What Lies behind the Russian Loan to Moldova?

Sergiu CEBAN It is no coincidence that the Russian loan to Moldova became the bone of contention for Moldovan politicians On April 17, Russia and Moldova signed a loan agreement to provide Chisinau with a 200 million euros financial loan. The first $ 100 million tranche should be received no later than 30 days from the date of the agreement ratification. The second half, according to terms of the document is to be transferred until October 31, current year. Such an agreement is somewhat extraordinary for Russian-Moldovan relations. In recent years, the likelihood of any credit line from Moscow has been virtually ruled out and now there are good reasons to open it. Meanwhile, the agreement provoked intense discussions among Moldovan politicians despite the quite modest credit amount, if judged by international parameters. The opposition generated many reasons for criticism. The main fears it caused were the conditions of financial assistance and they were as the interest rate or the likelihood of resources distribution between businesses affiliated with the current government, as the unjustified state guarantees and the lack of authority for the Ambassador Andrei Neguta to sign the agreement, etc. Such a nervous pro-European opposition reaction could not, of course, arise out of the blue and it is unlikely seriously connected namely with the lending conditions. Most probably, this was just an excuse to complicate or much better disrupt the agreement ratification. The real reasons for this opposition are much deeper and are directly related to the external curators’ interests. A convincing evidence of this is the forced decision of the European Commission to also provide Moldova with a 100 million euro loan a few days after Moscow and Chisinau concluded the financial transaction. In Brussels and Washington they could not help but notice the financial and humanitarian intervention of Moscow and Beijing in the Moldovan direction. The vivid picture of the air transport board unloading in the presence of the Russian and Chinese ambassadors apparently, forced the Moldovan western partners to adjust their tactics. Therefore, in the near future we can expect the emergence of new solutions designed to balance, say, the “eastern blow” in regions where the US and the EU have their strategic interests. In fact, Western players have something to fear since searching for post-crisis investment new niches will take place in the post-Soviet space as well. In this regard, the active penetration of financial resources of the Celestial Empire with an appropriate military-political patronage from Moscow can become the basis for mutually beneficial cooperation and strengthen the position of the Russian-Chinese tandem in the CIS. A consistent link to credit capital from the east to Eurasian markets and projects will create inevitable circumstances for Chisinau's (external) political reversal and the gradual refusal to implement the Association Agreement with the EU, which is currently the main basis for the country's development. The light friction along the external contour could not but affect the local-political level in Moldova. In this regard, the weaknesses of the current ruling coalition, where the Democrats begin to feel less and less comfortable have become more and more apparent. In this regard, there were real risks that the Russian loan would not pass the ratification procedure in parliament, which would ultimately result in irreparable political consequences for Igor Dodon personally. Fearing exactly such an event development the Moldovan president decided to discipline his alliance colleagues and recently announced that he was considering the option of organizing early parliamentary elections along with the presidential ones. PDM ideologists were aware of the current situation’s fatality and took it clear that the party was in a double position. After all, voting for the Russian loan did not correlate with the party’s political profile but if Democrats approve the loan with their own votes, this could close any future prospects for dialogue with Western partners and thereby leave PDM on the sidelines of the Moldova’s political history. Nevertheless, despite all the risks, the loan agreement was still able to go through ratification procedures in parliament. Russian credit line allocation can be considered as a “trial ball” not bearing any particular risks for Moscow, since the terms of the agreement neutralized most of them. At the same time, it is obvious that such financial assistance is only partly related to the upcoming electoral processes in Moldova and is mainly aimed at solving much more complex and long-term tasks that have a serious geopolitical background.