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The economical relations between Moldova and European Union. The perspectives of integration
Scobiolă Eugen BA -101
The development of the national economy in 2006 was negatively affected by a number of external factors. Since 2000 the economy has been on the rise. as well as the implementation of tax reforms aimed at improving the tax collection system. The economic crisis in Moldova lasted for 10 years (from 1990 to 1999). the national currency exchange rate remained rather stable while the currency reserves increased substantially. During the period 2000-2005 the GDP in real terms increased with 43 percent. The economic growth and circumspect external loans allowed for a decrease in the share of the public debt and the publicly guaranteed debt from 79 percent of GDP in 2000 to 27 percent in 2005. The country continues to maintain macroeconomic stability. which had a partly impact on poverty reduction.3 percent. Inflation reduced from 44% in 1999 to 10% in 2005. 2 . the Republic of Moldova passed through a complex stage of transition to the market economy and experienced a significant economic recession.Introduction After the collapse of the USSR and the declaration of its I independence on 27 August 1991. Consequently the poverty rate decreased with 41. Besides. This period is characterized by a steady recovery of the production output. These achievements were due to the promotion of an appropriate monetary and credit policy coupled with a rigid fiscal and budgetary policy. During this period the GDP decreased almost by three times.
economic and institutional reforms. The EU is developing an increasingly close relationship with Moldova. to gradual economic integration and a deepening of political cooperation. A joint EU-Moldova ENP Action Plan lays out the strategic objectives based on commitments to shared values and effective implementation of political. due to which the trade balance deficit and the deficit of balance of payments increased. coupled with limited access to other export markets. and a decrease in the industrial and agricultural outputs and the quantity of exported goods. ban on the export of certain goods to the Russian Federation. upon need. double increase in prices for energy resources imported from Russia. This led to some deterioration of macroeconomic indicators. and a significant rise in prices for energy resources on other world markets. Economic difficulties faced by the Republic of Moldova in 2006 could have a negative impact on the population’s living standards. The EU-Moldova ENP Action Plan is based on the Partnership & Cooperation Agreement (PCA) and 3 . The external factors in 2006 created certain difficulties for the Government’s activity aimed at achieving its economic and social objectives. energy resources and the increase in related production costs. Therefore. further measures to attenuate and prevent potential shocks in the social and economic development of the country. Moldova is a partner country within the European Neighbourhood Policy (ENP). and is dependent on prices for gas. As a result there was an acceleration of inflationary processes. going beyond co-operation.These included unfavourable weather conditions. the Government and the National Bank remain committed to undertake. There was registered a reduction of the GDP growth rate. The increase in inflation does not have a monetary nature.
One of the key objectives of this action plan will be to further support a viable solution to the Transnistria conflict. It will contribute to the further development of our strategic partnership. security.encourages and supports Moldova’s objective of further integration into European economic and social structures. The European Neighbourhood Policy of the European Union sets ambitious objectives based on commitments to shared values and effective implementation of political. going beyond co-operation. The European Union and Moldova are determined to make use of this occasion to enhance their relations and to promote stability. enhanced cross border cooperation and shared responsibility in conflict prevention and conflict resolution. joint ownership and differentiation. The pace of progress of the relationship will acknowledge fully Moldova’s 4 . Introduction The enlargement of the European Union on 1 May 2004 has brought a historical shift for the Union in political. geographic and economic terms. further reinforcing the political and economic interdependence between the EU and Moldova. The level of ambition of the relationship will depend on the degree of Moldova’s commitment to common values as well as its capacity to implement jointly agreed priorities. economic and cultural relations with the EU. The approach is founded on partnership. to involve a significant measure of economic integration and a deepening of political co-operation. Enlargement offers the opportunity for the EU and Moldova to develop an increasingly close relationship. economic and institutional reforms. Moldova is invited to enter into intensified political. European Union – Moldova ENP Action Plan 1. security and well-being.
and the possibility for Moldova to participate progressively in key aspects of EU policies and programmes. In this context. It will furthermore help to devise and implement policies and measures to promote economic growth and social cohesion. Moldova and the EU will cooperate closely in implementing this Action Plan.efforts and concrete achievements in meeting those commitments. thereby contributing to the long-term objective of sustainable development. through further development of mechanisms for political dialogue. to reduce poverty and to protect the environment. This Action Plan is a first step in this process. For the near future the PCA remains a valid basis for EU-Moldovan cooperation. it will build solid foundations for further economic integration based on the adoption and implementation of economic and trade-related rules and regulations with the potential to enhance trade. • An upgrade in the scope and intensity of political cooperation. Implementation of the Action Plan will significantly advance the approximation of Moldovan legislation. including through a stake in the EU’s Internal Market. The EU Moldova Action Plan is a political document laying out the strategic objectives of the cooperation between Moldova and the EU. norms and standards to those of the European Union. 5 . New partnership perspectives The European Neighbourhood Policy opens new partnership perspectives: • The perspective of moving beyond cooperation to a significant degree of integration. Its implementation will help fulfil the provisions in the Partnership and Cooperation Agreement (PCA) and will encourage and support Moldova’s objective of further integration into European economic and social structures. The European Union acknowledges Moldova’s European aspirations and Moldova’s “Concept for the Integration of the republic of Moldova into the EU”. investment and growth. It covers a timeframe of three years.
promoting cultural. • Possibilities of gradual opening of or reinforced participation in certain Community programmes. environmental. • Opening as soon as possible a Commission Delegation in Moldova. • The opportunity for convergence of economic legislation. and targeted advice and support for legislative approximation through a mechanism such as TAIEX. drawing on the instruments at the EU’s disposal. In light of the fulfilment of the objectives of this Action Plan and of the overall evolution of EU – Moldova relations. The Commission is furthermore proposing a new European Neighbourhood and Partnership Instrument (ENPI) for this purpose. The EU is ready to consider ways to strengthen further its engagement.• Continuing strong EU commitment to support the settlement of the Transnistria conflict. the opening of economies to each other. and in close consultation with the OSCE. • Support including technical assistance and twinning to meet EU norms and standards. • establishing a constructive dialogue on visa cooperation between the EU and Moldova. technical and scientific links. including an exchange of views on possibilities of visa facilitation in compliance with the acquis. also covering the very important aspects of cross-border and trans-national cooperation between Moldova and the (future) Member States. educational. • Increased financial support: EU financial assistance for Moldova will be available to support the actions identified in the present document. consideration will be given to the possibility of a new contractual relationship. • Deepening trade and economic relations. and the continued reduction of trade barriers which will stimulate investment and growth. The Republic of Moldova and the Commission put forward a number of 6 .
• improving the investment climate through appropriate structural reforms aimed at ensuring non-discriminatory. implementing actions aimed at poverty reduction. particular attention should be given to: • sustained efforts towards a viable solution to the Transnistria conflict. Priorities for Action The Action Plan sets out a comprehensive set of priorities in areas within the scope of the Partnership and Cooperation Agreement. • ensuring respect for the freedom of the media and the freedom of expression. 7 . by ensuring effective control of the origin of goods from Moldova. The advisability of any new contractual arrangements will be considered in due time. all of which are important. transparent and predictable business conditions and by the fight against corruption. • working towards the EU granting Autonomous Trade Preferences. • ensuring the efficient management of migratory flows. • progress towards a system of efficient. including initiating the process towards conclusion of a readmission agreement between the European Community and Moldova. to strengthen private sector led growth and for fiscal sustainability. • stepping up the fight against organised crime. • further reinforcing administrative and judicial capacity. including trafficking in human beings. comprehensive state border management on all sectors of the Moldovan border including the Transnistrian sector. • further strengthening the stability and effectiveness of institutions guaranteeing democracy and the rule of law. Among these priorities.suggestions in this regard. • resuming cooperation with IFIs. ensuring the democratic conduct of parliamentary elections (February2005) in Moldova in accordance with European standards.
Economic advantages brought by Moldova’s involvement In the Common European Market have a tremendous importance: acces to a large market with free movement of people. acces to structural funds and flows of investment capital. will bring about an new approach to solving the issue of foreign troops in Moldovan territory and will contribute to finding solutions to regionalist tendencies inside Moldova by modern European means. its integration into the international community. Integration with the Union will speed up economic growth.Progress in meeting these priorities will be monitored in the bodies established by the Partnership and Cooperation Agreement and the European Commission will issue a mid-term report on progress accomplished. goods. which offers an opportunity of an accelerated development and catching–up with rich countries on the continent. Summary Accession to the European Union is a strategical goal of the Republic of Moldova. together with Moldova. including the possibility of new contractual links adoption. decisions may be taken on the next step in the development of bilateral relations. will review the content of the Action Plan and decide on its adaptation and renewal. On the basis of this evaluation. The Commission will issue a second report after three years and on this basis. modernization of the economic and legal systems and help to eliminate the 8 . This way Moldova will gain free acces to an enormous marketand advanced technologies. the EU. Political solidarity in the international arena will contribute to strengthening of Moldova’s independence. capital and services.
Economic Growth and Poverty Reduction Strategy Paper ETSI . According to latest political statements by the Presidency.International Organisation for Standardisation IST. Moldova intends to enhance its relations with the EU by signing an Association agreement.Moldovan Export Promotion Organisation MTFF .Technical Assistance Information Exchange TRACECA .Transport Corridor Europe Caucasus Asia TRIPS: .International Maritime Organisation INTOSAI .Institute of Internal Audit ILO .WTO Agreement on Intellectual Property WMD .Financial Intelligence Unit IAIS . IOSCO International Organisation of Securities Commissions ISO . leaders of political parties.Weapons of Mass Destruction _______________ 9 .technological gap between our country and more advanced European states.International Organisation of Supreme Audit Institutions . The Foreign Ministry of Moldova has taken necessary measures in this direction.International Telecommunication Union JAA .European Telecommunications Standards Institute FATF Financial Action Plan Task Force for Money Laundering FIU .Joint Aviation Authorities MEPO . Dictionary EGPRSP.International Labour Organisation IMO .International Electrotechnical Commission IFAC .International Accounting Standards Board IEC .International Association of Insurance Supervisors IASB .Information Society Technologies ITU .Medium Term Fiscal Framework TAIEX .International Federation of Accountants IIA .
10 .The association of persons or businesses for common. usually economic. Cooperation . or generally more closely integrated with the economy of the European Union. primarily developing countries. include many who seek one day to become either member states of the European Union itself.is a foreign relations instrument of the European Union (EU) which seeks to tie those countries to the east and south of the EU into the EU. benefit. These countries. Integration .The process of placing more than one integrated circuit on a single chip.Keywords: The European Neighbourhood Policy .