in planning it with the Ukrainians. Mr. Dodon even suggests that President Sandu could be arrested over this. President Sandu categorically rejects these (currently unproven) claims. While the political back and forth may be par for the course now, there is something much bigger afoot here and Moldova seems to be struggling to understand what it is. At the very least, there was a failure to heighten the alert status at the borders for more than 6 hours after a very public abduction. More broadly though, the situation has triggered a developing diplomatic crisis with Ukraine. Leaked documents showed that the Moldovan Ministry of Foriegn Affairs has asked Ukraine to lift diplomatic immunity from one of the suspects in the kidnapping. Meanwhile, President Sandu’s team has been unsuccessful at setting up direct talks with Ukrainian President Zelenski. The leaked memo notes that this crisis almost appears that "... Maia Sandu's political opponents and their Russian curators deliberately led President Sandu into a situation where she must either take political responsibility for the kidnapping or take a tough stance towards Ukraine,"

In light of the serious and rising tensions between Ukraine and Russia it is unfortunate timing to say the least. 

COVID-19 Update

The pandemic situation in Moldova continues to show moderate improvement with the 7 day average of new cases falling below 1000 to 800 for the first time in since early February. The 7 day average of daily deaths has also fallen to 28 which, while an improvement, is still dire. But the improvement is enough that 2 hospitals in Chisinau have been taken off of COVID front line status and returned to normal medical work. Restrictions remain in place and the police are issuing regular fines for people who break curfew, refuse to wear masks, and businesses that do not follow restrictions. In a new development Moldova’s Security and Information Service (SIS) is actively blocking websites that follow a pattern or propagating fake news around the pandemic or vaccines. 

How’s the Vaccine Rollout Going?

Progressing but still slow. Moldova has administered 78,000 doses of the various COVID vaccines to date to healthcare and front line workers. An additional 48,000 doses of the Astrazeneca Vaccine from the COVAX program are due to arrive by the end of April. Recall, COVAX has committed to providing vaccines for 20% of Moldova’s population for free, after which Moldova will have an option to buy additional doses at a reduced price. This week, COVAX announced that the price will be $7 / dose and the Ministry of Health has until April 28th to announce how many doses they plan to order. Delivery will take place as supplies become available throughout this year. 

Additionally, some weeks ago the Moldovan Government released a tender to buy 400,000 doses on the open market. The only respondent to this tender was the Chinese manufacturer of the SinoVac vaccine who theoretically won the tender. But the government is still working on this process and it remains unclear how it will unfold and when, or if, SinoVac will arrive. 

On the topic of paid vaccines in private clinics there is no new information about their arrival, but the Interim Prime Minister has announced the government will enact price controls to prevent price gouging. So while no date is set, they are preparing for this process as if it is coming soon. 

Still no sign of Sputnik V?

Nope. 

Dual Citizen Vaccination in Romania

One story that is becoming a major success story is the Romanian vaccination program, where many dual Moldovan - Romanian citizens are eligible for vaccination. Romania has opened up all age groups without appointment for the Astrazeneca vaccine and is doing Pfizer and Moderna by appointment. Many Moldovans have been crossing the border to get their shots utilizing their dual citizenship. Romania has discussed opening this option up to all Moldovan citizens so as not to create an artificial divide between the approximately 20% who are dual citizens and those who are not. These vaccinations are absolutely a boon for Moldova but they do present logistical challenges as the Ministry of Health has not made any provisions to tracking people getting vaccinated in this way. Given the large numbers of dual citizens, and the possibility of Romania opening the process up even further, this presents a circumstance where Moldova will have a lot of trouble accurately tracking who is and isn’t vaccinated. 

Wow, sounds like a major victory for Romanian soft power in Moldova...

Not so fast. While this has undoubtedly been a good news story highlighting Romania and Moldova’s close relationship the Romanian Ambassador Ionita decided to throw a massive unforced error on top. When asked on a local talk show about the possibility to setting up vaccination centers in Romanian Consulates (in order to avoid border crossing for vaccines), the Ambassador said that if he “had the ability to set up vaccination centers in the Consulate they would be vaccines against primitive Moldovenism.” This comment was roundly condemned by all political factions with the Socialists calling for an apology or the expulsion of the Ambassador. In response to the outrage his comments caused, Ambassador Ionita claimed that he was only joking and was taken out of context. He went on to say that he was also being scientific as there is no “Moldovan language” or identity outside of Romania and people with “Soviet mentalities cling to these falsehoods.” Great, that cleared things up...

So, while trying to celebrate a massive soft power victory for Romania and highlight how much vaccine aid they are providing, Ambassador Ionita decided to ignite Moldova’s most politically divisive debate instead. Whatever you think of his comments, this is a masterclass in how not to be a diplomat. 

Continued Economic Crisis

Moldovan Railways is Still not Paying its Workers

The railroad has still failed to manage its debt crisis or provide any credible plan out of it. To date, the management seems to feel that continuing to run services and save money by simply not paying anyone is the best approach. The workers disagree and have given the railroad until April 25th to pay them. The union representatives have said that if they are not paid by then quote “mass chaos” will ensue. Parliament has a commission studying the issues with the railroad but no solutions have come either from politicians or from the management. We will have to wait and see what April 25th brings. 

Political Factions Debate COVID Economic Responses

Over one year into the pandemic and economic crisis there have been close to zero state support programs for those affected. Now, the Socialists, led by Mr. Dodon, have proposed subsidizing electricity payments for pensioners and the poor during the State of Emergency. MPs from President Sandu’s PAS Party say that this is nothing more than a scheme to pay the electric bills for rich people alongside the poor and drive the state into debt. PAS MPs meanwhile have proposed a targeted relief measure for restaurants and hospitality which is the only industry seriously restricted at this time. They propose subsidizing wages, tax cuts, reduced rent and allowing companies to negotiate payment plans on back taxes without penalties. 

While it is good that both factions are proposing relief options, the hyper partisan nature of the debate almost assures that little will get done. But maybe some better angels will prevail and these initiatives will get a good faith debate and negotiation. Maybe…

Moldova’s GazProm Debt Passes 8 Billion Dollars

A milestone was passed this week as Moldova’s debt for natural gas from Russian GazProm passed 8 billion US dollars. This number is somewhat misleading though and needs some context. Of the 8 billion, 7 billion are owed by Transnistria, a debt Moldova disputes as a Russian and Transnestrian scheme. The basic idea is that Russia sends gas to Transnistria where residents pay their “government” for it at a subsidized rate. This payment is then kept by the local government and no one pays for the gas. Russia meanwhile sends a bill to Moldova. The scheme is designed to create debt as leverage over the Transnistria conflict and to indirectly subsidize the Transnestrian government and elite for their loyalty to Moscow. So while this milestone represents a very large number, it doesn't represent any urgent issue - just a long festering one. 

The Bond Market Opens

The Ministry of Finance is rolling out Moldova’s first Bond issue with 7 year bonds to be purchased through brokers at banks. Details on yield and quantity are due in the coming days.  This represents a major step in Moldova’s monetary independence and has been a very long time in the making. 

Corruption Updates

The Soviet Cocaine Union - Mr. Shor is Upset

The investigative journalists at RISE Moldova continue to preview their investigation into how Vladimir Plahotnuic, Ilan Shor and other associates allegedly laundered cartel money and distributed cocaine. We introduced this investigation in a previous Weekly Roundup and noted what a bombshell this investigation portends to be as it connects Moldovan Oligarchs to international crime in ways that were not previously reported. Ilan Shor is not amused and sent out a video from the undisclosed location where he is hiding threatening to sue RISE and other outlets. While Mr. Plahotniuc and Mr. Shor have previously been implicated in stealing a billion dollars from Moldova, money laundering, human trafficking and more they have not been connected to drugs or crimes in the Americas. When former US Secretary of State Mike Pompeyo publicly designated Plahotniuc as unwelcome in the US due to his corruption in Moldova, he didn’t actually kick him out of the US. It is not known where Plahotniuc is now, but firm connections to cartel money is likely to make it harder than ever for him to find a place to hide. Let’s see what RISE unveils when their full investigation is made public. 

Ending on a High Note!

This week’s high note is about passports, specifically that Moldovan passports got stronger last year with even more countries accepting Moldovan travelers visa free. Since gaining visa free access to the EU Moldovan citizens have been seeing steadily more travel possibilities year over year. Once the pandemic ends and borders open travel might be just a little bit easier which is something to celebrate.