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Jan 19, 2022
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Russia stalled in Moldova due to Putin’s gas policy

Russia stalled in Moldova due to Putin's gas policy

Photo: Vadim Denisov/TASS

Former President of Moldova Igor Dodon believes that opposition parties should join forces and organize peaceful anti-government protests. Otherwise, Maya Sandu and the ruling Action and Solidarity Party will lead the country to dictatorship. Russia will lose Moldova?

“The new leadership of the Party of Socialists in the format of a collegial body of five to six people should hold discussions with other political parties and create a united front of protests,” the politician explained. The united opposition should go to rallies without party symbols.

Dodon considers the current government headed by Natalia Gavrilitsa to be the weakest in the history of Moldova. “At first I thought they were wrong, because they are still new to politics, but six months later I see that these mistakes have become chronic,” the ex-president complained.

An example of a mistake can be considered the situation with gas supplies to the republic. The price of fuel has skyrocketed so much that the prime minister has started talking about declaring a state of emergency, and the vice premier Andrei Spinu wanted to revise the recently signed contract with Gazprom.

In the context of the strongest geopolitical confrontation with the West, Russia’s positions in Moldova are now extremely important. Near potentially explosive Transnistria, Ukraine, not far from Crimea. Dodon’s success would help Moscow to strengthen itself in the region, knock over Sanda…

Dodon’s prospects to reverse the internal political situation in Moldova appreciated political expert Yevhen Sholar.

– This is an attempt by Dodon to restore his positions after a serious defeat of the socialists in the presidential and parliamentary elections. He also wants to improve his image in the eyes of external partners, primarily Russia. In my opinion, he has no chance to restore his reputation. Already now, both Dodon personally and the socialists are being replaced by other forces that are oriented, among other things, to the left, center-left flank, to Russia.

So far, this is not yet a fully formed conglomerate of political figures. It is possible to single out the mayor of Chisinau Iona Chabanuwho announced the creation of his political movement. It is possible that the Bashkan of Gagauzia may join the wider political project Irina Vlakh, former prime minister Ion Chicu etc. If you look at the results of the last elections, even the Shor party, whose leader is on the run, does not lose its positions and wins back Dodon’s electorate.

“SP”: – Dodon is still a former president. Can he bring them all together?

– In Moldova, the call for protests, if they are not agreed in advance with all interested political forces, will not be heard. If stated by Dodon, others will not agree to it. If, for example, the “Civil Congress” declares a former adviser Voronin Mark Tkachuk – too. For protests to be successful, they need to be some kind of common initiative. There are protest moods in Moldova, although not as strong as many say. The authorities have not exhausted their support yet.

“SP”: – Gas that has risen sharply in the middle of winter is not a suitable fuel for street activity?

“Although the reason for what is happening is clear, it is largely due to the situation on the market, it is convenient to build political constructions on this basis, put forward slogans, and make demands. For the rather poor population of Moldova, this is a painful topic and, of course, it stirs up protest moods. In fact, expensive gas is the main factor. Because there is no need to talk about the popularity of the opposition in society. Few people are ready to follow the current leaders of the opposition.

“SP”: – Does Russia still have instruments of influence on Moldova?

— There are two main levers of influence: gas and Transnistria. We have seen that sometimes Russia has used the gas issue as such a tool, although there is also an objective side to the issue. However, it is still impossible to talk about some kind of cold war between Chisinau and Moscow.

Russia does not take a black and white position regarding the current government in Moldova. It is clear that Sandu is not the most pleasant partner for Moscow. It was easier to deal with Dodon – he is in many ways an obedient politician. But the current Moldovan government does not seek, is not ready to completely burn all bridges with Russia. We saw a rather successful and constructive visit of the head of the Moldavian Foreign Ministry Nicu Popescu to Moscow.

There is a resource for building normal relations. Including the possible support of Moscow opposition. A smarter game of Russia on the Moldovan political field would probably be more interesting for consolidating its forces, including for the future.

The situation around the gas issue explained expert of the National Energy Security Fund and the Financial University under the Government of Moscow Igor Yushkov.

– Moldova’s reference to the energy crisis, to force majeure, which influenced the signing of the last contract with Gazprom, cannot but surprise. Isn’t it force majeure now? Literally today they have to transfer money, but they have no money.

The same situation was for the November deliveries. Then “Gazprom” had to publicly put forward an ultimatum: do not pay, turn off the gas. And when Moldova found the money, Gazprom also publicly promised to stop deliveries in the event of a new delay in payment. And now, there is no money again and there is nowhere to take them. The government does not give funds to Moldovagaz.

“SP”: – That is, a political question?

— The pricing formula of the previous Gazprom contact (ended on September 30, 2021, — ed.) was beneficial for Moldovan fuel consumers. Since in winter, when the spot price in Europe rose, there was a transition to oil pegging. And in the summer, when the spot price fell, they returned to the exchange price again.

In the new Euro-oriented government of Moldova, they constantly said that that contract was unfair. They wanted everything to be like in Europe, where there is only spot pricing. The details of the new contract with Gazprom are unknown, but judging by the fluctuations in gas prices in Moldova, there is now a complete link to the spot market. Because oil has not risen in price so much.

It seems that pegging to the spot is carried out with a lag of six months. Because it was in July-August that the jumps in spot prices were quite large. By December-January, it increased from 400 to 650 dollars in Moldova. And where does Moldova want to go again? To oil pricing? Of course, it is profitable: 300-350 dollars. But what if six months later the situation changes again?

They don’t do that. Long-term contracts, even if they carry certain risks, are stable. The last contract with Gazprom was signed for five years. Let Moldova either raise domestic prices so that Moldovagaz does not have a cash gap, or subsidize fuel purchases from the budget.

SP: Logically. Clean economy…

– The Moldovan authorities, apparently, are trying to solve their domestic political issues. The scenario is visible… Gazprom will either have to lend to Moldovagaz or bankrupt it. In the event of bankruptcy, the old debt under the previous contract will have to be written off – about $ 1.5 billion. In addition, Gazprom can be squeezed out of Moldova as the owner of gas assets, although it will remain a supplier.

Shutting off gas supplies at the height of the heating season is dangerous. According to the Moldovan leadership, the political damage for Russia will be higher and therefore it will not agree to this. Moscow, they think there, has problems in Kazakhstan, there is a confrontation in Ukraine. And if Gazprom turns off the gas, Moldova will scream at every corner that it is being punished for its desire to go to Europe. They hope that Russia will be frightened. They take it for a show.

“SP”: – Then from Russia there will always be ropes to twist. Wouldn’t it be better to punish once, so that others would not be accustomed to?

– The previous time when we signed the contract, Russia went towards Moldova, although we had all the trump cards in our hands. In general, we could force Chisinau to buy gas for 1 thousand dollars. But top management, as a representative of Gazprom explained, Sergey Kupriyanov, asked to go forward. Like, not strangers. In fact, Putin personally ordered to give Moldova a more or less comfortable contract. Chisinau is now taking advantage of this, continuing to scare Russia.

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