Theme - Moldova

PSCRP-BESA Reports No 138 (July 3, 2025)

Part 1

On Wednesday, June 11, the Supreme Council of Transnistria, during an emergency session, approved the introduction of a state of economic emergency (SEE) in the region. The initial implementation of the SEE regime in the economy took place on December 11, 2024, and it has since undergone five extensions. The Moldovan government initiated a process—long anticipated by experts—to nationalize key energy assets of the republic, which until recently belonged to another state—Russia—not even a neighboring one.

At a government meeting on April 16, amendments to the Natural Gas Law were approved, with the stated objective of “combating the market dominance of Moldovagaz.” This document was prepared with the support of the EU, EBRD, and USAID as part of the MESA energy security project. The explanatory note to the bill indicates that despite a decrease in Moldovagaz’s share of the retail natural gas market recently, the company continues to hold a de facto monopolistic position. The figures confirm this assertion: a reduction from 97.69% in 2022 to 90.5% in the first half of 2024 cannot be considered genuine “demonopolization.”

As early as January 15, Moldovan Prime Minister Dorin Recean declared that Moldova intended to establish full control over Moldovagaz, a company in which Gazprom holds a 50% + 1 share. However, the primary political intrigue revolves around the Moldovan GRES (Cuciurgan power station), specifically because the station is located in de facto rebellious Transnistria.

Until very recently, the central authorities of Moldova purchased remarkably inexpensive electricity from the Moldovan GRES. The Moldovan GRES provided electricity to the state-owned company Energocom for many years at a rate of $65/MWh. In comparison, the average European electricity price is $327/MWh, with prices in Germany being approximately a quarter higher. This disparity largely explains why this single station supplied 95% of the country’s total energy consumption.

The cost of raw materials—Russian natural gas—determined the price of electricity. Rebellious Transnistria, which openly declared its political alignment with Moscow, benefited from unprecedented preferences from the Russian authorities in this regard.

This situation, naturally, displeased the authorities in Chisinau but completely suited Moldova’s economic elites. As a result, a unique situation of conflict preservation for years emerged in the post-Soviet space, described as “frozen without de-escalation.” While minimal communication in the 5+2 format effectively ceased five years ago and the sides engage in aggressive rhetoric, there has been no outbreak of violence or even overt forceful actions. “If it works, don’t touch it!” as they say in the IT industry. Business interests maintained the situation, rather than politicians.

 These events resulted in Moldova’s manifestation of a systemic conflict, which we have previously discussed in analyses concerning Georgia, Armenia, and Gagauzia.

Political elites in post-Soviet countries build their career trajectories through the process of their states’ integration into the European Union; they observe Estonians and Lithuanians becoming high-ranking European officials, which inspires them.

Conversely, economic elites have structured their business processes with or through Moscow. Each country has done so differently, as we have noted, but Moscow is an indispensable element of the business model everywhere. Practical, rather than rhetorical, rapprochement with the EU is unacceptable for the businesses of almost all dollar billionaires in the post-Soviet space.

This systemic, existential conflict for each side can manifest in various public forms—as an ethnic conflict, ideological conflict, territorial conflict, or even a religious conflict—yet internally, it fundamentally reduces to a conflict between owners of capital and owners of the state’s bureaucratic apparatus.

In January 2025, the transit of Russian gas through Ukrainian territory ceased. An energy crisis ensued, impacting both Moldova and Transnistria. This crisis eroded the foundation for the “frozen without de-escalation” state, prompting businessmen to step aside and yield control to politicians.

Tiraspol shifted the Moldovan GRES to coal and limited its service exclusively to Transnistrian consumers, while Moldova was compelled to transition to more expensive electricity from Romania. Immediately in January, the tariff for consumers of Premier Energy, the largest market operator, increased by 75% to $220/MWh, triggering an energy crisis in both Transnistria and Moldova.

The de facto frozen negotiation process then escalated into a phase of open rhetorical warfare. A week before the cessation of supplies, in December 2024, Moldova’s Deputy Prime Minister for Reintegration, Oleg Serebrian, proposed on PRO TV two options for Transnistria: “to die either of hunger or of cold.” This statement, while not inherently aggressive, was extremely imprudent and immediately taken out of context by the “war party” on both sides of the conflict, eliciting a sharp response from Vadim Krasnoselsky, the president of unrecognized Transnistria.

At the height of the conflict between Tiraspol’s and Chisinau’s statements, Moscow intervened. As reported by Russia’s Foreign Intelligence Service, Moldovan President Maia Sandu, amidst the crisis, demanded the preparation of a forceful seizure of the Moldovan GRES in Transnistria. The Russian intelligence agency claimed that the president of the republic also instructed the development of a plan for a military operation to establish control over Transnistria.

Then, unexpectedly in June, Moldovan Prime Minister Dorin Recean informed the Financial Times that Russia planned to increase its military presence in the Transnistrian region to 10,000 soldiers, noting that these data were based on “intelligence assessments.” The Russian Foreign Ministry immediately refuted these plans; however, this was clearly insufficient to halt the surge of discussion surrounding such a scenario, including within serious analytical circles.

The January escalation was successfully overcome. A humanitarian loan from Russia and Dubai gas purchased with these resources provided a respite for the parties. But all signs point to a hot fall and winter—not the heat in Moldovan and Transnistrian homes.

PSCRP-BESA Reports No 133 (May 26, 2025)

On May 21, the Chisinau Court of Appeal left the head of the Gagauz autonomy, Eugenia Gutul, under house arrest. Gutul was detained on March 25 at the Chisinau airport and arrested in a criminal case related to the financing of her election campaign in 2023. This arrest opens the way for the initiation of the procedure for removing the head of the dissident autonomous region from office after May 25, when she will have been unable to perform her duties as the head of the region for 60 days. The legitimate parliament of Gagauzia, the People’s Assembly, has effectively come out against the supreme power of Moldova and has expressed full support for Gutul.

There is probably no other state in the post-Soviet space, except Moldova, where the political struggle is conducted so openly and aggressively, using the entire toolkit of administrative power, attracting external intervention, judicial mechanisms, and even foreign military contingents located on the territory of Moldova, including its rebellious autonomies — Gagauzia and Transnistria. Without exception, all the countries that emerged from the USSR went through this stage but left it in the 1990s. Only in Moldova does the unconventional political practice of the 90s still shape the political reality.

The reasons for such a sharp confrontation, on the verge of a civil war, are the same as those we indicated in our publications about Georgia and Armenia. This is a conflict of goal-setting between the economic and political elites of new states, which is not encountered anywhere else in the world except in the post-Soviet space. While political elites see their personal career tracks only in integration with the Euro-bureaucracy — the entry of their countries into EU structures — economic elites realize that the business models they have formed are oriented exclusively to the East, toward Russia and the EAEU countries. These business models are not adaptable to the European status of their countries (and European regulation). This is why the struggle of these two macro-elites — political and economic — around the movement toward the EU is existential in nature in the post-Soviet countries.

But even against this background, the confrontation in Moldova is distinguished by its unusual intensity and severity.

Relations between Chisinau and Gagauzia have been deteriorating since Gutul won the elections for the head of the autonomy in the spring of 2023. Her candidacy was presented by the Shor party, which the Moldovan authorities subsequently declared unconstitutional due to accusations of illegal financing. This led to criminal cases being opened against the party’s leaders.

The central authorities ignored the inauguration ceremony of the Gutul on July 19, 2023, without sending a single representative. Moldovan President Maia Sandu has not made a decision to include the head of Gagauzia in the government, despite the law’s explicit requirements.

But the new authorities of Gagauzia did not try to find points of rapprochement with Chisinau. Let us give one example. In April 2024 Gagauzia signed an agreement with the Russian Promsvyazbank, allowing citizens of the autonomy to open direct accounts. It is important to note that Promsvyazbank (PSB) effectively forms the financial system of budgetary support for the autonomy — the bank will ensure the opening of salary accounts for public sector employees and pensioners of Gagauzia. Even more importantly, PSB is the official support bank of the Russian defense industry complex, headed for seven years by Petr Fradkov, the son of Mikhail Fradkov, the former Prime Minister of Russia, who later headed the Russian Foreign Intelligence Service, Russia’s equivalent of the CIA, for many years. Today, Fradkov Sr. is the director of the Russian Institute for Strategic Studies, Russia’s main state think tank.

It is unlikely that any state would put up with such direct intervention by another state into the key budgetary institutions of one of its autonomous territories.

The economy of Gagauzia itself is small and uninteresting; moreover, it is much more oriented towards the EU than towards Russia. According to the Ministry of Economic Development of Moldova, 49% of exports of enterprises registered in the autonomy go to the EU countries, and only 2% to Russia.

But for the Moldovan (not Gagauz) economic elites – and their Russian counterparties – it is extremely important to have such an “internal offshore”, deeply integrated into the Russian banking system. It is becoming increasingly difficult for the business elite in Chisinau to solve their problems of building business with Russia – the central government is increasingly linking its future with Europe – and in this situation, autonomous Gagauzia is becoming an important bridge for Moldovan business oriented to the East.

A strange, but internally logical configuration is emerging: the central political elites of Chisinau see their personal career tracks only in the direction of the EU, the Moldovan business elite is unable to resist them in this, and supports the political leaders of Gagauzia, who de facto are pursuing not a pro-Russian policy, as it may seem at first glance, but the same sectoral policy – but already in favor of large Moldovan businesses, rather than the political leadership.

If you look at the formal structure of Moldova’s foreign trade balance, the republic does not look dependent on Russia. The main consumers of Moldovan goods are Romania ($1.42 billion) and Ukraine ($595 million); Russia is significantly behind with $144 million. But it’s not that simple.

According to the National Bureau of Statistics, in 2023, re-export of foreign goods from Moldova amounted to 1178.5 million US dollars (29.1% of total exports), which is 13.7% less than in 2022. At the same time, in January-August 2024, re-export of foreign goods from the Republic of Moldova decreased by 32% and amounted to 577.3 million dollars (24.7% of total exports). Re-export of goods after processing amounted to 14.3% of the total volume, and classic re-export of unprocessed goods (e.g., gasoline, diesel fuel, sunflower oil, data processing equipment, medicines) — 10.4%.

Let us focus on two indicators: the initially large volume of re-exports — more than a third of Moldova’s total exports — and the rapid decline in re-exports.

Moldova was one of the main beneficiaries of the numerous multidirectional sanctions that appeared immediately after February 24, 2022 — the beginning of the military phase of the conflict between Ukraine and Russia. From legal schemes for producing goods from customer-supplied raw materials from territories where such production was limited or impossible due to sanctions or war, to direct resale by Moldovan companies of foreign goods whose distribution was restricted — all contributed. The first figure — total re-exports as one-third of national exports — is due precisely to this.

The second figure — the rapid decline — shows that Moldova is no longer a convenient bridge for businesses wanting to continue trade under wartime restrictions.

But the reason is not the success of the pro-European government of Chisinau in developing national exports (in 2024, Moldovan exports fell by 12.2% to $3.6 billion, while imports rose by 4.5%, leading to a 19% increase in the trade deficit to $5.5 billion), but rather growing political instability — primarily in relations between Gagauzia and Chisinau.

As shown above, the power crisis in Gagauzia can be seen as an elite struggle over creating an “internal offshore” in the autonomy, in which the Russian–Ukrainian–Moldovan (we believe this is an accurate term) business elite could solve its problems bypassing wartime restrictions.

However, this model does not explain why the elite conflict received such broad support from Gagauzia’s population. Here, an ethnic factor must be considered.

At the end of March 2025, the head of Gagauzia, Eugenia Gutul, turned to Turkish President Recep Tayyip Erdoğan for support: “I am sure that at this critical moment, when the Gagauz people are facing the threat of losing their autonomy, their identity and their future, you, Mr. President, and the entire brotherly Turkish people will not remain indifferent. We count on your voice, on your authority, on your international support… Gagauzia needs Turkey – as many years ago, when Ankara’s voice helped preserve peace and justice,” she said in a statement delivered through her lawyers.

The Gagauz are a Turkic-speaking people. Their national language belongs to the Oghuz subgroup of southwestern Turkic languages. Many historians believe the Gagauz are descendants of Seljuk Turks who migrated to Dobrudja in the 13th century and founded an Oghuz state there with the Polovtsians.

The already tense relations with Chisinau over language and identity are further strained by President Sandu’s de facto path for Moldova’s EU accession — through unification with Romania (a member since 2007).

A citizen of both Romania and Moldova, Maia Sandu does not distance herself from this idea, but sees it as politically unformed at the moment. “There is support for reunification with Romania, but it is not enough. There are people who promote this idea, but they are also not enough. There is also support for integration into the EU. This is what we are striving for,” Sandu said two years ago, in May 2023.

However, the practical steps of Chisinau are aimed precisely at this political formation of the idea of reunification with Romania.

In March 2023, the Moldovan Parliament adopted a law renaming the state language of Moldova from “Moldovan” to “Romanian”. This decision was made in connection with the Constitutional Court of the Republic of Moldova, which in 2013 recognized Romanian as the state language. Thus, all official documents and the Constitution now contain the term “Romanian language” instead of “Moldovan language”.

Of the three million citizens of Moldova, about one million citizens of Moldova already have Romanian passports.

The number of Romanians in Moldova’s government is growing. Former Romanian Finance Minister Anca Dragu has taken over the National Bank of Moldova, while former head of Romania’s National Anti-Money Laundering Office Marius Staicu has taken up a similar post in Chisinau. Romanian career diplomat Cosmin Dinescu has been appointed head of the EU Civil Partnership Mission in Moldova, focused on countering hybrid threats and strengthening crisis management structures in internal security. These are not isolated examples – there is a deep integration of the political nomenclatures of the two countries.

Almost all activities on Moldova’s integration into the EU are carried out by figures from the Romanian political elite. Nine high-ranking political bureaucrats from Romania have been sent as advisers and high-level advisers of the European Union to the executive authorities of Moldova. This includes the former Minister of Education of Romania, Daniel Funeriu , former president of the National Scientific Research Authority of Romania Dragos Ciuparu , former manager of the National Bank of Romania Nicolae Grigore , former Prosecutor General of Romania Gabriela Scutea , former head of the National Energy Regulatory Authority of Romania Alexandru Sendulescu , former first deputy head of the Romanian police, quaestor (brigadier general) Victor Apreutesei , former head of the Secretariat of the Romanian Government Victor Giosan . Also seconded to Moldova is former Minister of Transport of Romania Anca Boagiu , and former Secretary of State of the Ministry of Internal Affairs of Romania, quaestor (brigadier general) Irina Alexe.

Bucharest is even more open in its support for the idea of reuniting Romania and Moldova. In an interview with DC News on April 8 last year, Romanian Prime Minister Marcel Ciolacu said that he supports the unification of the two countries, as he considers Moldova to be part of Romania, “illegally torn away and included in the USSR in 1940.” Ciolacu admitted that the unification of Romania and Moldova could be implemented both within the EU and outside it. At the same time, he noted that this requires the support of Moldovan citizens. “I support this, I have no prohibition. This is my right!” — Marcel Ciolacu said.

On the same day, the head of the autonomy, Eugenia Gutul, stated that Gagauzia could separate from Moldova if the latter unites with Romania, and added that Moldova could introduce troops into the territory of the Gagauz autonomy if it declares independence.

If we abandon emotional approaches, we can see that the behavior of each of the actors in this conflict is rational and logical – from the point of view of their interests. The Chisinau authorities are using the unique opportunity to join the EU through joining Romania, bypassing the mechanisms for gradual accession to the European Union, which are practically blocked today. Bucharest is solving the historical task of reuniting a single state. Business elites are looking for ways to circumvent the sanctions and wartime risks imposed on them by politicians.Russia is playing on Gagauzia’s fear of Romanianization , trying to form a second outpost in Moldova. Turkey, like everywhere else in the Turkic-speaking world, is exploring the contours of a new location of influence. This is the main danger of this conflict. Politics is not a zero-sum game. And even the most logical actions of any of the actors – if they ignore the interests of others – only lead to everyone blocking the efforts of all other participants in the big game around little Gagauzia.

PSCRP-BESA Reports No 97 (Nov 12, 2024)

On November 8, the Central Election Commission of Moldova announced the official results of the presidential elections in the Republic of Moldova. With 55% of the votes, Maia Sandu won in the second round, while her opponent Alexandru Stoianoglo gained 44.8%. Despite this result, the election did not become a triumph for the presidential team. Moreover, the head of the election headquarters, Andrei Spinu, resigned not only from his position as Minister of Infrastructure but also left the ruling party, PAS. This marks the first time since 1991 that Maia Sandu lost the elections within the country, receiving only 48.81% of the votes, while 51.19% of citizens voted for Alexandru Stoianoglo. The decisive contribution to the Moldovan president’s victory was made by the diaspora, voting at 300 foreign polling stations.

This raises a logical question: Why did M. Sandu, who retained political leadership throughout her four-year mandate, give way to Alexandru Stoianoglo within the country? The former Prosecutor General had not been an active figure in Moldovan public politics for the past three years and was significantly disadvantaged in terms of resources. Moreover, as the informal leader of PAS, Maia Sandu also had a parliamentary majority obtained through early elections in 2021, garnering high—some might even say unprecedented—trust from Moldovan citizens. The answer to this question has two sides. Sandu’s supporters cite unprecedented pressure from Russia on Moldovan institutions and interference in the elections to secretly support their candidates. Her opponents insist on the low effectiveness of her economic policies during the initial phase of her rule. In my view, three systemic errors made by Sandu’s team during her first term largely account for the loss within the country:

1. Lack of a coalition with right-wing parties: The political leadership of Sandu and PAS created the illusion that there was no need to form a coalition with other pro-European parties. In Moldova’s parliamentary system, such an approach was a strategic mistake, leaving Sandu politically isolated during the elections.

2. Monopolizing the idea of European integration: The European integration agenda has been central to Moldovan politics for more than 20 years. The initial turn toward the EU followed the failure of Russia’s Kozak memorandum in 2003, which proposed settling the Transnistrian conflict through an asymmetric federation with Tiraspol. Since then, the European direction has become the sole unifying idea for Moldovan society. PAS’s control over the referendum to amend the Constitution for European integration caused mistrust among potential allies and much of the public.

3. Media restrictions: Under Sandu, 15 TV channels and more than 60 news websites were shut down. The Government justifies this as a measure to combat hybrid threats from Moscow. However, even considering the war in Ukraine, such media control is unusual for Moldova, as not even the Plahotniuc regime witnessed this scale of media closures. The lack of judicial orders for these actions provoked a negative response from the public.

Election Campaign

On December 24, Sandu proposed a referendum to gauge citizens’ support for Moldova’s EU membership. Experts interpreted this as an election tactic to mobilize support in the 2024 presidential elections with the goal of securing Sandu’s victory in the first round. The proposal was an unexpected move for both opposition and right-wing parties. In 2016, Prime Minister Vlad Filat proposed a similar referendum, which the Constitutional Court deemed illegal, but in 2024, there were no obstacles to Sandu’s proposal.

However, despite broad support for European integration, opposition criticized Sandu for changes made to the referendum’s question, which now asked if citizens support a constitutional amendment to integrate Moldova into the EU. The referendum, approved by Parliament on May 16, 2024 (Resolution No. 121), defined that European Union laws would override national legislation upon Moldova’s accession.

This created backlash. Statements by EU Ambassador Janis Mažeiks about land sales and PAS MP V. Soimaru’s remarks on renouncing the Russian-affiliated Metropolitanate of Moldova sparked discontent among rural and conservative citizens. Additionally, the refusal to register CUB party leader Igor Muntean as a presidential candidate further alienated right-wing voters.

Sandu’s team, confident in a first-round win, faced challenges when the Socialist Party nominated Alexandru Stoianoglo, who received quiet support from right-wing groups. Despite his low-key campaign, Stoianoglo posed an unexpected threat.

In the first round on October 20, 2024, Sandu received 42.49%, with Stoianoglo at 25.95%. However, 54% of domestic voters rejected the referendum, leading to victory only due to diaspora support at 50.1% to 49.69%.

The elections exposed deepening divisions in Moldovan society. While European integration remains appealing, its legitimacy has been questioned. The upcoming 2025 parliamentary elections may reveal whether Moldova will further split or consolidate under a unifying vision.