Moldova: Europe?s poorest pawn

Moldova has managed to make the news again. This does not happen often. But the ongoing election crisis of Europe's poorest nation has helped fill newspaper pages for the past three and half months. And it is not over yet.

Citizens of the tiny nation go to the polls today, only months after the last elections on 5 April produced no less than four separate, but intertwined, stories. First was the abortive ‘Twitter revolution' against the ruling Communists that collapsed amidst a burning parliament and hundreds of arrests where citizens took to the streets, inspired by activists using Twitter and Facebook. The authorities blamed youthful rioters; the opposition blamed government provocateurs. Second was the subsequent political gridlock between the Communists who claimed 60 seats in the new parliament and the three opposition parties who claimed 41[1] - enough, by one vote, to block the election of a new President and virtually shut down the government until outgoing President Vladimir Voronin agreed to repeat elections. Third is the collapse in Moldova's economy since April - the authorities having delayed the pain until after the vote. Fourth is the Moldova love triangle with Russia and the West. Moldova seems to be swinging back east after Russia offered it a $500 million loan that was implicitly conditional on the Communists' re-election.

Will this second round of general elections produce similar fodder for the international press? Rioting, at least on the same scale as the April crisis, is unlikely. The authorities are better prepared to quell dissent this time: while most activists have been released, some are still in hiding, but most have been cowed.

But renewed parliamentary gridlock is entirely possible. The Communists and the opposition have refused to compromise since April. Both showed impressive disciple in not breaking ranks.

The key to Moldova's governability after the elections is the former chair of parliament Marian Lupu, who left the Communist Party after the April events and took over the Democratic Party in June. With a solid block of 10% or more, he will be king-maker in the new parliament, possibly even crowning himself as the next President.

It is alleged that Lupu is some kind of life-raft project secretly supported by the Communists' éminence grise Mark Tkachiuk to win the presidency by the back-door and/or take votes off the opposition. But under Lupu or a Communist-Lupu alliance, Moldova's recent swing towards Russia could be reversed. All Moldovan politicians talk about a ‘balanced foreign policy', but Lupu's emphasis has been on balancing a ‘strategic partnership with Russia' with a rejection of the current President Voronin's increasing Euroscepticism, to the extent of promising to ‘fully use the opportunities provided by the EU "Eastern Partnership" initiative in a framework in which Moldova can become a "success story".

But before that happens, the economy is likely to collapse by anything between 6% and 13% this year. Moldova has always been one of the poorest countries in Europe, but its recent mini-boom had been briefly impressive, with GDP growing by 7.2% in 2008.

Moldova's economic problems are neither with its tiny banking system, nor with its industry, most of which is concentrated in the rebel ‘Transnistrian Republic' to the east. In recent years, Moldova has survived on remittances from the hundreds of thousands of Moldovans working abroad, which are now falling dramatically, down to $318 million in January to April 2009 from $477 million in the same period in 2008 - leading to a 10% drop in consumption and a 25% fall in imports. Moldova's budget is in tatters, as it relies heavily on customs duties and indirect taxes. The paralysed Moldovan government, made up largely of technocrats, has been unable to put together any real crisis package since April.

The EU was slow to react during the April crisis, especially in comparison to Russia, whose robust backing for the authorities' crackdown temporarily encouraged Moldova's pendular foreign policy to swing back east. But no Moldovan politician, not even Voronin, wants to swing too far eastwards. The EU has cards to play, though it is up to the EU to play them well. More Moldovan migrants are in the EU (an estimated 350,000 to 500,000 in 2008) than in Russia (344,000). The promise of future liberalisation of the EU visa regime is therefore a powerful incentive. Over 50% of Moldovan trade is with the EU, less than 20% is with Russia.

This time around, the EU should be ready to move immediately on any renewed political/social confrontation or constitutional gridlock as a result of today's election, especially if the results are disputed again. The EU should get all parties to agree to set up a functioning government, to recommit to reforms, particularly of the legal system and security apparatus, and lead a properly independent investigation into the events of 7 April.

The Eastern Partnership, launched by the EU in May, got off to a limp start. Russia has been flexing its muscles since the war in Georgia, but has also added financial assistance packages to its informal ‘neighbourhood policy'. Moldova is only one of many swing states in the region, but what happens in this tiny nation wedged between the EU and Russia may predict future trends in the wider "Eastern Neighbourhood".

Andrew Wilson co-authored ECFR's latest policy report: The limits of enlargement-lite: European and Russian power in the troubled neighbourhood. 

[1] Official results of the 5 April 2009 elections

                                                                    Vote                        Seats (out of 101)

Communists (CPRM)                                       49.5%                     60

Liberal                                                          13.1%                     15

Liberal-Democratic Party                                  12.4%                     15

Our Moldova                                                   9.8%                      11

Democrats                                                      2.97%                     -

Turnout: 57.5%