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30th Nov 2021

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Moldova 'between rock and hard place', PM says

  • Moldovan prime minister Natalia Gavrilita (l) sought support for gas troubles in EU. Ursula von der Leyen (r). Source: EC - Audiovisual Service (Photo: twitter)
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Moldovan prime minister Natalia Gavrilița has declined to confirm reports of Gazprom blackmail, but thanked her EU "friends" for their support in dealing with Russia.

"We are still in the middle of negotiations [with Gazprom], so we rather not comment on this specific point," she told EUobserver on Thursday when asked about a recent report on Gazprom dirty tricks in the Financial Times.

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The Kremlin-controlled gas giant had promised cheaper gas and increased winter supply in return for weaker EU ties, anonymous sources told the British newspaper on Tuesday.

Earlier on Thursday, EU high representative of foreign affairs, Joseph Borrell was also more outspoken, saying that "in global terms, the price increases around the world are not a consequence of weaponisation of the gas supply, but in the case of Moldova, yes it is."

"It is good to know that our friends will stand by Moldova in these difficult times," Gavrilița told EUobserver in response.

Sitting in a hotel close to the European Parliament in Brussels, she approached the end of an intense visit to the EU to win political and financial help.

The EU has pledged €60m in support - to be distributed before the end of the year without conditions after Moldova declared a 30-day state of emergency on 22 October.

It did so after Gazprom - the country's only gas supplier - suddenly refused to renew its long-term contract with the country two days before expiration.

"Gas prices rose from $250 to $790 per 1000 cubic meters in a matter of days," Gavrilița said.

"The European Union stands side-by-side with Moldova in overcoming the challenges it faces," European Commission president Ursula von der Leyen also told press on Wednesday.

But in truth, the EU emergency funds will only temporarily alleviate rising costs for Moldova's poorest households.

Its deputy prime minister has been to Gazprom's headquarters in St. Petersburg to negotiate a new long-term gas deal, but no agreement has been finalised yet.

Meanwhile, EU leaders have urged the Moldovan delegation not to sign new long-term deals with Gazprom, advising it to do short-term contracts to get through the winter instead.

"We are stuck between a rock and a hard place," Gavrilița said.

Her country now had two choices, she added: a complete shutdown of its gas supply or gas purchases on the spot market, which are prohibitively expensive.

"Even EU countries cannot afford that," she said.

Moldovan electric utility Energocom launched a tender this week for 5 million cubic meters of gas to help meet daily consumption, but according to Gavrilița this would sustain the country only "for a few days".

"This is for the first time in 30 years that we have had to buy gas on the spot market," she added.

"We are also looking to swap gas supplies. We could lend a volume that we can return after the winter season is over. We may also ask to access existing long term contracts for delayed payment," she told EUobserver, indicating a scramble for short-term solutions.

Pro-EU

There are longer-term EU funds available - worth €600m over three years - that can also be used to buy gas, but these come with the condition of further EU-style liberalisation - opening up Moldova's market to smaller suppliers, "for which we already receive technical support," Gavrilița said.

This would directly challenge the monopoly of Gazprom and its Moldovan subsidiary Moldovagaz.

The Gazprom-controlled company did not act when gas pressure went below the critical minimum of 15.5 bar - a metric unit of pressure - after assurances for new supplies were not fulfilled, forcing the government to declare an emergency.

"We have not been happy with how Moldovagaz has acted," Gavrilița said.

"Moldovagaz is part of the reason we are in this situation," she added.

As a provider of last resort, Moldovagas has "some obligation" to provide gas, even if there was no contract, the prime minister also said.

Ease Russian tension

Meanwhile, Gavrilița, who serves under president Maia Sandu and came to power in August on a pro-EU ticket, has also made it a priority to tackle corruption in the country.

But they are trying to do so while easing tensions with Russia.

Some 1,400 Russian troops are still stationed in Transniestria, a region bordering Ukraine that broke away from Moldova in the 1990s.

"We want a pragmatic relationship," Sandu said in the past. "First of all, we want peace."

"I want to point out again that we do not aim for big changes," Gavrilița told EUobserver, expressing concern Moldova may become collateral damage amid rising EU-Russian tensions.

"Our priorities are domestic, not geopolitical. We just ask Moldovagaz and Gazprom for an extension of the contract," she said.

Moldova facing Europe's worst demographic crisis

The loss of population is down to several factors - both negative demographic growth, plus Moldovans leaving for work abroad, or even taking up Romanian citizenships in order to move freely within the European Union.

Consultancies pocketing EU millions prompts MEP grilling

The European Commission spent €542.4m between 2016 and 2020 for studies written by external private contractors. The findings are part of a larger probe into how large consultancies are increasingly landing lucrative contracts, amid questions on possible conflicts of interest.

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