Can EU integration break the ice in Moldova’s frozen conflict?

Can EU integration break the ice in Moldova’s frozen conflict?
European leaders gathered at Moldova's Castle Mimi for the second European Political Community (EPC) summit in June. / European Commission
By Cameron Jones in Chisinau and Tiraspol June 7, 2023

The European Political Community (EPC) summit in Mimi Castle on June 1 was the largest diplomatic event Moldova has ever held and a chance for the country to underscore its commitment to European integration. But what concrete steps have been made and what does the strengthening of EU ties mean for the country's unresolved frozen conflict in the unrecognised breakaway state of Transnistria?

Despite Mimi Castle a winery constructed by 19th century Bessarabian aristocrat Constantin Mimi being 25 miles (40 km) from Chisinau, the summit took over the Moldova capital last week. Most of central Chisinau's roads were blocked and public transport was shut down. Police were omnipresent in the city centre, perched at pedestrian crossings, while bars and restaurants were packed and the local wine flowed freely. Roads that a few months ago had been riddled with potholes had been rapidly refurbished and brought up to standard to bear the motorcades of the various European politicians in attendance.

Moldova's Economy and Digitalisation Minister Dumitri Alaiba said in an interview with bne IntelliNews that the summit was a historic success, marking the first time that fifty heads of state had gathered in the country. The summit provided significant visibility and press coverage for Moldova, which is crucial for its EU integration agenda and pursuit of candidate status.

Olga Rosca, spokesperson at the European Bank for Reconstruction and Development (EBRD) for Azerbaijan, Bulgaria, Moldova, Romania, Serbia and Turkey, said the summit in Moldova carried a crucial message that Moldova is not alone in its struggle against the hybrid warfare waged by Russia. The summit demonstrated the commitment of friends and allies to protect the peace and unity of Moldova and Ukraine, she said. Additionally, the summit provided a platform to accelerate Moldova's EU accession process, with discussions on opening accession talks next year.

In Rosca's words, the summit showed "short-term tangible results as well as longer-term diplomatic gains that will anchor Moldova to Europe." 

When it comes to the gains for Moldova, the achievements at the summit included significant milestones such as the scrapping of roaming charges, the launch of the EU-Moldova partnership mission to counter hybrid threats, and the disclosure of equipment purchased with EU funds for the peace budget. Via its Peace Fund, the EU has played a vital role in nearly doubling Moldova's defence budget (funds don't go directly to Moldova's budget; EU funds buy equipment from defence companies for Moldova), ensuring its defence capabilities are enhanced, with EU foreign policy chief Josep Borrell showcasing some of the new equipment at the summit. 

The summit also resulted in increased co-operation between Moldova and Nato, as well as other allies. Moreover, Moldova received €50mn from Norway to enhance its energy resilience by purchasing gas. These achievements collectively contribute to Moldova's ability to combat hybrid threats.

Progress towards accession

Moldova, along with Ukraine, was given EU candidate status in June 2022. The country now aims to secure the start of accession negotiations with the ambitious aim, as announced by President Maia Sandu, of entering the EU by 2030. To achieve this, Moldova has work to do, not least in combatting corruption. 

According to Alaiba, Moldova has made substantial progress on various fronts. Specifically, he emphasised the advancements made in combating corruption, particularly in the "de-oligarchisation" of state-owned enterprises and the justice system. 

"There are two recipes for becoming an oligarch,” Alaiba said. "Exploiting state assets on the cheap, such as how Moldovan oligarch Ilan Shor used to control Chisinau airport, and the other being selling to the state at increased prices ... We're doing what we can to crack down on this now."

One concrete example of a successful anti-corruption measure through digitalisation has been cutting down on the amount of paperwork that needs to be stamped by officials. When the stamp holder holds the power, the potential for bribery increases. Turning everything digital reduces this, and Moldova now has the five most popular extracts from the government registry all online, with business owners able to provide proof of property instantly from their phone or computer.

"We take inspiration from Estonia," Alaiba stated. “Currently 40% of government-to-business services are online but by next year it'll be 75%, and we won't stop until we've reached 100. Estonia has done it and so will we.” The digitalisation efforts have already saved thousands of working hours and streamlined processes such as obtaining property extracts or certificates for business activities, saving 200,000 working hours per year through the elimination of obsolete regulations.

Alaiba emphasised the importance of attracting foreign investment and positioning Moldova as a meeting place where businesses can open and design their own companies, with access not only to Moldova's population but also to a billion people. This will be achieved through a new package in July that will eliminate work permits for over 50 states (Russia and Belarus are not included). Taking further inspiration from Estonia's e-citizen programme, Moldova has made all EU citizens with valid signatures e-citizens of Moldova.

Reintegrating Transnistria 

While the issue of Transnistria was not raised directly at the EPC summit, Moldovans believe the key to resolving the conflict lies through making Moldova as attractive as possible economically in order to reintegrate the Dniester's left bank.

Transnistria, which lies between the Dniester and Moldova’s border with Ukraine, has been controlled by Russia-backed separatists since the early 1990s. 

In recent years, however, the opening of EU markets to Moldova and by extension Transnistria has achieved what decades of diplomacy failed to do: kick-starting the economic integration of Transnistria with the rest of Moldova. 

Since the signing of Moldova’s Association Agreement and Deep and Comprehensive Free Trade Area (DCFTA) with the EU in 2014, Moldova’s trade has shifted from being predominantly with Russia and the CIS to mainly with the EU, particularly in sectors such as wine and IT. Only 15 years ago 70% of Moldova's trade was with Russia and other Commonwealth of Independent States (CIS) countries, whereas now it's 70% with Western nations (60% with the EU, and a further 10% with the UK, US, Norway and Switzerland).

Economic integration with Transnistria has already been achieved to some extent, but the emphasis now lies on making Moldova more appealing and reintegrating the region by demonstrating the benefits of EU integration. Transnistria already does 70% of its trade with the EU and any bottle of Transnistrian cognac or wine is branded with a "product of Moldova" label to make it available for export to the outside world. 

The closure of the Ukraine border with Transnistria and the Russian naval blockade of the port city of Odesa has further emphasised the importance of trade routes through Moldova into the EU via land or outside the EU via Romania's Black Sea ports. With no sea or land connection to the breakaway region, it will be difficult for Russia to maintain economic influence in Tiraspol.

The view from Tiraspol 

Since Russia’s invasion of Ukraine in February 2022, there was speculation that Transnistria less than 100 km from Odesa might become embroiled in the conflict. So far this has not happened, and the authorities in both Chisinau and Tiraspol have sought to maintain calm within the country. 

On the ground, things do not feel tense. Border checks are fast and easy with the military presence in Tiraspol and Bender is far from overbearing. In fact, many of the "Russian peacekeepers" are not from Russia proper at all, but Transnistrian locals who have been granted Russian citizenship and applied to work as part of the peacekeeping contingent. 

Citizens of the "Pridnestrovian Moldavian Republic”, as they call themselves, outright reject any suggestion Tiraspol takes its orders directly from Moscow. Despite this, the flag of the Russian Federation, alongside the Soviet inspired Transnistrian flag, flies ubiquitously from government buildings and on checkpoints and adorns the shoulders of the uniforms of soldiers manning them.

The long-standing frozen conflict is also seen differently in Tiraspol than it is in Chisinau. Andrey Demchenko, a tour guide and proud "Pridnestrovian" citizen, born to a Ukrainian father and Russian mother, argues that it is not the "Pridnestrovians'' who are the separatists but the rather Moldovans who separated from the USSR with the intention of establishing a more ethnically homogeneous state that would merge with Romania. In contrast, the people in Tiraspol, the capital of Transnistria, wanted to preserve the spirit of the multinational USSR. Transnistria's history of Soviet industry gave them the confidence to believe they could exist independently.

When it comes to their stance on the Ukraine crisis, Demchenko says "Pridnestrovians" watch media from all sides, Russia, the West and Ukraine, and try not to pick sides, believing that both sides need to stop shooting and start talking and that no good will come from further death and destruction. Likewise, they believe that the only solutions to solving their frozen conflict are peaceful, a sentiment shared in Chisinau. 

And in terms of Transnistria being used as a Russian bridgehead for an attack on Moldova or Odessa, he stresses that the military force stationed in the tiny sliver of land is paltry. Indeed, Demchenko himself served two years in the breakaway state’s army, during which time he never once even held a rifle.

Far from settled 

Sandu has made it clear that while Moldova strives to join the EU it will not abandon Transnistria

However, there are major sticking points to further reintegration. The government in Tiraspol is still formally opposed to Moldova joining the EU, with the authorities issuing a statement in 2022 reasserting the self-declared republic's independence and saying the request to join ignored the negotiations aimed at reaching a settlement to the Transnistria conflict.

Another issue is the languages spoken in Moldova and how they are described. Both Romanian and Russian are widely spoken in Moldova. While Transnistrians are almost entirely Russian speaking, in Chisinau there has been a conscious effort to speak Romanian rather than Russian following the invasion of neighbouring Ukraine. 

In March, the parliament of Moldova also voted to replace the term “Moldovan language” with “Romanian language” in all national official acts and documents. The decision had a symbolic value besides simply settling a dispute among linguists; Moldova was abandoning the Soviet construct of a separate “Moldovan people” distinct from Romanians.

For Transnistrians like Demchenko, Russian is not seen as only the language of Russia and Russians, but a multicultural language that unites peoples of different religions and ethnicities across 12 different time zones.

Adding to the problems facing the small and divided country, Moldova had a turbulent 2022, experiencing a severe downturn of -5.9% of GDP due to being heavily affected by Russia's invasion of Ukraine. Odesa, the biggest port for Moldovan exports prior to the Russo-Ukrainian War, remains blockaded, forcing Moldova to rely more heavily on land trade or Romanian ports for its exports. 

Despite Moldova’s wide-ranging recent reforms, the economic problems remain and Moldovan wages dropped 3.9% in Q1 of 2023 as the country remains one of Europe’s poorest

Resolving the frozen conflict still remains a long way away, but both sides remain committed to an eventual peaceful solution, while Moldova looks West with the aim of becoming a more attractive place to do business and addressing the country's economic problems.