Moldova’s Bargaining with Russia: The Stakes Are Going Up

Sergiu Ceban

Lengthy gas talks between Moldova and Russia are reaching a denouement

 In recent days, news feeds have been full of headlines about how negotiations on a new gas contract have reached an impasse after the next tour of the Moldovan delegation to Moscow. Therefore, on October 22, the parliament, on the proposal of the government, voted for the introduction of a state of emergency in the energy sector in Moldova and instructed the state company Energocom to purchase the missing volumes of blue fuel from alternative suppliers. The situation has apparently become so hopeless that Deputy Prime Minister Andrei Spinu decided to publicly criticize the Russian Gazprom, from which he had clearly refrained before. According to the official, the offer of the Russian side is uneconomical for Moldova, therefore Chisinau is not ready to pay more than other states in the region. In addition, according to Spinu, the price includes financial and non-financial conditions, including the need to pay a historical debt. Due to the circumstances, the government, by all accounts, will look for other suppliers to provide the country with gas and diversify energy sources. At the same time, the Moldovan delegation remains hopeful of reaching an agreement with Gazprom and is ready for another round of negotiations. “Our message in the negotiations has always been the same: the Republic of Moldova wants to continue negotiations and sign a long-term contract between Moldovagaz and Gazprom that is beneficial for both sides”, the Deputy Prime Minister stressed. He said that on Wednesday he would go to Russia again to talk with the head of Gazprom, Alexey Miller. Moscow also decided to break the silence and put all the blame for the possible energy crisis in Moldova on the current authorities, who are not satisfied with the contract terms proposed by Gazprom, including a 25% discount on the current market price. The Moldovan delegation did not agree with such an offer and insisted on halving the price, alleging the lack of necessary funds. In addition, according to the official representative of the company, if Chisinau does not pay for gas supplies, a new contract will not be signed, and from December 1, Russia will stop gas supplies to Moldova. Meanwhile, it may stop as early as November 1. Gazprom, of course, expresses its readiness to sign another monthly contract, but only on condition of payments for the gas delivered in September and October of this year. However, given the degree of Chisinau and Moscow opinion differences, there is every chance that Moldova will be left without Russian fuel in a week. Apparently, knowing in advance the results of the Moldovan delegation’s visit to Moscow, Prime Minister Natalia Gavrilita sent an appeal to her Ukrainian counterpart with a request for “gas assistance”, which the Head of the Foreign Ministry of Moldova Nicu Popescu delivered to Kiev on October 21. The next day, during a meeting of the National Security and Defense Council of Ukraine, the government was instructed to find opportunities for the gas transfer to Moldova in the form of a commodity loan. The fact that the Ukrainian authorities so promptly made a positive decision with the existing problems in their own gas sector can be explained by certain interests of Kiev, which are affected in the current dispute between Chisinau and Moscow, as well as possible requests from external partners of Moldova and Ukraine. The major nuances of the current situation are that Chisinau has not disclosed details of exactly what non-financial conditions of the Russian side were discussed during the negotiations and why they went beyond the scope of a commercial dispute. Experts suggest that it might be the transfer of the gas receiving point and reverse fuel supplies to Moldova from the Turkish Stream in order to avoid the need to transit the contracted volumes through Ukraine. Also, the Kremlin can link the new price to the Transdniestrian region, where Russia has its own specific interests, both political and energy ones. Most probably, the Moldovan delegation at the level of deputy prime ministers will not be able to overcome the positions that have been publicly highlighted by Gazprom. Chances to rectify the situation may appear in the case of the President or Prime Minister’s trip to Moscow, but a visit of this level will obviously not be related to the gas topic only, and we will most likely be proposed to make additional commitments to reduce the blue fuel price. So far, judging by actions of our authorities, the Moldovan leadership, and Maia Sandu in particular, does not want to go to the Russian capital and respond to tough questions about the Crimean Platform there and satisfy the Kremlin’s requests. The advisers of the head of state totally understand that any “constructive meeting” with the Russian president can instantly destroy a Moldovan voter’s trust, as well as her image of the leader of resistance to Russian influence in the region. Let’s just hope that the sides have not slammed the door loudly yet and that a favorable way out of the current situation is still possible. If our authorities did launch a strategy to reduce energy dependence on Moscow, then we are going to witness an extremely difficult development of events. This might significantly change the status quo that has been formed over the past decades in Moldovan-Russian relations, as well as in the Transdniestrian settlement. In a sense, victimization of our authorities, who decided to challenge the Russian gas giant, may bring some benefits in the form of a special attention from Brussels and Washington. It is obvious that the impending gas crisis can greatly undermine the standing of the current Moldovan authorities which won’t be just left at the Kremlin’s mercy and which will certainly be provided with some feasible support. The gas storyline seems to approach its final denouement, with the country being literally at a crossroads. What happens next is either the new authorities will start an extremely difficult and painful process of breaking the energy dependence on Russia in the near future, with all the “shocking” attendant consequences, or they will manage to adapt to the long-term practice of political and energy agreements with Moscow on their own special terms.