What’s behind the latest row between Chisinau and Tiraspol?

The Transnistrian settlement under PAS remains a viscous environment, mainly shaped by accumulating issues, mutual accusations and risks of disruption

The fever heat in the Transnistrian settlement in recent months has been the PAS’s plans to establish a convergence fund, filled with donor resources and funds collected from left-bank enterprises through excise duties and value-added tax. As Deputy Prime Minister Valeriu Chiveri has stated several times, the fund should facilitate reintegration to a greater extent than negotiations with the regional elites. The implementation deadline for this measure, extremely negatively received in Tiraspol, has been repeatedly postponed and is tentatively set for 1 September. On the one hand, the Left Bank is reporting losses of around USD 50 million annually, while on the other, the actual amount, as stated, will be less, but only because most businesses subject to the new regulations couldn’t pay VAT or excise taxes to Chisinau and will simply cease operations. Meanwhile, the authorities provide no calculations, but Vasile Tofan is trying to justify the decision by citing the fact that the central budget already subsidizes some Transnistrian residents through pensions, maternity benefits, university tuition, and healthcare. However, Tiraspol cites its own figures on this matter: the number of Transnistrians studying at right-bank universities is lower than even the number of graduates from local schools under the jurisdiction of the Ministry of Education and Research; the treatment is provided primarily to national health insurance policy holders, with payment made by the local “Ministry of Healthcare” or, in fact, by the individual; the pensions are primarily received by Moldovan personnel stayed in Transnistria after retirement; and the total amount of payments allegedly falls short of USD 30 million that Left Bank economic operators, according to the local “customs service”, have already paid into the national budget since the beginning of 2024. As usual, each bank has its own truth. Negotiations could conceivably resolve or at least deescalate the tensions, but even that is proving problematic. Tiraspol claims it has been demanding a meeting of the working groups on economic issues throughout July, but no specific date has been announced so far. Meanwhile, the local “Ministry of Agriculture” on Monday sharply criticized the Dniester Commission’s recent decision to reduce water discharge into the river by 15%, citing negative environmental and agricultural consequences. They also once again lamented the lacking dialogue and the refusal to invite regional representatives to discuss the management of the Dniester basin. It seems our authorities lacked much influence over Kyiv’s decision, driven by power generating capacity and abnormal weather conditions. Or perhaps associates of Maia Sandu assumed that the main consequences of reducing discharges would hurt the approval ratings of Chisinau Mayor Ion Ceban, who, amid numerous scandals and the collapse of the Alexandru Munteanu government, has surpassed the approval numbers of the president for the first time. For several weeks, the mayor has been locked in a standoff with Environment Minister Gheorghe Hajder, who is exploiting the city’s water supply situation to launch an artificial attack on one of the main political opponents of the ruling regime. Meanwhile, the National Crisis Management Board adopted several measures on Monday to protect water resources, including activating reserve wells, reducing industrial consumption, and using water for land reclamation, filling swimming pools, washing streets, and other purposes. None of this reduces the risks for the agricultural sector, which has long been in crisis due to government debts on VAT and subsidies, Ukrainian dumping, and the uncontrolled rise in diesel prices. Aside from the Dniester issue, Tiraspol accused Chisinau of failing to deliver results from Tuesday’s meeting of the transport working groups. Meanwhile, the press releases from both sides read as if experts from both banks attended different meetings. Tiraspol expressed dissatisfaction with Chisinau’s refusal to implement the 2018 Protocol Decision on “neutral” license plates. The main grievance is their inaccessibility for vehicles imported into the region after the agreement was reached, as well as for Transnistrian ambulances. Conflicts over the economy, the environment, and transportation are exacerbated by a longstanding downtime in negotiations between political representatives, who haven’t met since mid-April, alongside with mutual accusations of disrupting meetings. Chisinau clearly wants to abandon holding meetings in Tiraspol or Bender, as established in recent years, returning them to its territory or at least moving them to another left-bank city. At first glance, the uncompromising stand of this question is unclear. It would seem that where we negotiate matters little, as long as what we discuss is the main issue. However, the left bank is convinced that the central authorities firstly have no interest in dynamic negotiations with Transnistria, and, secondly, want to softly steer them away from the old formats involving the OSCE and, especially, Russia. This approach, in fact, has some merit, as the government has openly expressed its desire to, at a minimum, significantly increase the role of the EU in the negotiation process, which currently only has observer status. Overall, the Transnistrian issue is a highly volatile environment where any positive impulses and initiatives are stifled, regardless of their introducers. The authorities appear intent on further postponing any fundamental steps until after the end of the war in the neighboring country, hoping that a resolution to the conflict with Tiraspol will be folded into the overall Russian-Ukrainian settlement and implemented through external actors. Until then, efforts are focused primarily on monetizing the Transnistrian issue through donor funding and increasing resources collected from the left bank. The latter issue is simultaneously aimed at undermining the ability of Tiraspol regime to maintain the regional social and economic situation, which the government also sees as a benefit for reintegration prospects. The viability and, more importantly, the potential progress of this approach are questionable, especially in the long term. We should remember that the official measures are being implemented in a context where the administrative apparatus and media on the left bank (apparently, not without success) are channeling local discontent over declining living standards specifically toward Chisinau. Furthermore, there are doubts that the current strategy of undermining the economic basis for the existence of the so-called “PMR” can produce results, given Moscow’s lasting willingness to financial, military and political support of the enclave. However, it could ultimately bury the possibility of achieving a settlement through negotiations. It’s difficult to predict what this deadlock will lead to. But, as before, the feeling persists that PAS is squandering a unique opportunity for a relatively painless and lasting solution to the Transnistrian issue under generally acceptable terms, instead pursuing a dangerous strategy that guarantees nothing and carries serious risks of disruption.