It’s not often that the United States and Russia find common ground in Eastern Europe, and it’s even rarer that one of Europe’s poorest countries inspires cautious optimism. Yet that is just what has happened in tiny, landlocked Moldova last month, as popular unrest against oligarchic rule and the outside mediation of American, Russian, and EU diplomats forced a resolution to a simmering constitutional crisis. On June 14, Moldova’s former Prime Minister stepped aside to make way for an untested new coalition government, after a week of recalcitrant refusal to do so.
Yet this seemingly favorable resolution leaves in its wake a long list of questions. Can Moldova continue to split the difference on its geopolitical orientation? Can the country’s Western forces hope for meaningful cooperation with Russia? And can Moldova overcome its sorry track record of oligarchic mismanagement to make real economic progress? The answers to these questions will reverberate far beyond Moldova’s borders.
How Did We Get Here?
Moldova—widely known as Europe’s poorest country, although the IMF technically designates Ukraine—has suffered a series of self-inflicted blows over the past five years. In November 2014, against the backdrop of national elections, news broke of a banking scandal that quickly became known as the “Theft of the Century.” In three days, approximately $1 billion was stolen from three Moldovan banks and laundered abroad, in a coordinated action that shocked the country and produced bitter recriminations, protests, and financial instability. Vladimir Plahotniuc, the country’s richest oligarch, managed to persuade, bribe, and coerce enough deputies to install a controversial government led by his Democratic Party of Moldova (PDM) in early 2016. Though formally just head of his party, Plahotniuc extended his personal domination over Moldova’s courts, police, security, and anti-corruption agencies to exercise near-complete control over its governing institutions.
This control did not translate into broad popular support, however. For a time Plahotniuc and the PDM professed a pro-EU orientation in a country often divided between pro-Western and pro-Russian sentiment. But the banking scandal, which saw the equivalent of an eighth of Moldova’s annual GDP disappear, helped to discredit the pro-Western leadership. Meanwhile, the European Union began to treat Moldova less as a model of EU integration than as a major corruption threat. Eventually, anti-corruption and anti-Plahotniuc demonstrations in the winter of 2015-2016 gave birth to two new pro-Western parties, Action and Solidarity (PAS) and Dignity and Truth (DA).
In the 2016 presidential election, the PDM-backed candidate trailed far behind the PAS candidate Maia Sandu (now the new coalition Prime Minister) and the winning candidate from the Party of Socialists of the Republic of Moldova (PSRM), President Igor Dodon. Crucially, however, Plahotniuc obtained support from PSRM for changing the electoral system from a national proportional regime to one in which half of the parliament’s 101 deputies would be elected in single-mandate districts. This 2017 electoral “reform” clearly favored the PDM, which could use its deep pockets and control of local administrations to offset its national unpopularity. The OSCE, EU, and Venice Commission all strongly argued against the change. When Plahotniuc’s government proved adamant, Brussels cut off most of its economic assistance to Moldova.
In the February 2019 national elections, Moldovan voters were split almost equally into three camps. The largest of these supported the PSRM, which campaigned on an explicitly pro-Russian platform. ACUM (NOW in English), an electoral bloc of the pro-Western PAS and DA, came in second in the national popular vote, with Plahotniuc’s PDM trailing in third. However, the single-mandate district results gave the PDM a total of 30 deputies, four more than ACUM.
In the scramble that followed to form a government, ACUM and PSRM leaders refused to entertain a coalition with Plahotniuc and the PDM. Negotiations went down to the end of the three-month deadline, and by early June most observers and participants expected repeat elections later in the year.
Instead, PSRM and ACUM struck a surprise coalition agreement at the last minute. Interestingly, the coalition won the support of Russia, the European Union, and—somewhat belatedly—the United States. The ACUM-PSRM alliance, no matter how fleeting or lasting, reflects a deep and widespread public reaction against oligarchic rule, against Plahotniuc specifically, and against the pervasive corruption, stubborn poverty, and failed promises of both pro-West and pro-East governments.
The results of the election do not portend a shift in Moldova’s geopolitical orientation. The two coalition parties have significantly different orientations, and the Moldovan electorate remains almost evenly split between pro-Western and pro-Russian voters. Past Moldovan governments have run into popular resistance when they have tried to move too rapidly to the East or the West. This pattern may change, but not anytime soon. The main lesson of the 2019 elections is that over two-thirds of voters opted for an end to corruption and oligarchic rule. This is a hopeful development, notwithstanding the deep geopolitical divisions that remain.
What Should Moldova Do Now?
The most important task facing Moldova’s new coalition is to cleanse and reform the country’s law enforcement and judicial institutions. The rot from the Plahotniuc years is pervasive. For example, the PDM packed the Constitutional Court with loyalists, who reciprocated with a series of dubious decisions from 2016 onward which clearly favored Plahotniuc’s political interests. Lower courts were apparently willing participants in gigantic, long-running money laundering operations. The police, under the Interior Ministry, and the Anti-Corruption Agency were packed with Plahotniuc loyalists and used for reprisals and coercion against political opponents.
Along with a thoroughgoing overhaul of the courts and police, the new Moldovan government needs to demonstrate a real dedication to the rule of law in practice. The best way to do this is to make public the results of the international investigation of the 2014 banking fraud, followed by a demonstrable attempt to bring those responsible to justice. This will be a delicate task, given that many members of Moldova’s political elite were involved, but the government should attempt to make the process fair and transparent, and not simply an exercise in reprisals. Movement on this high-profile case may instill popular confidence in the bona fides of the coalition.
The new government has already taken one of the most important steps needed in reversing the 2017 electoral reforms and returning to the nationwide proportional representation system. However, electoral reform should not stop there. The ACUM-PSRM alliance should seize the opportunity to update and improve Moldova’s electoral lists. Electoral law and practices should also be changed to permit easier, verifiable registration and voting by the hundreds of thousands of Moldovans who live and work abroad, both in the West and in the region.
On anti-corruption, the most important guiding principle should be transparency. Steps to achieve greater openness in Moldovan government and economic affairs could also have salutary side effects with respect to freedom of the press and improvement of the business and investment climate. More stringent laws and regulations governing information about the sources of capital and real owners of property and enterprises can help both root out existing corruption and encourage non-corrupt practices in the future. This is essential in a country suffering from massive brain drain due to rampant bribery and lack of economic opportunity.
Moldova will not be fixed overnight. Over the past two decades Moldova has been severely depopulated, and the personnel resources are not available to deal with more than the highest priority problems. The new government’s best course is to set in motion positive, hard-to-reverse processes to deal with the priorities it has identified, and to maintain progress on those.
The Transnistrian Question
Moldova has been a divided country since it gained independence in 1991. The Transnistria region, a narrow strip on the left bank of the Nistru River, broke away while the Soviet Union was in the process of disintegrating, in a dispute more about elite competition than the ostensible issues of language and nationality. Russian military forces remaining in the region from Soviet times intervened to halt a brief war in 1992 between Chisinau and Tiraspol. Since that time Russia has used its status as a mediator in the political settlement negotiations and the presence of small detachments of its troops to offer de facto support for the separatist authorities in Tiraspol and to exert political pressure on Chisinau. Despite a couple of near successes, the political settlement talks have been basically deadlocked since they began in 1993.
Ironically, the past few years have seen some practical progress in dealing with Transnistria, albeit as the result of improved relations between oligarchs: Plahotniuc, the Transnistrian Sherrif conglomerate head Viktor Gushan, and former Ukrainian President Petro Poroshenko. Irrespective of how it came about, the progress in the Transnistrian settlement process has been real, welcome, and of genuine benefit to the population on both sides of the Nistru River. People, goods, and services move more easily between the two banks and across borders. Experts from Chisinau and Tiraspol in diverse fields such as public health, environmental protection, transportation, and telecommunications work cooperatively and professionally together. One hopes that this situation will continue.
This practical progress in the Transnistrian settlement process, however, has not produced movement toward agreement on a final status for the Transnistrian region within the Republic of Moldova. While acting cooperatively on most other questions, Tiraspol has steadfastly refused to abandon its insistence on independence and international recognition. Moscow has worked surprisingly cooperatively with its partners in the “Five Plus Two” negotiation mechanism—albeit after decades of obstruction on a conflict it has helped to prolong—but it has refrained from pushing Tiraspol to agree on, or even discuss proposals for a final status. There are no firm indications of any real change in Moscow’s or Tiraspol’s positions.
Managing relations between Chisinau and Tiraspol and the Transnistrian settlement process requires the cooperation of the United States, the EU, Russia, Ukraine, and the OSCE. Thus developments on the Transnistrian issue could foretell broader political movements in the region and in Europe as a whole.
The recent changes in government in Chisinau and Kyiv bring some uncertainty into the Transnistrian question. Moldova’s relationship with Ukraine since 1991 has vacillated frequently and markedly between warmth and extreme irritation. Under Poroshenko, Ukraine was supportive of Moldova but wary of upsetting the relative stability that has prevailed in and around Transnistria in recent years. A Zelenskiy government is likely to be more militantly anti-Russian than the divided government in Chisinau. Kyiv’s hostility toward and distrust of Moscow could carry over into its attitude toward the separatist authorities in Tiraspol.
Russia: Real Change or Tactical Moves?
Perhaps the most striking action by Russia during the course of the Moldovan crisis was the statement of Deputy Prime Minister and Special Representative for Economic Relations with Moldova Dmitry Kozak that Moldova should revert to its old, proportional representation electoral system as part of a PSRM-ACUM coalition. Throughout the crisis, Kozak and Putin himself took a resolutely anti-Plahotniuc line and supported the incongruous coalition in Moldova. Was this really a change of heart and a sign of a more cooperative posture from the Kremlin on this and other “frozen conflicts”?
Large numbers of Moldovans are dubious of the Kremlin’s motives, and for good reason. Russia soured on Plahotniuc years ago. The reasons are obscure, and rumors abound. In any case, since late 2017 Russia has filed criminal charges against Plahotniuc for commissioning an attempted murder, and more recently, for money laundering. Some rumors suggest that Moscow was uncomfortable with the extent of Plahotniuc’s cooperation with Sherrif in Transnistria, which reduced the Kremlin’s influence on both banks of the Nistru.
Since 2014 Putin and the Kremlin have steadfastly supported the PSRM and Igor Dodon, and most observers in Moldova interpret Moscow’s recent actions as designed to ensure PSRM dominance and thus Russian influence in Moldova over the long run. What is not clear is the extent to which Putin and his colleagues are prepared to tolerate a Moldovan government that seeks good relations with the West as well as with Russia. Dodon has said publicly and privately that this is his aim; many of his Moldovan critics and opponents do not believe him.
Kozak is active in both Chisinau and Tiraspol, though it is not yet clear in what direction he is pushing. An early indication of Russia’s intentions in Moldova may come in the course of the Transnistrian settlement process and upcoming Five plus Two events. Direct engagement with Moscow is necessary to test whether there has been real change in its approach, but caution is warranted. Russia’s long-run policy has been one of obstruction, not cooperation.
Can the West Help?
Western governments and assistance agencies have provided vast sums to assist Moldova, and much of this aid seems to have vanished into a black hole. Individual successful projects exist, but Western assistance has hardly made a dent in addressing Moldova’s most significant problems—persistent poverty, corruption, depopulation, and failings in rule of law. The emergence of the coalition government may offer the United States and the European Union an opportunity to rethink their approaches. It would be a mistake to concentrate primarily on economic and financial assistance.
What Moldova needs most desperately is people—capable, educated people of all ages to make government and private institutions work at all levels. There is no way to induce the hundreds of thousands of Moldovans who have left the country over the past decades to come back immediately. However, Western donors can help provide incentives, and—more important—they can provide their own people to advise Moldovans to rebuild a working government and economy. Moldovan law prohibits political parties from hiring foreigners, but foreign experts can be embedded in Executive Branch agencies, and within the NGO community. The most important areas for immediate attention are justice and law enforcement, but Western assistance need not be confined to these fields. The EU deserves credit for having reached agreement with Moldova in 2014 on an Association Agreement, a Deep and Comprehensive Free Trade Agreement, and visa liberalization.
It is publicly unknown whether any sort of private deal was reached with Plahotniuc and PDM leaders to induce them to relinquish power. Nonetheless, the U.S. government should consider applying Global Magnitsky sanctions to Plahotniuc and his senior colleagues. The aim here is not criminal prosecution, so much as to lessen the oligarch’s ability to use his wealth to dabble in Moldovan politics from abroad or to lobby in Western capitals. Keeping Plahotniuc physically out of Moldova would also reduce tensions.
Above all, U.S. and EU assistance to Moldova should be characterized by conditionality, based upon transparency and honest effort. Not every specific initiative will work, but Western donors should strive to ensure that Moldova’s population perceives their efforts as genuine and consistent with their professed ideals. The United States’ and European Union’s reputations suffered during the Plahotniuc years because of the widespread perception in Moldova that their acceptance of the outwardly pro-Western Filip government was rooted in geopolitical cynicism. Real conditionality is essential to restoring and maintaining public confidence, and could ultimately help state performance, too.
Where Does It All Lead?
Moldova has come through a political battle with a positive result, but the country will not be transformed instantly. The immediate outcome, however, offers possibilities for constructive change both in the country and beyond it.
First of all, the Left-Right, East-West coalition in Moldova demonstrates that it is possible for citizen groups, political activists, and leaders across the political spectrum to unite in opposition to corruption and in support of the rule of law and democratic norms. Moldova’s anti-oligarchic upheaval follows on similar developments in Ukraine, Romania, Slovakia, and the Czech Republic. Civic activists and reformers around Europe can be heartened that they are not fighting a losing battle.
The outcome in Moldova could also contribute to positive movement in regional and European geopolitics. At a time when Moscow and the West rarely see eye-to-eye on issues, understanding why and how the two both supported the coalition is worth exploring. Russia has worked more constructively than usual for several years within the framework of the Five Plus Two; perhaps this dynamic can be extended to cooperation in addressing Moldova as a whole.
Given Moldova’s domestic politics, the country is likely to retain the basic political divisions present since it achieved independence in 1991. Therefore, a geopolitical struggle between East and West inside Moldova is unlikely to be resolved, and more likely to simply prolong conflict within the country. But Moldova is, as recent events show, a promising field for progress in rule of law and the fight against corruption.
The most important thing is to begin action to address these issues now. There is political momentum and popular desire for change within Moldova. However, the campaign for local elections will start August 20, and the ACUM-PSRM coalition was explicitly temporary. It is crucial now to put in place measures and programs supported by both coalition members which can endure even as the expected political competition between ACUM and the PSRM returns.
That renewed competition will not be the end of the world. Moldova has had left-wing and right-wing governments before. The Communist Party ruled from 2001 to 2009, but ultimately relinquished power peacefully to a pro-Western coalition. The real tragedy in Moldova has been the failure of just about all its governments—pro-West and pro-East, Left and Right—to make real progress in addressing its most pressing needs and problems. The political crisis of 2019 offers an opportunity to change that pattern, if its leaders only have the boldness to seize it.