Relations between the EU and the Republic of Moldova have intensified since the Partnership and Cooperation Agreement of 1994.
Relations between the EU and the Republic of Moldova (hereinafter "Moldova") have intensified in the past years. Moldova joined the EU's Eastern Partnership in 2009 and the EU-Moldova Association Agreement entered into force on 1 July 2016. This includes the introduction of a Deep and Comprehensive Free Trade Area (DCFTA).
The Association Agreement strengthens Moldova's political and economic ties with the EU. It sets out a reform plan in areas vital for good governance and economic development and strengthens cooperation in several sectors. By signing the agreement, Moldova committed to reforming its domestic policies on the basis of EU laws and practice. To do so, the country benefits from substantial EU support.
Since 28 April 2014, Moldovan citizens with a biometric passport can travel to the Schengen area without a visa. Since then, more than 800,000 Moldovan citizens have benefitted from the visa-free regime. The EU has provided €21 million to Moldova for reforms in the areas of justice and security, which are related to visa liberalisation.
For Moldovans with non-biometric travel documents, the upgraded Visa Facilitation Agreement continues to apply, with a reduced visa fee of €35 and a fee waiver for students, those visiting family in the EU and many other groups of citizens. The Visa Facilitation Agreement also provides for easier access to multiple-entry visas with longer validity. The refusal rate for visa applications has sharply decreased from 11.4% in 2010 to 4.4% in 2015.
The EU and Moldova also signed a Mobility Partnership in May 2008. The Mobility Partnership is the most elaborated bilateral cooperation instrument in the domain of mobility. It offers a political framework for comprehensive and tailor-made dialogue and cooperation with Moldova. This includes a set of targets and commitments, as well as a package for specific support measures offered by the EU and interested EU Member States.
The Deep and Comprehensive Free Trade Area between the European Union offers Moldova privileged access for goods and services to the EU market. The implementation of the Deep and Comprehensive Free Trade Area is underpinned by substantial financial support programs from the EU side.
The European Union's imports from Moldova increased by 5% in 2015, as did the value of the EU's imports from Moldova: up to the value of €1.2 billion, an increase of 21% since 2013, the year before the DCFTA was signed. The European Union is Moldova's first trading partner and the first investor in the country, accounting for 63% of total Moldovan exports, up from 53% in 2014. The value of certain imports grew more strongly, for example agricultural imports from Moldova grew by 9% in 2015. Following sharp increases in 2014 and continued growth in 2015, statistics for the first half of 2016 show that the positive trend of growth in Moldovan exports to the EU continues to be seen, in particular for sunflower seeds, nuts, grapes, dried fruits, wheat, barley, sugar, certain types of paper, clothing and bedding articles such as mattresses.
Overall, trade between the EU and Moldova decreased by 6% in 2015, largely due to the strong decline of EU exports to Moldova. EU exports to Moldova have significantly declined (by 11%) since 2014, and amounted to €2.08 billion in 2015.
Access to the European markets and benefits from the DCFTA will further increase once Moldova has aligned its health and safety standards to those of the EU. The food safety reform will enable Moldova to export its agricultural products, notably animal products, whose safety for consumers is strictly controlled in the EU. Overall, if reforms are completed, the DCFTA is expected to boost Moldova's GDP by 5.4% annually.
The DCFTA is compatible with all other free trade agreements that Moldova is part of, and does not limit Moldova's ability to export its products to other countries. Moldova also retains full sovereignty over its trade policy since it is not a member of any customs union. Domestic reforms in Moldova, together with EU support, will upgrade the quality of Moldovan products and services. This will open trade opportunities well beyond the EU market and bring growth and jobs to Moldova.
EU assistance to Moldova supports the objectives of the Association Agreement. It is linked to the country's reform commitments under the Association Agreement and aims at improving the quality of life of ordinary Moldovans in a tangible and visible manner, strengthening the rule of law, as well as improving the business climate, with a view to reaping the benefits from the DCFTA, and supporting greater connectivity between Moldova and the EU in the areas of energy and transport.
New programmes launched during 2014 to 2016 amounted to € 310 million. They are focusing on four priority sectors: public administration reform, agriculture and rural development, police reform and implementation of the Association Agreement. In addition, assistance is provided to civil society. To support the implementation of the DCFTA, the EU helps Moldova to meet the requirements for access to the EU market. This includes: improving the policy framework and legislation on small business and competitiveness; reinforcing quality infrastructure and market surveillance (metrology, standards, conformity controls); information campaigns; sustainable management of natural resources in rural areas; supporting Moldovan businesses to export to the EU and promoting the agro-food sector.
EU assistance is conditional to the progress of the country in its reform agenda. To this respect, when major frauds in the Moldovan banking system emerged in 2014-2015, the European Union suspended budget support payments to the Moldovan authorities. The EU resumed its budget support disbursements following the agreement at the end of 2016 on a programme between Moldova and the International Monetary Fund, whose main aim is to stabilise the banking sector in Moldova, and also given Moldova's compliance with other budget support conditions (e.g. progress on public finance management). The Commission will continue to apply strict conditionality; in doing so, it will pay particular attention to the need for the country to deliver on key reforms, especially in the justice area, the financial sector, the energy sector, public administration and on prevention and fight against corruption (see Council conclusions on Moldova, 15 February 2016), and to the sound implementation of the IMF agreement.
Tangible results of EU assistance for Moldovan citizens include:
New drinking water supply infrastructures were built in the Municipalities of Nisporeni, Vărzăreşti and Grozeşti. As a result, approximately 15,700 people are provided with safe and sufficient drinking water.
Biomass heating systems have been installed in more than 225 schools, kindergartens, community centres and village halls, making heating better and cheaper. 47 of these sites were also equipped with Solar Hot Water Systems. 35 new biomass businesses were set up and over 400 new jobs have been created in communities. Last but not least, these developments diversified the country's energy supply sources.
Improved public transport in Chisinau and Balti has been funded by the EU.
The EU is supporting financially the construction of the Ungheni – Chisinau gas pipeline. The new pipeline will finish connecting gas transportation systems from the EU (i.e. Romania) to Moldova. This project will enhance energy security of the country and also contribute to increasing the competitiveness of the Moldovan energy market for the benefit of all citizens.
More than 350 Moldovans living in the diaspora and wanting to return received financial incentives to complement their own investments back in Moldova.
Eight business incubators have been set up in the areas of Leova, Stefan Voda, Rezina, Singerei, Cosnita, Cedir Lunga, Nisporeni and Cimislia.
Confidence building measures have allowed 70 people from both sides of the Nistru river to set up businesses and create 350 jobs.
In 2015, more than 350 Moldovan students have benefitted from Erasmus+ scholarships to study in the European Union.
The restoration of the Soroca fortress, major Moldovan national heritage, was financed by the European Union.
Moldova also benefits from regional programmes for the Eastern Partnership region, supporting SMEs, energy, transport, environment, access to finance, growth as well as the overall business environment. Moldova also participates in Cross Border Cooperation (CBC) programmes such as the Black Sea Programme, the Romania-Ukraine-Moldova ENPI Land-Border Programme, and the INTERREG Danube Transnational Programme.
Overall, the EU estimates that its cooperation projects have created 20,000 jobs in Moldova.
An important number of EU Member States and donors are present in the country, as well as World Bank, EBRD, EIB, and UNDP. Donor coordination is well in place in Moldova. EU Delegation, EU Member States and like-minded donors are working closely together to jointly plan their financial assistance to Moldova for 2017-2020, with a view both to increasing the impact of their support and strengthening the European visibility and leverage.
Click on the "see also" links below to watch how EU assistance has changed the lives of Moldovan citizens or watch the series of videos on YouTube.
Moldova became the first Eastern Partnership country to participate in the EU's Competitiveness of Enterprises and SME programme, which promotes entrepreneurship and entrepreneurial culture, improves access to markets and finance for SMEs and boosts the competitiveness of enterprises.
Moldova was also the first Eastern Partner to be associated with theHorizon 2020programme, through which the EU supports research and innovation. It also participates in the Erasmus+ programme for education, training, youth and sport. In March 2015, Moldova joined the European programme for culture Creative Europe.
TheEuropean Union Border Assistance Mission to Moldova and Ukraine was launched in 2005. Illicit cross-border activities, including trafficking of human beings, smuggling and other illegal trade, were occurring along the Moldova-Ukrainian border. This was aggravated by the fact that the Moldovan government had no direct control over the secessionist region of Transnistria in Moldova (which stretches along 454 km of the Moldova-Ukraine border). The aim of EUBAM is to improve border governance and management, help combat illicit practices and improve the regional security and support economic development.
Moldova is one of the non-EU states that participate in the EU's Common Security and Defence Policy (CSDP) missions and operations. Moldovan experts have contributed to the EU Training Mission in Malisince 2014 and joined the EU Military Advisory Mission in the Central African Republicin 2015. At Moldova's request, Security Sector Reform advisors from three EU countries helped with the reform process of the security sector in 2014-2015. The EU has continued providing security sector reform-related advisory support under a new phase of an advisory programme to Moldova since 2016.
The EU participates as an observer in the 5+2 negotiation process on the settlement of the Transnistrian conflict, and it continues to support a comprehensive, peaceful settlement based on the sovereignty and territorial integrity of Moldova with a special status for Transnistria.
The EU supports, to the tune of €28 million, confidence building measures designed to foster regional development in Gagauzia and to facilitate the settlement of the Transnistrian conflict by increasing confidence between Chisinau and Tiraspol through joint initiatives involving local authorities, civil society organizations and other stakeholders from both sides.