Not every policy detail may have been perfect in Moldova since 2009, but at least the narrative seemed right. Eastern Europe’s only ruling Communist Party fell from government. The changeover was mythologised as the ‘Twitter Revolution’ – a precursor of the ‘Arab Spring’ and ‘Moscow Winter’ - although in fact it was a prosaic process of elections and parliamentary arithmetic. The Communists were replaced by the smooth-sounding ‘Alliance for European Integration’, which was soon getting rave reviews for its reform efforts from the EU. Tiny Moldova leapfrogged the other five states in the ‘Eastern Partnership’ and seemed to be first in the queue to sign an Association and Deep and Comprehensive Free Trade Agreement at the Vilnius summit in November 2013.

‘Since the beginning of the year, Moldova has plunged into the kind of political infighting reminiscent of ‘Orange’ Ukraine at its worst.’

By 2013, however, reviews were getting more mixed. Since the beginning of the year, Moldova has plunged into the kind of political infighting reminiscent of ‘Orange’ Ukraine at its worst. After a previous crisis over the presidency was solved in 2012, it had seemed the current parliament would sit out a full term until the next elections are due in 2014. Today, Moldova has to sort out three simultaneous problems: it has no stable government, new elections are threatened and it is limping towards the November summit. It might collapse over the finishing line or just before; it might have a sudden burst of energy in the finishing strait; or it might fail a last-minute dope test.

The 2009 'Twitter revolution' saw Moldova convert into the 'poster boy' of Eastern Europe, disposing of Communist party rule and beginning an ambitious reform programme. Developments this year have led many to question this status. Photo: Wikimedia

So what went wrong? In reality, the three-party ‘Alliance for European Integration’ (AEI) was badly designed at birth; more exactly, at its rebirth. The first incarnation of the AEI in 2009-10 struggled with a minimal majority over the Communists. That majority was improved at new elections in November 2010, but the elections also gave Russia the chance to push hard for an alternative alliance between the Communists and the pivotal Democratic Party (which includes many ex-Communists). Putin sent his right-hand man Sergei Naryshkin to Chişinău to seal the deal. He didn’t succeed, but encouraged the Democrats to secure a high price for not defecting back to the Communists, with the signing of a secret agreement in December 2010, leaked in 2012, to partition not just ministries but also supposedly neutral state institutions and revenue streams among the AEI’s three component parties. 

The largest of the three parties, the Liberal Democrats, claim that their ministries spearheaded subsequent reform efforts, while the other parties simply policed their respective spheres of influence. The Liberals are the AEI’s most ideological, pan-Romanianist party; but their leader Mihai Ghimpu has long been obsessed with removing the Liberal Democrat Prime Minister Vlad Filat. Others claim that all three AEI parties have overseen corruption within ‘their’ sector: the Democrats in the legal sector, the Liberal Democrats in customs (see below), and the Liberals in the airways and railways, via the Ministry of Transportation.

The Democrats and the Legal System

The Democrats, financed by Vladimir Plahotniuc, Moldova’s lone ‘oligarch’, took over the legal sector. They already controlled many courts, which they had used to protect the financial operations of the old Communist elite – and indeed to take over many of those operations.  Although now in opposition, the Communists therefore de facto helped the Democrats by continuing to block attempts to reform the system they had set up before 2009.  

But the Democrats also pushed hard to expand their influence, adding the Prosecutor General’s office and the National Anti-Corruption Centre (NAC) to their empire. The NAC was set up with good intentions in 2002, but turned into its ironic opposite: its legal powers were used to soften up and take over businesses targeted by Plahotniuc. The scourge of so-called ‘raiderstvo’ [corporate raiding] actually increased. In 2010-11 Moldova-Agroindbank (the largest domestic bank), Victoriabank (the second largest), Banca de Economii (the Savings Bank of Moldova) and the largest insurance company ASITO all saw sudden and often unexplained changes of ownership to obscure offshore companies, usually on the basis of secret court proceedings. Two of the alleged victims, Victor and Viorel Topa, now have a case before the English courts, accusing Plahotniuc of orchestrating the change to seize their assets. Banca de Economii has also been accused of laundering $53 million out of the $230 million for the Russian suspects in the Magnitsky case.

Filat versus Plahotniuc

In December 2012 Prime Minister Filat accepted the need for a review of the case.  In the same month, an opportunity arose to do something about the Democrats’ state capture, when a local businessman was shot on a hunting trip attended by Valeriu Zubco, the Democrats’ Prosecutor General. Zubco was accused of orchestrating a cover-up and forced out of office in January. Filat had been chomping at this particular bit for a long time. He had failed to get rid of Zubco in October 2011, and resorted to chipping away at the edges of Plahotniuc’s empire, dissolving the Economic Courts in July 2011, after an abortive judicial reform in 2010. The long-running saga of dismissing Ion Muruianu, the alleged linchpin of judicial corruption, as chair of the Supreme Court had also sapped the government’s strength. 

Oligarch and leader of the Moldovan 'Democrat' party Vladimir Plahotniuc. Plahotniuc wants to move from minority party to kingmaker, but is it a case of double or bust?

The Democrats instantly fought back, using the NAC to launch investigations against leading Liberal Democrat ministers. Filat was accused in turn of capturing the customs service, and using it to run a vast tobacco smuggling operation. The accusations were amplified on Plahotniuc’s TV channels; ‘Prime’ and ‘Publika’ (the takeover of Publika in the summer of 2012 gave him more than a 50% media share).

Moldovan politics had seemed stalemated between the AEI and the Communists since 2009. But political loyalties were now scrambled. All parties in parliament now began making fluid alliances with one another – and encouraging defectors from opposition ranks.  Filat was able to use Communist votes to remove Plahotniuc as deputy chair of parliament on February 15th, but could do little to offset the damage to his own reputation. 

Moldova’s Parliamentary Arithmetic, as of May 2013 (original results from the November 2010 elections in brackets, 101 seats in total)

The old ‘Alliance for European Integration’

Liberal Democrats 31 (32)
Democrats 15 (15)
Liberals 12 (12)
Communists 34 (42)
Unaffiliated 9 (0)
Mishin Group 3
Socialists (Dodon) 3
Other 4

On March 5th of this year Filat was defeated in a confidence vote, but he realised that hanging on to office in some form, no matter how, was key, both to his own survival and to any hopes of containing Plahotniuc. Unlike neighbouring Ukraine, he could not play a game of divide and rule between the local oligarchs, as there was only one – Plahotniuc. Filat could only counter-balance Plahotniuc’s financial resources if he still controlled the resources of the state.

Shock Deal with the Democrats

Filat therefore sought re-nomination as Prime Minister on April 10th. The AEI was no more, but his own party remained reasonably solid behind him. The Liberal Party split (see below). There were also a handful of defectors from the Communist Party. This was a plurality but not a majority; Filat could have tried to govern alone or maintain the informal alignment with the Communists. The decision on April 17th to strike a power-sharing deal with the Democrats therefore came as a shock. Worse, it looked like a bad deal: the Democrats were left in control of all the key legal ministries. Plahotniuc’s ally Corneliu Gurin was made Prosecutor General. Gurin was not formally a Democrat, as Filat had fought hard to break the quota deal. But he wasn’t really an ‘independent’ either; until January he had been a member of one of Plahotniuc’s ‘pocket parties’, the ‘Democratic Action Party’. Prosecutors were also made harder to dismiss ‘for subjective reasons’. Another Plahotniuc ally, Viorel Chetraru was confirmed, and entrenched, as head of the Anti-Corruption Centre.

In March, PM Vlad Filat looked like he had reached the end of his political road, outmanouvred by his political opponents and ousted in a vote of confidence. But a spirited fightback means that he might once again face voters in 2014

Worse still, Filat endorsed a switch to a mixed voting system for the next elections, using both PR and territorial constituencies. Recent experience in Ukraine and elsewhere has shown that territorial constituencies are more prone to corruption. In Moldova, the Democrats would have the edge with their money; and the Liberal Democrats with the ‘administrative resources’ they enjoyed in government. The Democrats have also been accused of buying up the votes of the ethnic minority Gagauz. The deal threatened to turn Moldova into a condominium – a two party state of the Democrats and Liberal Democrats.

Or even a one party state. The Democrats quickly grew over-confident, because the logic of their ‘business’ model required monopoly control. Filat accused them of being behind the shock announcement by the Constitutional Court on April 22nd that he was barred from standing again as Prime Minister for 'tolerating ministers suspected of involvement in corruption'. This fell short of accusing Filat himself of corruption, but made the former Prime Minister alone, somewhat bizarrely, collectively responsible for the actions of his ministers. Ironically, Filat had acquiesced in the appointment of two new judges to the Court in April and May, which actions made him look shortsighted in the extreme: most of the Court’s six members were now under the influence of the Democrats or Liberals.

Filat Fights Back

Filat seemed down and out. Foreign Minister Iurie Leancă was made acting PM. But there was now no need for Filat to stick to the deal with the Democrats. On April 25th, a combination of Liberal Democrat and Communist votes dismissed the nominal Democratic Party leader Marian Lupu as chair of Parliament; the next day the same parties combined to promote Liberal Democrat Liliana Palihovici, from deputy chair to acting chair.

On 3 May parliament passed several other fight-back measures – seven laws in total. The mixed election system was dropped, which was good for democracy and bad for the Democrats. On the other hand, the threshold in parliamentary elections was raised from 4% to 6%, which was bad both for democracy and for the Democrats; most opinion polls gave them below 10%. In case they tried to get round this barrier by leaping into bed with others, the threshold would now be 9% for any alliance of two parties, or 11% for more than two parties. In a concession to the Communists, it would be possible to vote with old-style Soviet passports. Moldova has ID cards, but many of the Communists’ elderly voters still have the old documents.

The vote of no confidence on March 5th was defined as ‘a political act’, not an accusation of corruption against Filat.  Parliament was given the power to sack judges by a three-fifths vote, although this proved too controversial; and the law was sent back by President Timofti on May 8th. Timofti signed four of the other laws the next day.

Retrospective ring fencing, or ‘de-politicisation’, of the key legal ministries was also attempted. Gurin’s appointment as Prosecutor General was cancelled, after accusations that two votes had been fraudulently cast in his original election. The Anti-Corruption Centre was made responsible to the government rather than parliament. Leancă was given more power as acting Prime Minister, including the ability to sack ministers. He was, after all, a Liberal Democrat, so it seemed they were reverting to the option of governing alone, supported by tactical voting with the Communists, and the three MPs from the Mishin group, as well as some or all of the seven out of twelve MPs from the Liberal Party who had declared themselves ‘Reform Liberals,’ to provide tactical support for Filat.

Ex foreign minister Iurie Leancă was on 15 May nominated to form a government. The initial task is to survive until November's Eastern Partnership summit summit in Vilnius

Finally, on May 15th Leancă was given the chance to win nomination as a normal, not just ‘acting’, PM and to form a full cabinet. He was instantly smeared with a flood of compromising material relating to misuse of expensive cars in Moldova’s Moscow embassy while he was Foreign Minister.

The Endgame

If they could batten down the hatches, the Liberal Democrats’ plan was to survive until the November summit. There was enough momentum in negotiations with the EU for the Agreements to be initialled, if not signed. Filat could then claim the credit for this, and face the voters in 2014. The alternative option, of an earlier election in the autumn before the Vilnius summit, looked much riskier. Moldovan voters have been split in two camps since at least 2009, but all the infighting within the AEI might cost the Liberal Democrats the voters within their own camp. Perhaps, except that the underlying assumptions of Moldovan politics might be changing: with the Democrats seeking to jump from minority party status to state capture in one go. That would threaten the Communist vote, so early elections were not necessarily in their interest. 

It has actually suited the Democrats’ interests to hide behind the AEI. Now that their blocking role was more widely known, they could be locked into a dangerous game of double or quit. Or Moldova’s state could truly be ‘captured’ by one party or more; in which case the Eastern Partnership’s ‘success story’ narrative would truly have collapsed. But Plan B is often a lot like Plan A. Something like a Liberal Democrat coalition may continue, and the EU can look more clearly at whether it is delivering on reform, and deserving of support.