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EU association offers Moldova grim prospects

June 11, 2014, 18:36 UTC+3 Alexandrova Lyudmila
© EPA/Zsolt Czegledi

MOSCOW, June 11. /ITAR-TASS/. Russia is concerned about the possible consequences of Moldova's accession to the EU for bilateral economic relations. Moscow has already warned it would have to revise its approach, if the agreement is signed. In particular, Russia can abandon preferences for Moldavian migrants. Meanwhile, experts are pessimistic about Moldova’s economy in the near future.

The signing of the agreement, scheduled for June 27, can compound Moldova’s relations with Russia and “can be a serious test for them”, the Russian Foreign Ministry said on Tuesday after Deputy Foreign Minister Grigory Karasin visited Chisinau and Tiraspol.

The agreement was initiated at the Eastern Partnership Summit in Vilnius last November, but polls show most of the republic’s population and an overwhelming majority of autonomous Gagauzia and the self-proclaimed republic of Transdniestria oppose EU integration, advocating cooperation with Russia and other members of the Customs Union - Belarus and Kazakhshtan.

The trade minister of the Eurasian Economic Commission (EEC) Andrei Slepnev also mentioned possible trade implications for Chisinau if Moldova signed the free trade zone agreement with the EU. Slepnev and Economic Development Minister Alexei Likhachev said Moscow would hike duties for Moldavian goods if they saw a threat of grey import.

Many people in Moldova fear the national economy might come off worst.

Moldova risks losing CIS markets as the EU association agreement stipulates a free trade zone with the European Union, the Director of the Center of Strategic Studies and Reforms of Moldova, Galina Shelar, told ITAR-TASS in Chisinau.

“The Moldavian government needs to convince Russia as its key trade partner that its market will be protected against re-export from the EU. Otherwise, Moldavian exporters could face restrictive measures,” said the expert.

Association with the EU will have an adverse effect on the national economy, believes a former economic policy advisor to the Moldavian president, Communist legislator Oleg Reidman.

“The economy might somehow benefit in terms of the announced goals over the long term. But over the short and medium terms of 3-7 years, the agreement will undoubtedly damage the Moldavian economy,” the deputy was quoted by as saying.

It is not only trade relations with Russia that can suffer from the agreement - it poses a considerable threat to labor migration from Moldova. The Russian Ministry of Economic Development did not rule out it could toughen the migration regime, the head of the ministry’s department for cooperation with the CIS states, Alexander Tsybulsky, said recently.

Moldavian specialists can stay in Russia unregistered for 90 days now, but the risk of migration growth can prompt Russia to cancel the preferences.

“If they open or relax visa relations with the EU, we’ll face the risk of increasing migrant flows of labor force. Therefore, we could also quit this preferential regime and adopt a normal regime with registration,” Tsybulsky is quoted by the RBC daily as saying.

Labor migrants now bring $1.7 billion to Moldova’s budget annually, as shown by the official statistics alone - at least, twice as much unofficially. This, the official said, accounted for up to 40% of the country’s GDP.

The head of the national and federative relations department of the Russian Presidential Academy of National Economy and Public Administration, Vyacheslav Mikhailov, believes the association will lead to bad political and economic consequences for Moldova. “We have Ukraine’s example in front of our very eyes, and further situation in Moldova can become a mirror reflection of these events,” he told ITAR-TASS.

The head of Transdniestria and Moldova department at the Institute of CIS States, Sergei Lavrenov, disagrees. “Maidan will not happen there - the situation is different in Moldova,” he told ITAR-TASS. However, the situation may deteriorate, since much will depend on Gagauzia and Transdniestria, the regions that fiercely reject the idea of the EU integration supported by less than a half of the Moldavian population.

“Everybody expects a deterioration in the economic situation as the country will transfer to the EU standards. Positive shifts, if any, will happen, by expert estimates, not until 5-7 years after the agreement is signed," the expert believes.


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