Moldovan government facing no-confidence vote

By bne IntelliNews March 5, 2013

bne -

The Moldovan parliament will stage a vote of no-confidence in the government of Prime Minister Vlad Filat on March 5. The survival of the administration depends on the ability of the bickering coalition parties to put aside their differences and push through to seal an Association Agreement with the EU due to be signed later this year.

The opposition Communist Party, which controls 34 out of 101 seats in parliament, called the vote on February 28 after over two months of growing fractures within the coalition government amidst accusations of corruption. It will try to enlist the support of deputies of the Liberal Party and Democratic Party (DP), both affiliated with the ruling coalition - the Alliance for European Integration - to get the 51 votes necessary to force the cabinet's resignation, Itar-Tass reports.

The coalition fell apart last week after Filat's Liberal Democratic Party (PLDM)

withdrew, and together with the Communists voted for the resignation of Vlad Plahotniuc as first deputy speaker of parliament. Plahotniuc is Moldova's wealthiest oligarch and is the main backer of Marian Lupu's DP, but is accused by PM Filat and many others of involvement in massive corruption, charges he denies.

Embezzlement on a huge scale has been uncovered at Moldova's state-owned savings bank Banca de Economii a Moldovei (BEM). It will go under by the end of March unless decisive action is taken, according to a leaked International Monetary Fund (IMF) report.

Plahotniuc's critics allege that they have gathered some damning proof showing that the oligarch has been raiding Moldova's banking system with impunity over the last three years, protected by his control of the prosecutor and anti-corruption offices. He has also reportedly been aided by his influence over the economic bloc of the government and the National Bank of Moldova.

While there is no documented link between Plahotniuc and the fraud at BEM specifically, the bank figured in 2010 and 2011 as one of a group of lenders where minority share packets were expropriated by dodgy court decisions in Moldova, and transferred to non-resident companies, chiefly in the UK. In the case of one of the other banks affected, Victoria Bank, litigation in London subsequently established that Plahotniuc was now the beneficiary owner of the UK shell company owning the share packet. Plahotniuc says that the UK documents bearing his name are forgeries. Large outflows of funds seem to have taken place from the banks subsequent to the "raids".

Meanwhile, other political forces are pushing the government to work out its differences and continue on its path towards cementing stronger relations with the EU. President Nikolai Timofti's press secretary told journalists: "The president believes that the resignation may lead to early elections which are undesirable in 2013 when our country is expected to sign an Association Agreement with the European Union."

Yet the disposition of forces in parliament is unclear, and the result looks finely balanced. The Liberal Party says it will not vote with the opposition, but to date, all 34 Communist deputies, 12 from DP and 4 from the Socialist Party have spoken in favor of resignation of the motion, leaving them with just one more approval to find. Meanwhile, a group of deputies from Vadim Mishin's Rebirth Party has also declared its opposition.

Should the government be to forced to resign, the president will nominate the candidacy of a new prime minister after consultations with parliamentary factions. The new premier will then to submit his proposals on the make up of the new cabinet to parliament. If rejected, the country will head to the polls.

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