EU to start talks on new deal with Moldova soon

The European Union will start talks with Moldova soon on a new cooperation agreement that will bring the former Soviet state into closer political and economic ties with the bloc, the EU said yesterday.

A statement from the Swedish EU presidency and the executive European Commission said the planned deal would go beyond a Partnership and Cooperation Agreement in place since 1998.

"A mandate has already been given to the European Commission and negotiations will be launched shortly," the statement said, after an EU delegation headed by Swedish Foreign Minister Carl Bildt visited Europe's poorest nation.

Western-leaning parties in Moldovia formed a government last month after beating the incumbent communists in an election. But a protracted deadlock over the presidency is yet to be solved in the country squashed between EU-member Romania and Ukraine.

The government stands on a platform of closer integration with the EU, which may yet irritate former Soviet master Russia.

And the EU is wary of a conflict on its own doorstep in the form of rebel region Transdniestria, where ethnic Russians live and Russian troops are stationed. The region broke away 19 years ago fearing Moldova would unite with Romania, with which it shares a language and history.

Moldovan Prime Minister Vlad Filat said talks with the European Commission on the new agreement would start next week, his spokesman said.

The spokesman also cited Bildt as saying in Chisinau that much depended on whether Moldova would be able to strike a loan agreement with the International Monetary Fund.

"We came to Chisinau to show our support for the new government of Moldova, which must take the path of radical reform," the spokesman cited Bildt as saying.

"All will depend on whether Moldova signs a memorandum with the IMF. Then a green light will be lit for foreign investors in Moldova."

An IMF mission is now in Chisinau to discuss loans with the new government. The communists had rejected the IMF's overtures when still in power, calling its demands for tax increases and budget cuts unacceptable.

Like all former Soviet states, Moldova is suffering deeply from the global slowdown as remittances from its workers abroad - a vital earner for the economy - plunge.

Moldova is part of the EU's European Neighbourhood Policy and Eastern Partnership drive, which aims to bring former Soviet states closer through stronger ties and economic integration.

The partnership includes closer cooperation in areas such as energy with six Eastern European countries, offering them some €350 million for strengthening state institutions, border controls and assistance for small firms.

Moldova hopes visa restrictions for its 4.3 million people would be eased after a new deal is struck.