Moldova, which was forced to declare a state of emergency after Gazprom increased gas prices in September, will be free of outside interference only when it has rid itself of endemic corruption and diversified its energy supplies, Natalia Gavrilița, the prime minister, has said.
Speaking to the Guardian, she said capacity shortages and soaring inflation, including increases in gas prices, were going to put a strain on the popularity of her government, which was elected only last summer.
Gavrilița said the new government, given a majority mandate, came to power not because of its pro-European views, but its commitment to end endemic corruption.
She and the president, Maia Sandu, make up the only all-female leadership team in Europe, and have the unenviable task of steering the small former Soviet republic, the poorest in Europe, towards the west without alienating the east, on which it depends for its energy and survival.
The dilemma came into sharp relief in September when Moldova was forced to declare a state of emergency after the Russian-owned energy firm Gazprom raised the price of the gas it supplied to $790 per 1,000 cubic metres, and cut deliveries by a third. A five-year contract had come to an end and Gazprom said the new prices reflected the market.
The EU has accused Russia of using gas as a weapon, with some seeing Modova’s position as a foretaste of the vulnerability the west may face if Germany gives the Nordstream 2 gas pipeline from Russia the final go-ahead.
In the talks with Moldova over a new five-year gas contract, Russia was accused of linking concessions on the gas price to discussions over the separatist region of Transnistria, future maintenance of Gazprom’s supply monopoly and even trade with the EU.
An EU grant of €60m, agreed in October, “helped us to get to a deal with Gazprom, since it improved our negotiating position”, Gavrilița said. The talks ended with Moldova securing a new five-year gas contract at a lower price than initially demanded, but also a protocol on a future audit of more than $700m of disputed Moldovan debt owed to Gazprom.
Opinion varies on whether Moldova panicked and conceded too much. With highly sensitive talks on the debt still to be resolved by next May, and Russia holding strong cards, Gavrilița is reluctant get into a slanging match with Moscow. The strategy seems to be to loosen Russia’s stranglehold – but to do so gently.
Pressed on how much politics – as opposed to energy markets – had played a role in Moldova’s crisis talks, she said: “We have agreed to negotiate and sign an energy agreement with the Russian Federation. We are letting experts and international relations pundits draw their conclusions. What we are concentrating on is having a pragmatic professional relationship with the Russian Federation.
“In the elections we were voted in on a largely domestic agenda. It was more about corruption, governance, creating jobs, rather than going pro-east or pro-west, because so many politicians in the past have hidden behind these geopolitical lines and used it to engage in corruption. Our approach is to deal with the issues that the people care about.”
She said rising commodity prices were reducing the standard of living, and even with the resolution of the gas crisis, the gas tariff had increased two and a half times. “For a country as poor as Moldova it is a big hit for the people. We kept our electoral promise to raise pensions from €55 to €100 and that helps more than 400,000 people. We have put in money for targeted social assistance and provided subsidies for the first 150 cubic metres of gas consumed.”
But, she said, for Moldova to survive, structural solutions were urgently needed, including energy efficiency and renewables, with which the European Bank for Reconstruction and Development is helping.
Moldova’s best hope lay in diversifying its energy sources, improving its gas storage, investing in new pipeline connections with Romania, and looking at the fact that 100% of its domestic electricity comes from Transnistria, on the its eastern border with Ukraine. “None of this will be done overnight. It will take many years”.
But Gavrilița said the precondition for change was ending what the president has referred to as “the rule of thieves”, a fair description for a country that has been used for massive Russian money laundering and which saw more than $1bn – about 12% of Moldova’s GDP – siphoned from state-owned banks in 2014.
Gavrilița said: “Our government institutions have been corroded by years of vested interests and corruption. We came to power on this promise to improve the rule of law, so we are reviewing positions, introducing external vetting of judges and prosecutors. The prosecutor general, Alexandru Stoianoglo, has been arrested and there have been some high-profile resignations”.
But, referring to previous fruitless anti-corruption campaigns in Moldova, she said: “It is not just about changing the processes but also the outcomes. We have to end an era based on public expenditure and private gain”.