JOINT STAFF WORKING PAPER Implementation of the European Neighbourhood Policy in 2010Country report: Republic of Moldova  JOINT STAFF WORKING PAPER Implementation of the European Neighbourhood Policy in 2010Country report: Republic of Moldova
Date: 2011-05-25
Institutions: European Commission, High Representative of the Union
Subjects: European neighbourhood policy, Moldova, State aid, association agreement, bilateral agreement, democracy, economic reform, human rights, political cooperation, political reform

EUROPEAN COMMISSION 

HIGH REPRESENTATIVE OF THE
EUROPEAN UNION FOR 
FOREIGN AFFAIRS AND 
SECURITY POLICY

Brussels, 25.5.2011 
SEC(2011) 643 final 

JOINT STAFF WORKING PAPER 

Implementation of the European Neighbourhood Policy in 2010 
Country report: Republic of Moldova 

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JOINT STAFF WORKING PAPER 

Implementation of the European Neighbourhood Policy in 2010 
Country report: Republic of Moldova 

1. 

OVERALL ASSESSMENT 

The  Republic  of  Moldova  and  the  European  Union  first  established  contractual  relations  in 
1994 through a Partnership and Cooperation Agreement, which entered into force in 1998. On 
that  basis,  an  EU-Republic  of  Moldova  Action  Plan  was  adopted  in  February  2005  for  a 
period of three years and was extended by mutual agreement from February 2008 onwards. In 
order  to  provide  further  guidance  for  the  implementation  of  the  ENP  Action  Plan,  a  reform 
priorities  matrix  was  tabled  by  the  EU  side  in  May  2010,  and  a  yearly  implementation  tool 
was  adopted  at  the  EU-Republic  of  Moldova  Cooperation  Council  of  June  2010.    In  the 
context  of  the  Eastern  Partnership,  negotiations  on  a  future  EU-Republic  of  Moldova 
Association Agreement were launched in January 2010, and negotiations since then have been 
progressing at a very good pace.  This Agreement is conceived by both Parties as illustrating 
the  most  advanced  and  ambitious  approach  to  the  Eastern  Partnership vision  of  association, 
including  a  Deep  and  Comprehensive  Free  Trade  Area  and  a  comprehensive  programme  of 
approximation  to  EU  acquis.  The  negotiations  on  a  Deep  and  Comprehensive  Free  Trade 
Area  (DFCTA)  will  start,  in  the  same  framework,  once  the  necessary  conditions  have  been 
met. 

Close  cooperation,  including  at  the  various  levels  of  the  Cooperation  Council,  the 
Cooperation  Committee  and  its  four  subcommittees,  enabled  both  sides  to  steer  the 
implementation of the Action Plan in 2010. This document reports on overall progress made 
in the implementation of the EU-Republic of Moldova Action Plan between 1 January and 31 
December 2010. Developments outside this period are also considered when deemed relevant. 
It is not intended to be a general review of the political and economic situation in the Republic 
of Moldova. 

Notwithstanding the unresolved political stalemate over the election of the next President of 
the  Republic,  the  Republic  of  Moldova  made  good  progress  overall  in  most  areas  of  the 
Action  Plan.  Progress  was  achieved  in  the  legislative  field  as  well  as  at  the  implementation 
level.  Efforts  were  initiated  to  address  the  administrative  capacity  problems  underlined  in 
previous Progress Reports. The Republic of Moldova ratified, without territorial reservations, 
the Rome Statute of the International Criminal Court. Thanks to a dynamic and constructive 
political dialogue and cooperation with the EU, the Republic of Moldova was able to secure 
an unprecedented level of assistance from its international partners for the coming years. At 
the same time, the underlying political uncertainty and resource constraints prevented large-
scale  reform.  More  sustained  efforts  are  needed  to  fight  corruption,  to  reform  the  judiciary, 
prosecution and police, and to implement certain human rights commitments. 

The structural vulnerabilities of the economy of the Republic of Moldova severely exposed it 
to  the  global  crisis.  In  2010,  with  large  international  financial  support  and  the  start  of  the 
recovery, the tasks of maintaining basic living standards whilst consolidating public finances 
–  both  reflected  in  the  Action  Plan  –  proved  somewhat  easier  to  achieve.  The  authorities 
maintained strict macroeconomic policies and launched structural reforms. By the end of the 

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reporting period, a post-crisis return to the macro-economic objectives set out in the Action 
Plan  was  well  underway.  This  allowed  the  EU  to  disburse  significant  macro-financial 
assistance to the country. However, progress towards improving the functioning of the market 
economy  and  the  business  and  investment  climate  through  reforms  aimed  at  achieving 
transparency and predictability of business conditions – another Action Plan objective – was 
too limited to bear fruit.  

The EU proposed an Action Plan on Visa Liberalisation in January 2011. 

The  Moldovan  authorities  and  civil  society  representatives  participated  actively  in  the 
multilateral  framework  of  the  Eastern  Partnership,  in  particular  through  open  dialogue  and 
their contribution of the working programmes for the four thematic platforms.  Together with 
the bilateral elements of the Eastern Partnership, this contributed to the strengthening of EU-
Republic  of  Moldova  relations  and  reinforcement  of  the  follow-up  on  the  priorities  of  the 
ENP Action Plan. 

Finally, EU-Republic of Moldova cooperation on all issues pertaining to the Transnistria issue 
has  remained  good  throughout  the  year.  The  Republic  of  Moldova  continued  to  play  a 
constructive part in the five informal meetings of the so-called “5+2” format, despite the fact 
that  these  efforts  did  not  bring  real  progress  towards  the  resumption  of  official  talks.  The 
Republic of Moldova and the Transnistrian de-facto authorities lent their coordinated support 
to  the  EU-sponsored  confidence  building  efforts.  The  EU  Border  Assistance  Mission  to 
Moldova and Ukraine (EUBAM) has continued to operate smoothly.  

2. 

POLITICAL DIALOGUE AND REFORM 

The political dialogue between the Republic of Moldova and the EU was intense, with many 
high-level  contacts.  In  January  2010,  at  the  initiative  of  France  and  Romania,  an  informal 
“Group of EU ministers for the European Action of the Republic of Moldova” was set up in 
Brussels as a ministerial forum to advise the Republic of Moldova on its EU integration path; 
it met again in Chisinau in September.  

Political  consultations  also  took  place  between  the  Moldovan  government  and  the  EU 
Political and Security Committee, the Council Working Party on Eastern Europe and Central 
Asia  (which  visited  the  Republic  of  Moldova  in  September  2010),  and  the  EU  Political 
Directors. The EU-Moldova Parliamentary Cooperation Committee convened twice.  

Democracy and the rule of law 

The  Republic  of  Moldova  managed  to  make  progress  towards  compliance  with  democratic 
principles in a year of severe budget constraints and in the context of protracted political crisis 
linked to the election of the President of the Republic. The resolution of this crisis through an 
inclusive process of political consultations among the country’s main political forces remains 
essential, notably for ensuring the sustainability of the reform process. In particular, training 
and organisational measures were implemented to strengthen the parliament and the operation 
of  the  Central  Electoral  Commission  –  key  institutions  for  the  Republic  of  Moldova’s 
democratic development.  

During the year the country engaged in two major polls: first, a referendum in September to 
introduce  a  system  for  electing  the  President  by  universal  suffrage;  second,  following  the 
failure  of  the  referendum  as  the  minimum  voter  turnout  requirement  was  not  reached,  pre-

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term parliamentary elections in November. The Organisation for Security and Cooperation in 
Europe  -  Office  for  Democratic  Institutions  and  Human  Rights  (OSCE/ODIHR)  Election 
Observation Mission, which was present throughout the process, concluded that the elections 
“met most OSCE and Council of Europe commitments”. In particular it noted that the media 
ensured that a “broad range of political views and election information” was available to the 
electorate.  Nonetheless  it  underlined  the  need  for  further  efforts  “to  strengthen  public 
confidence in the democratic process”.  

The Election code was amended in June and September 2010, in order to address a number of 
deficiencies  previously  identified  by  the  Venice  Commission  and  the  OSCE/ODIHR. 
Weaknesses remained with regard to the public control of campaign financing and the quality 
of voters’ lists. If properly established and maintained, the centralised electronic voter register 
to  be  set  up  by  law  in  2011  could  address  the  latter  issue.  An  amendment  modifying  the 
mandate  allocation  method  was  strongly  challenged  by  the  parliamentary  opposition.  The 
timing  of  its  adoption  –  four  months  before  the  elections  and  without  public  consultation  – 
was widely perceived as being designed to benefit the parties in power, and was qualified by 
the  OSCE/ODIHR  as  a  breach  of  the  Venice  Commission’s  Code  of  Good  Practice  in 
Electoral  Matters.  Nonetheless,  the  Secretary-General  of  the  Council  of  Europe  and  the 
President of the Venice Commission noted that the amendment did “not appear as an obstacle 
to the holding of free and fair elections”.  

Public administration reform was given new impetus. An e-government Centre was created, 
with  the  streamlining  of  public  service  delivery  as  its  objective.  Institutional  development 
planning  methods  were  revised  ahead  of  major  capacity-building  efforts  which  will  be 
supported  in  part  by  the  Comprehensive  Institution  Building  Programme  under  the  Eastern 
Partnership. However, reform was slowed down by a long process of re-organisation and the 
unfinished  reform  of  the  civil  service.  Regarding  decentralisation,  a  National  Strategy  for 
Regional Development was approved in March 2010 and the process of implementation was 
launched  under  the  auspices  of  the  new  National  Coordination  Council  for  Regional 
Development. However, progress was hampered on the ground due to lack of resources at the 
local level. 

In the field of regional policy dialogue Commissioner for Regional Policy J. Hahn signed a 
joint  declaration  with  Prime  Minister  V.  Filat  during  a  visit  in  July  2010.  However,  new 
elections, government changes and uncertainty about ministerial structures delayed approval 
and implementation of a work programme until March 2011. 

Steps were taken to improve the justice system and strengthen the rule of law. In July 2010, 
the Law on the Status of Judges was amended to increase judges’ responsibility, with mixed 
results.  The  self-governing  bodies  of  the  judiciary  were  re-cast,  in  line  with  a  decision  of 
2008.  The  implementation  of  a  comprehensive  judicial  information  system,  ensuring  the 
random  distribution  of  cases,  the  recording  of  court  sittings  and  the  publication  of  court 
rulings, continued. However, the parliament did not abolish the widely-criticised specialised 
economic courts. Furthermore, an ongoing conflict between the executive and parliament, on 
the one hand, and the Supreme Court of Justice, on the other hand, diverted efforts away from 
reforming the judiciary. 

The  Law  on  the  Bar  was  amended  to  create  a  self-governing  body  for  lawyers,  introduce  a 
system of mandatory training, reform the apprenticeship system, and forbid representation in 
court  by  non-lawyers.  A  corps  of  private  bailiffs  was  created  in  June  2010  to  improve  the 
execution of judgments. A Superior Council of Public Prosecutors was established, but further 

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reform of the prosecution was delayed. In November 2010 the government adopted a police 
reform  concept  which,  if  implemented,  should  lead  to  improvements  in  the  way  police 
investigators  operate.  No  progress  can  be  reported with regard to the implementation of the 
Law on Mediation. 

The National Institute of Justice stepped up its training and qualification activities for judges 
and prosecutors. Nevertheless, the existence of a parallel qualification system at the Superior 
Council of Magistrates, and the direct appointments of judges, continue to raise questions as 
to the consistency and cost efficiency of public policy in this area.  

The main challenge in reforming the justice system remained the limited resources available. 
While access to justice continued to be improved, with the introduction of a ceiling on case 
registration fees, other shortcomings of the legal aid system - mainly the lack of resources for 
its administration - were not addressed. In September 2010 the government adopted an action 
plan on the funding of the judicial system which began to address resources constraints.  The 
EU,  throughout  the  reporting  period  in  this  domain,  consistently  provided  assistance  to  the 
Republic of Moldova in this important area, and it remains committed to continue to do so. 

Only  limited  progress  was  observed  in  the  fight  against  corruption,  and  more  sustained 
efforts  are  needed.  Awareness-raising  campaigns  continued;  a  new  version  of  the  Anti-
corruption  action  plan  was  approved  in  May  2010  and  a  Civil  Council  was  established  to 
monitor  the  activities  of  the  Centre  for  Combating  Economic  Crimes  and  Corruption.  The 
enforcement  of  the  legal  framework  remained  a  primary  concern:  the  Council  of  Europe’s 
Group of States against Corruption (GRECO) concluded that five of its six recommendations 
made in 2008 (second evaluation round) required further work. The GRECO Report for the 
third  evaluation  round  comprised  all  in  all  17  recommendations,  pointing  out  the  need  for 
further amendments to the criminal law framework and for additional steps to ensure a more 
transparent  party  funding  system  and  a  new  independent  and  effective  mechanism  for 
supervision of financing of political parties and electoral campaigns. Overall, the track-record 
of  high  level  corruption  cases  is  unsatisfactory.  Coordination  of  law  enforcement  agencies, 
information exchange, parallel financial investigations and asset recovery remain problematic. 

Human rights and fundamental freedoms 

In  March  2010  the  Republic  of  Moldova  and  the  EU  initiated  a  structured  dialogue  on 
human rights.  In September  2010 the  government submitted a  draft National Action  Plan 
on  Human  Rights  2011-2014  to  the  parliament.  The  draft  plan,  improved  compared  to  its 
earlier version, still did not take into account some of the important recommendations made 
by civil society and international organisations. The reform of the Centre for Human Rights 
(Ombudspersons) was initiated.  

While the government accepted responsibility for the instances of ill-treatment and torture 
reported  during  the  post-election  events  of  April  2009,  investigation  of  the  alleged  abuses 
progressed slowly and did not address the pleas of the vast majority of the victims. The ad-
hoc parliamentary commission of inquiry started work in January 2010, three months after it 
was  set  up.  Its  conclusions,  delayed  until  July  2010,  were  not  acted  upon  as  required,  thus 
creating a sense of impunity. In parallel, the government set up a commission to identify and 
indemnify  the  victims  and  in  October  2010  provided  compensation  to  14  civilians  and  four 
policemen.  

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Limited  progress  was  achieved  in  the  eradication  of  ill-treatment  and  torture.  The  police 
reform  concept  of  November  2010  did  not  acknowledge  the  issue.  Whereas  the  Council  of 
Europe  recommended  the  creation  of  an  independent  torture  investigation  body,  only  a 
specialised  unit  was  set  up  within  the  Public  Prosecution  Service,  and  no  independent 
investigators  were  designated.  The  obligations  laid  down  by  the  UN  Committee  against 
Torture  to  improve  the  functioning  of  the  National  Preventive  Mechanism  Against  Torture 
were  only  partially  addressed.  As  regards  forensic  evidence  of  physical  abuse,  the 
requirements of the Istanbul Protocol were still not met.  

In 2010 the government started implementing a National Programme on gender equality and 
a  related  medium-term  plan  (2010-2012).  It  also  designed  a  programme  addressing  the 
specific problems of women living in rural and suburban areas. Limited progress was made on 
the protection of persons from domestic violence and sexual harassment in the workplace. 
Courts  issued  some  40  protection  orders  under  the  recently  adopted  Law  on  Domestic 
Violence. In February 2010, the government adopted regulations on shelters for the victims of 
domestic violence as well as a number of professional guidelines, including for the police. In 
practice,  effective  protection  remained  unavailable  in  most  rural  areas,  owing  to  the  lack  of 
shelters and appropriate social services.  

Steps  were  also  taken  to  protect  children’s  rights,  including  the  re-establishment  of  the 
National Council for the Protection of Children’s Rights; the designation of special judges for 
juvenile  justice;  and  the  ban  on  solitary  confinement  for  children  in  the  Republic  of 
Moldova’s largest penitentiary. In April 2010, an inter-agency commission set up to address 
the  issues  of  children  left  without  parental  care  adopted  an  Action  Plan,  although  the 
implementation  of  this  plan  has  been  undermined  by  the  lack  of  resources.  The  parliament 
adopted  in  May  2010  the  legal  framework  for  the  adoption  of  children.  The  government 
approved in June 2010 the national action plan for protecting children without parental care in 
2010-2011. 

The situation with regard to freedom of expression and media pluralism improved. A new 
Law on Freedom of Expression, largely in line with OSCE recommendations, was adopted in 
April 2010. Two TV stations with national coverage and several local TV and radio stations 
were  opened.  Observers  praised  the  balanced  editorial  line  of  the  national  broadcasting 
company Teleradio Moldova following changes in its leadership and the strengthening of its 
Supervisory Council. This improvement, however, is mostly contingent upon individuals and 
is  not  guaranteed  by  law.  The  Audiovisual  Code  and  the  Electoral  Code  were  amended  to 
better  regulate  media  coverage  of  electoral  campaigns.  No  restrictions  on  the  freedom  of 
media were reported in the electoral context. Nonetheless, complaints about unfair treatment 
by  the  authorities  were  made  by  a  nation-wide  TV  channel,  a  radio  station  and  two 
newspapers linked to a major opposition party.  

In  June  2010  legal  amendments  were  made  to  improve  the  exercise  of  the  freedom  of 
association,  notably  by  avoiding  re-registration  with  the  authorities  of  established  civil 
society  organisations.  At  the  same  time,  there  was  a  fall  in  the  number  of  violations  of  the 
right  to  peaceful  assembly,  although  a  number  of  restrictions  continued  to  be  reported.  In 
May  2010,  the  Chisinau  municipality  requested  the  prohibition  of  the  Moldovan  gay  pride 
parade, which led to the latter’s cancellation for the third year in a row; in June, it withdrew 
its authorisation of a demonstration organised by a large opposition party.  

No  significant  progress  was  made  with  regard  to  minority  rights  and  the  fight  against 
discrimination.  A  Law  on  preventing  and  combating  discrimination  was  not  adopted.  A 

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number  of  groups  (including  Roma,  persons  living  with  HIV/AIDS,  and  Lesbian,  Gay, 
Bisexual and Transgender persons) continued to suffer from discrimination. In May 2010, the 
Committee  of  Ministers  of  the  Council  of  Europe  listed  a  number  of  “issues  for  immediate 
action” to combat discrimination. In November 2010, the government started to reflect on a 
new  Action Plan  on  Roma Discrimination.  Persons  with  disabilities also  continued to face 
discrimination  as  well  as  pressure  towards  institutionalisation.  However,  in  July  2010,  a 
national strategy on their social inclusion, supported by an action plan, was adopted; as part of 
that effort, a roadmap was designed to introduce the World Health Organisation International 
Classification  of  Functioning,  Disability  and  Health,  and  the  related  policy  and  regulatory 
reform measures.  

Freedom  of  religion  showed  a  slight  improvement.  Religion  became  an  optional  class  in 
school,  and  religious  activity  by  foreign  citizens  in  public  places  was  explicitly  allowed. 
However, the treatment of religious groups not belonging to the mainstream Orthodox church 
remained  problematic.  A  number  of  groups  (mainly  Muslim)  continued  to  be  denied 
registration; and although the authorities condemned the dismantling of the Jewish Chanukah 
Menorah  in  Chisinau  by  an  Orthodox  community  in  December  2009,  the  desecrated  object 
was not replaced, which contributed to a sense of impunity.  

No  new  developments  can  be  reported  as  regards  trade  unions’  rights  and  core  labour 
standards (see under employment and social policy part).  

The execution of judgments of the European Court of Human Rights improved throughout 
the  reporting  period,  but  not  all  measures  have  yet  been  taken  to  address  the  systemic 
problems noted in the Court’s decisions. 

During  the  second  half  of  the  year,  the  Republic  of  Moldova  ratified  the  International 
Convention  on  the  Rights  of  Persons  with  Disabilities.  The  following  remain  to  be  ratified: 
the Optional Protocol to the latter convention, the International Conventions for the Protection 
of All Persons from Enforced Disappearance and on the Rights of All Migrant Workers and 
Members of their Families, and the European Charter of Regional and Minority Languages. 
The  Republic  of  Moldova  continued  to  cooperate  actively  with  the  UN  human  rights 
mechanisms, and in June 2010 extended an open invitation to all UN special procedures.  

Regional  cooperation,  cooperation  in  foreign  and  security  policy,  conflict  prevention  and 
crisis management 

The  Republic  of  Moldova  cooperated  closely  with  the  EU  on  regional  and  international 
issues,  and  aligned  itself  with  38  of  the  44  EU  CFSP  declarations  open  for  alignment.  In 
October,  the  government  deposited  the  ratification  documents  of  the  Rome  Statute  of  the 
International Criminal Court. 

The  Republic  of  Moldova  and  Ukraine  did  not  succeed  in  finding  a  negotiated  solution  to 
their  few  remaining  disagreements  over  the  demarcation  of  the  northern  and  southern 
segments of their common border. Whereas bilateral contacts on these issues intensified at the 
expert  level,  more  attention  and  effort  are  needed  on  this  matter  at  political  level  given  the 
importance of border management issues in the visa dialogues of the two countries with the 
EU. 

Cooperation for the settlement of the Transnistrian conflict 

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The  Republic  of  Moldova  cooperated  with  the  EU  on  all  issues  related  to  the  Transnistria 
settlement efforts. It played a constructive part in the five informal meetings of the so-called 
“5+2”  format,  which  yielded  long-overdue,  though  only  limited,  progress  towards  the 
resumption  of  formal  talks.  The  Deputy  Prime  Minister  in  charge  of  the  Transnistrian 
settlement had frequent informal meetings with the Transnistrian negotiator. The Republic of 
Moldova and the Transnistrian de-facto authorities lent their coordinated support to the EU-
sponsored  confidence-building  projects,  and  reactivated  their  bilateral  sectoral  working 
groups.  As  a  result,  train  passenger  traffic  to  and  from  Odessa  (Ukraine)  through  the 
Transnistrian region resumed.  

EU Border Assistance Mission to Moldova and Ukraine (EUBAM) 

The Republic of Moldova continued to be fully committed to, and participated constructively 
in  the  work  of  the  EU  Border  Assistance  Mission  to  Moldova  and  Ukraine  (EUBAM).  A 
EUBAM branch office was opened in Chisinau in February 2010. With EUBAM support, the 
Moldovan  customs  and  border  guard  services  continued  to  enhance  their  professional 
capacities, as well as inter-agency cooperation within the Republic of Moldova and between 
the  Republic  of  Moldova  and  Ukraine.  EUBAM  supported  the  demarcation  of  the  central 
segment of the Moldovan-Ukrainian State border on the Ukrainian side. 

3. 

ECONOMIC AND SOCIAL REFORM 

Macroeconomic framework and functioning of the market economy 

The  global  crisis  hit  the  Moldovan  economy  hard.  GDP  contracted  by  6%      in  2009,  with 
investment  and  remittances  falling  by  around  30%.  The  sharp  fall  in  external  financing 
sources  exposed  a  severe  financing  gap.  On  29  January  2010,  the  IMF  agreed  to  provide 
financial assistance of approximately USD 560 million (EUR 420 million) spread over three 
years. This was supplemented by EUR 90 million of EU macro-financial assistance. 

In  2010  the  Moldovan  economy  began  to  recover.  Real  GDP  grew  by  6.9%.  Private 
consumption and investment started to rise again, although external demand subtracted again 
from growth. On a sectoral basis, the recovery was broad-based, with agriculture, industry and 
services all growing.  Exports rebounded strongly but were outpaced by imports, meaning that 
the persistently high trade balance expanded by about 2% of GDP. The increase was offset by 
a rise in remittances and labour income and the current account deficit decreased slightly from 
8.5  %of  GDP  in  2009  to  8,3%    of  GDP  in  2010.  Foreign  direct  investment  inflows  are 
estimated to have risen to 3.5% of GDP from 2.3% % in 2009 (although still less than a third 
of the level in 2008). Long term external borrowing increased again together with the official 
reserves,  although  also  supported  by  the  multilateral  and  bilateral  financial  assistance.  The 
weakness  on  the  external  accounts  subsided  in  2010  while  the  IMF  programme  and  the 
international  donor  assistance  continued  supporting  the  macro-economic  stability  and  the 
government's reform agenda. 

After  decreasing  rapidly  through  2009,  inflation  edged  up  again  through  2010,  while  credit 
and domestic demand remained subdued. In particular, inflation was driven up by increases in 
food  prices  and  energy  tariffs,  the  depreciation  of  the  leu,  and  higher  excise  rates.  The 
Consumer  Price  Index  rose  to  7.41%  in  2010  (period  average).  In  response  to  mounting 
inflationary pressures, the National Bank of Moldova (NBM) reversed the trend of monetary 
easing by raising the base lending rate twice in the first quarter of 2010, up to 7% and further 

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to 8% in January 2011. The National Bank of Moldova (NBM) adopted a more explicit policy 
of  inflation-targeting,  with  a  target  of  5%  ±1,5  percentage  point  for  the  end  of  2012.  The 
NBM’s policies have started to be gauged in quarterly Monetary Policy Reports, the first of 
which was published in February 2010.  

The authorities have focused fiscal and monetary policy on ensuring macroeconomic stability 
and fiscal consolidation. The government reduced the deficit in 2010 to 2.5% of GDP ) from 
6.3% in 2009. The reduction was driven by the good performance of revenues linked to the 
economic recovery, cuts in general public services and reduced debt servicing costs, as well 
as  regulatory  rises  in  taxation  contributing  to  a  substantial  increase  in  revenue.  The  2010 
budget  included  increases  in  VAT  on  gas,  and  higher  excise  duties  on  tobacco  products, 
luxury  cars,  alcoholic  beverages  and  perfumes.  Government  debt  increased  somewhat  to 
around 26% of GDP.  

In the context of efforts to put the economy on a reform path, the government has adopted a 
wide-ranging  medium-term  structural  reform  programme  ('Rethink  Moldova').  The 
programme received the support of international donors at the Consultative Group meeting of 
March 2010 organised by the World Bank and by the Commission. In the medium term, the 
government  aims  at  further  narrowing  the  budget  deficit,  mainly  through  an  adjustment  of 
current  expenditure  on  wages,  goods  and  services,  and  subsidies.  In  line  with  Action  Plan 
objectives,  the  government  also  aims  at  reforming  the  civil  service  and  the  judiciary; 
combating  corruption;  reducing  and  streamlining  business  administration,  providing  greater 
support to small and medium-sized enterprises, and improving education and health. A total 
of EUR 1.9 billion (of which EUR 550 million from the EU) were pledged by international 
donors in support of the programme for the period 2010-13. 

Employment and social policy 

As 30% of the Republic of Moldova’s population lives in absolute poverty and 4.5% lives in 
extreme poverty, the impact of the recession on living standards has been acute. The major 
near-term challenge for the Republic of Moldova is to fight poverty and maintain basic living 
standards, whilst consolidating public finances.  

The  economic  recovery  is  not  yet  reflected  in  employment  creation.  Unemployment 
continued to rise and was estimated at 6.5% according to the survey-based ILO methodology 
at  the  end  of  2010  –  while  officially  registered  unemployment  is  estimated  at  3.4%  for  the 
same year. Youth unemployment (16-24 years old) also rose, to 18.9%. 

In January 2010, the funds for active employment policies (training, mediation, placement in 
the  labour  market)  increased,  but  the  resources  for  passive  policies  remained  much  higher. 
Active  Labour  Market  Policies  are  often  not  offered  as  comprehensive  packages  of 
employment and training services and do not reach those who are “hard to place”. In March 
2010, the government approved the 2010 National Action Plan on Employment.  

The  Republic  of  Moldova  continued  convergence  towards  EU  standards  in  the  area  of 
employment and social policy. In May 2010, the government approved national legislation in 
line  with  the  EU  directive  on  the  minimum  requirements  for  safety  and  health  at  the 
workplace,  following  the  ratification  of  the  International  Labour  Organisation  (ILO) 
Convention on occupational safety and health. The Amendment to Article 20, paragraph 1 of 
the  Convention  on  the  Elimination  of  All  Forms  of  Discrimination  against  Women  was 
ratified in September. 

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No new developments can be reported as regards social dialogue. 

As regards labour rights, the Labour Code was amended in July 2010 with changes aiming at 
respecting  human  dignity,  preventing  discrimination  based  on  gender  and against  persons 
infected with HIV, as well as at combating sexual harassment at the workplace. A government 
Decision  of  May  2010 
the EU 
Directive (89/391/EEC)  regarding  the  minimum  requirements  for health  and  safety  at  the 
workplace. 

into Moldovan  national 

transposed 

legislation 

In the area of social protection, the Republic of Moldova put in place targeted compensation 
schemes  for  heating  costs  for  families  receiving  social  assistance,  low  wage  public  sector 
workers and pensioners on low incomes. The minimum guaranteed income was increased in 
October  2010  by  40%  for  the  first  three  months  of  2011.  Although  social  aid  continued  to 
expand, as of August 2010 it only covers 27% of the poorest 10% of the population and 7.6% 
of the second poorest. The Republic of Moldova continued to extend the new targeted social 
assistance scheme and, according to the ministry of labour, Social Protection and Family over 
two  thirds  of  the  eligible  households  (a  target  agreed  with  the  IMF)  benefited  from  at  least 
one social allowance by the end of 2010 

4. 

TRADE-RELATED ISSUES, MARKET AND REGULATORY REFORM 

The EU remained the Republic of Moldova’s most important trade partner. Moldovan exports 
to  the  EU  increased  by  12.8%,  while  EU  exports  to  the  Republic  of  Moldova  increased  by 
24.7%. The Republic of Moldova’s trade balance with the EU remains substantially negative, 
accounting for EUR 948 million. The EU Autonomous Trade Preferences (ATPs) granted to 
the  Republic  of  Moldova  since  March  2008  had  a  positive  impact  on  trade  flows,  as  the 
Republic  of  Moldova  used  its  EU  import  quotas  mainly  for  non-animal  related  products.  A 
proposal  from  the  Commission  to  extend  the  current  ATP  Regulation,  which  would  also 
include a significant increase of the wine quota, will be presented to the Council in May 2011. 
The  negotiation  of  the  Agreement  for  protection  of  Geographical  Indications  made  good 
progress during the reporting period. The legal framework was further developed with, inter 
alia, the adoption of regulations on the procedure for filing, examination and registration of 
Geographical  Indications,  Appellations  of  Origin  and  Traditional  Specialties  Guaranteed. 
There  were  no  developments  in  relation  to  the  ecological  tax  on  the  eco-declaration  on 
imports of products packed in plastic recipients and in plastic coated paperboard. 

The Commission carried out a fact-finding mission to the Republic of Moldova in June 2010 
and established a detailed assessment of the Republic of Moldova’s preparedness for a deep 
and  comprehensive  free  trade  area  (DCFTA).  It  made  recommendations  on  key  reforms 
which the Republic of Moldova would need to undertake in order to start negotiations ("key 
recommendations"). To address these recommendations the Republic of Moldova adopted an 
Action Plan in October 2010. The plan was prepared in consultation with the private sector 
and provides for the creation of Mixed Working Groups for the DCFTA. 

As of January 2010 the Customs Service of the Republic of Moldova (MDCS) comes under 
the  ministry  of  finance.  The  modernisation  of  the  MDCS  in  line  with  the  EU  standards  is 
continuing via the implementation of the 2009-2011 Institutional Development Plan and the 
Strategy of Professional Training for 2010-2013. In order to strengthen customs control based 
on risk management, the MDCS developed a risk management action plan. It also drafted new 
regulations on procedures for risk assessment, analyses, profiling, monitoring and reviewing 

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of the risk management process, including the reporting system. It furthermore reinforced the 
central  and  local  levels  by  means  of  additional  personnel  and  training.  The  MDCS  set  up  a 
specialised IPR division at central level. In June 2010, the Republic of Moldova adopted a law 
for abolishing customs fees. Since July 2010 the Republic of Moldova has applied the ATA 
Carnets System for the facilitation of temporary import procedures. The MDCS launched the 
implementation  of  the  “Trustworthy  economic  operators”  programme  which  provides  for  a 
simplified  customs  control  procedure  for  reliable  companies.  In  July  2010,  the  MDCS 
approved a regulation which outlines the criteria and procedures for obtaining the said status. 
As  far  as  cooperation  with  other  enforcement  agencies  at  the  border  is  concerned,  in  April 
2010  the  MDCS  and  the  Border  Guard  started  implementing  a  new  on-line  information 
exchange system to simplify control procedures. 

On  the  free  movement  of  goods  and  technical  regulations,  the  Republic  of  Moldova 
continued  to  make  some  progress.  The  government  adopted  a  draft  law  on  accreditation  in 
August 2010 and submitted it to the parliament. The Republic of Moldova has adopted over 
700 EU standards since late 2009.  

In the area of sanitary and phyto-sanitary (SPS) rules, the Republic of Moldova took further 
steps  towards  gradual  approximation  with  EU  rules.  This  is  important,  inter  alia,  in  the 
context  of  a  future  DCFTA.  The  Republic  of  Moldova  started  developing  a  food  safety 
strategy. It adopted implementing legislation in areas such as hygiene rules and prepared other 
SPS legislation. The European Commission’s fact-finding mission of June 2010, preparing the 
DCFTA,  showed  that  the  Republic  of  Moldova  will  have  to  make  further  progress  in  the 
sector. In May 2010 the Republic of Moldova adopted rules on food of animal origin and on 
hygiene  for  food.  The  Republic  of  Moldova  trained  SPS  experts,  further  strengthened 
laboratories and continued the identification of animals with a view to developing traceability. 
In May 2010, the European Commission’s  Food  and Veterinary  Office (FVO) carried out a 
mission to the Republic  of  Moldova on residue control  in  live  animals  and  animal  products 
and the control of veterinary medicinal products. This mission monitored the implementation 
of the action plan established by the Republic of Moldova following a FVO mission in 2008. 

The business climate was improved through the adoption in June 2010 of a law on a ‘one-
stop-shop’  for  business  registration  and  in  September  2010  of  a  new  law  on  Internal  Trade 
that  clearly  stipulates  the  authorisation  procedures  for  business  activities.  The  ministry  of 
economy conducted an inventory of the permissive acts issued by public central authorities to 
entrepreneurs,  instruments  such  as  authorizations,  permits,  certificates,  approvals  and 
declarations. The study concluded that only 270 of the 400 or so acts should be maintained. 

There were no significant developments on company law and the bankruptcy law in 2010.  

On financial services, while the banking system is well capitalised, there are a large number 
of  non-performing  loans,  amounting  to  17%  of  all  bank  loans,  and  a  high  proportion  of 
foreign  currency  denominated 
loans,  around  45%,  which  heightens  exchange  rate 
vulnerability. Partly as a result of this, as well as due to falling deposits, banks significantly 
tightened  their  lending  criteria.  The  parliament  adopted  a  Law  on  Financial  Institutions  in 
September 2010. This will also lead to some modifications in the Law on the National Bank 
of  Moldova  (NBM).  The  Strategy  for  Development  of  the  Non-Banking  Financial  Sector 
2010-2013  was  adopted  in  August  2010.  It  provides  for  consolidation  of  regulatory  and 
surveillance system; development of securities markets; strengthening of a network for loan 
associations; and reduction of risks as well as protection of the rights and interests of financial 

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market  participants.  A  draft  law  on  capital  markets  was  presented  to  the  government  in 
September 2010.  

There  were  no  new  developments  in  the  policy  area  of  movement  of  capital  and  current 
payments. 

Other key issues 

The  Republic  of  Moldova  continued  to  strengthen  its  tax  administration  and  developed  a 
medium-term  strategy  for  its  reform  (State  Tax  Service  Development  Plan  for  2011-2015), 
and  a  tax  compliance  strategy  for  2011.  More  efforts  are  needed  in  terms  of  policy 
formulation. The Republic of Moldova approved a new regulation on VAT refunds in October 
2010,  which  assigns  the  responsibility  for  examination  of  requests  for  VAT  refunds  to  the 
heads  of  local  tax  units  with  a  view  to  simplifying  the  refunds  procedure  and  increasing 
transparency.  

There  was  no  progress  in  the  key  area  of  competition  policy.  Work  on  the  new  Law  on 
Competition is still ongoing.  

In  the  field  of  intellectual  property  rights,  the  Republic  of  Moldova  adopted  a  law  on 
copyrights and related rights in July 2010. The National Commission on Intellectual Property 
started work in July and is to take the lead in implementing and enforcing intellectual property 
legislation.  Enforcement  of  intellectual  property  rights  remained  an  issue  of  concern.  The 
level  of  piracy  and  counterfeiting  remained  high.  According  to  a  study  by  an  independent 
expert organisation, published in May 2010, prevalence of software piracy had risen to 91%. 
The Republic of Moldova ranks as the third most affected country in the world. The National 
Commission  on  intellectual  property  started  work  in  July  2010.  Following  the  Republic  of 
Moldova’s  request  to  negotiate  an  extension  agreement  with  the  European  Patent  Office 
(EPO), a feasibility study was launched. The Customs improved its surveillance of the borders 
by setting up a specialised IPR division and by completing its IPR register, doubling its risk 
profiles in Asycuda World from 15 to 30. 

Approximation  of  the  Moldovan  public  procurement  legislation  continued  on  the  basis  of 
the 2007 law. An independent Public Procurement Agency was created under the ministry of 
finance.  Sectoral  Legislation  Approximation  Guidelines  for  convergence  towards  EU  law 
were  developed  to  help  complete  the  work;  the  main  shortcomings  concern  the  domestic 
preference for contracts below MDL 2.5 Million (EUR 152,000), the electronic procedure and 
the  appeals  procedure.  Practice  showed  increased  public  confidence  in  the  fairness  of  the 
procurement  system.  Over  900  representatives  of  contracting  authorities  were  trained  in  the 
new procurement systems. 

The National Bureau of Statistics continued implementing the Strategy for National Statistics 
Development and Action Plan for 2008-2011. It prepared the upgrade to the Classification of 
Economic Activities of the Republic of Moldova according to the Nomenclature of activities 
within the European Union - NACE rev.2 and launched the Consumer Price Index calculator 
on its web site. In September the government approved the concept for the development of the 
Statistical  Information  System.  The  dissemination  of  statistical  information  was  further 
improved.  

In  August  2010  the  Republic  of  Moldova  adopted  the  Action  Plan  for  the  Development  of 
Accounting  and  Auditing  in  the  Corporate  Sector  for  2009-2014.  The  new  National 

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Accounting  Standards  will  be  implemented  from  January  2014  except  for  public  entities, 
starting in 2011. The ministry of finance undertook preparation and broad consultation on the 
introduction  of  International  Financial Reporting Standards (IFRS) for  SMEs as an  optional 
second level reporting standard, whilst retaining the existing National Accounting Standards, 
which were updated in line with recent developments in IFRS.  

During 2010, the ministry of finance started work on measures to improve the organisational 
structure of the Audit Oversight Council and to ensure operation in line with the EU Directive 
on  Statutory  Audit.  A  Working  Group  to  draft  proposals  for  amendments  to  the  Law  on 
Auditing was set up in September 2010. 

On enterprise policy, the government continued to implement the Institutional Development 
Plan  (IDP)  for  2009-2011  in  support  of  SMEs.  It  also  adopted  a  national  strategy  for 
consumer protection, which provides for the cooperation of governmental bodies with civic 
associations  and  for  some  public  financial  support.  The  Republic  of  Moldova  improved  the 
compliance  evaluation  process,  reinforced  consumer  protection,  made  market  supervision 
more  efficient,  facilitated  domestic  trade,  eliminated  certain  administrative  constraints  and 
reduced  operational  costs  for  authorising  trade  activities.  A  new  retail  price  formation 
mechanism for medicines was also developed. 

With  regard  to  the  management  of  public  finances,  the  ministry  of  finance  proposed 
additional amendments to the 2009 law on budget systems and processes in the context of the 
2010  Budget  Law.  Work  on  budget  preparation  and  implementation  methodologies 
progressed  satisfactorily,  but  the  new  law  on  public  sector  financial  management  and 
accountability  remains  suspended  and  further  reforms  are  being  introduced  through  other 
legislation.  Weak  implementation  capacity  within  the  Treasury,  including  staffing  and 
management,  may  be  hindering  progress  on  developing  further  budget  implementation 
methodologies.  

In  July  2010,  the  government  approved  the  public  internal  financial  control  development 
programme, setting out its strategy and action plan for implementation. In  September  2010, 
the parliament approved a new law on public internal financial control and this will enter into 
force  in  November  2011.  The  Central  Harmonisation  Unit  within  the  ministry  of  finance 
continued developing methodological norms for improved financial management and control. 
Considerable  awareness-raising  and  training  effort  will  still  be  required  in  order  to  explain 
and implement the new approach to public internal financial control 

The Court of Accounts adopted Financial Audit and Performance Audit manuals for external 
audit  in  line  with  the  International  Organisation  of  Supreme  Audit  Institutions  (INTOSAI) 
standards and prepared a Development Strategy for 2011-15.  

5. 

COOPERATION ON JUSTICE, FREEDOM AND SECURITY 

In the field of mobility, in June 2010 the EU and the Republic of Moldova established a visa 
dialogue  examining  the  conditions  for  visa-free  travel  of  Moldovan  citizens  to  the  EU  as  a 
long-term goal. The EU prepared an Action Plan on visa liberalisation and forwarded it to the 
Republic of Moldova in January 2011. The Action Plan contains two sets of benchmarks and 
identifies all the measures to be adopted and implemented as well as clear requirements to be 
achieved. 

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The implementation of the Visa Facilitation and Readmission Agreements with the Republic 
of  Moldova  has  continued.  The  European  Commission  adopted  in  October  2010  draft 
negotiating  directives  for  the renegotiation  of  the  Visa  Facilitation  Agreement  in  order  to 
align  it  with  the  new  Visa  Code  and  to  introduce  further  facilitations.  The  negotiating 
directives were approved by the Council in April 2011. 

Regarding  the  mobility  partnership,  new  initiatives  were  included,  covering  areas  such  as 
strengthening organisational and institutional capacity of the Republic of Moldova to regulate 
legal migration flows, promotion of sustainable use of remittances and their attraction into the 
local  economy,  supporting  the  implementation  of  the  EU-Republic  of  Moldova  visa 
facilitation  and  readmission  agreements,  protection  of  victims  of  trafficking,  analysing  the 
effects  of  migration  on  families  left  behind,  as  well  as  protection  of  refugees  and  asylum 
seekers. The implementation of most of these projects will start in 2011. 

As far as the asylum system is concerned, the Republic of Moldova continues to be covered 
by a Regional Protection Programme (RPP) for Eastern Europe (encompassing also Belarus 
and  Ukraine).  Phase  II  of  this  RPP  will  start  being  implemented  in  2011.  So  far  the 
Programme has been successful. The asylum legislation has been aligned with EU standards. 
However, needs to ensure that the rights of recognised refugees  are  enforced (i.e. regarding 
the issuance of travel documents). 

In July 2010, the Republic of Moldova adopted the Law on Foreigners, which regulates the 
entry,  stay  and  exit  of  foreigners.  The  law  includes  provisions  for  a  ‘one  stop  shop’  for 
foreigners to obtain residency permits. 

In the area of border management, the Republic of Moldova established a National Council 
on Border Management in September and adopted its Integrated Border Management strategy 
in  November  2010.  In  addition,  it  cooperated  closely  with  EUBAM,  FRONTEX  and  other 
partners  in  the  TYRA  joint  border  control  operation.  This  intelligence-led  action  enabled 
Moldovan and Ukrainian agencies to identify illegal migration and contraband channels and 
to develop a corresponding modus operandi.  

Concerning  the  fight  against  organised  crime,  the  ministry  of  the  interior  established  an 
inter-agency Working Group in July 2010 to draft a law and a corresponding Strategy for the 
period 2010-15.  

The Additional Protocol to the Council of Europe Convention on Cybercrime concerning the 
criminalization of acts of a racist or xenophobic nature committed through computer systems, 
which the Republic of Moldova signed in 2003, remained un-ratified. 

With regard to the fight against trafficking in human beings, an amendment to the 2005 law 
in June 2010 specified the state authorities and agencies involved in addressing the issue. In 
August,  the  National  Committee  for  Combating  Trafficking  in  Human  Beings  adopted  its 
second  National  Action  Plan  for  2010-11  establishing  state  policy  on  coordination; 
prevention; victim assistance and witness protection; criminal investigation and prosecution. 
The  number  of  victims  still  remains  high,  and  much  greater  efforts  are  required  in  order  to 
tackle organised trafficking networks and related corruption activities. The National Referral 
System  for  the  protection  of  victims  under  the  ministry  of  labour,  social  protection  and  the 
family  needs  to  be  enhanced.  Considerable  capacity-building  of  all  relevant  stakeholders 
including  law-enforcement  agencies  is  still  needed.  Further  vigorous  action  to  prevent  and 
combat violence against women is also necessary. Measures to improve reintegration of and 

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assistance  to  victims  should  be  stepped  up.  Strengthening  cooperation  with  civil  society  in 
these efforts is fundamental. 

An inter-ministerial Agreement with the Russian Federation on combating trafficking is being 
discussed with view to signature in 2011.  

Concerning  the  fight  against  drugs,  in  December  the  government  approved  a  National 
Strategy  on  Combating  Drug  Trafficking  and  Addiction  for  2010-2017  as  well  as  a  first 
Action  Plan.  The  Strategy  is  evidence-based  and  predicated  on  targeting  both  drug  demand 
and supply as well as harm reduction, in line with EU practice. In September, the Anti-Drugs 
Department  of  the  ministry  of  the  interior  participated  in  the  “Narcostop  2010”  operation 
organized by GUAM countries (Georgia, Ukraine, Azerbaijan and the Republic of Moldova) 
focusing  on  operational  coordination  of  law  enforcement  agencies  along  regional  transport 
corridors.  However,  drug  trafficking  and  its  links  with  organised  crime  remains  an  issue  of 
serious  concern  which  requires  intensified  inter-agency  law  enforcement  cooperation  both 
nationally  and  regionally.  The  development  of  an  integrated  approach  on  drug  demand  and 
supply reduction needs investment, particularly in capacity building, training and operational 
coordination.  In  October  2010,  the  Republic  of  Moldova  participated  in  the  ENP  regional 
seminar  on  the  EU  drug  monitoring  system  organised  by  EMCDDA  (European  Monitoring 
Centre for Drugs and Drug Addiction) and the Commission in Brussels. 

With  regard  to  the  fight  against  money  laundering,  the  Centre  for  Combating  Economic 
Crime and Corruption elaborated a draft National Action Plan against money laundering and 
the  financing  of  terrorism  in  February  2010.  The  Moldovan  Financial  Intelligence  Unit 
participated  in  the  Egmont  Group  meeting  in  October  2010  leading  to  negotiations  on 
information exchange agreements with Portugal, France, Malta and Azerbaijan. The Republic 
of  Moldova  continued  to  implement  the  national  control  regime  based  upon  the  40  plus  9 
Special  Recommendations  of  the  Financial  Action  Task  Force  (FATF)  and  in  line  with 
Council  of  Europe  Moneyval  recommendations.  Due  diligence,  ‘Know  Your  Customer’ 
(KYC)  and  ‘Know  Your  Business’  (KYB)  practices  continued  to  be  implemented  within 
financial institutions and reporting agencies, in line with statutory obligations. 

In the area of data protection, the Republic of Moldova signed the Additional Protocol to the 
1981  CoE  Convention  for  the  Protection  of  Individual  with  regard  to  the  Automatic 
Processing of Personal Data regarding supervisory authorities and trans-border data flows in 
April 2010.  

Regarding police and judicial cooperation, the Republic of Moldova actively participated in 
the  information  exchange  activities  of  the  SECI  centre  (Southeast  European  Cooperation 
Initiative)  and  with  other  GUAM  countries.  In  July  2010  the  ministry  of  interior  agreed  an 
Action  Plan  with  the  General  Inspectorate  of  the  Romanian  Gendarmerie.  The  government 
approved  the  concept  for  the  reform  of  the  ministry  of  interior  and  its  subordinated  and 
deconcentrated structures in December 2010. The Republic of Moldova has not yet signed the 
Second  Additional  Protocol  to  the  European  Convention  on  Mutual  Assistance  in  Criminal 
Matters. 

With regard to judicial cooperation in civil matters, no progress can be registered regarding 
the  accession  of  the  Republic  of  Moldova  to  some  important  Hague  Conventions  e.  g. 
conventions on judicial assistance (1965 Convention on the Service Abroad of Judicial and 
Extrajudicial  Documents  in  Civil  or  Commercial  Matters  and  1970  Convention  on  the 
Taking of Evidence Abroad in Civil or Commercial Matters) and on Child protection (1996 

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Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in 
respect  of  Parental  Responsibility  and  Measures  for  the  Protection  of  Children).  The 
implementation  of  the  1980  Hague  Convention  on  International  Child  Abduction  is  also  a 
matter of interest for the Commission. 

6. 

TRANSPORT, ENERGY, ENVIRONMENT, THE INFORMATION SOCIETY, RESEARCH AND 
DEVELOPMENT 

In  January  2010  the  government  started  allocating  50%  of  the  fuel  excise  tax  revenues  to  a 
road fund. This boosted the implementation of the land transport infrastructure policy. The 
procurement of works for investments financed by various donors made significant progress. 
As  regards  the  United  Nation  Economic  Commission  for  Europe  (UNECE)  -  AETR 
agreement  on  driving  times  and  rest  periods,  the  ministry  of  transport  developed  a  security 
policy for the use of digital tachographs that has been approved by the European Certification 
Authority  (ERCA).  As  from  1  January  2011,  drivers  of  vehicles  equipped  with  digital 
tachographs will be fined when conducting international transportations, if they do not have 
the  personal  driver  card.  Furthermore,  the  Republic  of  Moldova  approved  a  National  Road 
Safety action plan. 

The Republic of Moldova cooperated closely with the European Aviation Safety Agency and 
plans  to  achieve  a  higher  level  of  integration  with  the  EU  through  the  negotiation  of  a 
comprehensive aviation agreement aimed at creating a Common Aviation Area.  

As regards inland waterways, there is a need to ensure that the Republic of Moldova's inland 
waterway  fleet  will  meet  UNECE  requirements.  In  the  maritime  sector,  the  Republic  of 
Moldova's  main  port,  in  Giurgiulesti  on  the  Danube  River,  substantially  increased  the 
turnover  of  goods.  Construction  work  to  extend  the  port  for  container  handling  is  ongoing. 
Maritime  safety  remains  an  issue  of  great  concern.  The  Moldovan  fleet  still  figures  in  the 
‘High  Risk’  category  of  the  black  list  of  the  Paris  Memorandum  of  Understanding  on  port 
state control.  

In May 2010 following the entry into force of the new electricity and gas laws (in February 
2010), the Republic of Moldova became a member of the Energy Community. The Republic 
of  Moldova  initiated  an  update  of  its  energy  strategy.  The  situation  in  the  energy  sector 
remained difficult due to the heavy dependence on (Russian) imports, major inefficiencies and 
historical debts. In March 2010, the Republic of Moldova adopted a plan to implement the EU 
acquis  in  accordance  with  its  obligations  under  the  Energy  Community  Treaty.  In  May,  the 
regulator  adopted  rules  to  enhance  transparency  in  its  decision  making.  The  Republic  of 
Moldova  continued  to  assess  ways  to  address  historical  gas  supply  debts  including  gas 
supplies to Transnistria. The Republic of Moldova started addressing losses and arrears in the 
heating sector. Since January, the Republic of Moldova has transferred the responsibility for 
setting  heat  tariffs  from  the  municipalities  to  the  energy  regulator.  In  January  and  May,  the 
Republic of Moldova adjusted heat, electricity and gas tariffs.  

The Republic of Moldova pursued preparations to assess the possibility to join, together with 
Ukraine,  the  interconnected  electricity  networks  of  continental  Europe.  It  continued  the 
construction  of  the  electricity  interconnection  Gotesti-Falciu  (Romania)  and  further  studied 
the  Balti-Suceava  (Romania)  electricity 
interconnection.  The  Republic  of  Moldova 
rehabilitated  electricity  and  gas  networks  and  further  reduced  network  losses.  It  drafted  an 
inventory  for  the  maintenance  of  gas  pipelines.  The  Republic  of  Moldova  continued  to 

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implement its programme to gasify the country and assessed the possibilities for underground 
gas storage. The Republic of Moldova and Romania studied the construction of the reversible 
Ungheni-Iasi gas pipeline.  

In July 2010 the Republic of Moldova adopted an energy efficiency law, which provides, inter 
alia,  for  the  establishment  of  an  energy  efficiency  agency.  The  Republic  of  Moldova  took 
steps towards an energy efficiency programme, the updating of the law on renewable energy, 
as well as action plans on renewable energy and biofuels. The Republic of Moldova needs to 
step up its efforts to update and implement its energy strategy in this area. 

In the field of climate change, the Republic of Moldova completed a first draft National Low 
Emission  Development  Strategy  and  a  draft  National  Climate  Change  Adaptation  Strategy. 
The  Republic  of  Moldova  continued  to  prepare  projects  under  the  Clean  Development 
Mechanism  (CDM),  even  if  no  new  projects  were  registered  at  the  UN  level,  leaving  the 
overall number of registered projects at four. The European Commission continued to support 
the  Republic  of  Moldova  in  the  implementation  of  the  Kyoto  Protocol.  The  Republic  of 
Moldova is encouraged to fully implement the Cancun agreement and in particular devise a 
low carbon development strategy including update information on target or actions that it will 
implement 

Regarding the environment, the legislative framework for environmental policy continues to 
require  further  development,  and  implementation  of  legislation  remains  a  challenge.  There 
was  little  development  in  the  preparation  of  a  new  environment  framework  law,  a  law  on 
environmental impact assessment and a new water law, as well as legislative amendments on 
nature  protection.  The  Republic  of  Moldova  made  progress  in  developing  river  basin 
management  plans  with  neighbouring  countries.  It  also  took  some  steps  to  promote  the 
integration  of  environmental  considerations  into  other  policy  sectors,  such  as  energy.  The 
ministry  of  environment  obtained  additional  staff,  although  further  strengthening  of 
administrative  capacity  at  all  levels  remains  a  major  challenge.  Coordination  between 
authorities continues to require attention.  

Procedures  and  consultation  with  the  public  in  the  context  of  environmental  assessments 
continue  to  require  particular  attention.  The  Republic  of  Moldova  finalised  a  plan  for 
implementing  the  Aarhus  Convention.  The  Moldova  Regional  Environmental  Centre 
continued to play an important role in enhancing stakeholder participation and networking in 
the  area  of  the  environment.  The  Republic  of  Moldova  made  no  significant  progress  in  the 
ratification  of  remaining  relevant  UNECE  protocols.  Furthermore,  particular  attention  is 
needed with regard to the implementation of several agreements which are already ratified.  

The Republic of Moldova participated in the EU Water Initiative, including a national policy 
dialogue, as well as in the International Commission for the Protection of the Danube River. 
Cooperation and information exchange took place between the Commission and the Republic 
of  Moldova,  including  on  the  2001  national  concept  of  environment  policy,  water,  forestry, 
waste  management,  management  of  environmental  information,  nature  protection  and  air 
quality.  

the 

field  of  civil  protection,  an  administrative  arrangement 

In 
reinforce 
cooperation between the authorities of the Republic of Moldova and the EU Civil Protection 
Mechanism is under preparation.  There are also activities under the EaP framework (please 
see the sectoral report). 

to 

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In  the  information  society  sector,  the  National  Regulatory  Agency  for  Electronic 
Communications and Information Technology started the market analysis process, identified 
six  relevant  markets  and  designated  the  incumbent  operator  as  having  significant  market 
power  in  two  of  them  (wholesale  access  to  network  infrastructure  at  a  fixed  location  and 
wholesale  broadband  access).  This  is  expected  to  lead  to  obligations  imposed  on  these 
operators  that  will  open  the  fixed  telecommunications  markets  to  competition.  Other 
important  measures  concern  the  management  of  the  National  Numbering  Plan  and  the 
National Table for Frequencies Allocation, the alignment to the EU decision on harmonised 
numbers  for  services  of  social  value  and  the  elaboration  of  the  methodology  to  be  used  for 
drafting the cost calculation models for interconnection and access services. 

Some  positive  initiatives  are  reported  in  the  field  of  e-government,  including  the 
establishment  of  an  e-government  centre  in  August  2010.  To  improve  accessibility  in  rural 
areas, the International Telecommunication Union (ITU) will implement a pilot project on the 
connection  of  education  institutions  to  broadband  Internet  in  rural  areas  of  the  Republic  of 
Moldova.  The  Republic  of  Moldova  has  made  progress  to  improve  high  speed  connectivity 
with  research  and  education  networks.  This  included  the  inauguration  of  the  fibre  link 
between  the  Republic  of  Moldova  and  the  GEANT  network  node  in  Romania,  which  took 
place in May 2010. Via this link, the Moldovan research and education community has full 
access to its European and global partners. 

Regarding the audiovisual sector, there is a need to ensure that all enacted legislation in the 
field of media complies with European standards on media regulation, in particular the laws 
on state secrets and on transparency in the public decision-making process which entered into 
force  in  2009.  There  is  also  a  need  to  ensure  the  further  approximation  of  audiovisual 
legislation  and  standards  to  those  of  the  EU,  in  particular  with  regard  to  the  ‘Audiovisual 
media services directive’. 

Investment  in  Research  and  Innovation  remains  at  relatively  modest  levels.  During  2010, 
the  Academy  of  Science  continued  to  be  very  active  in  preparing  the  Moldovan  research 
community  for  association  to  the  7th  Framework  Programme  (FP7),  by  implementing  a 
comprehensive  action  plan  to  increase  research  capacity.  Although  the  numbers  of 
applications  from  Moldovan  research  organisations  to  FP7  increased  slightly  in  2010,  the 
overall number of applications still remains relatively low. 

The  Republic  of  Moldova  continued  to  participate  actively  in  the  International  Science  and 
Technology  Cooperation  Network  for  Eastern  European  and  Central  Asian  countries  (FP7 
IncoNet EECA project), which aims to support a bi-regional EU-EECA policy dialogue and 
to increase EECA participation in FP7. The Republic of Moldova is a target country under the 
new FP7 International Cooperation Network for Central Asia and South Caucasus countries 
(FP7 IncoNet CA/SC) which was launched in April 2010 and aims to strengthen and deepen 
the EU S&T cooperation with the CA/SC countries. 

The Republic of Moldova is also taking an active part in the Black Sea ERA-NET project, the 
aim of which is to contribute to the coordination of national research programmes (from EU 
member  states  and  partner  countries)  targeting  the  extended  Black  Sea  region.  The  project 
consortium  for  the  Black  Sea  ERA-NET  project  recently  launched  a  first  joint  call  for 
research proposals to develop innovative solutions for sustainable development in the region.  

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7. 

PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH 

The  ministry  of  education  drafted  a  new  Education  Code  which  was  submitted  to  public 
consultation  in  April  and  presented  to  parliament  in  June,  but  not  yet  adopted.  It  includes 
important  provisions  on  decentralization  to  the  regions,  lifelong  learning,  quality  assurance 
and the involvement of social partners in education. Most higher education institutions have 
achieved Bologna Process objectives, such as the implementation of a two-cycle system; the 
quality assurance measures; the European Credit Transfer and Accumulation System (ECTS); 
and the recognition of diplomas. However, further work is required on the development of a 
national  qualifications  framework  that  is  compatible  with  the  European  Qualifications 
Framework (EQF) and on the organization of third cycle for doctoral studies.  

In the field of vocational education and training (VET), reforms continued to orient training 
provision  towards  labour  market  demands  in  line  with  the  2007  National  Strategy.  The 
Consultative  Council  finalised  a  first  draft  of  a  comprehensive  National  Qualifications 
Framework with the technical support of the European Training Foundation. The first national 
report  under  the  Torino  Process,  spearheaded  by  the  Republican  Centre  for  VET 
Development,  identified  the  following  as  future  priorities:  a  clear  role  for  social  partners  in 
training  provision,  learning  opportunities  for  adults  and  young  people  outside  formal 
education, and effective financing. As in 2009, EU assistance focused on improving training 
content  in  the  context  of  the  EU-Republic  of  Moldova  Mobility  Partnership  with  results 
achieved in the definition of occupational standards and development of a competence-based 
approach  in  education  and  training.  Continuing  work  on  social  dialogue  in  education  and 
training is needed in order to enable training provision and policy to better meet the demands 
of employers and the labour market.  

Higher education reform continued to benefit from participation in Tempus, with 5 projects 
selected under the third Call for Proposals for Tempus IV, including support for the creation 
of  doctoral  studies  in  line  with  policy  commitments  under  the  Bologna  Process.  The 
programme  continues  to  facilitate  implementation  of  Bologna  reforms  with  all  17  public 
universities taking part.  

Six  Moldovan  students  were  awarded  scholarships  for  Erasmus  Mundus  Masters  Courses 
under Action 1. In 2010, Moldova State University became the first Moldovan university to 
be  selected  as  a  full  partner  in  an  Erasmus  Mundus  Action  1  project,  delivering  a  masters 
course on migration with EU partner universities. Student and academic mobility was further 
enhanced under Action 2 with the expected award of 66 grants. The Academy of Economic 
Studies  received  a  Jean  Monnet  project  to  increase  the  understanding  of  the  Eastern 
Partnership by public servants, students and academics.  

Moldovan  youth  organisations  and  young  people  continued  to  benefit  from  participation  in 
the  Youth  in  Action  Programme,  with  a  particular  increase  being  noted  in  the  number  of 
young people from the EU who are participating in voluntary service actions in the Republic 
of Moldova. In the area of culture, three Moldovan cultural organizations participated in the 
2010  ENP  Special  Action  under  the  Culture  Programme.  The  ministry  of  culture  began 
preparing four legislative proposals on the protection of cultural heritage; the first of these – 
on archaeological sites - was adopted in September.  

The  government  continued  to  implement  its  National  Strategy  for  the  development  of  civil 
society  2008-2011.  In  this  respect,  the  2008  law  on  transparency  in  public  decision-making 
was  amended  in  September,  while  the  strategic  partnership  between  public  authorities  and 

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civil  society  developed  further  through  the  facilitation  of  public  dialogue,  via  the  National 
Participation Council and access to a specific website.  

The  Republic  of  Moldova  continued  to  reform  the  health  sector.  The  challenges  include 
disparities in health services related to, inter alia, place of residence or wealth. In July 2010, it 
adopted  a  primary  health  care  strategy  for  the  period  2010-2013.  The  Republic  of  Moldova 
continued to renovate and build hospitals, and it adopted a hospital development programme 
in May 2010. It also worked towards a health information system that will be aligned with EU 
and  international  practice.  In  May  2010,  the  Republic  of  Moldova  adopted  measures 
enhancing state supervision in public health. It also established a Transplantation Agency and 
started preparations to adapt the law on organs, tissues and cells to EU rules. The Republic of 
Moldova  continued  to  participate  in  the  Commission’s  HIV/AIDS  think  tank.  It  adopted 
programmes on the prevention and control of HIV/AIDS and Sexually Transmitted Infections, 
and on the control of tuberculosis for the period 2011-2015. 

8. 

FINANCIAL COOPERATION – 2010 KEY FACTS AND FIGURES 

Cooperation framework 

The  Mid-Term  Review  of  the  programming  document  confirmed  that  the  Country  Strategy 
Paper  adopted  in  2007  remains  a  valid  framework  for  cooperation  with  the  Republic  of 
Moldova.  The  new  National  Indicative  Programme  (NIP)  2011-2013  for  the  Republic  of 
Moldova was adopted in May 2010 and has a budget of EUR 273.1 million. The programme 
is geared towards supporting the achievement of key policy objectives as outlined in the EU-
Republic of Moldova Action Plan, and pursues three priorities: (1) good governance, rule of 
law  and  fundamental  freedoms;  (2)  social  and  human  development;  and  (3)  trade  and 
sustainable development. 

The NIP 2011-13 includes a specific appropriation to finance new actions under the Eastern 
Partnership, notably a Comprehensive Institution Building programme (CIB) (a minimum of 
EUR  41.2  million)  and  Cohesion  Policy  (a  minimum  of  EUR  6.9  million).  The  CIB 
Framework  Document  was  signed  in  November  2010  and  identified  the  following  key 
institutions / institutional clusters for capacity-building support: public administration reform; 
reform  of  the  justice  system  and  law  enforcement  institutions;  and  preparations  for  a  future 
Deep and Comprehensive Free Trade Area (DCFTA) with the EU.  

Implementation 

The implementation of measures covered by the Annual Action Programmes (AAP) for 2007, 
2008 and 2009 continued. The Sector Budget Support Programme (SBS) in the area of social 
protection  was  further  implemented;  it  helped  the  government  cushion  the  effects  of  the 
increase in energy tariffs on the vulnerable layers of the population. The SBS programme in 
the  area  of  healthcare  system  reform  rewarded  the  progress  made  in  areas  such  as:  (1) 
management stewardship of the healthcare system, (2) funding of the healthcare system and 
mechanisms of payment for healthcare services, (3) the delivery of healthcare services and (4) 
resource  management.  The  2009  SBS  programme  in  the  area  of  water  and  water  sanitation 
experienced some delay due to the Republic of Moldova’s only partial compliance with the 
conditions set for disbursement. Besides, EU assistance continued to be implemented through 
other  aid  modalities  such  as  TAIEX,  twinning,  SIGMA  and  Technical  Assistance.  In 
particular,  a  High  Level  Advisory  Group  of  10  experts  was  recruited  at  the  request  of  the 

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government  to  provide  strategic  advice  in  a  number  of  areas.  The  EU  continued  to  support 
reform  efforts  and  committed  assistance  for  a  total  amount  of  EUR  66  million  under  the 
bilateral  appropriation  of  the  European  Neighbourhood  and  Partnership  Instrument  (ENPI). 
The  AAP  2010  comprises  a  Sector  Policy  Support  Programme  on  economic  stimulation  of 
rural areas (EUR 45 million), an energy and biomass project (EUR 14 million) and Technical 
Assistance  &  Twinning  in  support  of  the  implementation  of  the  EU-Republic  of  Moldova 
ENP Action Plan (EUR 7 million).  

in  2007-2013).  Priorities  are  competitiveness  of 

In  addition  to  the  bilateral  allocation,  the  Republic  of  Moldova  also  benefited  from 
cooperation  activities  financed  under  the  ENPI  cross-border,  inter-regional  and  regional 
programmes.  The  Republic  of  Moldova  participated  in  the  ENPI  Cross-Border  Cooperation 
(CBC) programme Romania/Ukraine/Republic of Moldova (EUR 126.7 million for the whole 
the  border  economy, 
programme 
environment,  emergencies  and  interaction  between  people  and  communities  living  in  the 
border areas. The Republic of Moldova also participated in the ENPI CBC Black Sea Basin 
programme (EUR 21.3 million for the programme in the period 2007-2013 with a perspective 
of an additional increase in its budget). The main priorities of this programme are to support 
cross-border partnerships for economic and social development based on combined resources, 
to  share  resources  and  competencies  for  environmental  protection  and  conservation,  and  to 
support  cultural  and  educational  initiatives  for  the  establishment  of  a  common  cultural 
environment  in the  Basin. The Republic of Moldova also  participated in South-East Europe 
Transnational Cooperation Programme to which the country was admitted in May 2008 with 
the  prospect  of  being  able  to  access  ENPI  Funds  for  this  co-operation.  Since  March  2011 
ENPI  funds  are  integrated  in  the  South-East  Europe  programme  and  are  managed  by  the 
authorities of the programme as for ERDF. On the other hand, due to its geographical location 
in  the  Danube  Basin,  the  Republic  of  Moldova  is  part  of  the  Danube  macro-region  and 
therefore  plays  an  important  role  in  achieving  objectives  of  the  future  EU  Strategy  for  the 
Danube Region as a whole. 

Under  the  ENPI-financed  Neighbourhood  Investment  Facility  (NIF),  one  project  was 
approved for the Republic of Moldova in 2010: the Water Utilities Development Programme 
(NIF grant contribution: EUR 10 million, total project cost: EUR 31.5 million). 

Other  EU  instruments  supplement  the  ENPI  assistance  package.  The  Republic  of  Moldova 
benefited  from  cooperation  activities  financed  under  horizontal  instruments  such  as  the 
European Instrument for Democracy and Human Rights (EIDHR) and the Development Co-
operation Instrument (DCI) thematic programmes: Non-State Actors and Local Authorities in 
Development (NSA-LA), Investing in People, Migration and Asylum, and Environment and 
sustainable  management  of  natural  resources  including  energy.  The  EU  adopted  a  EUR  90 
million  package,  tied  to  public  finance  reforms  and  improvements  in  financial  stability  in 
2010, under the Instrument for Macro-Financial Assistance. 

In 2010 the European Investment Bank signed lending operations to the Republic of Moldova 
for  an  amount  of  EUR  150  million  of  which:  (1)  EUR  75  million  to  upgrade  the  quality  of 
Moldovan wine production and (2) EUR 75 million to support the rehabilitation and upgrade 
of priority roads. 

Donor coordination 

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In  2010,  the  EU  Delegation  in  the  Republic  of  Moldova  played  an  important  role  in  the 
coordination  of  assistance  activities  in  particular  among  EU  member  states.  Most  donors 
signed the “Partnership principles” with a view to enhancing donor coordination in the future.  

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