The European Parliament voted this week to lift import duties on Moldovan wine, responding to the "unjustified and arbitrary pressures exerted by Russia", which banned the product as of 1 January next year. But Russia has not had its last word yet, analysts warn, urging the European Union to speed up its association process with Chisinau to avoid a Ukraine-like scenario.
The Parliament vote on Tuesday (10 December) was aimed at speeding up the EU and Moldova's negotiations for a free trade agreement, which would have otherwise only entered into force at the beginning of 2015.
The move comes two months after Russia banned wine exports from Moldova citing “food safety concerns”, and just a few weeks after Moldova initialed a key association agreement with the EU in Vilnius, which is yet to be formally signed.
The Parliament vote was generous, “especially coming from wine-producing countries in the EU” like France and Italy, said Dirk Schuebel, the former EU ambassador to Moldova.
However, its impact might turn out to be more symbolic than a real economic game changer.
Speaking at a panel debate organised by the European Policy Centre (EPC) in Brussels, Kamil Ca?us, an analyst specialised on Moldova at the Warsaw-based Centre for Eastern Studies, said wine exports to Russia actually represent “only about 2-3% of the general amount of goods exported” by Moldova.
For Ca?us, it is clear that Russia was “aware that the ban was not able to hit the Moldovan economy”.
Moreover, Moldova does not have the capacity to use all its EU quotas. In 2013, the EU quota was set to 240,000 hectoliters, of which Moldova was only able to use 65-80% up until December 2013, according to the official numbers from the Moldovan Ministry of Economy.
“It’s obvious that the full abolition of wine trade restrictions would render no effect on the economy in this year and probably just a minimal effect, if any, in 2014,” Kamil Ca?us told EurActiv.
A much more serious blow to the Moldovan economy, experts say, would come from a Russian ban on products such as fruits or vegetables, as well as restrictions on Moldovan migrant workers.
Seasonal workers abroad contributed €2 billion to the Moldovan economy this year. And 60% of that amount came from migrants working in Russia.
As Ca?us put it, Moscow was until now merely placing its pieces on the Moldovan chess board rather than playing the game, as in the run-up to the Vilnius Summit, all eyes were on Ukraine.
EU 'not yet an irreversible choice' for Moldova
Even though Chisinau is seen as the champion of the EU's Eastern association process for now, things could heat up in the course of 2014.
The country is set to hold general elections in November 2014, with a Communist opposition which has a much different, pro-Russian plan for the country. A victory would most probably mean the end of the EU integration process for Moldova, warned many of the panelists at the EPC event.
If the EU fails to speed up the association process with Chisinau in 2014, the country could easily fall into Moscow’s orbit, they warned.
Ambassador Caras called for the Association Agreement initialed in Vilnius to be signed next September, “thus allowing the current parliament to ratify it”. Signing the AA before the election would make the EU choice “a point of no return” for Moldova, the ambassador said. However, he admitted the signature would be conditional on Chisinau delivering on the promised reforms.
Getting closer to the signature will also most probably trigger stronger pressure from Moscow, Ca?us said. “Until now the Kremlin was not trying hard to prevent the initialing of the agreement with the EU because it was concentrated on Ukraine, but not only," he said.
"Russian decision-makers are fully aware that there is time between the initialing and the signing. They probably assume that it would be better to act in 2014 as it is an election year. In Moldova, it’s easier to change the government than to make this government change its mind on EU integration."
Moscow can apply several leverages on Moldova, the panelists explained – ranging from food products ban and migrant workers restrictions to the sensitive issue of Transnistria and the internal political structure.
If progress on the Association Agreement cannot be done, an option for the EU to make itself more attractive to Moldovan citizens is liberalising the visa regime and allowing Moldovans to travel freely in the EU for touristic purposes, ambassador Caras stressed.
The Commission issued a positive report on the matter in November, stating that Chisinau had fulfilled all the requirements.
Dirk Schuebel, who now works in the European Commission's Eastern Partnership division, said EU officials were “impressed” by Moldova’s progress, “and believe me [the Commission] is not easy to please,” he added jokingly.
However, “the ball is in the court of MEPs and member states,” the Moldovan ambassador reminded, adding that he hoped for a swift vote before the next EU election and in time before the Moldovan ones.
The Moldovan economy relies mainly on agriculture and exports to the Eastern market, such as Russia, Ukraine and other former Soviet republics.
Russia said that Moldova's EU rapprochement would jeopardise the future of Transnistria, a breakaway territory unrecognised by the international community located on the border between Moldova and Ukraine.
- 22-25 May 2014: European elections
- November 2014: Moldovan parliamentary elections
- European Parliament: MEPs back freeing trade with Moldova (10 Dec. 2013)
- European Commission: Progress report on visa liberalisation for Moldova
- European Union External Action Service: EU-Moldova Association Agreement
Centre for Eastern Studies, Warsaw: Russia announces new sanctions against Moldova