Weekly Roundup
October 10 - October 15
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!
Politics Roundup
This week the government and parliament were busy working on moving forward their legislative agenda while grappling with what may prove to be a serious energy crisis. We’ll talk about energy and the EU wide natural gas crisis in the economics section below. For now, let’s take a peek at the work in parliament for the week.
Rapid Proposals and Passage of Reforms
Parliament continues to work at a rapid pace on issues big and small. First, MP’s voted and officially ratified the Istanbul Convention on preventing and combating violence against women and domestic violence in its second reading. As we discussed last week this ratification was a party line vote with only PAS supporters. The socialists railed against the passage and folded this into a broader culture war message which we will dive into a bit below.
Meanwhile, parliament began a process of “abolishing” offshore secrecy in Moldova supported by the government and Prime Minister. This action, following the explosive revelations of the Pandora Papers in the past weeks seems to be the government’s response to the fact that Plahotnuic and other oligarchs and shady business owners have disguised their real ownership of companies through offshore shell entities. While final details of the new law are scarce, the gist seems to be that Moldova will make public the “beneficial owners” or real owners of all companies in Moldova. Currently, if you personally own part of a Moldovan Limited Liability Company (SRL) that information is public in many databases online. But if an offshore company owns shares of a Moldovan company the people who own that offshore company are not listed. They are however known to the state as all companies are already required to file beneficial ownership disclosure forms. This law would seem to target making this information public.
In addressing another area of transnational corruption and crime MPs have also proposed a law reforming Moldova’s maritime registration system. As anyone with a map knows, Moldova isn’t exactly a seafaring power and is essentially a landlocked country. For years, the country has allowed anyone who can pay a fee to register their ships as “Moldovan” and operate under a Moldovan flag. Anyone who recalls the horrific story last year of the massive Beirut port explosion might also recall that the ship carrying the huge cargo of fertilizer unsafely was operating under a Moldovan flag. The new proposal from PAS MP’s would try to cut down on the usage of Moldova’s name in smuggling, crime and unsafe operations by requiring all ships carrying or applying for a Moldovan flag to undergo EU inspection and certification for safety and operations. Since these standards are strict it will be much harder to buy an aging rust bucket, fly a Moldovan flag and transport dangerous cargo.
Are Socialists and Communists Finding their Political Feet?
After the landslide victory of the PAS party in this summer’s election, and the corresponding huge defeat for the Communist and Socialist Block, it would be fair to say that the opposition is somewhat in disarray. They have made consistent statements opposing actions of the PAS party and blaming President Sandu for all manner of supposed wrongdoing but finding a coherent message in their statements has been difficult. If anything, there seems to have been an attempt to paint PAS and President Sandu as having “captured the state” which seems to just be a very threatening way of saying “crushed us in an election.”
This week though we are seeing tentative signs that the opposition is organizing it’s message and working to present a united front. Firstly, the Communists and Socialists have reaffirmed their political alliance and committed to running as a block in local elections this fall. This includes 12 towns with mayoral or other local elections including the city of Balti. Next, the Socialists organized a protest last Sunday against the removal and arrest of Prosecutor General Stoyanaglo. During the protest, which drew between 1000 and 1500 people Socialist party representatives focused the topic squarely on PAS and President Sandu and hardly mentioned the Prosecutor General. Mr. Dodon said these protests were the beginning of the “Overthrow” of the new “regime.”
This week, the Socialists in Parliament have announced that they will propose a law establishing the Russian language as the “language of interethnic communication” in Moldova. Additionally, Mr. Dodon and other Socialist and Communist representatives continued to speak out strongly against the ratification of the Istanbul Convention. Mr. Dodon said “"No piece of paper will abolish our centuries-old culture and traditions." His intention was to articulate a nuanced position that the Istanbul Convention is secretly about gay rights (it’s not). In fact these statements seem to be saying that “violence against women is a centuries old tradition” which is a bit of a strange political leg to stand on. He wrapped these statements saying that "there is no limit to the meanness, baseness and cynicism of the group that seized power in Moldova" referring to the PAS government.
So what is all this about? Well, it seems that the opposition is working to find a unifying message against the new government and has settled on…. the same message that lost them the campaign. Culture wars, language wars, traditional values and “holier than thou” religious messaging. All of it wrapped up in the challenging-to-unpack idea that the winning of an election is equivalent to “capturing a state.” Mr. Dodon will have a party conference in December that will determine if he continues to lead the Socialist party and, by default, the political opposition. It will be very interesting to watch if they try any new messages before then or just keep to the greatest hits of the last campaign.
Economic News - Looming Energy Crisis?
The biggest single story this week is about a potential looming energy crisis in Moldova. Domestically, the issue is that Moldova’s contract with the Russian energy giant GazProm expired last month. This contract provided for fixed price natural gas deliveries and it’s expiration has allowed the price to float as the government negotiates with Russia for a new contract. This has resulted in the price of gas increasing by 400% in October. Mr. Dodon and the Socialists have blamed the new government for not negotiating fast enough with Russia on this issue and framed the whole crisis as a political mistake by a rookie government. Many foriegn political commentators have suggested that all of these issues stem from Russia’s desire to punish a Pro-Western government in Moldova and throw a political bone to their supporters in the Socialist party.
There is however a much larger regional context to this looming crisis. All across Europe natural gas stockpiles are at a historic low heading into winter. Meanwhile, calm winds, multiple nuclear plant decommissionings and a reduction in coal power have meant that far less electricity than normal is being made by wind and traditional power sources. All together, this means that countries across the EU are bidding up prices to secure winter gas supplies. Overall, stockpiles are low, and prices are up 500%.
Between Moldova and Russia negotiations are ongoing with Minister of Infrastructure and Regional Development Andrei Spinu leading the Moldovan side. Moldova is seeking to negotiate a contract keeping last year’s gas prices and is unwilling to raise prices long term. Russia meanwhile is (presumably) noting prices increases all across Europe as justification for raising it’s prices. Now, is this just about the market? Probably not. Russia has a long history of blackmailing Moldova with energy prices in order to get concessions in other areas. Particularly, Russia has long wanted Moldova to accept Transnestria’s gas debts as part of the national debt, basically buying free gas for the breakaway region.
Meanwhile, Minister Spinu and members of the government have noted that the Iasi - Ungheni gas pipeline from Romania is now active and Moldova can buy gas from the EU if Russia refuses to make a deal. While this is *technically* true it is also somewhat besides the point. Gas from Romania is also bought from Russia and transporting it back to Moldova will increase the price over what Romania paid. This means that Moldova can always buy gas at slightly higher than the Romanian rate and has a backup if Russia cuts off gas entirely. But it does not help much in bringing the price down in negotiations with Russia now. Something Mr. Dodon repeatedly has pointed out in interviews where he calls the Romania pipeline “populist” and basically not a real substitution for a long term contract with Russia.
Ok, so what happens next?
Negotiations are ongoing and Minister Spinu has made clear that he hopes to have a solution in place by the end of October. In the meantime, the government is preparing for the worst. The government has announced a “High Alert” in the gas sector saying that Moldova is currently using more gas than it is importing and that all ministries must work to prevent an emergency and prepare for “any scenario.” Right now, this means making plans for a potential shortage. So far reporting has indicated that the following is being implemented or considered:
Cost mitigation policies are being prepared to subsidize expensive gas purchases for the poor and vulnerable populations in Moldova to heat their homes in the winter.
Thermoelectric plants are preparing to burn less gas and substitute with fuel oil in case of a shortage.
Power plants are preparing to use coal instead of natural gas and electricity is being imported more from Ukraine on credit.
The Ministry of Education is preparing scenarios that would include returning to remote learning if schools cannot be heated.
Minister Spinu insists that there is currently no risk of crisis… though he caveated that he is only speaking about the next week or so. The government is meeting Monday to discuss further plans.
While this situation is evolving, it’s safe to say that Moldova will face high gas prices this winter. Again, this is not unique to Moldova and is a Europe wide crisis with newspapers in the UK reporting the potential of factory shutdowns and serious economic impacts due to their own gas shortage this winter. Politically speaking, this international context will not much help the PAS government as average people will simply see much higher costs to heat their homes this winter… a prospect Mr. Dodon and the Socialists are clearly preparing to capitalize on.
COVID-19 Update
The 3rd wave continues in Moldova with 1335 daily cases and 25 daily deaths in the running 7 day average. The increasingly high numbers of cases and deaths has resulted in Romania reaffirming Moldova on it’s “red list” and the US State Department returning Moldova to “Level 4 Do Not Travel” status for the first time since spring.
New Restrictions Remain Unclear
Restaurant owners spoke to journalists and on social media about the difficulty in implementing the “vaccinated only” policy of the new government. Many owners are angry about the policy saying that there were not clear instructions given until half way through October 1st, the day on which the restrictions went into place. Some owners have read the policy to say that they must ask guests to show documentation of vaccination but the responsibility to confirm the validity of this documentation does not lie with the establishment. Others worried that if they have to ask for customers to show ID to match with their certificate it would violate personal privacy laws that limit companies asking individuals to show their ID cards. The Ministry of Health responded that it is now mandatory for all adults to carry ID cards with them during the health crisis so that they can be checked against their vaccine certificates. This certainly implies that companies must check IDs and certificates validity. That said, the app designed by the government for checking certificates has not yet been released following multiple delays and there is still no guidance on how to check foriegn issued certificates.
The Ministry is working to address these issues with the issuing of a new digital certificate format that will align more with EU norms and also show recent negative test information and information about past COVID infections. This new certificate is available today October 15th and can be downloaded at this link.
As this author likes to eat out from time to time, I can say with experience that there is nowhere near uniform implementation of these rules. Some restaurants simply ask if you are vaccinated and leave it at that. Others don’t ask at all. Some verify and scan certificates. No one (so far) has asked for an ID.
It is also worth noting that there are no enforced restrictions on buses or public transit which remain packed to the gills with maskless people on a daily basis. On the whole, even as cases are spiking there is no sense of urgency or clear action by the government to enforce policies and rules in public. It is safe to say we are in for a long winter in Chisinau.
Crime and Corruption
Former Democratic Party MP Vladimir Andronaki was officially charged in the case of the theft of the billion. He is suspected of embezzling 32 million lei ($1.8 million dollars) from Banca de Economia as part of the broad scheme and theft. Andronaki was put on the international wanted list. Recall, he was last seen boarding a plane hours after PAS won an election victory this summer.
Mr. Andronaki may have more than interpol to fear however. This week, disgraced journalist Natalia Morari was photographed with Platon in London. Members of the diaspora saw them together and sent photos to news publications in Moldova. Once again this week the Moldovan Diaspora proved that you can run but you cannot hide for long as there are Moldovans living and working in almost every country on earth.
The Fabrication of Evidence Against Gheorghe Petik
SIS and law enforcement conducted searches and detained 6 people in a case described as suspecting the fabrication of a rape case against activies Gheorghe Petik. Gheorghe Petik himself spoke out about the case for the first time in years. Mr. Petik is a retired lieutenant colonel with 20 years of experience in the border police. In 2016 he left the police force and joined the political opposition in order to speak out against smuggling and criminal activities at the border. In 2018, during the time of Plahotnuic, a rape case was brought against him by the now disbanded 5th Directorate of Investigations. The 5th directorate was disbanded following the fall of Plahotniuc because the primary activity of this group seems to be the staging of evidence in political cases. Gheorghe Petik was imprisoned for 9 months while claiming his innocence and alleging the case was politically motivated.
Now, we know that he was in fact telling the truth. SIS released video and audio recordings of the preparations and process of staging this rape case. Apparently Mr. Petik went home with a woman to her apartment consensually. While he was in another room, the woman can be heard on the phone with the police receiving instructions on how to drug him and knock him out. They clearly tell her how and when she must report a “rape” and how she should preserve forensic evidence for use in the case. 6 police officers are currently under arrest for their part in staging this crime.
All this serves to highlight just how dangerous it was to be an activist or whistleblower under the Plahotniuc regime and just how much is changing in Moldova.
Ending on a High Note!
Moldovan Greco Roman wrestler Victor Ciobanu won gold at the world championships in Oslo this week! In the up to 60kg category Victor Ciobanu became the first Moldovan world champion in wrestling! On returning to Moldova he was honored by the government and celebrated widely on social media. Go Victor!!!
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!