MEMO/09/180

Brussels, 23 April 2009

European Neighbourhood Policy – The Republic of MOLDOVA

Benita Ferrero-Waldner, External Relations and Neighbourhood Policy Commissioner, acknowledged today the progress made by the Republic of Moldova in many areas covered by the ENP Action Plan in the course of 2008. “Moldova has made progress but a number of major challenges remain. Moldova needs to renew its efforts in this regard”.

EU–Moldova relations: basic facts

The Republic of Moldova (hereafter referred to as Moldova) and the EU first established contractual relations through a Partnership and Cooperation Agreement (PCA), which entered into force in 1998. It sets a framework for trade liberalisation, legislative harmonization and co-operation in a range of sectors and political dialogue. On this basis, the EU-Moldova ENP Action Plan was adopted in February 2005 for a period of three years, and prolonged by mutual agreement beyond February 2008, as a useful tool for supporting Moldova’s own programme of democratic and economic reforms.

The EU has conducted internal reflections on a new Agreement going beyond the PCA and presented draft negotiating directives to the Council on 3 December 2008. The new Agreement will be a comprehensive agreement reflecting the existing wide range of cooperation in economic and political areas and will develop these areas further. It should also include the aim to establish a deep and comprehensive Free Trade Area with the EU, if and when Moldova is deemed to be ready to sustain effects of far reaching liberalisation. With this in mind, the EU launched a feasibility study in December 2008.

Major developments in 2008 and overall assessment

Overall in 2008 Moldova made progress in a number of areas of the ENP Action Plan. Major achievements were:

• The EU and Moldova signed in June 2008 a pilot Mobility Partnership to strengthen legal migration opportunities and to strengthen capacities for migration management and fighting illegal migration.
• The visa facilitation and readmission agreements between Moldova and the EU entered into force in January 2008.
• Moldova continued to cooperate with the EU on all questions related to the Transnistria settlement efforts, including on confidence-building measures in Transnistria.
• Moldova cooperated actively with the EU on regional and international issues, and aligned itself with nearly all EU CFSP declarations open for alignment.
• The area of public governance progressed with the adoption of two new laws: on the civil service (in July 2008), which provides for a delimitation of political and non-political functions in public administration, and a law on transparency in the public decision-making process (in November 2008).
• Important anti-corruption laws entered into force or were adopted. The Council of Europe Group of States against Corruption (GRECO) concluded in December 2008 that significant progress in the legislative framework had been achieved.
• Good progress was made in the area of customs, including new harmonised system for the classification of goods that is applied since 1 January 2008.
• Moldova's economic performance was significantly better in 2008 than in 2007. The GDP increased by 7.2%. However, in the last months of the year, the global financial crisis started affecting the economy, and output and import growth slowed down significantly with negative impacts the state budget. The co-operation with international financial institutions, in particular the International Monetary Fund is and will remain important. Bilateral trade with the EU continued to grow in the 2008, reaching €2.3 billion, which accounted for almost half of total Moldovan trade. This made the EU by far the first trading partner of Moldova.

How does the EU supports reforms in Moldova

In November 2008, Moldova and the European Commission opened negotiations on the country’s accession to the Energy Community Treaty, which includes commitments for gradual convergence with the internal energy market rules.

Moldova continued the reform of its health sector with substantial budget support from the European Commission. The Neighbourhood Investment Facility under the ENPI co-financed, as a first-ever social project, the modernisation of a hospital in Chisinau (see below).

There is a developing cooperation with the EU Border Assistance Mission (EUBAM), which is also helping to ensure transparent management of the Moldova-Ukraine border, improving customs services and increasing customs revenue. EC assistance to the development of the border guard service continues within the EUBAM.

The Community Civil Protection Mechanism was mobilised in August 2008 to support Moldova in assessing the flooding of the Nistru (Dniester) and the Prut rivers, and in January 2009 in alleviating the consequences of the Ukraine/Russia gas crisis. Moldova and the European Commission agreed to explore possibilities for closer co-operation in the field of civil protection.

Higher education reform continued to benefit from participation in Tempus and Erasmus Mundus programmes.

Assistance to Moldova

In 2008, the EU continued to support the Moldova's internal reform efforts and allocated assistance for a total amount of €62.3 million, under the European Neighbourhood Partnership Instrument (ENPI).

This support was a part of the indicative amount of €209.7 million, allocated for the period 2007-2010 under the ENPI.

Moldova also benefits from the Neighbourhood Investment Facility - in 2008 grant support to four lending projects was provided for a total contribution of €19.75 million expected to leverage around €158.5 million in loans from consortia of European financial institutions in the social sphere (modernization of the Republican Clinical Hospital and improvement of the water and sanitation system in Chisinau) and in the transport sector (a road rehabilitation project and modernisation of the Chisinau airport).

The Communication from the Commission to the Parliament and the Council Implementation of the European Neighbourhood Policy in 2008 (23 April 2009) and a country report on Moldova are available at

http://ec.europa.eu/world/enp/documents_en.htm

More on Moldova and ENP

http://ec.europa.eu/external_relations/moldova/index_en.htm

http://ec.europa.eu/world/enp/index_en.htm

See also IP/09/625 EU reinforces ties with its neighbours and continues to support their reforms.