Moldova will remain vulnerable to the pressures of Gazprom. IPN Interview

[Info-Prim Neo interview with the director of Foreign Affairs Programs and Political Analysis of the Independent Analytic Center “Expert-Grup”, Alexandru Opruneneco.] [-How do you appreciate the negotiations of Moldovan officials with the Russian concern “Gazprom” and their results?] It’s a pity to say, but the negotiations took place in a non-transparent manner. We find out more information from the Russian press, rather than from Moldovan officials, including about the offers of investment projects of the Government for Gazprom. The Moldovan Government has a vulnerable position in these talks that is why it is appropriate that our officials to ensure a maximum transparency in this process. Sometimes the Government creates the impression that it comes every time unprepared at the negotiations. More, the Government has no strategy for administrating the consequences generated by the negotiations. Moldovan officials must always have a plan “A”, in case of success and a plan “B” in case the proposed objectives are not fulfilled. If speaking about the results of the negotiations, because the Government accepted the price of 160 USD / 1000 cubic meters, it did not succeed to draw up a clear formula for calculating the price for natural gas and to sign a long term agreement in order to ensure the certitude of final consumers. It means that Moldova will remain vulnerable to the pressures of Gazprom. [- How do you consider, Russia increased the price for natural gas because of economic reasons or because of other reasons?] I think that the increase in price is on one hand a new strategy of Gazprom. It is about passing to market relationships with CIS consumers, regardless of their geopolitical orientation. At the same time, the fact that the Moldovan authorities, as well as Ukrainian or Georgian are not considered by Russia a true partner, can influence the attitude of Gazprom in the process of negotiations, but it does not determine in any way the nature of these increases. [- What will be the impact of the increases in price of the natural gas over the national economy and population? What if the prices would reach in the future the level of European ones?] On short term a moderate impact is expected. However, the real sector of the Moldovan economy is less dependent of natural gas. We can mention the Thermo-Electric plants, the factories producing glass goods, concrete factories. The population will also feel the negative impact. In this way, according to the last memorandum with IMF, the Government of the Republic of Moldova engaged to ensure that the costs of the increase for gas to be paid firstly by the final consumers and only the vulnerable persons will receive compensations. However, on medium term, we can expect for more accentuated negative effects, at the time when the increase in price of the natural gas will lead to the increase in price of other products, creating in this way serious inflationist pressures. At the same time, the rate of the leu will also be under pressure and we can expect for a depreciation of the national currency. Respectively, the increase in price at an European level will endanger the economic system of Moldova. In order to avoid this kind of situations it is necessary to ensure the transparency of the negotiations’ process, but also modernizing the enterprises of the real sector, applying modern energetic technologies. [- The Government states that in October, when a long term contract on Russian natural gas deliveries could be signed, the price for natural gas could be reduced. What is your opinion about this fact?] There are little chances for this. The only thing that interests Gazprom, is 100% control over JSC “Moldovagaz”, fact that is not accepted by Moldovan authorities. More, Moldova was invited to join the European Energetic Agreement that also stipulates free access of competitors to the resources of natural gas and delivery networks of the countries that signed the Agreement. The Russian Federation though, did not sign this agreement, respectively if Gazprom takes control over the Moldovan networks it has no sense to join the European Energetic Agreement. On the other hand, the investment projects presented by the Moldovan Government do not seem to be interesting for the Russian concern. So in fact, what Gazprom wants is too much for Moldova, and what Moldova can offer is too little for Gazprom. This is why Gazprom has no reasons to decrease the prices for natural gas in Moldova’s case. [- Does the fact that the next negotiations on the new natural gas import contract will take place close to the heating season involve some risks, as it happened the last winter?] This situation will make the position of Moldovan authorities more vulnerable at the negotiations with Gazprom, which will try to avoid the deficit of heating resources before the winter season. In this context, Gazprom could insist on a price higher than 160 USD for 1000 cubic meters. We can not exclude the fact that some political demands will appear, but this variant is the less probable. [- How do you appreciate the increase of the compensations for domestic consumers as a result of the increase in price of the natural gas?] The facilitation offered to all domestic consumers for the first 30 consumed cubic meters will be hard to keep up with financially. As well, these measures can be different to the stipulations of the memorandum signed with IMF. In this case, authorities will have to solve a tough dilemma. They will have to choose, either to undertake some measures in order to avoid social tensions and in this case to endanger the relationships with IMF, or to maintain these relationships at any costs.