The Moldovan legislature completed its mandate at the end of November 2018, over two months before the new parliamentary elections set for February 2019. The last legislative body’s mandate during approximately two years was fully dominated by the Democratic Party of Moldova (DPM). At domestic level, the political power of the DPM was due to its capacities to disassemble and weaken its ex-partners (LDPM, LP) and its political opponents (PCRM), primarily by corruption acts. The latter says that between €200,000 to €500,000 per MP was allocated for forming the parliamentary majority of 57 MPs with whom the Democrats governed during two years. Besides the drastic revision of the composition of the legislative body, the DPM also extended its presence in the state institutions, local public administration and the public sector. At foreign level, the Democrats fully assumed the role of implementers of the commitments undertaken before the European Union (UE) and fulfilled a series of conditions that enabled them to gain access to European assistance. It is paradoxical, but the DPM is the first party in Moldova’s history that regained access to the EU financing after taking over (in 2016), and at the same time in about two years determined the suspension of this assistance in July 2018 (IPN, July 2, 2018).

Even if the Democrats could have benefited from the complete coming into force of the Association Agreement with the EU in July 2016, their strategic preferences rather focused on the redefining of the electoral norms. This way, with the aim of gaining electoral advantages at the upcoming parliamentary elections, the DPM replaced the proportional representation system with the mixed electoral system in June 2017. The annulment of the results of the Chisinau mayoral elections followed in almost a year, in July 2018. This showed that the intuitions and the judiciary power are synchronized with the logic of the DPM rather than with the provisions of the electoral legislation (IPN, July 9, 2018).

At the same time, the failure of the conditionality to which the EU subjected one of the neighboring countries with which it has profounder dialogues is related to the DPM’s governance as well. More exactly, the Democrats for two times shirked from European institutions’ insistent demands concerning the backsliding in Moldovan governance. For the first time, the EU faced the DPM’s resistance over the mixed electoral system that was introduced without the participation of the extraparliamentary opposition and civil society and that is seen as a “window of opportunity” for the oligarchic circles (IPN, June 19, 2017). The voiding of the elections in Chisinau was the second moment that revealed a type of crisis of EU’s conditionality mechanism in relation to Moldova. Partially encouraged by the Europeans’ earlier ‘concession’ over the mixed system, the DPM disregarded the EU’s criticism and maintained the invalidation decision on elections. Moreover, the government exploited the given precedent so as to liberalize electoral agitation on the day of election, contrary to the position of civil society (Promolex, November 8, 2018), and to maximize its electoral chances. Thus, the party controlled by Vladimir Plahotniuc unveiled European institutions’ weaknesses in influencing the political behavior of the pro-European governments in the neighborhood and spread a negative practice in the region, which consists in undermining EU’s authority (IPN, July 16, 2018).

Does EU’s conditionality concerning Moldova work or not?

The reforms done in Moldova since 2005 always entailed a particular dose of conditionality. But this mechanism has never been so often and forcefully invoked as it was in the period after the signing of the Association Agreement, in 2014. Since then, on the one hand, the bilateral relations gained substance and mutual juridical and political commitment that calls for more responsibility. On the other hand, the Moldovan political class that ruled after 2009 created a favorable perception of itself as to the transposition of the European recommendations, even in sensitive areas and in a difficult way (antidiscrimination legislation in 2010-2012). For these reasons, the Democratic Party’s unwillingness to follow the Europeans’ pieces of advice dictated by the EU’s intention to defend the democratic institutions generated in Brussels, in turn, reactions of confusion, dissatisfaction and, finally, of condemnation.

The EU’s conditionality is essential for promoting reforms in Eastern Europe. That’s why the lack of progress or, worse, the degradation of the situation should definitely determine the flow of financial assistance and other recompenses provided by EU. Any government absorbed by group interests of parties will agree to adopt reforms that are costly from political-electoral viewpoint if it is stimulated. This way, the more legitimate and upright the government is, the greater will be the number of “carrots” (positive incentives) used by EU, compared with the number of “sticks” (negative incentives). In the case of Moldova, the use of negative insensitive, namely the blocking of the macro-financial assistance, was inevitable, even if difficult and this offered the PDM a broad space for maneuvering and readjustment of the political tactics  (IPN, October 9, 2017).

In practical terms, the EU lost time when it only warned about the activation of political preconditions, even if it had reasons to activate them after the introduction of the mixed electoral system already, in June 2017. Present earlier among the criteria for EU budget support, the political preconditions became a reality for the macro-financial assistance as of 2017 (IPN, September 24, 2018), several years later than for Georgia (2013) and Ukraine (2014). In the case of Moldova, the tying of the macro-financial assistance to the political conditions (multiparty system) was due to the pressure exerted by the European People’s Party group in the negotiations with the European Commission and the Council of the EU. This decision was supported by the Moldovan extraparliamentary opposition led by Maia Sandu and Andrei Năstase and by civil society that is critical of the government. These were imposed by the government to externalize the local public agenda owing to the impossibility of exerting pressure from inside (IPN, July 17, 2017), including to mobilize massive protests that would put the ruling party in difficulty (IPN, June 11, 2018).

So, the European conditionality can start the engine of major reforms, including in sensitive areas, such as the banking system, but this considerably diminishes its effects if the decisions are related to the change of the political status quo. For these reasons, the EU could not prevent the introduction of the mixed system or the invalidation of elections and the ruling party remained fully intact before the imminent suspension of the assistance and the attraction of the title of “problematic pupil” among the countries with Association Agreements.

Recalibration of EU conditionality
 
EU’s conditionality mechanism is a useful instrument for promoting difficult reforms that are not wanted by the government. After the failure of the conditionality applied to Moldova, which resulted in the introduction of the mixed system in 2017 and invalidation of elections in 2018, the European Parliament suggested that the EU should change its tactics (Resolution of November 14, 2018).

First of all, the focus of the EU’s conditionality was transferred to the compliance of the elections of February 2019 with the democratic principles (IPN, September 18, 2018). This creates a new political and temporary framework for the EU to reopen the subject of financial assistance, possibly with a fully renewed government, even if this is highly improbable. At the same time, the European side practically pledges to restore the dialogue with any government that will come to power, even if this consists of the DPM and its allies. In other words, the EU wants to obtain new political conditions for reintroducing the conditionality elements. In parallel, the DPM wants to regain by elections the legitimacy that it didn’t have in 2016-2018, unlike the similar oligarchic regimes in Ukraine (Piotr Poroshenko and others) or Georgia (Bidzina Ivanishvili) (IPN, July 30, 2018). 

Secondly, there is a tendency in the rhetoric that asks for the reallocation of the European financial assistance to other entities in Moldova than the central authorities. The MEPs noted that the European funds could benefit civil society, the mass media, the private sector and the local public authorities. So, instead of Moldova losing access to critical European sources that can be reoriented to other countries and for other problems (for example, the management of migration in Northern Africa or in Turkey), the financial assistance (both direct budget support and macro-financial assistance) can be turned into funds for developing the (non)governmental players at central and local levels, which want and can comply with the conditions imposed by the EU. This implies the enhancement of the capacities of the EU Delegation in Chisinau and maximum decentralization and flexibility in the administration of the reallocated funds. Such an exercise depends on the European Commission (Directorate-General for Neighborhood and Enlargement Negotiations) and, at operational level, on the European External Action Service. These institutions reiterated the strict conditionality and recalibration of the financial assistance for the people’s benefit during the recent visit to Moldova (EU Delegation in Chisinau, November 27, 2018).

Last but not least, the justice sector reform, fight against upper-level (political) corruption and reinvigoration of the government become key areas to which the EU makes reference, even if the financial assistance was stopped. As a matter of fact, the European institutions can only revert the conditionality elements. This means that it can restore the macro-financial assistance and direct budget support in a plenary way, if the government of Moldova fulfils several of the preconditions – fair elections, investigation of the banking fraud, justice sector reform and counteracting of grand corruption. These expectations can be met only after the elections and depending on the conjuncture of the future ruling alliance where the force of the Democrats is substantially reduced, the Socialists do not have the leverage of power, while the extraparliamentary opposition dominates the legislature (IPN, March 18, 2018).

Instead of conclusions...

During the rule of the Democratic Party, the political class in Moldova revealed the capacity to survive the European conditionality, but at the price of the backsliding of Moldovan democracy and the creation of a dangerous anti-model for other states that apply Association Agreements.

The EU’s conditionality is in the process of recalibration and the European institutions realize how important the particularities of local politics, where the power is distributed non-uniformly, are. In such conditions, the local authorities and state institutions are politicized, while civil society and the critical opposition are marginalized and forced to look for solutions outside the country.

The understanding of the deficiencies of the European conditionality seen in Moldova creates opportunities for revising the Moldovan reform agenda and of preventing the spread of the Moldovan precedent to other countries in the future. The major emphasis of a new view on the improved conditionality mechanism should include the consolidation of other local players. Having more robust local public authorities, civil society or the mass media, any government will learn to share the power to influence the decision-making mechanism in the state.