Weekly Roundup

September 8, 2022

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! And consider becoming a paid subscriber to support our work at Moldova matters. For just $5 / month, the price of a nice coffee, you can support this work and help us expand into even better content!

Prime Minister Gavrilita Takes the Gloves Off

In a meeting with Ministers of her government on Wednesday Prime Minister Gavrilita forcefully demanded answers on why progress on key priorities was moving so slowly. The Prime Minister cited our recent Moldova Matters “Explainer: Understanding ‘Reform’” when she demanded explanations from the Minister of Economy as to when real progress can be expected saying:

“It's laughable and laughable at how many bureaucratic regulations we have in the Republic of Moldova. I want every minister to take this task seriously. We have a bunch of bureaucratic regulations that were created to squeeze certain payments out of people. In order to untie this knot, the effort of several institutions is needed. I read David Smith's article. He tells what an entrepreneur has to go through to pay the advertising fee of 90 lei. 3 times he had to go to the Police Academy and 2 times to ASP. And there are more examples. We are talking about this blue passport for the HoReCa field. Mr. Gaibu (Sergiu Gaibu, Minister of Economy) we are talking about deregulation. But nothing happened for a year. How long must pass before we see a project in the government for deregulation?”

If you missed it, read our most recent Explainer here

Additionally, the Prime Minister demanded answers from the Minister of Ecology over the planned lemne.md website (wood . md) which is designed to answer questions of citizens and local officials on where to obtain firewood for the winter heating season. The site was supposed to launch on September 1st, but the Minister of Ecology cited delays with "financiers and development partners" which have meant that only now is the contract for building the site being signed. The Minister noted that the state hotline designed to answer questions about firewood is now active.

The Prime Minister responded that by October the information will already not be needed saying:

“I don’t know who is involved in this – donors, financiers. I understand that there are procedures. I don't understand why we wait until it's too late. It is necessary to do everything in a timely manner so that the information is useful right now. A volunteer will make a website in a day,”

Addressing the elephant in the room, it is clearly flattering to find articles from Moldova Matters making their way into the halls of power. Looking more broadly at the tone of the meeting it is fair to say that the Prime Minister’s blunt demands for accountability are new, at least in public, and indicate a dissatisfaction with the work of some of her Ministers. Rumors from this summer of a cabinet reshuffle so far have come too little as the Minister of Agriculture was replaced but no other senior changes have been made. We’ll see going forward it more changes might be in the cards.

War in Ukraine

This week, the main news from the region is about Ukraine’s unfolding offensives in both Kherson and near Kharkiv that appear to be pushing Russian forces back. Ukraine is maintaining tight operational security so as not to endanger their troops and their requests that the open source intelligence community do likewise are mostly being followed. So we don’t know for sure what is going on in either of these two directions. With that said, Russian sources have not been so silent and are reporting with increasing alarm Ukrainian gains and Russian losses. Common themes are that Ukraine is successfully implementing “NATO-style” combined arms warfare on multiple fronts and that Ukrainian forces in the Kharkiv region are making major gains by “town-hopping” - effectively bypassing many smaller towns rather than capturing them in order to continue a rapid advance and force isolated Russian units to surrender. At least one Russian general has been captured with surrendering units.

Russian ultra-nationalist turned Kremlin critic Igor Girkin “Strelkov” opined this week that "The war in Ukraine will continue until the complete defeat of Russia. We have already lost, the rest is just a matter of time." Strelkov was instrumental in the beginning of the Russian invasion of 2014 but has since turned on Putin for not fully mobilizing Russian society to completely destroy Ukraine.

All of this information paints, at best, a murky picture of what is going on. But it does seem that Ukraine is having some successes and that while this war is likely to drag on for some time Russia is on that back-foot, at least for now.

Side Note: Anne Applebaum published an article in the Atlantic this week titled “The Country That Suffers Whenever Russia Schemes” about Moldova’s precarious position and Russia’s long history of meddling in Moldova. It’s well worth a read for anyone interested in a birds-eye view of the crisis sparked by the war in Moldova.

Moldovan Security

In the past 2 weeks Russian and Transnistrian authorities have issued increasingly combative statements about the frozen conflict. Russian Foreign Minister Lavrov spoke about what he called an increase in “Russophobia” in Moldova and cited unspecified threats against Russian speakers in the country. Specifically he warned against any moved to settle the Transnistrian issue by force saying that Russia would consider any attacks against its “Peacekeepers” as an attack on Russia itself. The Russian Foreign Ministry added separate warnings in statements warning regional countries that any attempts to resolve the conflict by force would be dangerous.

Transnistrian leadership has also loudly complained that they have sent 8 letters to the Moldovan government seeking direct talks between the two sides about a settlement. Russia has supported this idea indicating it would like to participate in these “bilateral” talks.

President Sandu responded by saying that she “does not understand these letters” because Moldovan and Transnitrian parties are in constant contact. She also noted that in the context of the ongoing war now is not the time to try and discuss any kind of settlement, but that once the war is concluded Moldova would like to see the 5+2 talks resumed. Essentially Moldova is hoping for a continuation of the status quo while the war rages.

One possible reason for the increased rhetoric from the Russian side are comments such as those from retired general and former Commander United States Army Europe, Ben Hodges who posted on twitter:

“Perhaps the time has come for Ukraine and Moldova to resolve the Transnistrian issue. The Kremlin really cannot stop this at this stage. Do the inhabitants of Transnistria really want to be chained to a corpse, which is the Russian Federation today? Do they have hope for a brighter future?”

These comments, from the Moldovan perspective, represent a pretty naive reading of the situation on the ground. Worse, they sound alarmingly similar to “Bush Doctrine” thinking, whereby far off parties decide they know who does and doesn’t want to be “liberated.” Moldovan authorities are striving for calm and the status quo and in that context comments like this can be filed aways as “unhelpful” to say the least.

Moldovan Wine Takes a Stand

In a small, humorous and overdue story, Cricova Winery announced that it has removed Vladimir Putin’s personal wine collection. The company issued a statement saying:

“We inform you that in February 2022, Mr. Putin’s wine collection was moved to the plant’s warehouse,”

While this is far from the most important news in Moldova, it is interesting because the Cricova Wine cellars have always had quite a lot to say about geopolitics in the country. Cricova has the 2nd largest wine cellar in the world with over 74 kilometers of underground tunnels where wine is aged in giant barrels and steel tanks (the largest wine cellars in the world Mileștii Mici, are also in Moldova). Vladimir Putin celebrated his 50th birthday in Cricova cellars in 2002 where he was gifted a personal collection from the winery - the largest personal collection on display in Cricova. This collection was displayed for winery tourists alongside rare bottles including one of the oldest bottles of wine in the world and portions of Hermann Göring’s personal collection taken by the Soviet Army after WW2. Following Moldova’s shift in direction towards Europe, and the beginnings of Russian aggression in Ukraine, Cricova gifted an identical collection to US Secretary of State John Kerry when he visited Moldova in 2013. This collection was positioned immediately across the aisle from Putin’s collection so that 2 equal collections, one with the Russian flag, one with the American flag, were staring each other down, 60 meters underground in Cricova.

Now, in 2022 this “balanced” position of wine geopolitics is finished and Putin’s collection removed to storage.

Limba Noastră “Our Language”

On August 31st Moldova celebrates the day of the national language. This holiday commemorates the return of the Romanian language too Moldova after years of Soviet oppression and marginalization. Speaking on the holiday Prime Minister Gavrilita said:

“we can speak our native language without any fear, our children study in Romanian-language schools and libraries are full of Romanian books.”

“The Romanian language is the strongest identity tool that defines us as a nation, which shows the world who we are and where we come from. It is spoken, written and sung by millions of people in all corners of the world,”

Questions of language can be fraught political issues in Moldova (as we will discuss below), but this year speeches and commemorations of the holiday seemed especially resonant as the legacy of Soviet occupation is felt more immediately in the light of the war in Ukraine.

President Sandu Visits Gagauzia

President Sandu made her 2nd trip to the Gagauz autonomous region’s capital Comrat since her election nearly 2 years ago. This was her first working trip with multiple meetings setup with regional politicians. By a broad consensus this trip did not go very well.

Firstly, Bashkahn (Governor) Irina Vlah did not meet with President Sandu. Vlah said that Sandu refused a meeting with her. The President said that her team reached out to Vlah and offered either a one on one meeting, or a joint meeting with the leadership of the People’s Assembly (Gagauzia’s legislature), but that Vlah’s team did not respond. Journalists noted that in the President’s meeting with the leadership and extra chair was set out, presumably for the Bashkahn, but she did not attend.

While failing to meet with the Bashkhan is certainly bad optics, things got worse when the President met with representatives from the People’s Assembly. This meeting turned raucous with representatives shouting and in some cases heckling the President. The complaints were fairly standard pro-Russian talking points about the price of gas, inflation and the need to “negotiate with Russia” President Sandu pushed back on multiple points including calling out the representatives for ignoring completely the elephant in the room - the war, and noting that this is the entire crux of Moldova’s relationship with Russia saying that she will “will never support the war.” In another exchange representatives angrily addressed the President saying that the national language was in fact “Moldovan” not Romanian to which Sandu replied that she believes she knows the language she speaks better than them (not so subtly noting that they do not in fact speak the language in question). In one of the more substantive back and forth moments (which is not saying much), some representatives noted that the EU is sponsoring the building of regional hospitals in Moldova but that Gagauzia is not planned to get one. The President responded “You don’t want to enter the European Union, but you want a hospital from the EU. We need to decide already.”

The President attempted to deliver a clear message that Chisinau wants a better relationship with Comrat saying:

“We are ready to help you financially. Tell us how to do it, what is the most effective mechanism, and we will finance.”

Overall though, it is safe to say that the two capitals are growing further apart not closer together. Elements in Gagauzia want rapprochement with Russia. This does not turn on simple matters of finance but of core issues.

Side Note: I visited Comrat in late May on work and was approached by multiple people, interested to chat with an American. In particular, they wanted to ask if I had seen the news that the Empire State Building was draped with the St. George’s ribbon expressing New York’s support for the Russian war in Ukraine. People were exceptionally friendly, Gagauzia is a wonderful place to visit, but living in an entirely alternate information reality with Russian news masterfully wielding misinformation in the region.

Competing statements and… some agreement?

Following these meetings, the Bashkan criticized the national government for many many supposed failings. But one in particular was the failure to educate the whole population in Romanian. She said:

“My dream is that in every village and city in Moldova there should be an educational institution teaching in Romanian, one in the native language, and one in English. Parents and children should have a choice,”

She noted that she herself only learned Romanian at age 48 and that of the 7 schools in Comrat only one offers Romanian from first grade.

Meanwhile, speaking at Comrat University, and enjoying a far better reception, President Sandu talked about the Gagauz language saying:

“The Gagauz language is on the list of endangered languages. We cannot allow this. We must work together to solve this problem. Serious efforts are needed to preserve the Gagauz language and culture for present and future generations,”

She also stated that a national program for learning Romanian would be created and praised the example of Irina Vlah learning the language as an adult.

So while major rifts exist between the Gagauz authorities and the national government, the Bashkan Irina Vlah continues to take a pragmatic approach to language politics and, potentially, continues to set herself up for a national political run after her term ends next year.

Economic News

Here is a rapid fire roundup of important economic news of the last week:

• Moldova Takes Control of its Bus Stations - The State Property Agency has canceled a 4 year old concession given to a private company to manage all the country’s intercity bus stations. The Agency claims that the company failed to invest in the stations as promised and outlined their strategy to return the intercity bus stations to state control under the management of a newly formed company that will be 100% publicly owned. The concessionary company is appealing but admits they did not invest in modernizing the stations as promised but cites COVID related problems as the cause. This company was originally formed only months before the contract was announced and has changed hands many times over the years. In that time, it has been owned or been affiliated with many companies linked to Ilan Shor through his network of Duty Free stores and the airport concession. Real ownership is mostly shielded through offshore entities.

• New Social Benefits for Parents - Parents of children under 2 will now receive a 1000 lei monthly support stipend from the state.

• Moldova Real Estate Market in Crisis - Moldova’s real estate market has been in crisis since the beginning of the war in Ukraine. New construction is down 50% this year with the lowest level of new building since 2014. Mortgage applications are also down 50%. Experts predict a housing shortfall as early as 2023.

• Farmers Threaten Protests - The National Federation of Farmers of Moldova and the Moldova Fruct Association demand meeting with Prime Minister Gavrlita by Sept 12 to discuss their demands to deferred loan payments, state subsidies and tax benefits. They note that the drought has affected 80-90% of corn crops and 60-70% of sunflower and sugar beet crops - adding on to supply chain challenges caused by the war. If the Prime Minister does not agree to a meeting by the specified date they threaten protests. We’ll track this because farmers’ protests - which often involve blocking traffic with tractors - can be very disruptive.

Energy Crisis

This week, Russia has made explicit what we all already knew - they view energy as a weapon and will try to use it to compel Europe to accept their invasion of Ukraine during the cold season. Russian Press Secretary Dmitry Peskov made this clear when he explained why Russia is shutting down the Nord Stream 1 pipeline to Germany saying that “Europe will have gas problems until sanctions are lifted.”

GazProm decided to go a step further releasing this threatening video showing Europe freezing this winter:

UkraineWorld @ukraine_world

Gazprom releases a new video showing how cold winter in Europe will be👇

Meanwhile, Moldova’s purchase price for gas shot up $400 / 1000 cubic meters this week to $1882. MoldovaGaz announced it is planning to request a price increase for customers in late September. Meanwhile, the Government is actually buying more Russian gas in order to create a reserve storage of 10 million cubic meters in Romania for winter. Current prices on the European market have been as high as 3200 euros / 1000 cubic meters in past weeks but are beginning to fall as EU countries become more confident that alternate sources will be enough for them to make it through the winter.

Moldova consumes 800 million cubic meters of gas between October and April yearly. Minister of Infrastructure Spinu announced that negotiations are underway with Azerbaijani and Romaia and that the country should be able to maintain a gas supply provided there is a 15% voluntary cut in consumption. The Minister noted that this would bring consumption to 600 million cubic meters and that the country could survive a supply drop to 500 million cubic meters with alternative sources. To that end Moldova also announced the purchase of 3155 tons of coal to stock up emergency reserves.

Ending on a High Note!

In the past 2 weeks there has been some positive news for Moldovan air travelers who have dealt with myriad delays and flight cancelations over the course of the year. WizzAir, which previously cut most flights in and out of Moldova, announced they would resume flights to Barcelona, ​​Berlin, Basel, Paris, Brussels, Dortmund, Eindhoven, Memmingen, Hamburg, Larnaca, Liverpool, Prague, Turin, Venice, Vienna and Verona from Chisinau in the near future.

In further good news, Air Moldova announced 3 new flights to Tbilisi, Warsaw and Prague.

For the last 6 months the “normal” flight situation in Moldova has been a mess. Flights returning and the addition of new routes to cities that were previously quite hard to get to from Chisinau is a rare bit of good news for Moldovan travelers!!

And consider becoming a paid subscriber to support our work at Moldova matters. For just $5 / month, the price of a nice coffee, you can support this work and help us expand into even better content!