European Central: Moldovan President Stands Up To Russia
Antoine Gyori - Corbis
Lithuania has been known as a small but mighty country for speaking out against China, but Moldova is making its voice heard as well. Moldova's President is making it clear she will not be intimidated by Russia. Moldova, formerly part of the Soviet Union has gone back and forth between aligning itself with the European Union and Russia. The president has made it clear she is orientating Moldova with the West. Russia is trying to derail her plans but Sandu is determined. EU membership is a priority of hers and will not let Russia deter her from making progress toward this goal. This has not been easy due to Russia threatening Moldova’s energy supply.
In an attempt to destabilize Moldova, Russia dramatically raise the price of natural gas exports to Moldova. It was able to do this due to the unfortunate timing of Moldova's energy contract expiring with Russia in September. When the contract expired, Moldova was forced to pay 790 dollars per cubic meter instead of 550, while the gas supply was cut by a third. After Moldova settled a new contract with the Russian energy company Gazprom, it was threatened in late November to pay 73 million dollars for energy delivered in October and November within 48 hours. If Gazprom did not receive the money in the time frame it would stop supplying natural gas to Moldova. The deadline was extended by a couple days and Gazprom confirmed it received payment from Moldova. Von Der Leyen, President of the European Commission has pledged support to Moldova. In mid-December Von der Leyen announced that 60 million euros would be given to Moldova in order to help the country deal with energy costs. Fortunately, the new five-year contract Moldova and Gazprom agreed on includes a decrease in the gas price. Moldova was expected to pay $450 for every 1,000 cubic feet of gas and will pay less as time goes forth, half of what the market price will be for gas. Originally Gazprom wanted to charge Moldova $750 for 1,000 cubic feet of gas, significantly more than $250 which Moldova paid under the previous contract.
The situation between Moldova and Russia is further complicated due to a region of Moldova called Transnistria. Transnistria is a Russian speaking region of Moldova that views itself as independent from Moldova. Russia keeps 1,500 troops and 500 peacekeepers in Transnistria to help support its claim for independence. Interestingly enough, Russia does not recognize Transnistria as an independent country formally, nor does any other UN member. Only three other countries; South Ossetia, Abkhazia, and Nagorno-Karabakh recognize Transnistria. All three of these breakaway regions were also part of the Soviet Union and are not recognized by UN members as well. Despite not having formal recognition, Transnistria acts as an independent country and elects its own government, flag, passports, and has its own currency, the Transnistrian Ruble.
It is uncertain what moving closer to the European Union will mean for Moldova’s claim to Transnistria whose residents still have strong ties with Russia. While Transnistrian passports may not be recognized by any UN member state, it is estimated that half of Transnistrians have Russian passports. Transnistria held a referendum in 2006 (which Moldova does recognize) which resulted in 90% voting to unify with Russia and vote to leave Moldova. Moldova’s energy crisis can also be partially explained by this region declaring independence. When Transnistria still considered itself part of Moldova, it was responsible for 40 percent of the Moldovan GDP and provided the majority of electricity when Moldova was still part of the Soviet Union. Transnistria has relied heavily on Russia for economic support since declaring independence and receives free energy from Russia. Seniors in the region also receive a $9 monthly supplement to their pension.
There is however the possibility that the mentality may change and that Transnistrians may slowly look towards the West as well. Since the European Union and Moldova agreed on a trade deal in 2014 which reduced tariffs on Moldovan exports to the EU, Transnistria has also developed economic ties with EU member states. Transnistrian companies have been able to benefit by registering as a business in Moldova and paying taxes to the national government in Chisinau, the capital. The breakaway region has exported goods to 20 out of 28 member states (pre-Brexit), and 70 percent of exports are bought to the EU. Exports to Russia have decreased by 74 percent as a punishment because of the trade deal between Moldova and the EU. Russia only accounted for 16 percent of Transnistrian exports.
While Transnistrian leaders may still refuse the idea of remaining in Moldova and becoming part of the EU, they cannot ignore the impact this trade deal has had on the region. The trade deal has partially eroded the regions claim to independence by getting some companies to recognize the Moldovan Government as having authority over them and paying taxes to it in order to increase exports. The number of companies exporting to the EU may continue to increase if Russia continues to punish all of Moldova including Transnistria for the trade deal. This may cause residents of the region to resent Russia for punishing them for a trade deal they are not responsible for and instead favor the EU which has absorbed a majority of the region’s exports.
President Sandu has many challenges ahead of her, but also has many opportunities as well. The European Union has made it clear it supports the country’s ambitions to become a member state in the future. Due to Russia wanting to punish Moldova for these ambitions it has punished Transnistria in the process and may help Sandu unify the country in the process. She may be able to propose a compromise to Transnistria, such as being recognized as an autonomous region which can be seen in Eu member states for regions that differ culturally and linguistically.
