Moldova “Caught” Between US and EU

RTA experts look into whether Europe can step up and become a new source of support for Moldova once America shuts off its “aid tap” Sergiu CEBAN As the US media have reported, the process of terminating the USAID activities to be liquidated by autumn, with all of the agency’s employees dismissed, is almost finalized. The financial resources that were reserved for its budget, as well as part of the staff, will be redirected to the State Department. Therefore, there is a possibility that funding for certain programs and projects will be resumed, but most likely solely under the significantly adjusted international agenda of the United States, which is actively promoted by the Donald Trump’s administration. For Moldova, as well as for the majority of its non-governmental sector, the loss of a significant part of the resource support was a serious blow, forcing numerous “independent” journalists, experts, activists and influencers to reach for Brussels and other European capitals in search of alternative sources of sponsorship. Under the circumstances, the EU is trying to find extra funds to somehow compensate for the sharp deficit, but even the example of Ukraine proves that the EU is absolutely unable to replace American resources. Obviously, due to sagging US aid, the political support of the authorities is also weakening, and hence the ability to keep the domestic political situation under control. The most obvious examples of how Moldova is deprived of benefits are the stay of our delegation to the USA to open new diplomatic offices, the remarkable speech of Foreign Minister Mihai Popsoi at the Atlantic Council and, finally, the decision of Donald Trump to impose one of the highest import duties for our country. Brussels, of course, will try to cheer up Chisinau and sugarcoat the bitter American pill with another donation of several tens of millions of euros, as well as, perhaps, some additional relief as part of the EU accession negotiations. In addition, it is quite likely that in the coming months we will see another dozen delegations of parliamentarians and European leaders who, travelling towards Ukraine, stop for another day in the Moldovan capital. We will once again hear pompous statements and words of solidarity, but, alas, nothing more. After all, parliamentary elections are ahead and, unlike the White House, the EU is not ready to cast adrift the current ruling regime. The only question is to what extent the European bureaucrats and individual European capitals, which have, to put it mildly, exaggerated geopolitical ambitions, will be able to provide the additional resources to replace the US and maintain the previous level of soft non-governmental influence in countries like Moldova. Anton ŠVEC Moldova, as a non-sovereign state, will change according to the external context and framework set by its partners. Chisinau soft-pedals the whole range of unfriendly steps made by the US in the nothing-personal-just-business mode. First, the Americans cut off the financing of the non-governmental sector and mass media, which together are not just the ‘fourth power’ in the country, but the conscience of the nation, the main “lifeline” and, as it turned out, the personnel reserve of the “lame PAS”. This week Washington went further, announcing reciprocal import tariffs with 31% rate. Moreover, it demanded to accept back Moldovan citizens staying in the US in violation of the law, as well as additional migrants under the promise of financial benefits. Since its WTO accession in 2001, Moldova has never been subject to such weighty duties, which now may result in the loss of the American market. Despite the narrow range of products (beverages, agricultural and food products, plastics, clothing and steel) and their non-critical share in total exports (about 2.5%), the political effect of this measure, as well as its impact on several specific businesses, may be devastating. Dorin Recean’s press release and Mihai Popsoi’s visit to Washington guarantee that Chisinau will choose a conciliatory tone to communicate with the US. After all, the transfer of land and facilities for the construction of the US embassy complex in the capital is on the agenda. It’s not clear what Moldova will do with the migrants expelled from the USA. There are simply no financial resources, infrastructure and expertise for their accommodation and socialization. Meanwhile, the European Union, against the background of membership negotiations, is already addressing Chisinau with similar requests. Even with the generous funding from Washington and Brussels, Moldova will not bear such an influx, but PAS leaves this issue for the future – if it stays in power, it will send everyone to Gagauzia. Political tutelage and EU funding are the backup plan for Moldova. Chisinau could receive 1.9 billion euros from the EU in the coming years. This week, Annalena Baerbock, whose party will not be in the new coalition, brought 37 million euros to Moldova for the army, police and customs, thus testifying ideological support and at the same time criticizing current US policy in the Moldovan media. The problem is that all EU money, including loans, is not about investment and economic development. They are directed solely at creating Moldova’s infrastructural dependence on the EU (including in terms of transport and energy) and strengthening the military-police component. Moreover, a significant share will have to be repaid over time, cutting expenditures, reducing the social sector and guarantees for citizens. In a few years, if the PAS regime is preserved, Moldova will become a country with an acutely deficit budget and state debt, with reduced social functions, but with constantly growing military expenditures, and also mired in a migration crisis which can be a fatal factor amid a long-standing identity crisis (or rather different views of identity between the people and the authorities). Notably, this setup will be a result of the actions and totality of choices of foreign partners, while PAS will simply enjoy power. Christian RUSSU The economic losses resulting from the US duties will undoubtedly be tangible. Our exports overseas have reached $90 million. However, the political blow from this measure is severe. To rank among the countries with the highest safeguard duty, alongside Angola, is very indicative, as it shows the level of attention of the new US administration to the PAS government. Chisinau tries to show good acting in a bad play, pompously presenting a kind of Budget Plus, and demonstrating the support from the EU, or rather some countries of the bloc, which in addition to helping Ukraine are ready to allocate something for Moldova. In general, it imitates frenzied activity, carries out minor reshuffles in the government, pretending that the drastic shift in the attitude of the key strategic partner is merely a temporary technical setback. The technical aspect here is only Washington’s decisions on assigning interlocutors for Minister Popsoi. The so-called Budget Plus investment programme includes already agreed issues like the January EU energy grant. In other words, they are trying to sell the population the same things for the second time, but under a new label. The authorities asked the head of DG Move from the European Commission to come to the country to create the appearance of addressing the problem of 115 national transport companies which suddenly found themselves out of work. However, no practical measures to help our transport workers were announced. The European official simply repeated the ideas about the importance of implementing reforms and EU legislation.