Moldova on the Verge of Default?

The disputes over the fate of Gavrilita’s government may be not only a matter of improving the efficiency of the executive, but also a cover for the stalemate in the economy

Sergiu CEBAN, RTA: The real reasons for Sunday’s urgent meeting behind closed doors in the presidency are still stirring the public’s imagination. The main version promoted by the media and political commentators is the change of government. Moreover, yesterday was the two-year anniversary of Maia Sandu’s victory in the elections: a threshold beyond which it is reasonable to “count the hatched chickens” and take tough decisions in order to try to save her obviously unsuccessful rule so far. This also applies to the president’s brainchild, PAS, whose unity has been severely shattered by now. One of the triggers that appears to have significantly sped up the processes of disintegration within the ruling party was the leaks of the officials’ personal phone data. As much as the government would like to deny these “leaks”, the scandal is spreading, and the opposition is already timidly trying to use this data against the individuals involved. For example, the Socialists and the Communists have prepared a vote of no confidence in the Justice Minister. The series with the publication of personal correspondence, including that of the MPs, continues, so there will be plenty of reasons to bring up uncomfortable questions to the government and the parliament. As for the closed meeting in the presidency, I would like to note that such a communication between deputies and the government in the presence of the head of state can be organized on any working day. However, there is a feeling that on Sunday, very important news arrived in Chisinau, which had to be urgently discussed by the full political team. Experts are still arguing about the effects of this meeting, but after several days, it is clear that no hasty decisions have been taken. Some are trying to develop conspiracy theories that the circle of those affected by the hackings was determined, someone is talking about the intelligence received by Maia Sandu on Moscow’s further actions to destabilize the situation in Moldova. No matter what anyone says, it is virtually impossible to deny or hide the fact that our authorities are at a crossroads. Just as it is no longer possible to conceal the deepening rift among internal factions in the PAS. While initially the core of the party consisted of several groups of influence, the internal party structure now looks somewhat more complex. New party functionaries with their own interests and ambitions are increasingly involved in the decision-making process. In addition, in just over a year, a large clod of contradictions has piled up between the government and the parliamentary majority, leading to a sharp increase in discontent on the part of PAS deputies, as well as a critical decline in trust between the Cabinet leadership and the “majority shareholders” of the party. Therefore, most likely, in order to relieve the excessive internal tension, Maia Sandu decided to act as an arbiter and organize a tripartite meeting with MPs and ministers. Given yesterday’s incident with electricity, that could repeat anytime and lead not only to a prolonged blackout, it is possible that the current situation in the energy sector could also be one of the reasons for the tensions within the government. Most likely, not everyone is happy with the fragile state Moldova finds itself in. Experts say there has been an opinion behind the scenes of the authorities for a long time that the current energy risks could be minimized by a proper anti-crisis management. Clearly, the authorities tried not to wash their dirty linen in public and not to let the inner-party conflict seep into the streets. The carefully smoothed statements from PAS representatives do not yet give a clear understanding of what the participants in the “secret party” agreed on. Yet all speculations are mostly based on two main versions: the dismissal of individual ministers or the resignation of the entire government. Each option has nuances, and each is dangerous in its own way. First of all, we should keep in mind that state agencies are experiencing an acute personnel shortage, so an attempt to completely reset the government may lead to an even greater weakening of the Cabinet, and thus a further decrease in the effectiveness of the executive branch. The example of the two-month search for a candidate for the position of Ecology Minister is vivid evidence of the extremely difficult staffing situation in the country. However, trying to keep hiding the poor quality of the current ministers’ performance is not an option either. It is difficult not to see how a number of directions, with specific names of ministers and high-ranking officials behind them, have almost completely failed. Therefore, Maia Sandu actually faces a difficult choice: either to go on turning a blind eye to the government fiasco, not yielding to intraparty squabbles and oppositional pressure, or to dismiss it, admitting the weakness and mistakes of her colleagues. But the latter will inevitably be used by the revanchist forces. The real situation in the country may also be even worse than we think. And the debate about the fate of the current government is not just a technical question, but in many ways a cover for the economic stalemate. Next week, the regular session of the “Platform for Moldovan Support” will be held in Paris, where Natalia Gavrilita wants to ask the international partners for 450 million euros for a relatively stable winter. At the same time, the parliamentarians speak about the financial need of 1 billion euros to cover all expenses and compensations to the population. It is worth recalling that back in April, at this platform’s first session, the Prime Minister spoke about the urgent need for additional financial support, because the amounts agreed with the IMF and the World Bank will not allow us to cover the budget holes in 2022-2023. In addition, Gavrilita emphasized the problem of the increase in public debt: even then, Moldova was approaching the limits of safe loans. Throughout the year, we heard that despite abundant crowdfunding and financial promises with six zeros, Moldova did not receive the necessary minimum of macrofinancial assistance and was struggling to make ends meet. Official inflation has approached 40%, and the government’s continued borrowing on the domestic market at a gigantic interest rate may have already led the country to either default or a pre-default state, which the authorities have so far been reluctant to make public.