Why did Moldova miss €60 million in Romanian aid?
This is a translated and slightly adapted version of an article originally published in Romanian on March 31.
An agreement whereby Romania offered Moldova €100 million in aid and investment wasn’t extended, even though there were still €60 million to be spent. President Sandu did not miss the opportunity to lay the blame on former Prime Minister Chicu, while the Foreign Ministries in Bucharest and Chișinău traded thinly veiled accusations.
The story according to Moldovan authorities is as follows: Romania proposed an extension of the agreement, the 6th Protocol, in December 2018, but began stalling negotiations in the fall of 2019. In November 2020, Bucharest sent a new draft of the Protocol, which Moldovan authorities say contained “political conditionalities (sic) not found in any bilateral treaty signed by the Republic of Moldova”. The Moldovan side also says that Romania rejected a middle ground version of the text. On the other side, the Romanian Ministry of Foreign Affairs deflected all responsibility onto the Moldovan authorities, who refused to accept additional conditions and replied too late.
What exactly was the last straw for both sides? And how did Moldova manage to absorb only 40 out of the 100 million over 10 years? To find out, we spoke to Armand Goșu, lecturer at the Political Science Department of the University of Bucharest, and to Angela Grămadă, head of the think-tank Experts for Security and Global Affairs.
The Age of Great Hopes
The initial agreement was signed on April 27, 2010, one year after the Voronin regime was supplanted by the Alliance for European Integration.
“Meanwhile in Bucharest, Băsescu had won the presidential election and Moldova was high up on his political agenda. The Minister of Foreign Affairs, since December 2009, was Teodor Baconschi, whose ancestors had been priests in Chișinău and, as such, he had a strong attachment to Bessarabia”, says Armand Goșu.
It wasn’t all sentiment though. The historian explains that “after April 7, 2009, there was a window of opportunity Bucharest could not miss. The strategic goal was to bring Moldova closer to the EU and Romania. The tactical steps involved an aid package of €100 million, which authorities in Bucharest could maneuver according to their agenda”.
At that moment, the agenda was pretty ambitious. According to Angela Grămadă, “Bucharest was demonstrating its capacity to define foreign policy objectives with regard to Moldova, that it was investing in welfare, in infrastructure projects, that it had serious intentions for further investments. Moreover, I think that the agreement was a chance for Romania to assume its role as a EU member that contributes to the transfer of welfare, stability and security in the region.”
The Test of the Real World
The initial agreement was signed for a period of 6 years, yet we learn from a note of the Government in Chișinău that five years later only 31.65 million had been used.
“The project kicked off with difficulties. In 2010-2011, the Emil Boc Government didn’t have the funds required to finance this project. Don’t forget that it was a period of austerity in Romania: salaries and pensions were cut, investments went down”, recalls Armand Goșu.
“The whole thing was something new for Bucharest, it had never offered this kind of financial aid before. For Chișinău, it was a difficult test as well. They had to prove they could absorb that money. Nobody came from Bucharest with bags of money to share in villages, as some might have expected”, adds Goșu.
It was a test Moldovan authorities did not pass with flying colors, says Angela Grămadă. “Many project proposals were poorly drafted, didn’t meet standard requirements and had to be rewritten and resubmitted over the years. Some works were stopped and then resumed, then the funds allotted for their completion had to be recalculated. There were also cases when the procurement tenders weren’t really fair.”
Of course, political instability in Chișinău did not help either. “Let’s not forget that we didn’t have a president until March 2012 and there were numerous problems after Vlad Filat was removed (as prime minister, ed.). The trajectory was good until about 2013, then things moved mostly out of the inertia generated by measures adopted in 2010”, says the ESGA chair.
A Premier Relationship
After that slump, Romanian aid for Moldova was resuscitated in 2014-2015. “I think that Victor Ponta’s Cabinet, with Titus Corlățean as Foreign Minister, was the most active in the relationship with Moldova. Both of them were very dedicated to this topic”, says Armand Goșu.
The Romanian PM had an excellent relationship with his Moldovan counterpart Iurie Leancă. Their friendship outlasted their premier terms and, at the latest parliamentary elections in Romania, Leancă ran on the list of Ponta’s Pro Romania party.
Angela Gramadă points out that their friendship also had a practical motivation: “Both of them were running electoral campaigns and relied on bilateral actions. I don’t recall any discussion or event without photo ops or TV cameras around at that time. This is why there was great determination, between 2014 and 2015, to win the hearts of voters ahead of elections.”
This is the period when Romania financed the renovation of numerous kindergartens, schools, hospitals, roads and there was tangible progress toward the interconnection of Moldova’s and Romania’s energy grids.
Calm after the Storm
2015 was a troubled year in Chișinău – Vlad Filat was arrested, the scandal around the bank fraud grew, several governments fell and, in the end, Vlad Plahotniuc’s PDM took over by the end of 2016 with Pavel Filip as prime minister.
There was a change of government in Bucharest as well. The new Prime Minister Dacian Cioloș offered a new aid package for Moldova – a loan of €150 million, but it came with several conditions.
“These are not conditions imposed by someone who gives on someone who takes. These are measures that have been demanded by the people who took to the streets several weeks ago in Chișinău. They are the result of the necessity to have some progress in several important directions – the economy, the banking sector, the justice reform in Moldova”, the Romanian PM told reporters during a meeting with his Moldovan counterpart.
As regards the good old €100 million aid package, Cioloș was confident they would be spent ‘correctly’ because “Romanian administrative structures are directly involved in the management of these funds. We make sure that those works in kindergartens are actually carried out and we see concrete results. The procurement tender for those minibuses is organized in Romania, so we’ll directly buy those minibuses ourselves, to simplify things. For the investment projects, together with local public authorities, we’ll have transparent instruments to make sure that the money is used as we agreed”.
Post-Cioloș PSD governments were more tolerant towards Vlad Plahotniuc’s stranglehold on power in Chișinău – a situation favorable for the extension of the 2010 agreement, thinks Armand Goșu. “In December 2018, when the 6th Protocol was approved in Chișinău, Plahotniuc had all the chancellery doors closed for him around the world. He wasn’t getting a single euro from Brussels. Only Bucharest was still supporting him. It was to be expected the Plahotniuc regime would cling on to the Romanian aid agreement.”
The 6th Protocol
This protocol was meant to extend the duration of the agreement, but also to introduce several additional conditions. In itself, Angela Grămadă doesn’t think that some political conditions are anything unusual: “In order to decide to make some investments, you need some guarantees. Pragmatically, you need to know that the private property right will be respected, the interests of beneficiaries. We are talking about citizens here, with the right to vote in both countries, and you need to be sure that the investment in welfare and stability can be harnessed and can further produce conditions for other investments”.
“After Plahotniuc fled, Bucharest tried to introduce some ‘additional elements’ – as reads the Ministry’s communique – about the justice reform, the protection of Romanian investments, support for the language, culture and history communion… It’s curious, why did these conditions become necessary only after June 2019?”, Armand Goșu wonders.
Protecting Romanian investments and strengthening linguistic and cultural communion are two of the requirements that hardly fit in the traditional mould of conditions meant to encourage reforms. We can only guess if these are the ”political conditionalities” that the Moldovan Foreign Ministry found unacceptable.
Who is right?
“We’ll find the truth in 30 years, when American and German diplomatic archives are declassified”, only half-jokingly says Goșu.
“In recent years, there weren’t any projects financed from those €100 million. This aid agreement was a soft power tool for Romania in Moldova. During the COVID crisis however, with Romania’s budget suffering from a huge deficit, I don’t think anyone in Bucharest was in a hurry to send several tens of millions of euros to Chișinău”, argues the historian.
As regards Chișinău’s reaction, Armand Goșu thinks that the Ministry’s press release ”was read several times by Mr. Ciocoi, who is not merely a former presidential advisor to Dodon or a minister subservient to the Socialists, but a well-connected diplomat, with relations in several important capitals. He was appreciated for his dignified and professional attitude during Plahotniuc’s regime, when he was recalled from Washington by the oligarch several weeks after being appointed ambassador.”
On the other hand, Angela Gramadă thinks that the Moldovan Foreign Ministry’s communique shows “an incapacity to manage the country’s foreign affairs, regardless of the political interests of individual actors. You cannot miss such financial opportunities, especially when you know that you’re out of options, that there’s a pandemic, resources are scarce, that financing programs come with conditions, that you have an Association Agreement with the EU to implement and certain commitments to fulfill”.
The ESGA head acknowledges that Bucharest’s communication left a lot to be desired as well. “The Romanian Foreign Ministry’s press release seems to suggest something akin to ‘I’m taking my toys and leaving’, while the real message is ‘how long do we have to wait for you to decide where you see yourselves in the near future?’ [..] Quite often, Bucharest suggests in its press releases that it feels underappreciated, excluded from the power games, but it also doesn’t make a lot of effort to be truly relevant. Many times we are left with the impression that it’s waiting to be invited to become relevant”.
Angela Grămadă hopes we won’t witness ‘a war of communiques’ in the upcoming weeks. “As far as I understand, all legal options to resolve the issues have been exhausted”, she says.
However, both press releases, despite all the other disagreements, actually end on the same seemingly positive note about Romania’s availability to negotiate a new agreement to replace the expired one from 2010.
The immediate consequences of this diplomatic dispute have been different on the two banks of the Prut. In Chișinău, Armand Goșu thinks that “Maia Sandu scored political points with that press release where she criticized the government for the suspension of the agreement with Romania. She could not miss this opportunity, she’s a politician. We’ll have to see if these points will have to be paid for in the relationship with Romania”.
In Bucharest, the historian says the incident went mostly unnoticed and the media didn’t pay much attention to Chișinău’s reaction.
Regardless of the resuscitation of the agreement, Armand Goșu thinks that the dissolution of the current Parliament could prove beneficial for the Moldovan treasury. “After Maia Sandu’s victory, chancellery doors in the West opened for Moldova. If early elections are organized this year and a new government is formed, Moldova’s chances to gain external funding in advantageous conditions will grow exponentially.”
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Precizări de presă referitoare la ieșirea din vigoare a Acordului între Guvernul Republicii Moldova și Guvernul României privind programul de asistență tehnică și financiară în baza unui ajutor financiar nerambursabil în valoare de 100 milioane de euro, mfa.gov.md ↩︎
Ieșirea din vigoare a Acordului privind programul de asistență tehnică și financiară în baza unui ajutor financiar nerambursabil în valoare de 100 milioane de euro acordat de România Republicii Moldova, mae.ro ↩︎