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5. EaP in Moldova

5.3. Governance

EU standards on multiple levels has been occurring - such as operator certification and revision of cross-border tariffs. (Dovgal & Martin 2020)

Overall, the EaP has yielded positive results in the economic and environmental sector of Moldova. Following the successful negotiations for the Association Agreement (including the DCFTA) concluded in 2014, important reforms and advancements have been implemented.

Tangible results have also ensued in the SME financial and technical assistance (EU4Business), energy efficiency and energy security sector, increased bilateral and regional trade, etc.

Nonetheless, experts and scholars indicate that the cooperation should strive to go beyond the mere formal fulfillment of obligations – as the potential of EU-Moldova cooperation has not fully materialized. (Morari 2016) Namely, the assumed commitments from the Moldovan side are often curbed by the existing high-level corruption, lack of transparency, and other governance-related issues (elaborated in Chapter 5.3.). As such, entrepreneurs and businesses are vulnerable - and often limited - by the national regulatory institutions. The EU could therefore increase support and opportunities by engaging with them locally/directly.

(Frear et al. 2018) The scope and success of the EaP in the economic area is proportionally dependent on the advancement in the governance field; such as fight against corruption, progress in law and justice reforms, and preventing money laundering within the institutional system. The EU membership thus remains distant and unattainable for Moldova thus far, albeit the many positives vis-à-vis the EaP (economic) cooperation.

executed in practice – and not merely mimicking their implementation. Accordingly, the need to strengthen the rule of law and anti-corruption mechanisms is considered vital for Moldova, as the national democratic standards have continuously been challenged in multiple spheres.

(European Commission 2019b)

Corruption in Moldova is present in all governmental establishments and spread across all levels, even involving the control of key national institutions. This phenomenon is known (and almost normalized) amongst the Moldovan population; and in the Corruption Perception Index from 2017 Moldova has ranked 122nd out of 180 countries. The EU has progressively expressed concerns regarding the Moldovan approach in combating high-level corruption and money laundering. (Frear et al. 2018) In 2014, a major banking fraud occurred, in which $1 billion disappeared from three Moldovan banks, accounting for 12% of Moldova`s GDP. State institutions failed its prevention and/or active intervention, and subsequently pro-European domestic parties collapsed. Although the next government that was formed in 2016 proclaimed pro-European inclination, in practice it did not comply to the EU democratic benchmark. The laws to combat high-level corruption that were adopted in 2017 have still been pending and delayed in their implementation. (European Commission 2019b)

The EU Council Conclusions from 2018 urged the Moldovan authorities to pursue a renewed thorough investigation and prosecution of all individuals involved in the banking fraud.

Furthermore, it called for a complex reform of the judicial system – providing concrete recommendations vis-à-vis a Joint Opinion of the Council of Europe Venice Commission and the OSCE. The EU emphasizes that citizens’ trust in the law enforcement apparatus can only be achieved by an independent, impartial, and accountable judiciary. The latter should be able to provide transparent records of convictions in corruption cases, and prosecutions of high-level officials irrespective of their position or political affiliation. (European Council 2018) The EU has since 2019 contributed €10.6 million in the light of a program to combat corruption by increasing people`s participation and involvement in decision-making.

(European Commission 2020h) This shows once again that when the government of an EaP country becomes problematic or unaccountable to deal with, the EU resorts to a greater cooperation and support towards its civil society. Another of the depicted issues within governance is that local authorities have an unequal relationship vis-à-vis the central government authorities. In order to facilitate an easier and more efficient EaP program

cooperation, local authorities could directly interact with the EU on specific deliverables.

(Frear et al. 2018)

During the mayoral elections in Chisinau in 2018, the results were invalidated following the victory of the oppositional leader Andrei Nastase – something that was considered unacceptable and non-transparent by the EU and the international community. The EU called for a comprehensive monitoring of the electoral campaigns and processes, since transparent and credible elections are central to a democratic, multi-party system. (European Commission 2019b) On June 2019, the Moldovan government addressed some of the pending legislative proposals, and started working on a new agenda. This improved legislation cancelled the former mixed electoral system, and it got restored back to a proportional one (based on party lists). Other decisions concerning anti-corruption, depoliticizing of state institutions, and optimized voting conditions for the Moldovan diaspora were adopted. In spite of some law changes being relatively swift in their implementation, particularly the alterations around transparency and limited electoral/campaign funding caused controversies amongst the government and various stakeholders. As such, the EU Council laments that the new electoral law did not address the recommendations of the Joint Opinion of the EU and the OSCE - albeit laid out in the Moldovan Action Plan. (European Commission 2019b;2020h; European Council 2018)

In the light of the secessionist conflict resolution of Transnistria, a 5+2 negotiation platform was established in 2011 in order to support a comprehensive and peaceful conflict settlement. In this framework, the 5 mediators are Moldova, Transnistria, Russia, Ukraine, OSCE; accompanied by the observers – the EU and US. The EU actively supports the territorial integrity of Moldova – with a special status for Transnistria – and this topic is almost always on the agenda when the EU engages with Moldova. (European Commission 2020h; OSCE 2021) With the creation of the ENP, the EU has become more interested and involved in conflict situations around its immediate periphery. A specific program that was launched in the context of European Neighborhood and Partnership Instrument in 2005 was the European Union Border Assistance Mission to Moldova and Ukraine (EUBAM). The aim of the Mission is to manage and harmonize border control, trade and custom standards, combat cross-border crime, and the overall improvement of CBC and integrated border management. Amongst its specific objectives is also the contribution to a peaceful conflict settlement concerning the

Transnistrian secession. This is supported by activities that tackle confidence-building between Chisinau and Tiraspol; transport management; legislative approximation and enforcement within trade, customs, and transport area; etc. EUBAM essentially serves as an advisory/support/and technical body for the involved stakeholders and civil society, and operates through its headquarters (Odesa, Ukraine) and field offices across the region.

Although EUBAM does not possess executive power, its mandate allows it to move freely across the (conflict) region. (EUBAM 2021)

A stronger security partnership is one of the EaP objectives, and of a particular relevance and importance for Moldova. Within the EU, Romania has been one of the main EU countries providing security assistance, as Moldovan stability and independence is essential for its neighborhood. However, the EU strains away from military and intelligence engagement in the EaP region. It also has a limited budget for the latter, and has neither cooperated with larger security institutions. Rather than dealing with hard security interests, the EU has resorted to a soft security cooperation - such as funding police and border guards` capacity building, security communication systems, cybercrime security, etc. The EU`s (lack of) security and military policy in the Eastern neighborhood has been one of its critiques for a long time, also in the framework of the CFSP. Experts and policy-makers suggest more investment in intelligence partnership with Moldova, also in liaison with funds and capacity building of police, prosecutors, courts, and intelligence agencies. (Gressel & Popescu 2020) A noticeable improvement has been the increase in public confidence towards police, which rose from 25%

to 41% between 2016 and 2020 thanks to an EU funded support program for police reform.

(European Commission 2020h)

Russia has leveraged its soft power influence over Moldova, especially when dealing with its local proxies. It does so by utilizing already existing interdependencies (i.e. security, energy, trade) and exploiting issue-linkage strategies. This can be also seen in its open support towards the breakaway state Transnistria, which simultaneously weakens the Moldovan state and other external conflict resolution efforts. (Beyer & Wolff 2016) On the other hand, the EU does not deploy similar issue-linkage strategies or interdependencies in its external policy.

Moreover, the EaP countries are less likely to adhere to EU policies and acquis when there are no alternatives offered – this is particularly relevant in the security area. Yet, the EU has been able to offer other attractive options for Moldova, and with the experiences from the

Crimea annexation in 2014, there is more domestic willingness to lessen dependence on Russian energy supply and invest in relations with the EU on multiple levels. A case study has shown that Russia leverages its dominant influence in the fields of energy and security;

whereas lesser so in trade and migration areas. Due to an advantageous EU offer of an AA/DCFTA, Moldova obtained trade benefits and visa-free entry to attractive (labor) migrant destinations - whilst adopting a nexus of EU policies and conditionalities. (Całus et al. 2018) Thus far, the state-of-the-art and respective reforms in the governmental and judicial system have been lagging behind and not achieving the desired results and standards. The course of its development could indeed be influenced by the new pro-European President Maia Sandu, that won the office in December 2020. Nevertheless, although it is a positive step closer to the EU, a complex internal situation in the Moldovan government remains. Namely, there are conflicted interests regarding geopolitics and external policy orientation; with a pro-Russian parliamentary majority on one hand - and Sandu with the pro-EU opposition on the other.

The EU opted for no intervention in the domestic affairs of Moldova, and hence the political crisis that has been escalating in recent months seems to lack any external brokerage. Thus far, state institutions are relatively weak and the political tensions and animosity high. Some experts suggest that mediation from external partners would be helpful for organizing earlier parliamentary elections this year, meanwhile ensuring that the election process is monitored, transparent, and democratic . (Cenusa 2021; Milewski 2020)

Overall, the EU has been mostly voicing its concern regarding the state of the governmental institutions including their transparency and corruption-related problems – and not many tangible results have been observed in this area. Even when concrete action steps were proposed by the EU, ultimately it is in the hand of the EaP country itself to decide whether to pursue its implementation or not. Overall, the EU continues to support efforts in strengthening democratic institutional reforms, rule of law, and fight against high-level corruption. Appropriately, the EU assistance to Moldova within the governance sector is thus based upon strict conditionality and its respective progress in applied reforms. (European Commission 2020h; 2020g)