Moldova and the EU

Moldova wants to join the EU, but the EU is not sure it wants Moldova to join - at least not yet. This is presenting both sides with a dilemma. Moldova is torn between its past allegiance to Russia and its future prosperity, which only the EU can guarantee. But the EU cannot be forthcoming enough, partly because of Moldova's low level of political and economic development, and partly because it is not sure of Moldova's commitment.

This case also raises the issue of the EU's own identity. Where will the EU draw its frontiers? Should it be a smallish and tightly knit group, or a larger and looser organisation? As Malta joins and starts taking an increasingly active role, it must think of the EU's frontiers to the north and east, as well as to the south.

The current phase of the EU's enlargement will end in 2007, when Romania and Bulgaria are expected to join. That will make Moldova, situated between Romania and the Ukraine, an immediate neighbour of the EU, which will become directly concerned by the country's political instability and economic poverty. Should Moldova be given the prospect of joining at a later stage, or should it remain covered by the EU's proximity policy?

The latter, as developed by EU Commission President Romano Prodi and others in 2002-2003, would give neighbouring countries everything but the institutions. That is, it would provide them with most of the advantages and obligations without letting them participate in the EU's decision making process. It has been described as second class citizenship, which most countries try to avoid.

Huge problems

Moldova's problems are huge. Politically, the country's institutions are unstable and the rule of law, civil society and public governance are still weak. Moldova itself took its independence from the former Soviet Union in 1991. Before that it was the Mol-dovan Soviet Socialist Republic.

Most of its area was part of Romania between 1918 and 1940, and most of the inhabitants speak Romanian, an endearing language close to Latin and Italian.

The Russian annexation gave Moldova additional territory - the province of Transdniestria - and a large Russian-speaking minority. The province tried to break away from Moldova in the early 1990s, with the help of the Russians who have kept some military troops there and a stock of outdated weapons.

The population of Moldova is currently about four million; but more than half a million Moldovans, mostly from the countryside, can be found as legal or illegal immigrants in Western Europe and in the former Soviet Union.

Moldova is Europe's poorest country. Its gross domestic product is about €400 per inhabitant. There is a high rate of infant mortality. Government buildings, including schools and hospitals, are in a state of dilapidation. Industry is mainly limited to textiles and clothing. Its large but primitive agriculture generates some exports, especially wine. The country is heavily dependent on external financing: remittances from nationals working abroad are said to account for a third of Moldova's GDP.

Independence was followed by a series of unstable centre-right coalition governments in 1991-2001. As a result of popular discontent, the Communist Party won 70 per cent of the seats in Parliament in democratic elections held in 2001.

The Communists campaigned on a platform of more socialism and a more pro-Russian orientation in foreign policy. The party's way of governing has shown a persistence of its Soviet mentality, including a lack of understanding of the working of a market economy, large-scale state intervention, suspicion of foreign investors and the renationalisation of two-thirds of the enterprises privatised by previous governments.

Like the Western Balkans?

The EU's relations with Moldova are based on a Partnership and Co-operation Agreement (PCA) signed in 1994. This gives it the loosest possible relations among the neighbouring countries - looser still than the Euro-Mediterranean partnership agreements with most Arab countries - but guarantees it some financial aid. The PCA provides for regular political dialogue, trade liberalisation and wide-ranging co-operation based on respect of democratic principles and human rights¹.

Technical advice is the main instrument of aid and helps Moldova strengthen its democratic institutions, consolidate the market economy and bolster up its administrative capacity, particularly in areas connected with foreign trade and the internal market. The PCA also envisages the possibility of establishing a free trade area between the EU and Moldova in the future, but the Moldovan economy is at present much too weak to face up to competition from much stronger partners.

The last five months of 2003 saw two major developments in Moldova's foreign policy. In August, the Moldovan government submitted a paper to the EU spelling out the government's policy of seeking membership of the EU and describes "the short-term goals for Moldova to become, first, an associate member and, subsequently, a fully fledged member of the European Union."

During the Council of Europe's ministerial conference in Chisinau, the Moldovan capital, in November, and on other official occasions, the Moldovan government stated its wish for the country to be assimilated to those of the Western Balkans.

The latter have a very good deal with the EU under the Stabilisation and Association Process. The EU has guaranteed Albania, Croatia, Bosnia and Herzegovina, Macedonia, and Serbia and Montenegro that membership is the ultimate goal, if that is what they wish; but it has not laid down a date for this, or even for the start of accession negotiations. At the same time, it has granted duty-free entry to practically all their exports and is giving them massive financial aid.

The Western Balkans lie at the very heart of the new EU and are surrounded by Italy, Greece, Slovenia and Austria. Poverty and instability in the Western Balkans have adverse effects on their neighbours, especially by way of trafficking in drugs, weapons and human beings. The EU is, therefore, investing in the eventual stability and prosperity of these relatively small countries.

Moldova would like to be treated in the same way. The EU attracts because it provides financial aid and liberal market access. One of its unstated arguments is that it confronts the EU with the same kind of problems, as can be seen by the substantial number of Moldovans involved in trafficking of all kinds in Western Europe.

However, the question is whether the EU can afford to extend 'Western Balkans' treatment to Moldova, and then to other countries in the region, including the Ukraine, Belarus and beyond. Another question is whether the EU has the same level of interest in Moldova and whether Moldova is as committed to the EU.

This leads to the second development that took place in late 2003². At a meeting of the Organisation for Security and Co-operation in Europe, held in Istanbul in 1999, Russia had made a commitment to withdraw all its troops and ammunitions from the province of Transdniestria by the end of 2003. The breakaway province is said to be ruled in a Stalinist fashion and to be centre of trafficking, especially in weapons.

Despite this long-standing undertaking, last November Russia and Moldova reached a provisional agreement which would have allowed Russian troops to stay in Transdniestria till 2015 or 2020 and would have given the province and its Russian-speaking population disproportionate power in a new federal Constitution. Russian President Vladimir Putin was reported to be ready to fly to Chisinau to sign the agreement.

Moldova's centre-right opposition protested vehemently, as did many western governments, and the Mol-dovan government backed away from signing the agreement. But the incident underlined the dilemma faced by both Moldova and the EU.

Does Moldova wish to untie its links of dependence with Russia? Can it afford to? Is the EU willing to give Moldova as favoured a treatment as it extends to the Western Balkans? Will Russia be as willing to give the West as free a hand in Moldova as it has done in the Western Balkans, not to mention the Baltic states?

In the coming years, Moldova will put the EU's proximity policy to the test.

1. European Commission, Moldova - Country Strategy paper 2002-2006, Brussels, December 27, 2001.

2. Les roumanophones s'inquietent du plan russe pour la Moldavie, Le Monde, Paris, December 3, 2003.