Moldova: election outcome will test viability of Europe's eastern expansion - Austrian Economics Center

Moldova: election outcome will test viability of Europe’s eastern expansion

Image by © Dreamstime

Image by © Dreamstime

by Eka Tkeshelashvili*

Moldova’s progress towards the European Union is on a knife-edge after the formation of a minority pro-European coalition.

Following weeks of negotiations after the November 2014 general elections, two of Moldova’s largest pro-European parties sealed a coalition deal on January 23, 2015. But the coalition will have to count on support from the Communist Party (PCRM) which in turn could jeopardise Moldova’s move to Europe.

Necessary reforms

The new government – the Political Alliance for a European Moldova (APME) – is made up of the conservative Liberal Democratic Party (PLDM) with 23 seats, and the left-leaning Democratic Party (PDM) with 19 seats. Together this is only 42 of 101 parliamentary seats.

The Liberal Party (PL) with 13 seats backed out of coalition talks.
The fact Moldova now has a minority government needing the support of the Communist Party, which gained 21 seats in the election, means its ability to carry out necessary reforms – including those required by Brussels – may be impaired. It will also be tough going for the weak coalition of the pro-European parties against the much stronger showing of the Socialist Party – the Party of Socialists of the Republic of Moldova (PSRM) – which has vowed to move Moldova closer to Russia.

Infighting and the general inefficiency of the new government together with its collaboration with the Communist Party is likely to unsettle the pro-European electorate. The opposition pro-Russian Socialist Party – led by Igor Dodon – will use this to undermine the new alliance. The Socialist Party wants Moldova to join the Eurasian Economic Union – Russian President Vladimir Putin’s vision of united former Soviet states.

Shake with fear

Igor Dodon promised that his party in opposition – the largest single party in the new parliament – would make the ‘European integrationists shake with fear’.

Moldova’s elections were held against a backdrop of the ongoing turmoil in Ukraine. Little attention had been paid to the developments in eastern partnership countries such as Moldova and Georgia, both about to implement free trade deals with the European Union. Both Moldova and Georgia have had to withstand enormous pressure from Moscow to stay on their course to Europe.

Moldova began the process of meaningful integration with Europe in 2009 when a pro-European coalition government came to power.

It was the first Eastern Partnership country to sign its Association Agreement with the European Union. In parallel, its citizens were given visa-free travel to Europe. Crucial to the deal was Moldova’s commitment to reform in accordance with EU regulations in areas such as rule of law, democracy, energy, education, and environment. The war in Ukraine, Moldova’s neighbour, helped speed up the process.

transtrinia

Transnistria and Gagauzia - two breakaway regions - 
which Russia could manipulate to put pressure on Moldova

Moldova narrowly emerged from the election as a country bound to continue its integration with Europe – a move bitterly opposed by Russia.

Transnistria

Residents of the Russian-backed breakaway region of Transnistria did not take part in the election.

The continuation of Moldova’s progress towards the EU is essential for the viability of the Eastern Partnership (EaP) – the EU’s eastwards expansion initiative. Moldova is critical for the EU in shaping up its own eastern neighbourhood. But it comes at the cost of defying Russia.

Against the backdrop of increased pressure from Russia as well as Moscow’s poorly-disguised meddling in the pre-election process, even a narrow win for the pro-European parties was good news.

However, after winning the battle, the pro-Europe political forces still have to win the war.

In practical terms it means the pro-European parties should consolidate their gains by forming a stable coalition government tasked to deliver long-awaited anti-corruption and economic reforms.

There are two main points on which to focus while following developments in Moldova: Whether or not the pro-European political elite has the ability to consolidate, drive through and deliver reforms; and whether Russia will increase pressure on Moldova in order to hinder its integration with Europe.

Economic pressure

The likelihood of Russia continuing to put pressure on Moldova is high. There are two main tools Russia will use: economic pressure and manipulation of Moldova’s internal political scene and its public opinion. As of now it is less likely that Russia will use a protracted conflict in Transnistria as leverage against Moldova or create a new hotspot in the autonomous region of Gagauzia.

A free trade deal with the EU will create potential for Moldova to further diversify its trade. However, it is still vulnerable to Russian pressure and trade sanctions remain a powerful tool for the Kremlin to influence or punish policymakers in Chisinau, the capital.

During the implementation of the free trade deal with the EU, the likelihood of the Kremlin using trade restrictions against Moldova is high.

The Kremlin will attempt to demonstrate to the Moldovan public that the road to Europe is costly due to the ‘irreconcilable’ differences between Europe’s Deep and Comprehensive Free Trade Agreement (DCFT) and unrestricted trade with Russia.

The Kremlin will aim to undermine support given to pro-European parties and aim to strengthen public sentiment which favours closer ties with the Eurasian Union.

Close ties

In this regard, the Communist Party – which in general terms favours Moldova’s integration to Europe over close ties with Russia’s Eurasian Union – could still prove to be useful for Russia. The Communist Party, unlike the Socialist Party, is not asking to revoke the Association Agreement, however it is sceptical about the DCFTA in its current form and has asked for revisions.

Russia’s request for a postponement under the pretext of finding ways of reconciling Moldova’s free trade deal with the Eurasian Union – could be acceptable to Communists. This in itself could trap Moldova in limbo and impede Moldova’s progress towards Europe.

The main challenge here for the Kremlin would be Russia’s own economic troubles. Its economic meltdown makes the appeal of a lucrative Russian market a hard sell. The same applies to the role of remittances sent home by Moldovans working in Russia. Some studies estimate nearly 500,000 Moldovans work in Russia. But Russia is tightening its migration and employment laws.

Moldova’s fragmented political scene reflects deep divisions in public opinion which could prove beneficial to the Kremlin.

The election outcome indicates a strong dissatisfaction within the population with what has been achieved so far in terms of the country’s economic and social development.

Eurasian Union

Public opinion is split almost 50-50 between those supporting membership of Russia’s Eurasian Union and those supporting the European Union.
There has been a fall in support for the pro-European parties – from 52 per cent at the 2010 elections, to 44.6 per cent in the latest 2014 election.

This split opinion is, to a large degree, the result of the Moldovan government’s ineffectiveness to deliver on reform and curb corruption which has hardly helped strengthen trust in the political elite who are supporting Moldova’s future in Europe. The history of the coalition’s infighting only strengthened the electorate’s distrust and dissatisfaction.

Having said that, the effect of Russia’s meddling in Moldova’s internal affairs should not be underestimated. This includes Moscow’s support of political forces loyal to the Kremlin and the trade and information wars it has waged against the coalition government.

Whether or not the new coalition will be able to generate necessary votes and form the government will depend on further political consultations which could last for weeks.

Horse trading

The key will be agreeing on the candidate for prime minister. The acting Prime Minister Iurie Leanca is being considered.

However, the Communist Party has openly said it will not support the coalition led by Iurie Leanca. This might either lead to heavy horse-trading with the Communist Party – which is eager to increase its share of government positions – or selecting an alternative candidate. The possibility of reopening consultations with the Liberal Party – in case an agreement with the Communists proves impossible – is not fully off the table.

The outcome of talks among coalition members will determine the parties’ share of influence over various state institutions and in the decision-making processes of Moldova.

The EU and the US are watching the process closely. Given that acting Prime Minister Iurie Leanca has earned the trust of the West, he could be the best bet to lead reforms in Moldova. His public approval has steadily increased during his tenure. However the final outcome will be determined by political forces.

Anti-EU narrative

A minority government is not good news for Moldova.

It is troubling that the ultra-left Party of the Socialists gained the biggest number of votes (21 per cent) and has the largest number of seats in parliament. The Socialists’ campaign was based on an anti-EU and a pro-Eurasian Union narrative.

Its leader, Igor Dodon, openly advertises his ties with Russia’s President Vladimir Putin and promises to fight for the denunciation of the EU Association Agreement and move Moldova towards joining the Eurasian Union.

The Socialists will be a destructive force to reckon with in the coming parliamentary term. They will try to score on failures of the government and to manipulate public opinion by highlighting infighting and competition among the pro-European parties. It is clear that the Socialist Party will be used by Russia to complicate Moldova’s progress towards Europe. The Kremlin will not shy away from supporting the Socialist Party, including financially.

It remains to be seen how the Communist Party – which received 17 per cent of the vote – will leverage its position in the absence of a majority government of pro-European parties.

Substantial backtracking

While the Communists want to revisit the provisions of the Association Agreement and, more particularly, the trade-related issues covered under the Deep and Comprehensive Free Trade Agreement, they do not support a substantial backtracking from the European course, let alone aim to join President Putin’s Eurasian Union.

The worst-case scenario would have been the Communists joining forces with the Socialists, which is not a realistic option. One of the reasons for that is because Igor Dodon defected from the Communist Party to the competing break-away Socialist Party and became its leader in 2011.

The leverage of the Communist Party in the decision-making processes in Moldova will increase substantially. The new speaker of the Parliament was only voted in with the help of the Communist Party. In addition, one of the vice speakers of the Parliament has become a representative of the Communist Party.

Key importance

The Communist Party can be expected to support government issues of key importance. However, before agreeing to do so it will try to get a bigger share for its participation in governing positions as well as use its support to bargain over reforms.

The main deficiency of the minority government could be its inefficiency to lead the reform process. There is a common understanding that only a deep and radical reform of the public institutions can convince the public that the government genuinely intends to reform and deliver on its promise of Moldova’s European future.

Only a sustainable and a well thought through political framework can deliver real change. So far this is proving to be a difficult goal.

It will be up to the Moldovan political elite to prove it is ready to rise to the historic challenge and lay the foundation for Moldova’s European future.

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Source: Geopolitical Information Service

* Eka Tkeshelashvili is a Free Market Road Show speaker. To learn more about the Road Show, please click here.

The views expressed on AustrianCenter.com are not necessarily those of the Austrian Economics Center.
2015-02-06T10:33:39+00:00

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