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Russian gas for Moldova: Who will pay the debts?

Last week was heavy for Moldova as it tried to build relations with partners in the gas sector and determine the foreign economic priorities directly affecting the geopolitical roadmap of the region. In the given period of time, Valery Golubev, Vice Chairman of Gazprom Board travelled to Chisinau and Tiraspol and discussed development of cooperation in the gas sector with the government of Moldova and the leadership of the Dniester left bank area.

The accumulated debts for the gas supplied earlier were a special subject of the meetings. The sides expressed their fundamental stands on the issue. It appears that the Moldovan-Transnistrian format of reintegration talks depends on who and on what terms Gazprom will be developing relations with.

Prime Minister of Moldova Pavel Filip said “all current gas expenses connected with gas consumption” were made in 2016. He insisted on restructuring of the accumulated debts. In particular, he meant the gas debts of consumers in Transnistria. According to Chisinau, it is necessary to readdress $5,790.9 million, which accounts for 88.6% of total debt of Moldovagaz JSC, to Tiraspoltransgaz LLC, and then to the president and government of the Transnistrian Moldovan Republic (TMR) as the Moldovan authorities do not control Transnistria.

“We are for maintenance of the old model. Before speaking about reforms, it is necessary to understand that model and figure out what will follow it,” says Vadim Krasnoselsky, the president of the unrecognized republic.

Within more than 26 years of its independence, TMR has not paid for gas. It did not pay, but not received it without compensation. Consequently, it does not mean that Russian will not send bills to it. The only question is when will Russia do it.

Citizens and enterprises regularly receive checks for consumption of the Russian gas, as Russia supplies gas to Balkans via Transnistria. Actually, the gas account formed non-budgetary accumulations and looked to ensured sustainable development of the region.

It was Moscow’s assistance, for which Tiraspol thanks the Kremlin as occasion serves. “It is not easy for us, but the people understand the reality. We are hostages to the geopolitical disaster called ‘collapse of the Soviet Union’ and remain in the same conditions,” Krasnoselsky told Golubev. However, TMR has not turned into “the little Switzerland,” though the first president of the self-proclaimed republic Igor Smirnov talked much about it. Since his presidency, Transnistria’s economy has experienced a progressing budgetary deficit and inflation sparking large-scale migration. It is not clear who and how uses the saved “gas money.”

In this light, the gas account has become the cornerstone of the local politics. In the fight for votes, promises to revise the purposeful use of that money remain populistic.

“Restructuring of historical debts is possible only in case a 100-percent payment of the current consumption is maintained,” Golubev said in Chisinau.

Moldova has paid its part of the debt. Who will have to pay Transnistria’s debt remains an open question.

Earlier, President of Moldova Igor Dodon said, “Moldova will shoulder the debt for gas common with Transnistria region.” This fits into his idea of reintegration of the republic through federalization. In such case, it is logical that the federal center pays the bill of its segments.

Filip’s government is not ready to shoulder Transnistria’s debts. Binding Tiraspol to pay, he actually hopes to undermine the region’s economy finally and make it more negotiable in the reintegration talks.

It is evident that Filip and Dodon have different approaches, but one goal – to keep Moldova united. Perhaps, this is what will make the president and the opposition government agree. The gas money, in such case, may become one of the telling arguments in the negotiation process.

Therefore, everyone is waiting for Russia’s response, but there is no such yet. “Political developments depend on many factors. Today, it is perhaps, not within Moldova actually hopes the gas bill will make Tiraspol reintegrate.

Meantime, Transnistria hopes Moscow will support its political sovereignty and energy independence. “Our independence is the guarantee of our security and the energy security is given the top priority,” Krasnoselsky said.

Eventually, both Chisinau and Tiraspol are trying to assure Gazprom that they are reliable and stable partners pinning hopes with further development of relations to maintain their own regional geopolitical interests.

Let’s wait and see whose arguments will prevail.

Mikhail Tulyev for EADaily

Permalink: eadaily.com/en/news/2017/02/13/russian-gas-for-moldova-who-will-pay-the-debts
Published on February 13th, 2017 12:51 PM
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