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EUROPEAN STRATEGY OF THE REPUBLIC OF MOLDOVA

Chiinu 2005

EUROPEAN STRATEGY OF THE REPUBLIC OF MOLDOVA Contents


1. 1.1.

INTRODUCTION......11

DEVELOPMENT OF THE RELATIONSHIP BETWEEN THE REPUBLIC OF MOLDOVA AND THE EUROPEAN UNION 1.2. OPTIONS WITHIN THE SOCIETY 1.3. INTERNATIONAL POLITICAL CONJUNCTURE AND PRESENT CONTEXT 1.4. EUROPEAN STRATEGY OF THE REPUBLIC OF MOLDOVA 2. 2.1. STRENGTHENING THE STATEHOOD OF THE REPUBLIC OF MOLDOVA....38 SETTLEMENT OF THE TRANSNISTRIAN REUNIFICATION OF THE COUNTRY CONFLICT AND

2.1.1. Essence of the issue 2.1.2. Legal frame of the transnistrian conflict settlement 2.1.3. Institutional frame 2.1.4. Current issues 2.1.5. Priorities of the transnistrian conflict settlement 2.2. INTERNATIONAL CO-OPERATION AIMED REGIONAL SECURITY AND STABILITY AT STRENGTHENING

2.2.1. Co-operation within universal-scale structures 2.2.2. Regional co-operation 2.2.3. International co-operation in South-Eastern Europe 2.2.4. The Process of Stabilization and Association 2.3. THE POLITICAL DIALOGUE WITH EUROPEAN COUNTRIES 2.3.1. Institutional consolidation of the political dialogue between the Republic of Moldova and the EU 2.3.2. Political relations with the EU member states 2.3.3. Relations with new EU members 2.3.4. Relations with other European states 2.3.5. Establishment of the Euro-partnership between the Republic of Moldova and European countries 2.4. REFORM OF CENTRAL AND LOCAL GOVERNMENT 2.4.1. Management and co-ordination of the European process 2.4.2. Public administration 2.4.2.1. Central government 2.4.2.2. Sectorial branches of government (Specialized central government)

2.4.2.3. Local and regional government 2.4.3. Public service 2.4.4. Local development 3. BUILDING THE RULE OF LAW AND STRENGTHENING DEMOCRACY .....70 3.1. STRENGTHENING DEMOCRATIC SOCIETY 3.1.1. The stability of democratic institutions 3.1.2. The judicial system 3.1.3. Eradicating corruption 3.1.4. Civil society 3.1.5. Political parties 3.1.6. The institution of election 3.1.7. Trade unions 3.1.8. Mass-media 3.2. HUMAN RIGHTS AND PROTECTION OF MINORITIES 3.2.1. Human rights 3.2.1.1. Child protection 3.2.1.2. Gender equality 3.2.2. Protection of the rights of national minorities 4. JUSTICE AND HOME AFFAIRS.106 4.1. BORDER MANAGEMENT 4.1.1. Border control 4.1.2. Personnel, training, discipline and behaviour 4.2. LEGAL AND ILLEGAL MIGRATION 4.2.1. Entry and stay requirements for foreign nationals 4.2.1.1. Visa policy 4.2.1.2. Stay requirements for foreign nationals 4.2.2. Refugees and asylum seekers. Explusion and extradition. 4.2.3. Readmission agreements 4.2.4. Emigration from the Republic of Moldova 4.3. FIGHTING AGAINT ORGANIZED CRIME 4.3.1. Trafficking in human beings 4.3.2. Drug traffic 4.3.3. Preventing and fighting against money-laundering 4.3.4. Fignting against smuggling 4.3.5. Fighting against theft of means of transport

4.3.6. Fighting against trafficking in arms 4.3.7. Fighting against terrorism 4.3.8. Police co-operation in the fight against serious offence 4.4. JUDICIAL SYSTEM 4.4.1. Independence of the judiciary 4.4.2. Judicial co-operation in civil and criminal matters 4.5. FIGHT AGAINST CORRUPTION 4.5.1. National legislative and organizational measures 4.5.2. Regional arrangements in the concerned field 4.5.3. The efficiency of undertaken measures 5. ECONOMIC REFORM AND DEVELOPMENT ..185 5.1. THE TRANSITION TO FUNCTIONAL MARKET ECONOMY 5.1.1. Liberalisation of prices and trade 5.1.2.Financial market, restructuring of banking system and impact of the reform of pensions system on capital market 5.1.3. Property right 5.1.4. Structural reforms and changes 5.1.4.1. Privatization of the real sector 5.1.4.2. Industrial policy 5.1.4.3. Transport sector 5.1.4.4. Farming sector 5.2. MONETARY AND EXCHANGE POLICY 5.2.1. Financial policy 5.2.1.1. Fiscal and budgetary policy 5.2.2. Monetary and exchange policy 5.2.2.1. Monetary policy 5.2.2.2. Exchange policy 5.3. AGRICULTURAL REFORM 5.3.1. Institutional arrangements for sectorial agricultural policies 5.3.1.1. Viticulture and vinification 5.3.1.2. Land cadastre 5.3.1.2. Agricultural statistics 5.3.2. Sanitary- veterinary sector 5.3.3. Phyto-sanitary sector 5.3.4. Seeds and planting stuff sector 5.3.5. Biotechnologies and genetically modified organisms 5.3.6. Promoting the development of farming sector and of rural areas

5.3.7. Fisheries sector 5.3.8. Forestry sector 5.4. SMALL- AND MEDIUM-SIZED ENTERPRISES 5.4.1. Legislative frame 5.4.2. Institutional frame 5.4.3. Support for innovative action 5.5. STATISTICS 5.5.3.1. Statistica conturilor naionale 5.5.3.2. Statistica preurilor 5.5.3.3. Statistica industriei 5.5.3.4. Statistica energeticii 5.5.3.5. Statistica agriculturii 5.5.3.6. Statistica mediului 5.5.3.7. Statistica investiiilor n capital fix i construciilor 5.5.3.8. Statistica transporturilor, comunicaiilor i turismului 5.5.3.9. Statistica comerului cu amnuntul 5.5.3.10. Statistica comerului exterior de mrfuri 5.5.3.11. Statistica comerului exterior de servicii 5.5.3.12. Statistica finanelor 5.5.3.13. Statistica demografic 5.5.3.14. Statistica forei de munc 5.5.3.15. Statistica nivelului de trai 5.5.3.16. Statistica nvmntului 5.5.3.17. Statistica de drept 5.5.4. Clasificri statistice 5.5.5. Registrul Naional al Unitilor Statistice (RUNUS) 5.5.6. Sectorul tehnologiilor informaionale 5.5.1. Legal framework 5.5.2. Institutional framework 5.5.3. Macro-economic statistics 5.5.3.1. National accounts statistics 5.5.3.2. Prices statistics 5.5.3.3. Industrial statistics 5.5.3.4. Statistics in energetics 5.5.3.5. Statistics in agriculture 5.5.3.6. Statistics in environment 5.5.3.7. Statistics in investments in fixed capital and building 5.5.3.8. Statistics in transportation, communications and tourism 5.5.3.9. Statistics of retail trade 5.5.3.10. Statistics in foreign trade with goods 5.5.3.11. Statistica in foreign trade with services 5.5.3.12. Statistics in finances 5.5.3.13. Demographic statistics

5.5.3.14. Statistics of labour force 5.5.3.15. Statistics of level of life 5.5.3.16. Statistics of education, science and culture 5.5.3.17. Statistics in law 5.5.4. Statistical classifiers 5.5.5. National Register of Statistical Units (NARESU) 5.5.6. Informational Technologies Sector (IT) 5.6. FINANCIAL CONTROL 5.6.1. Preventive financial control and internal audit 5.6.2. Follow-up of external financial control 6. REFORM OF MARKET AND COMMERCIAL REGULATIONS ..297 6.1. MOVEMENT OF GOODS 6.1.1. Customs policy 6.1.1.1. Customs documents and formalities 6.1.1.2. Transit of goods and persons 6.1.1.3. The system of risk analysis and risk management 6.1.1.4. Co-operation with neighbours, bilateral projects and/or agreements concerning joint customs control 6.1.2. Trade policy 6.1.3. Standards and conformity evaluation 6.1.3.1. Standardisation 6.1.3.2. Empowerment and infrastructure for conformity evaluation 6.1.3.3. Metrology 6.1.4. Consumer protection and health 6.2. SERVICE PROVISION AND THE RIGHT TO SETTLEMENT 6.2.1. Energy market 6.2.2. Transport 6.2.3. Telecommunications 6.2.4. Insurances 6.2.5. Banking services 6.2.6. Capital markets 6.2.7. The right of commercial companies to settlement 6.3. COMMERCIAL COMPANY LAW 6.3.1. Commercial company law 6.3.2. Competition 6.3.3. Accountancy of commercial companies 6.3.4. Intellectual property rights 6.3.5. Enforcing intellectual property rights 6.3.6. Customs authority measures aimed at intellectual and industrial property

6.3.7. Civil law 6.3.8. Public acquisitions 6.4. MOVEMENT OF CAPITALS AND CURRENT PAYMENTS 6.4.1. Current payments 6.4.2. Movement of capitals 6.4.3. Investments promotion and protection 6.5. MOVEMENT OF PERSONS 6.5.1. The right of persons to settlement 6.5.2.The right to start and develop economic activities, to employ workers, to found and manage enterprises 6.5.3. Movement of workers 7. SOCIAL POLICIES AND EMPLOYMENT ..402 7.1. Labour legislation 7.2. Social dialogue 7.3. Employment 7.4. Social security, elderly people and social exclusion 7.5. Co-ordinating social security systems 7.6. Social insuarances 7.7. Social assistance 7.8. Disabled people 7.9. Health care and labour security 7.10. Public health 8. CROSS-BORDER CO-OPERATION IN THE FIELDS OF ENVIRONMENT, ENERGY AND TRANSPORT .....424 8.1. ENVIRONMENT PROTECTION 8.1.1.Institutional frame 8.1.2. Legal frame 8.1.3. Air protection 8.1.4. Waste management 8.1.5. Protection of water resources 8.1.6. Protection of land resources 8.1.7. Chemicals and genetically modified organisms 8.1.8. Industrial pollution 8.1.9. Enviornmental infrastructure 8.2. ESTABLISHMENT AND INTER-CONNECTION OF ENERGY NETWORKS 8.2.1. Natural gas 8.2.2. Electrical energy 8.2.3. Thermical energy

8.2.4. Fuels 8.2.5. Energy efficiency 8.2.6. Environment protection 8.3. TRANSPORT NETWORKS 8.3.1. Road transport 8.3.2. Railway transport 8.3.3. Naval transport (fluvial and maritime) 8.3.4. Air transport 8.4. INFORMATIONAL SOCIETY 8.4.1. Legal regulations 8.4.2. Telecommunication and radiocommunication terminal facilities 8.4.3. Informational technologies 8.4.4. Audio-visuals 9. SCIENCE, EDUCATION, INTER-CULTURAL EXCHANGES ....504 9.1. SCIENCE AND RESEARCH 9.1.1. Academic science 9.1.2. Applied sciences 9.1.3. Research and development 9.1.4. Top technologies 9.2. EDUCATION, VOCATIONAL TRAINING AND YOUTH ISSUES 9.2.1. National system of education 9.2.2. Lifelong training 9.2.3. Vocational training 9.2.4. Youth policy 9.3. CULTURE AND TOURISM 9.3.1. Preservation and protection of the cultural patrimony 9.3.2. Conservation and protection of the architectural patrimony 9.3.3. Infrastructure and tourist services 9.3.4. Hotel services 9.4. SOCIAL PARTNERSHIP 9.4.1. Social dialogue 9.4.2. Partnership between NGO-s and the state 9.5. CROSS-BORDER RELATIONSHIP

9.5.1. International cross-border co-operation 9.5.2. Lower Danube Euro-region 9.5.3. Siret-Prut-Nistru Euro-region 9.5.4. Upper Prut Euro-region 10. APPROXIMATION OF NATIONAL LEGISLATION TO ACQUIS COMMUNITAIRE...557 10.1. CURRENT SITUATION 10.2. IMPORTANCE FOR THE REPUBLIC OF MOLDOVA OF THE APPROXIMATION OF NATIONAL LEGISLATION IN THE PROCESS OF ACCESSION TO THE EU

10.3. LEGAL BASIS OF THE APPROXIMATION OF NATIONAL LEGISLATION 10.4. PRIORITIES AND SHORT- AND MEDIUM- TERM OBJECTIVES 10.5. INSTITUTIONAL FRAME 10.5.1. Domestic institutions 10.5.2. Collaboration with the EU 10.6.METHODOLOGY OF APPROXIMATION OF NATIONAL LEGISLATION TO ACQUIS COMMUNITAIRE 10.7. PROGRESS MONITORING AND EVALUATION 10.8. THE ASSISTANCE OF THE EU AND OF OTHER DONORS IN THE PROCESS OF APPROXIMATION AND IMPLEMENTATION OF THE ACQUIS COMMUNITAIRE 11. MONITORING OF THE REPUBLIC OF MOLDOVA WITHIN THE EUROPEAN PROCESS AND PROMOTING THE IMAGE OF THE COUNTRY 573 11.1. CURRENT IMAGE OF THE REPUBLIC OF MOLDOVA 11.2. THE PROCEDURE OF MONITORING THE IMPLEMENTATION OF THE EU/ MOLDOVA ACTION PLAN 12. ACCESS TO THE FINANCIAL INSTRUMENTS OF THE EUROPEAN UNION. OPPORTUNITIES FOR THE REPUBLIC OF MOLDOVA....580

12.1. THE ASSISTANCE POLICY OF THE EUROPEAN UNION

12.2. MAIN FACTORS IN DEVELOPING AND MANAGING THE ASSISTANCE POLICY OF THE EUROPEAN UNION 12.2.1. Global developments of the assistance policy 12.2.2. Interests of the EU member-states 12.2.3. Capacity of absorbtion 12.3. TYPES OF EU ASSISTANCE 12.3.1. European funds for structural assistance (for the EU member states) 12.3.2. Assistance for transformation (for countries with European integration prospects, 1989 -1997) 12.3.2.1. PHARE Programme 12.3.2.2. Limits of the assistance for transformation 12.3.3. Pre-accession assistance (for candidates to accession, 2000-2006) 12.3.3.1. ISPA and SAPARD Programmes 12.3.3.2. Objectives of pre-accession assistance 12.3.3.3. Principles of pre-accession assistance 12.3.4. Eclectic assistance programmes (for countries in the Process of Stabilization and Association, 2000-2006) 12.3.4.1. CARDS Programme 12.3.4.2. CARDS TWINNING 12.3.4.3. TEMPUS Programme 12.3.4.4. SIGMA Programme 12.3.4.5. ERASMUS MUNDUS Programme 12.4. ASSISTANCE FOR DEVELOPMENT (FOR OTHER COUNTRIES, INCLUDING FOR USSR SUCCESSOR COUNTRIES, 1991 -2006) 12.4.1. TACIS Programme. The New Concept 12.4.1.1. Strategy and general approach 12.4.1.2. Regional and bilateral (by countries) strategies and indicative programmes 12.4.1.3. Institutional implementation and adjustment 12.4.1.4. Programmes under implementation 12.5. EUROPEAN NEIGHBOURHOOD INSTRUMENT 12.6. 2005-2006 ASSISTANCE PROGRAMMES OF THE EUROPEAN UNION FOR THE REPUBLIC OF MOLDOVA. 12.6.1. Neighbourhood programmes. General aspects 12.6.2. Neighbourhood programmes for the Republic of Moldova 12.6.2.1. TACIS Programme of technical assistance for CIS countries in the field of cross-border co-operation 12.6.2.2. INTERREG III B CADSES Community Programme for inter-regional cooperation within the Central Adriatic Danubian South-Eastern European Space 12.6.3. Academic programmes 12.6.3.1. YOUTH Community Programme

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12.6.3.2. TEMPUS plus Programme of collaboration in the field of high education 12.6.3.3. Erasmus mundus Community Programme for academic collaboration and exchanges 12.7. CONCLUSIONS AND RECOMMENDATIONS 12.8. USEFUL INTERNET LINKS ANNEX. PROPOSED EU/MOLDOVA ACTION PLAN....................612

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1. INTRODUCTION 1.1. Development of the Relations between the Republic of Moldova and the European Union The relationship between the Republic of Moldova and the European Union dates from the 27th of August 1991. Like other former soviet republics, Moldova started that relationship as a successor of the Soviet Union. After the collapse of the USSR, the European Union (at that time-the European Community) needed to adopt a position on the new independent states, i.e. on the former soviet republics. To that end, the European Council met in Maastricht on 9th -10th of December 1991 and adopted the Declaration concerning the Developments in the Soviet Union. The main points of that paper have been defined more thoroughly on the 16th of December 1991 in the document The Directive Principles Established by the European Community for Recognizing the New States of Eastern Europe and of the European Union. According to the provisions of that document, on the 1st of January 1992, the European Commission submitted to the Council a thorough analysis of the relationship between the Community and the new states of the Commowealth of Independent States. To update the legal frame of that relationship, the European Commission proposed to replace the Co-operation and Trade Agreement between the European Community and the USSR with individual agreements concluded with former soviet republics. The Commission also pointed out that among USSR successors there were states similar to developing Asian countries as well as European states which had explicitly expressed their wish to associate with the European Community. That was in fact the first recognition of the European option of Moldova by the European Community, but it was an indirect recognition that European decision-makers had further forgotten for ten years. On the 20th of July 1992, the European Commission expressed its availability to sign partnership and co-operation agreements with new independent states. Nevertheless, the idea of an individual approach of the relationship between the European Community and the new independent states remained in the background for a long time. The ice was broken by the proposal to start and to promote co-operation with the Commonwealth of Independent States as a whole, as far as it would be ready to assume the responsibility of having relationship with the European Community at community level. From that perspective, practically identical partnership and cooperation agreements have been developed for all CIS member states. As a result, taken into consideration the great differences between those states, the articles of the agreements looked quite vague and very general. It should be mentioned that negotiations with a number of CIS members started, except with Moldova. On the 1st of November 1993 and, repeatedly, on the 28th of January 1994, Mircea Snegur, President of the Republic of Moldova, sent letters to the Presidents of the European Council and of the European Commission to express his regret that Moldova was the only country in Central and Eastern Europe which did not have definite relations with the European Union. Due to the insistence of Moldavian authorities of that time, the Partnership and Co-operation Agreement was negotiated and signed during a quite short period of time on the 28th of November 1994, 10 months after President Snegur had sent his last

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letter. On the other hand, the enforcement of that agreement had to be long-lasting, so, on the 2nd of October 1995 was signed and on the 1st of May 1996 entered into force an Interim Agreement concerning the trade between the Republic of Moldova and the European Union. That fact encouraged commercial exchanges between the parties. Late in 1994 and early in 1995, Moldova enjoyed a favourable image on international arena, being even considered as an example of democratic reform. On the 13th of July 1995, Moldova was the first member state of the CIS to join the Council of Europe. It was an important step on the way to accession to the European Union. The Partnership and Co-operation Agreement (PCA) had not come into force yet, still, Moldavian authorities, realizing that the agreement aimed at co-operation, not at integration into the EU, attempted to persuade the EU leadership of the need to step towards the next stage of the relationship with the Republic of Moldova. On the 13th of December 1996, President Petru Lucinschi, in his letter addressed to Mr. Jacques Santer, President of the European Commission, expressed for the first time the will of the Republic of Moldova to become an associate member of the EU by the year 2000. Mr. Santer did not have any reaction to that letter. So, late in October 1997, President Lucinschi sent a new letter to Jacques Santer to point again out the aspiration of the Republic of Moldova to the statute of associate member and to solicit negotiations for the association agreement. Two months later, Petru Lucinschi sent letters with a similar content to all heads of the EU member states, but there was either no answer, or a negative response. After the Partnership and Co-operation Agreement had come into force on the 1st of July 1998, the relationship between the Republic of Moldova and the European Union acquired an official legislative frame which has further set up the legal basis for the implementation of TACIS Assistance Programme in Moldova. PCA was developed for a ten-year term and it aimed at the following objectives: follow-up of the political dialogue; promoting trade and investments; co-operation in legislative, economic, social, financial and cultural fields; supporting the endeavours of the Republic of Moldova to strengthen democracy, to develop economy and to complete the transition to market economy. The institutional frame for the implementation of the PCA included a Cooperation Council, a Co-operation Committee and a Parliamentary Co-operation Committee. According to the Agreement, the Co-operation Council consists, on the one hand, of members of the European Council and of the European Commission and, on the other hand, of members of the Government of the Republic of Moldova. The Cooperation Council enjoys the assistance of high level officials of the Co-operation Committee. Several months after the PCA had come into force, the Co-operation Committee decided to share the spheres of action and to set up 5 sub-committees: Sub-committee no. 1, Trade and Investments; Sub-committee no. 2, Economic and Financial Issues; Sub-committee no. 3, Customs, cross-border co-operation, fighting against organized crime; Sub-committee no. 4, Transport, telecommunications, energy, environment, education and training, science and technologies, culture;

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Sub-committee no. 5, CECO Contact Group (steel and coal trade). After four years of PCA implementation, the Co-operation Council decided to limit the fields of co-operation. The following fields have been identified as the most important: promoting trade and economic relations; co-operation in the field of justice and home affairs; customs and cross-border co-operation; approximation of the legislation; conducting a feasibility study concerning the establishment of the free trade area. In addition to above-mentioned structures, was set up a Parliamentary Cooperation Committee in charge of promoting the political dialogue at parliamentary level. In spring 1999, the new Government of the Republic of Moldova included in its Programme a special chapter concerning the European integration, defining it as the main strategic objective of its foreign policy. But Government dismissal which occurred late in 1999 had a negative impact on the relationship between the Republic of Moldova and the European Union. The European Commission deferred a 15 mln Euro grant aimed at supporting the balance of payments and adjourned for an indefinite date the meeting of the Co-operation Council Republic of Moldova-European Union. The omission of the Republic of Moldova from the conclusions concerning the EU enlargement to east, issued by Helsinki European Council, was the most serious consequence of that fact. Nevertheless, despite those circumstances, the approach of the Republic of Moldova to the EU could not be stopped due to objective reasons. Among those reasons the involvement of the Republic of Moldova into European and international circuits. As an European country, Moldova had already become a member of the United Nations Organization, of the World Trade Organization, of the Organization for Security and Co-operation in Europe, of the Central European Initiative, of the South-East Europe Co-operation Initiative, of the Euro-Atlantic Partnership Council, of the Partnership for Peace and, afterwards, an observer to the South-East European Co-operation Process, etc. In 2001, when the Republic of Moldova joined the World Trade Organization and the Stability Pact for South-Eastern Europe, the country was invited to take part in the work of the European Conference, which is a consultative body of ministers of foreign affairs of countries candidates to accession to the EU. On the 27th of December 2001, was adopted 2002-2006 Country Strategy Paper for Moldova. The Paper defines the objectives of the co-operation of the EU with the Republic of Moldova and it focuses on the implementation of the reform support programme. The geographical proximity of the EU to our border is another important factor. Two very important events took place in 2004: on the 2nd of April 2004, 7 new states, including Romania, joined NATO and, as a result, the western border of the Republic of Moldova became a border with NATO. The accession of 10 new countries to the European Union on the 1st of May 2004, brought the Republic of Moldova closer to the EU. Those processes, which had started long before, compelled the European Union to develop a new policy towards a number of states, including towards the Republic of Moldova. After the British and the Swedish diplomacy launched in 2002 the idea of -

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conferring the statute of special EU neighbours to Ukraine, Belarus and Moldova, on the 11th of March 2003 was issued a communication of the European Commission called Larger Europe-neighbourhood: a new framework for the relations with Eastern and Southern EU neighbours. The document invited EU neighbour-countries, including Moldova, to collaborate with the EU in the following fields: - enhancing domestic market and regulating structures; - preferential commercial relations and open market ; - prospects of legal migration and movement of persons; - more intense co-operation aimed at preventing and fighting against security risks; - more active political involvement of the EU in conflict prevention and crisis settlement; - enhancing endeavours to protect human rights and to promote cultural cooperation, as well as to strengthen mutual understanding; - integration into transport, energy and telecommunication networks, as well as into the European research sector; - new instruments for investments promotion and protection; - support in the process of integration into the world trade system; - intensifying the assistance, adjusting it better to the needs; - new funding sources. On the 1st of July 2003, the European Council passed a new document called Paving the Way for a New Neighbourhood Instrument. That new paper identified four key-objectives for future cross-border co-operation: promoting economic and social development in border regions; co-operating to eliminate joint risks in such fields as environment, public health and fight against organized crime; ensuring efficient and secure borders; promoting local actions from person to person. The new neighbourhood instrument was intended to replace the previous oneTACIS Programme, but TACIS had to expire in 2006, so, the Commission decided to apply the new instrument after the expiry of TACIS Programme. On the other hand, a temporary financial instrument was brought into force for 2004-2006 period of time-the Neighbourhood Policy focused on providing funds for cross-border co-operation among member states and EU neighbour-countries, as well as among candidate states and nonEU members which have border with future member states. The neighbourhood programme of collaboration between Romania, future EU member state, and the Republic of Moldova, future EU neighbour, was signed in the middle of 2004. That was also the time when the negotiation for the Action Plan Republic of Moldova-European Union started, as required by the new neighbourhood policy. That policy, called afterwards European Neighbourhood Policy (ENP) included ENP Strategy, Country Reports and Action Plans. ENP Strategy and Country Reports were published on the 12th of May 2004, while the Action Plans of seven countries, including the one of the Republic of Moldova, were issued on the 9 th of December 2004. Despite the availability of a new co-operation frame, the legal basis of the relationship between the Republic of Moldova and the EU has remained the same the Partnership and Co-operation Agreement.

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So, the Republic of Moldova, has stepped to a new stage of its relations with the EU. A series of measures aimed at strengthening the institutional frame of the European integration were undertaken to ensure the successful collaboration within the PCA: - setting up the National Commission for European Integration (in November 2002) which approved the Concept of Integration of the Republic of Moldova into the EU on the 16th of September 2003 and submitted it to the European Commission; - during the year 2003, were established a Parliamentary Committee for European Integration, a Department of European Integration of the Ministry of Foreign Affairs as well as ministerial and departmental subdivisions in charge of the European integration; - in 2004 was set up an inter-ministerial group in charge of legislative approximation; the Government of the Republic of Moldova issued a decree concerning the establishment of a diplomatic mission of the Republic of Moldova to the European Union; - with a view to monitor efficiently all actions related to the process of European integration of the Republic of Moldova, late in 2004, the Minister of Foreign Affairs was appointed simultaneously as Vice-Prime Minister; - since 2002, public servants of ministries, university staff, NGO representatives are trained in various issues concerning the EU. Parliamentary contacts are more intense and, as a result, the European Parliament has repeatedly taken position on processes occured in the Republic of Moldova. On the 5th of June 2003, the European Parliament passed a resolution concerning the meeting of the EU Troika and of the member states to the Stability Pact for South-Eastern Europe. According to that resolution, the European Parliament ... mentions that the Process of Stabilization and Association is a dynamical process aimed at bringing the beneficiaries closer to the EU and euro-atlantic standards and invites the EU institutions to evaluate the feasibility of its enlargement and of the inclusion of the Republic of Moldova and, if required, to clarify the conditions to be fulfilled to such an end... The European Parliament does not have a decisive power on the issue of new member acceptance, nevertheless, its authority is increasing and its vote is very important. A distinct side of the relationship between the Republic of Moldova and the EU is the transnistrian conflict settlement, a field considered traditionally as a part of the OSCE sphere of competence. Taken into account the fact that mediators the OSCE, Russia and Ukraine did not succeed to bring a decisive contribution to the conflict settlement, the European Union shows a growing interest in the transnistrian issue. Qualitative and quantitative changes within the EU position have been more and more visible since 2002. At the end of the year 2002 and throughout the year 2003, the EU issued a series of unprecedented declarations concerning the transnistrian conflict on the 4th of December 2002, 29th of January 2003, 18th of February 2003, 27th of February 2003, etc. In February 2003, the European Union imposed travel ban on transnistrian leaders within its territory. In February 2004, the ban has been extended for another year. In March 2003, on the initiative of the European Commission, in Brussels took place trilateral consultations EU-Republic of Moldova-Ukraine

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concerning the establishment of a joint control on the transnistrian segment of the Moldavian-Ukrainian border. The inclusion into the Action Plan of the provisions concerning the support to be given to the Republic of Moldova into the process of transnistrian conflict settlement can be considered as the most recent action in this field. Or, just the first lines of that paper emphasize that one of the key-objectives of the Action Plan consists in providing further support for a viable solution of the transnistrian conflict. To that end, the European Union shows availability to use all accessible means, in close collaboration with the OSCE. Diplomatic relations between the Republic of Moldova and the EU became more intense due to the Partnership and Co-operation Agreement. On the one hand, in response to the numerous addresses of the Republic of Moldova (and of the European Parliament), the EU took the decision to open a Delegation of the European Union to Chiinu. On the other hand, as mentioned above, the Government of the Republic of Moldova passed at the end of the year 2004 a decree concerning the establishment of a Moldavian diplomatic mission to the EU. Bilateral diplomatic relations with European countries are permanently expanding. In 2004, the Republic of Moldova opened its Embassy to Great Britain. Early in 2005, Moldavian President Vladimir Voronin announced the opening of diplomatic missions in Sweden, Czech Republic, Latvia, Estonia, Lithuania, Serbia and Montenegro. So, at the beginning of the year 2005, our country responds to all conditions required for starting and following-up the implementation of the Action Plan.

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1.2. Options within the Society The European option of the Moldavian society strengthened throughout many years under the influence of external and internal factors. The European developments as well as the developments within the CIS were the most important external factors. On the one hand, the people of the Republic of Moldova have been witnesses of the enlargement to the east of the security and welfare area of Western Europe. Countries candidates to the EU accession have become attractive for investors, living standards have increased and people enjoy more freedom of movement and residence. The freedom of capital, goods and services movement generated favourable circumstances for choosing freely the place and the conditions for work and living. Tens and hundreds of thousands of Moldavians who moved throughout the Europe enjoyed at least partly these four freedoms. During the same period of time, we have been witnesses of growing restrictions that resulted in problems within the relationship among former soviet republics which had become CIS members. Voluntarist decision-making system of the exUSSR had been replaced with national legislations and that fact broke former relationship. The movement of people, which was absolutely free at the beginning of CIS existence, has got more restrictive as some countries have imposed a visa requirement in their mutual relations with other CIS member states. During the first decade of CIS existence, the economic situation in its area was permanently declining towards a deep economic crisis with a stronger impact in small and less developed CIS countries. In the same time, despite the enlargement and the accession of new members, the situation within the European Union was permanently improving, especially in countries which were poor or less developed before joining the EU. During many years, political parties of the Republic of Moldova have expressed different visions on the European integration objective, on the concrete ways to reform and adjust the Moldavian economy and society to community standards, on the structure of economy and property, on the role of foreign investments, on the administrative model, on the role of civil society, etc. That revealed the lack of political maturity of the Moldavian society. So, even most people had an intuitive option for the integration into the EU, the political parties, with some exceptions, were unable to transform that option into provisions of their programmes and, as a result, to involve the masses in the political fight for power. Nevertheless, despite divergences between parties and, especially, between their leaders, in April 2000, the absolute majority of political parties of the Republic of Moldova adopted a declaration to support the idea of European integration of the country. In spring of the year 2002, when the country was affected by a political crisis, political parties established a round-table with permanent statute intended to

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develop viable solutions for promoting democratic values, boosting the reforms and the European integration. On the 5th of June 2002, a number of opposition political parties and non-governmental organizations signed an appeal addressed to the Moldavian President to claim the establishment of a National Commission for European Integration (which was set up in November 2002). In 2003, most political parties adopted a new declaration to support the process of European integration. In summer 2004, all factions of the Parliament of the Republic of Moldova adopted a similar declaration which was afterwards sent to the European Parliament and to other EU institutions. The European option of the Moldavian society existed permanently, but it became the subject of public opinion polls recently. The surveys revealed that 65% of the population are sure that their life would improve, if the Republic of Moldova joined the European Union and only 3% of the respondents thought their life would worsen, if Moldova was an EU member state. That is the reason why almost 70% of the population would vote for the accession of the Republic of Moldova to the EU, if a referendum on that issue was held. As a result, the European option of the Republic of Moldova was an essential point in the programmes of all political parties, both of the ruling and of opposition parties, at 2005 parliamentary election. It reveals that the Moldavian society reached a consensus on the fact that the future of the Moldavian people is indissolubly linked to the integration of our country into the European Union.

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1.3. European Political Conjuncture The European Union present and future members. Probably, the whole system of international relations in Europe is determined by the processes developed within the European Union: the EU enlargement and its institutional reform. The EU Enlargement The conclusion of the negotiation for the Action Plan Republic of MoldovaEuropean Union has coincided with the final stage of the fifth enlargement when the EU accepted 10 new members and has consequently become an international structure of 25 member states with 460 million of people. Now, the EU is preparing for its sixth enlargement four countries have been officially recognized as candidates to accession: Romania, Bulgaria, Croatia and Turkey. On the other hand, four other countries are now in the Process of Stabilization and Association (which is an official way towards accession to the EU for the countries of Western Balkans). Those four countries i.e. Albania, Bosnia and Herzegovina, Macedonia and the Federation of Serbia and Montenegro will probably be the subjects of the seventh enlargement. Naturally, the enlargement processes generate a number of problems for the EU institutions and member states. The new candidates encounter several barriers in their relations with the EU when upcoming enlargements are under consideration. Nevertheless, the Republic of Moldova will hopefully benefit from the fact that among the new EU members there are such countries as Estonia, Latvia and Lithuania, which, like Moldova, are former USSR republics and, like Moldova too, had been affected by Molotov-Ribbentrop Pact consequences. Among the new EU member states, there are also a series of former states of the so-called socialist camp, dominated by the USSR. One of them is Poland which since the first moment of its accession is a notable member of the European Union. Having had in the past (as well as at present) somewhat special relations with Ukraine and Russia, Poland has a clearer vision on the developments and on the problems faced by those countries and by other former soviet republics, including by the Republic of Moldova. The above-mentioned are positive factors: in our relations with the EU, we can rely on the support of the Baltic States and of Poland, as well as of Slovenia and of the Czech Republic. On the other hand, Moldova enjoys the favourable attitude of the old EU members, especially of Germany. On the 6th of May 2004, German Bundestag adopted a parliamentary motion called Supporting the Way towards the Unification and the Democratisation in the Republic of Moldova. According to that document, Germany together with European and international partners should strengthen their commitments towards the Republic of Moldova in order to foster German and European endeavours aimed at the transnistrian conflict settlement and at the countrys reunification. Among the present candidates to the EU 2007 enlargement, there are some countries which, for various reasons, could be active supporters of the process of Moldovas integration into the European Union. Romania is the country which in 2007 will transform the Republic of Moldova into an immediate neighbour of the European Union. So, Romania will be the main

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partner of the Republic of Moldova in cross-border co-operation, including in the fields of regional security, managing migratory flows, etc. After its accession to the EU, from the viewpoint of its size, Romania will be the seventh in 27 (or more) countries of the EU of that time. The role and the importance of Romania for the EU will considerably grow, taking into account its geographical situation in the Black Sea area. As a NATO member, together with Bulgaria, Romania has formed the south-eastern flank of the North-Atlantic Alliance. Romania will play a decisive role in fighting against organized crime and against trafficking in drugs, in human beings and in arms in the region. On the other hand, Romania, due to its history, to its common roots and culture, etc. with Moldova, as well as due to the fact that it will be the only EU country to have a border with the Republic of Moldova, is interested to establish and to promote good co-operation relationship with our country. This is a mutual interest shared in its relationship with Romania by Moldova, too. Bulgaria, like Romania, but to a smaller extent, will be an EU country which has in the Republic of Moldova a lot of its nationals (most of them form the Bulgarian minority). So, there will be the mutual interest of Bulgaria and of the Republic of Moldova to establish close collaboration in all fields, so that Moldavian citizens who have Bulgarian passports consider themselves not just Moldavian citizens but Bulgarian and EU citizens as well. A similar reasoning can probably be formulated with respect to Turkey, with the only difference that representatives of the Gagauzian minority of Moldova do not practically hold Turkish citizenship. All the same, the existing good relations between Moldova and Turkey and Turkeys support offered to Moldova could foster cultural and economic development of Gagauz-Yeri territorial-administrative unit of the Republic of Moldova. Croatia is a former Yugoslavian republic which suffered from the domination of the central government throughout the former Yugoslavian Federation and, afterwards, from the war in Yugoslavia. Having a similar territory and population with the Republic of Moldova, due to its strong determination and political will, Croatia became the first country in Western Balkans to start negotiation for accession to the European Union. The Republic of Moldova considers Croatia as an example worthy to be followed and, in its turn, Croatia has a favourable attitude towards Moldova and supports its aspiration to integration into the European Union. A particular field of the European co-operation of the Republic of Moldova is its collaboration with South-Eastern European countries within the Stability Pact for South-Eastern Europe, the South-East Europe Co-operation Initiative and the SouthEast European Co-operation Process. Countries of that region use the above-mentioned structures of regional co-operation in order to foster the Stabilization and Association Process and to come closer to the EU. The Republic of Moldova also needs stabilization and association in order to boost the social-economic development aimed at European integration. Good relationship established with Albania, Bosnia and Herzegovina, Macedonia and Serbia and Montenegro Federation as well as with facilitator-countries and with organizations supporters of the Stability Pact for South-Eastern Europe are a positive factor for the process of European integration of the Republic of Moldova.

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Institutional Reform of the European Union The European Union has got its present configuration according to the provisions of Maastricht Treaty signed on the 7th of February 1992, entered into force on the 1st of November 1993. The EU is based on three pillars: the first pillar: the European Communities, is the domain of the relationship among the EU member states where the European institutions can co-ordinate common policies (single market, single currency, competition, transport, employment, agriculture, education, culture, etc.); one of the objectives of the co-operation within the first pillar is economic and social cohesion; the second pillar: common foreign and security policy, is another domain for common action of the member states; the third pillar: police and judicial co-operation in criminal matters, is a frame for co-operation between the police and judicial bodies of member states. The objectives of the co-operation among the EU member states, set by Maastricht Treaty, have been strengthened from the legal point of view and expanded by the Treaty of Amsterdam, signed on the 2nd of October 1997 and entered into force on the 1st of May 1999. To support the achievement of those objectives in the context of the essential EU enlargement, an institutional reform was implemented as provided by the Treaty of Nice, signed on the 26th of February 2001, entered into force on the 1st of February 2003. The Treaty of Nice provides for the efficient work of all institutions of the European Union enlarged to 30 members. The Treaty is focused on three points: structure and work of the EU institutions, decision-making procedure within the Council of the European Union and strengthening the co-operation among institutions. The provisions of all treaties have been included in the European Constitution passed in January 2005. Now, the Constitution is at the stage of ratification by the EU member states. The European Constitution will not replace national constitutions of member states: as it has already been mentioned, it replaces the main treaties of the EU with one text and defines the external and internal competencies of the EU. So, the implementation of the Action Plan Republic of Moldova-European Union has started when the EU institutions were under reconstruction and their competencies were being clarified or even modified. Moreover, that period succeeded immediately to the election of the new European Parliament and the establishment of the new European Commission of 25 members. For the Republic of Moldova, it is a new opportunity: most of previous European officials and previous members of the European parliament who had shown a significant dose of conservatism towards Moldovas intention to integrate into the EU are no more present within the European structures. New officials, based certainly on the EU regulations, will hopefully be able to adopt new, really individual visions on each country which has relationship with the European Union. This is an extremely important point for the Republic of Moldova which conceives the European Neighbourhood Policy as a supplementary way of co-operation with the EU and as a bridge towards the following stage association and integration into the EU.

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Commonwealth of Independent States According to a notion introduced recently by the EU, Moldova enters into the so-called group of Western countries of the Commonwealth of Independent States (CIS), along with Russia, Belarus and Ukraine. This new classification shows the EU tendency to place in the same context CIS member states included in the European Neighbourhood Policy which are neighbours to the EU. The Republic of Moldova will undertake all required steps to implement as soon and as efficiently as possible the Action Plan in order to outrun other countries included in the European Neighbourhood Policy and to enjoy, as a result, a real differentiation in its relations with the EU. The relationship of the EU with Ukraine and Russia is among the most important issues of the European Neighbourhood Policy. For Moldova, it is a crucial issue, too: in addition to the great importance of our relations with Ukraine and Russia, the relations between the EU and these countries have a direct impact on the relationship Republic of Moldova-European Union. The European Neighbourhood Policy aims at creating four spaces for cooperation between the EU and Russia, identified at Sankt-Petersbourg summit. The establishment of those spaces and the efficient co-operation between the EU and Russia within them would foster the democratisation of Russia and its adherence to European values, generating favourable conditions for the transnistrian conflict settlement, where Russia plays the main role. Ukraine, according to its new President, has firmly oriented towards the EU, showing alignment with democratic standards, including in the field of the relationship between states. Supporting such an orientation of Ukraine, the Republic of Moldova is in the right to expect a more efficient collaboration with Ukrainian authorities aimed at the transnistrian conflict settlement. Moreover, the co-ordination of the Ukrainian and Moldavian efforts in the process of European integration of both countries could bring positive effects on the inclusion of Ukraine and Moldova in the seventh EU enlargement. The relations with Belarus are less intense than the ones with Russia and Ukraine and that harmonizes with the EU position towards Belarus. The relationship with other CIS member states are practically bilateral (like with Russia, Ukraine and Belarus) and do not touch the relations between the Republic of Moldova and the European Union.

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1.4. The European Strategy of the Republic of Moldova The European Strategy of the Republic of Moldova was developed according to the Decree of the President of the Republic of Moldova, Vladimir Voronin, no 957-III of the 13th of November 2002 concerning the establishment of a National Commission for European Integration. The need to develop the European Strategy of the Republic of Moldova was formulated in Government Decree no 351 of the 2nd of April 2004 concerning the results achieved by the national economy, the implementation of the budget in 2003 and the tasks to the accomplished by central government in 2004. The work on that paper had begun before the European Commission started consultations on the Action Plan and had been preceded by the Concept of Integration of the Republic of Moldova into the European Union. The Concept expresses a political message and confirms the European options of the Republic of Moldova. It sets the guidelines for the achievement of the European integration objective, a process which will involve central and local government as well as civil society institutions. When the document was being worked out, taking into account the developments of that time, the Republic of Moldova considered the SouthEast European channel as the most adequate, without excluding other possible options which would explicitly lead to the countrys integration into the European Union. National Commission for European integration approved on the 16th of September 2003 the Concept of Integration of the Republic of Moldova into the European Union and submitted it to the EU. The introductory part of the Action Plan Republic of Moldova-EU states that the EU acknowledged the Concept of Integration of the Republic of Moldova into the European Union. The European Strategy of the Republic of Moldova is a home paper which concerns the implementation of the Concept of Integration of the Republic of Moldova into the EU aimed at preparing the country for joining the EU. The strategy is based on the fact that European integration is a fundamental national interest and on the commitment to fundamental EU principles: the principle of the rule of law and of law enforcement, establishing an uniform legislative system and ensuring the protection of rights, based on community regulations; the principle of protecting fundamental human rights and freedoms; the principle of the social state; the principle of cultural pluralism; the principle of subsidisation The structure of the European Strategy of the Republic of Moldova, which plays a similar role with the one of association strategies of former and present candidate countries, was developed taking into account the experience of many states which are now at various stages of accession to the EU. The authors have also taken into consideration that the structure and the main elements of all pre-accession strategies are generally bound by the EU regulations concerning the enlargement process. According to a resolution adopted by the European Council in December 1997 in Luxembourg, the enlargement process includes the following stages:

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the European Conference, which is a consultative meeting of ministers of foreign affairs of candidate countries; the accession process is progressive and includes: a)working out and implementing a large-scale pre-accession strategy; b) negotiating the accession; c) projecting the EU legislation (the acquis communitaire) on the national legislation in order to detect problematic fields; d) the procedure of revising the actions; the process of negotiating the accession, the last stage of integration; at this stage, each candidate country is assigned accession conditions. The large-scale pre-accession strategy for each candidate country is usually adopted by the European Commission after the Association Agreement is signed and enters into force. Despite the fact that the Republic of Moldova has no concluded such an Agreement with the EU yet, our country has the right to draw the Strategy by itself. While developing it, the experts have paid attention to the following: I. The strategy must be based on a thorough and objective analysis of the development of the relationship between the Republic of Moldova and the EU. II. The structure of the strategy must respond to a number of criteria compulsory for candidates to integration into the EU. These criteria known as Copenhagen criteria were adopted in June 1993 by the European Council: 1. Political criterion stability of institutions intended to be democracy guarantors; enforcement of the rule of law; human rights enforcement; respecting and protecting the minorities. 2. Economic criterion availability of functional market economy; capability to cope with competition pressure and with market forces of the EU. 3. Capability to commit to the obligations of an EU member state by adhering to the objectives of the political, economic and monetary union; by ensuring the free movement of persons, services and capitals; by enforcing the rights of commercial companies; by promoting adequate policies in the field of competition; by promoting adequate agricultural, industrial, energy and transport policies; by promoting community policies aimed at the social sector and employment; by co-operating in the field of justice and home affairs.

In addition to the above-mentioned three criteria, the European Council held in Madrid (December 1995) set a new criterion which claims that candidate countries must ensure adequate conditions for integration by adapting their administrative and judicial structures with a view to approximate national legislation to the EU one. In 1997, the European Council held in Luxembourg provided for the consolidation and the

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improvement of the institutions on the basis of the Treaty of Amsterdam. Consequently, the forth criterion could be formulated as it follows: Public administration reform. III. After the start of consultations on the Action Plan, the structure of the strategy has been modified to comply with that paper. The experts took into account the fact that the Action Plan formulates, on 30 pages, the objectives of the co-operation between the Republic of Moldova and the EU and points out the action to be performed to that end. The Action Plan is supposed to be implemented within a three-year period of time. At the expiry of this term, there will be need for another paper - an agreement (of association or of neighbourhood), a new Action Plan or a strategy. Such a need will be strengthened by the expiry in 2008 of the Partnership and Co-operation Agreement between the Republic of Moldova and the EU. Regardless of the further EU position, the new paper to be developed by the Republic of Moldova should be based on the thorough analysis of all fields of co-operation legislative and institutional frame of the co-operation, co-operation problems and priorities. The European Strategy has a significant role, it will need periodic updates, in parallel with the implementation of the Action Plan, in order to make it a tool of monitoring the Action Plan implementation. The implementation of the European Strategy, a broader paper with concrete provisions, will shorten the period of completion of the Action Plan and of reporting it to the European Commission. That would hopefully help the Republic of Moldova outdistance the other states included in the European Neighbourhood Policy and to require the negotiation of an association agreement. The European Strategy of the Republic of Moldova includes for each field of action the following main parts: analysis of the legislative framework of the Republic of Moldova; analysis of the institutional framework; formulation of current problems; formulation of short and medium term priorities. Such a structure is characteristic of Association Strategies of former and present candidates to accession to the European Union. So, the European Strategy of the Republic of Moldova should become a paper intended to concretize the way towards the achievement of European integration objective, proclaimed by the Concept of Integration of the Republic of Moldova into the European Union. So, the Action Plan Republic of Moldova-European Union represents in fact the final part of the European Strategy - priorities. Obviously, the priorities could not be formulated correctly without being aware of current problems which, in turn, could not be identified without having done the analysis of the national legal and institutional frame. The table below shows a comparison between the European Strategy and the Action Plan. The full text of the Action Plan is annexed to the Strategy.

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EUROPEAN STRATEGY OF ACTION PLAN REPUBLIC THE REPUBLIC OF MOLDOVA OF MOLDOVA-EUROPEAN UNION 1. INTRODUCTION 1.1. DEVELOPMENT OF THE RELATIONSHIP BETWEEN THE REPUBLIC OF MOLDOVA AND THE EUROPEAN UNION 1.2. OPTIONS WITHIN THE SOCIETY 1.4. INTERNATIONAL POLITICAL CONJUNCTURE AND PRESENT CONTEXT 1.5. EUROPEAN STRATEGY OF THE REPUBLIC OF MOLDOVA 2. STRENGTHENING THE STATEHOOD OF THE REPUBLIC OF MOLDOVA 1. INTRODUCTION INTERNATIONAL POLITICAL CONJUNCTURE (EU ENLARGEMENT ON THE 1ST OF MAY 2004, EUROPEAN NEIGHBOURHOOD POLICY, NEW PARTNERSHIP PROSPECTS, PRIORITIES FOR ACTIONS)

2.1.

TRANSNISTRIAN CONFLICT 2.2. CO-OPERATION IN THE FIELD SETTLEMENT AND OF THE TRANSNISTRIAN CONFLICT REINTEGRATION OF THE SETTLEMENT COUNTRY 1. Sustained efforts aimed at the 2.1.1. Essence of the issue transnistrian conflict settlement, 2.1.2. Legal frame of the transnistrian respecting the sovereignty and the conflict settlement integrity of the Republic of Moldova 2.1.3. Institutional frame within its internationally recognized 2.1.4. Current issues borders and ensuring the democracy, the 2.1.5. Priorities in the transnistrian primacy of law and the observance of conflict settlement human rights. 2.2. INTERNATIONAL COOPERATION IN THE FIELD OF STRENGTHENING REGIONAL SECURITY AND STABILITY 2.2.1. Co-operation within universalscale structures 2.2.2. Regional co-operation 2.2.3. International co-operation in South-Eastern Europe 2.2.4. The Process of Stabilization and Association CO-OPERATION IN THE FIELD OF FOREIGN AND SECURITY POLICY; CONFLICT PREVENTION AND CRISIS MANAGEMENT Strengthening the political dialogue and the co-operation in foreign policy and security matters Regional co-operation
Permanent development of the co-operation in the field of fighting against terrorism, nonproliferation of weapons of mass destruction and illegal weapon exports

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4.4. JUDICIAL SYSTEM 4.4.1. Independence of the judiciary 4.4.2. Judicial co-operation in civil and criminal matters 4.5. FIGHTING CORRUPTION 4.5.1. AGAINST

National legislative and organizaitonal measures 4.5.2. Regional arrangements in the concerned field 4.5.3. Efficiency of the undertaken measures 5. REFORM AND DEVELOPMENT ECONOMIC REFORM AND SOCIAL-ECONOMIC DEVELOPMENT

5.1. TRANSITION TO FUNCTIONAL Functioning of market economy MARKET ECONOMY 5.1.1. Price and trade liberalisation 5.1.2. Financial market, restructuring banking system and impact of the reform of pensions system on the capital market 5.1.3. Property right 5.1.4. Reforms and structural changes 5.1.4.1. Privatization of the real sector 5.1.4.2. Industrial policy 5.1.4.3. Transport sector 5.1.4.4. Farming sector Commercial relationship

Industrial policy

Increase of peoples welfare Sustainable economic devleopment and solving the problem of domestic debt of the state Sustainable development Rural and regional development 5.2. MONETARY AND EXCHANGE POLICY 5.2.1. Financial policy

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5.2.1.1. Fiscal and bugetary policy 5.2.2. Monetary and exchange policy 5.2.2.1. Monetary policy 5.2.2.2. Exchange policy 5.3. AGRICULTURAL REFORM

Taxation

5.3.1. Institutional arrangements for sectorial agricultural policies 5.3.1.1. Viticulture and vinification 5.3.1.2. Land cadastre 5.3.1.2. Agricultural statistics Sanitary and phyto-sanitary issues 5.3.2. Sanitary- veterinary sector 5.3.3. Phyto-sanitary sector 5.3.4. Seeds and planting stuff sector 5.3.5. Biotechnologies and genetically modified organisms 5.3.6. Promoting the development of farming sector and of rural areas 5.3.7. Fisheries sector 5.3.8. Forestry sector 5.4. SMALL- AND MEDIUM-SIZED ENTERPRISES 5.4.1. Legislative frame 5.4.2. Institutional frame 5.4.3. Support for innovative action 5.5. STATISTICS 5.5.1. Stratistical infrastructure 5.5.2. Statistical directories 5.5.3. Macro-economic statistics 5.5.4. Social statistics 5.5.5. Business statistics 5.5.6. Industrial statistics 5.5.7. Statistics of domestic trade 5.5.8. Statistics of investments and constructions 5.5.9. Transport statistics 5.5.10. Agricultural statistics 5.5.11. Environmental statistics 5.5.12. Statistics of foreign trade 5.5.13. Regional statistics 5.5.14. Improving informational technologies 5.5.15. Dissemination of the statistical Statistics

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information 5.6. FINANCIAL CONTROL 5.6.1. Preventive financial control and internal audit 5.6.2. Follow-up of the external financial control 6. REFORM OF MARKET AND COMMERCIAL REGULATIONS 6.1. MOVEMENT OF GOODS 6.1.1. Customs policy 6.1.1.1. Customs documents and formalities 6.1.1.2. Transit of goods and persons 6.1.1.3. The system of risk analysis and risk management 6.1.1.4. Co-operation with neighbours, bilateral projects and/or agreements concerning joint customs control 6.1.2. Trade policy 6.1.3. Standards and conformity evaluation 6.1.3.1. Standardisation 6.1.3.2. Empowerment and infrastructure for conformity evaluation 6.1.3.3. Metrology 6.1.4. Consumer protection and health 2.4.1. MOVEMENT OF GOODS Customs Financial control and related issues

Standards, technical regulations, conformity evaluation and metrology (harmonized fields)

Eliminating the restrictions and optimizing the admnistration (non6.2. SERVICE PROVISION AND THE harmonized fields) RIGHT TO SETTLEMENT 6.2.1. Energy market 6.2.2. Transport 6.2.3. Telecommunications 6.2.4. Insurances 6.2.5. Banking services 6.2.6. Capital markets 6.2.7. The right of commercial companies to settlement 6.3. COMMERCIAL COMPANY LAW Services

2.4.2 The right company law

to

settlement

and

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6.3.1. Commercial company law 6.3.2. Competition Competition 6.3.3. Accountancy of commercial companies 6.3.4. Intellectual property rights Intellectual and industrial property rights 6.3.5. Enforcing intellectual property rights 6.3.6. Customs authority measures aimed at intellectual and industrial property 6.3.7. Civil law 6.3.8. Public acquisitions Public acquisitions 6.4. MOVEMENT OF CAPITALS AND CURRENT PAYMENTS 6.4.1. Current payments 6.4.2. Movement of capitals 6.4.3. Investments promotion protection 6.5. MOVEMENT OF PERSONS 6.5.1. Persons right to residence 6.5.2. The right to start and develop 2.4.4. Movement of persons, including economic activities, to employ movement of workers, and co-ordinating workers and to found and manage social security policies enterprises 6.5.3. Movement of workers 2.4.3 Free movement of capital and of and current payments

7. SOCIAL EMPLOYMENT

POLICIES

AND

Social policy and employment

7.1. Labour legislation 7.2. Social dialogue 7.3. Employment 7.4. Social security, elderly people and social exclusion 7.5. Co-ordinating social security systems 7.6. Social insurances 7.7. Social assistance 7.8. Disabled people 7.9. Health care and labour security 7.10. Public health

Public health

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8.

CROSS-BORDER COOPERATION IN THE FIELDS OF ENVIRONMENT, ENERGY AND TRANSPORT Environment

8.1. ENVIRONMENT PROTECTION 8.1.1.Institutional frame 8.1.2. Legal frame 8.1.3. Air protection 8.1.4. Waste management 8.1.5. Protection of water resources 8.1.6. Protection of land resources 8.1.7. Chemicals and genetically modified organisms 8.1.8. Industrial pollution 8.1.9. Enviornmental infrastructure 8.2. ESTABLISHMENT AND INTERCONNECTION OF ENERGY NETWORKS 8.2.1. Natural gas 8.2.2. Electrical energy 8.2.3. Thermical energy 8.2.4. Fuels 8.2.5. Energy efficiency 8.2.6. Environment protection 8.3. TRANSPORT NETWORKS 8.3.1. Road transport 8.3.2. Railway transport 8.3.3. Naval transport maritime) 8.3.4. Air transport

Energy

Transport (fluvial and

8.4. INFORMAITONAL SOCIETY Informational society 8.4.1. Legal regulations

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8.4.2. Telecommunication and radiocommunication terminal facilities 8.4.3. Informational technologies 8.4.4. Audio-visuals 9. SCIENCE, EDUCATION, INTERCULTURAL EXCHANGES 9.1. SCIENCE AND RESEARCH 9.1.1. Academic science 9.1.2. Applied sciences 9.1.3. Research and development 9.1.4. Most advanced technologies 9.2. EDUCATION, VOCATIONAL TRAINING AND YOUTH ISSUES 9.2.1. National system of education 9.2.2. Lifelong training 9.2.3. Vocational training 9.2.4. Youth policy 9.3. CULTURE AND TOURISM 9.3.1. Preservation and protection of the cultural patrimony 9.3.2. Conservation and protection of the architectural patrimony 9.3.3. Infrastructure and tourist services 9.3.4. Hotel services 9.4. SOCIAL PARTNERSHIP 9.4.1. Social dialogue 9.4.2. Partnership between NGO-s and the state 9.5. CROSS-BORDER RELATIONSHIP 9.5.1. International cross-border cooperation 9.5.2. Lower Danube Euro-region 9.5.3. Siret-Prut-Nistru Euro-region 9.5.4. Upper Prut Euro-region Regional and cross-border co-operation Co-operation with civil society Co-operation in the field of culture and of the audio- visuals Education, youth and training INTER-HUMAN CONTACTS Research, development and innovation

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10.

APPROXIMATION OF NATIONAL LEGISLATION TO ACQUIS COMMUNITAIRE

10.1. CURRENT SITUATION 10.2. IMPORTANCE FOR THE REPUBLIC OF MOLDOVA OF THE APPROXIMATION OF NATIONAL LEGISLATION IN THE PROCESS OF ACCESSION TO THE EU

10.3. LEGAL BASIS OF THE APPROXIMATION OF NATIONAL LEGISLATION 10.4. PRIORITIES AND SHORT - AND MEDIUM- TERM OBJECTIVES 10.5. INSTITUTIONAL FRAME 10.5.1. Domestic institutions 10.5.2. Collaboration with the EU 10.6.METHODOLOGY APPROXIMATION NATIONAL LEGISLATION ACQUIS COMMUNITAIRE OF OF TO

10.7. PROGRESS MONITORING AND EVALUATION 10.8. THE ASSISTANCE OF THE EU AND OF OTHER DONORS IN THE PROCESS OF APPROXIMATION AND IMPLEMENTAITON OF THE ACQUIS COMMUNITAIRE

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11. MONITORING OF THE REPUBLIC OF MOLDOVA WITHIN THE EUROPEAN PROCESS AND PROMOTING THE IMAGE OF THE COUNTRY 11.1. CURRENT IMAGE OF THE REPUBLIC OF MOLDOVA 11.2. MONITORING THE IMPLEMENTATION OF ACTION PLAN 12. ACCESS TO THE FINANCIAL INSTRUMENTS OF THE EUROPEAN UNION. 12.1. DOMESTIC DEVELOPMENTS OF THE ASSISTANCE POLICY 12.2. MAIN FACTORS IN DEVELOPING AND MANAGING THE ASSISTANCE POLICY OF THE EU 12.2.3. Global developments of the assistance policy 12.2.4. Interests of the EU member states 12.2.3. Capacity of absorbtion 12.3. TYPES OF EU ASSISTANCE 12.3.3.1. ISPA and SAPARD Programmes 12.3.3.2. Objectives of pre-accession assistance 12.3.3.3. Principles of pre-accession assistance 12.3.4. Eclectic assistance programmes (for countries in the Process of Stabilization and Association, 20002006) 12.3.4.1. CARDS Programme 12.3.4.2. CARDS TWINNING 12.3.4.3. TEMPUS Programme 12.3.4.4. SIGMA Programme 12.3.4.5. ERASMUS MUNDUS Programme 12.4. ASSISTANCE FOR

Monitoring

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DEVELOPMENT (FOR OTHER COUNTRIES, INCLUDING FOR SUCCESSOR COUNTRIES OF THE FORMER SOVIET UNION 1991 -2006) 12.4.1. TACIS Programme. The New Concept 12.4.1.1. Strategy and general approach 12.4.1.2. Regional and bilateral (by countries) strategies and indicative programmes 12.4.1.3. Institutional implementation and adjustment 12.4.1.4. Programmes under implementation 12.5. EUROPEAN NEIGHBOURHOOD INSTRUMENT 12.6. 2005-2006 ASSISTANCE PROGRAMMES OF THE EUROPEAN UNION FOR THE REPUBLIC OF MOLDOVA. 12.6.1. Neighbourhood programmes. General aspects 12.6.2. Neighbourhood programmes for the Republic of Moldova 12.6.2.1. TACIS Programme of technical assistance for CIS countries in the field of cross-border co-operation 12.6.2.2. INTERREG III B CADSES Community Programme for interregional co-operation within the Central Adriatic Danubian SouthEastern European Space 12.6.3. Academic programmes 12.6.3.1. YOUTH Community Programme 12.6.3.2. TEMPUS plus Community Programme for co-operation in the field of high education 12.6.3.3. Erasmus mundus Community Programme for academic collaboration and exchanges 12.7. CONCLUSIONS AND

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RECOMMENDATIONS 12.8. USEFUL INTERNET LINKS

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Due to its structure, the European Strategy of the Republic of Moldova, in addition to setting tasks and objectives, is a basic document which can be the starting point for developing the National Plan for Legislative Approximation. Or, each paragraph includes information about the legislative frame in the respective field. The Strategy also allows to draw due conclusions concerning the modification of the institutional frame aimed at the integration of the Republic of Moldova into the EU. The accession of the Republic of Moldova is a long-lasting process. Along the accession period, a lot of changes will occur both at international and at domestic level. Consequently, the European Strategy will require permanent updates and adaptations, as well as reformulation of short and medium term objectives.

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2. STRENGTHENING THE STATEHOOD OF THE REPUBLIC OF MOLDOVA 2.1. Settlement of the transnistrian conflict and reintegration of the country 2.1.1. The essence of the problem The conflict from the eastern area of the Republic of Moldova (Transnistria) belongs to the category of conflicts discharged at the periphery of ex-USSR, constituting the outcome result of a series of internal and external factors, as well as problems inherited from the controversial historic past. Unlike many other territorial conflicts, which occurred in the former soviet space, the transnistrian conflict differs first of all due to the fact that its not an interethnic or religious confrontation, at the same time its not an internal conflict. The events that followed after the termination of the military hostilities in 1992 demonstrated that most people from the both banks of the Nistru river does not considers themselves as enemies. In the purpose of maintaining the ex-MSSR in composition of USSR, in September 2, 1990 took place the self-proclamation of the autonomous transnistrian moldovan republic in composition of USSR. Afterwards, using violent methods, psychological and physical terror in the eastern region of the Republic of Moldova, led to the brake down of the state structures and elimination of any political opposition figures and the independent media in the region. Additionally was created a closed informational space on the left bank of the Nistru river. By means of censored mass-media, people from the security zone were maintained under tenacious propaganda of negative stereotypes in order to convince them of impossibility to surrender to Moldova. After the reprisals of the separatists regime, some thousands citizens of the Republic of Moldova were compelled to save their lives and refuge on the right bank of Nistru river becoming this way internally moved persons. Russian military forces continue to stay illegitimately in the transnistrian region of the Republic of Moldova. These troops, together with mercenaries from Russia and Ukraine got involved in the military conflict of 1992 on the side of separatists. Paramilitary forces of separatist regime were equipped with weaponry and munitions provided by the military units of the same Russian Federation; later the separatist leaders obtained Russian citizenship as a result of usurpation of the state sovereignty. Russian Federation is continually offering its citizenship to people from the conflict area. As a result, we have a few thousands Russian citizens living in the territory controlled by separatists. In the transnistrian region of the Republic of Moldova were created all the structures of its own power, in appearance of a lawful democratic state, with its own financial system transnistrian republican bank, custom committee etc. Repressive structures play a special role in keeping the viability of the anticonstitutional regime (ministry of state security, detachments with special destination, the Kazakhs etc.) by means of which it is assured the absolute control over population and nongovernmental organizations; the proceeded elections are staged etc. The population from security zone is out of any democratic policy experience, the activity of political parties, registered at the Ministry of Justice of the Republic of Moldova, are prohibited on the left bank of Nistru river.

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Also the official power and the anticonstitutional regime have no univocal delimitation, mutually accepted, let it be unspoken, of areas of competence. There are locations on the left bank of Nistru river, with inhabitants that preserved their right to be under the jurisdiction of the Republic of Moldova. However, the same locations are present in the official maps of transnistrian moldovan republic. Therefore, inhabitants of these villages have been harassed and intimidated by the separatist regime on the expiration of many years, being forced to withstand the repressive actions of the anticonstitutional regime. In the same situation still remain the suburbs of Bender located on the right bank of Nistru river. In last few years in transnistrian moldovan republic takes place an intense process of privatization, including the privatization of major industrial enterprises. The privatization process is out of the legal framework of the Republic of Moldova; moreover official Chisinau does not recognize the actual and the past privatization in Transnistria. Usually, businessmen from Russia or phantom firms, created by separatists themselves, are announced as owners of the privatized enterprises. The European Court of Human Rights decision in case of Ilascu versus Moldova and Russian Federation from July 8 2004 provides specifically that Russian Federation is fully responsible for the establishment of separatist regime and possesses the decisive influence over the situation in the security zone. This mixture of factors leads to the single conclusion that transnistrian conflict is in fact the result of interests promotion contrary to interests of the Republic of Moldova, and people who stay at the forefront of this regime in transnistria actually are exponents of this antagonistic interests who usurped the power in this region of the Republic of Moldova, and they have no right to present themselves as legitimate representatives of the population living on separatist controlled zone. 2.1.2. Legal framework of the settlement of transnistrian conflict It is necessary to mention the fact that from legal point of view the conflict consists in disobeying the Constitution and legislation of the Republic of Moldova by the self-declared authorities from the eastern region of the Republic of Moldova, which is the single subject of international law in this territory. Within this eastern region of the Republic of Moldova the state structures have been destroyed; this structures supposed to ensure the application of Moldovas legislation or from legal point of view settlement of transnistrian conflict means returning of this territory in the legal space of the Republic of Moldova. The Constitution of the Republic of Moldova adopted in July 29, 1994 is provided with provisions which determine the legal framework within the limits should be solved the problem of reintegration of the country. First of all its about Article 111 Special Autonomy Statutes: Article 111. Special Autonomy Statutes (1) The places on the left bank of the Nistru river, as well as certain other places in the south of the Republic of Moldova may be granted special forms of autonomy according to special statutory provisions of organic law. (2) The organic laws establishing special statutes for the places mentioned under paragraph (1) above may be amended if three fifths of the Parliament members support such amendments. From these provisions of Moldovas Constitution follows that:

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a) the problem of reintegration of the country can be solved without obligatory assignment of any special legal statute for places on the left bank of Nistru river; b) in case of assignment of this special status places from the left bank of Nistru river can pretend only to autonomy statute within the unitary state and not in the least subject of federation; c) this also means that only the Parliament of the Republic of Moldova is in upright to decide upon competences of the expected autonomy and to approve this special legal statute. Nevertheless, Article 111 from Moldovas Constitution doesnt exactly correspond to the political realities determined by the conflict itself. First of all, because Bender situated on the right bank of Nistru river is controlled by the anticonstitutional regime, and is not provided by the Art. 111. At the same time, some places from the left bank of Nistru river defended their right to remain under the jurisdiction of constitutional authorities and therefore dont pretend to a special legal statute. Article 11 of the Constitution indirectly approach the situation on the left side of Nistru river, because this article entitled The Republic of Moldova as a Neutral State specify the following: Article 11. The Republic of Moldova as a Neutral State (1) The Republic of Moldova proclaims her permanent neutrality. (2) The Republic of Moldova will not admit the stationing of any foreign military troops on its territory. From the paragraph (2) Article 11 of the Constitution, in spite of the fact that neutrality of the Republic of Moldova is not recognized on international arena results that stationing of Russian military troops, including under the set up of peacekeeping troops, it is inadmissible from the point of view of Moldovas legislation. Legal framework occurred in continuation of the negotiation process There is a series of documents signed on the extent of many years of negotiations by the official representatives of the Republic of Moldova. By April 25, 2005 there have been an overall 141 signed documents, 26 make reference to political sphere, 61 to economical and 54 to interdepartmental. None of the document signed during the negotiation process was ratified by the Parliament of the Republic of Moldova or published in the Monitorul oficial, which means that these documents have no legal power. The absolute majority of the documents contravene the Constitution of the Republic of Moldova and the sides do not comply with. One single exception in this regard constitute the Agreement regarding the principles of a peaceful resolution of the armed conflict in the Transnistrian region of the Republic of Moldova, signed on July 21, 1992 in Moscow by the Presidents Mircea Snegur and Boris Eltin. This Agreement assured the ending of the armed conflict and created the Joint Control Commission (JCC), a commission created to ensure the practical implementation of this Agreement and coordination of the peacekeeping forces. However provisions of this Agreement contravene the Constitution of the Republic of Moldova no less than UN and OSCE standards. It is sufficient to notice that this Agreement provide the presence on the territory of the Republic of Moldova sides military troops as well as Russian troops for an indefinite term, which means that this territory tend to legalize for a unlimited term stationing of Russian military troops and of paramilitary troops of

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unconstitutional regime on the territory of the Republic of Moldova. Agreement of 1992 stipulates that JCC make decisions within consensus of the participating sides, yet again this is undeniably a violation of the sovereignty of the Republic of Moldova. International legal framework On the duration of existence of the transnistrian conflict there have been adopted a series of documents including in the framework of international organizations. First and foremost its about the OSCE Mission to Moldova established in April 1993 mandated in the negotiation process as of mediator. The OSCE Istanbul Summit Declaration adopted in November of 1999, Art. 18 and 19 refers to resolution of the transnistrian conflict. The Declaration univocally recognize the sovereignty and territorial integrity of the Republic of Moldova and welcomes the specific commitment of Russian Federation to complete withdrawal of the Russian forces from the territory of Moldova by the end of 2002. Its important to notice that OSCE did not manage to complete withdrawal of Russian forces from the territory of the Republic of Moldova nor did it succeed to contribute to achieve a progress in resolution of the conflict. OSCE can adopt any decision or document only in conditions when the consensus is reached, after Istanbul Summit of 1999 no objectives have been accomplished because of the Russian authorities position. The transnistrian conflict problem is also mentioned in the Treaty of friendship and collaboration between Russian Federation and the Republic of Moldova, signed on November 19, 2001. In this Treaty, Russian Federation recognize the supremacy of international law regarding transnistrian problem and its quality of co-mediator and guarantor respecting the sovereignty and territorial integrity of the Republic of Moldova. Treatys Art. 5 stipulate that each side will abstain from any actions that will damage the sovereignty, independence and territorial integrity of the Republic of Moldova. Both sides condemn separatism in all its forms of manifestation and take the obligation not to support separatists movements. Russian Federation commitment regarding the transnistrian conflict incontestably demonstrates that Russian Federation does not comply with provisions stipulated in bilateral Treaty of friendship and collaboration between Russian Federation and the Republic of Moldova. In connection with above aforesaid we can affirm that there is no legal framework necessary for the conflict settlement. 2.1.3. Institutional framework On 6 of December 2002 entered into force Law number 1520-XV for amendment and completion of Law regarding the Government by means of which was introduced the function of Minister of reintegration. RM President has signed the decree, according to which Minister of Reintegration was appointed Vasilii Sova. Minister of Reintegration is member of the Government. Other components of institutional framework that can also be considered as dealing structures tangential with transnistrian issue are: Ministry of Foreign Affairs;

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Ministry of Internal Affairs; Intelligence and Security Service; Border Guard Service; Customs Service; Ministry of Economy and Trade; Ministry of Justice etc.

To a certain extent JCC can be considered as tangential with transnistrian conflict settlement. 2.1.4. Existent problems The fact that Moldovan state continues to be divided is justified by the existence of a series of obstacles without elimination of which its impossible to settle the conflict and consolidate the statehood of the Republic of Moldova. Also people from both banks of Nistru river do not perceive themselves as enemies. The lack of progress in the conflict settlement and its frozen character can be explained by next particularities: totalitarian character of tmr leadership and presence of the repressive structures; - illegal economic activities (ware transit through Ukrainian customs, smuggling, illegal traffic of ammunitions and weapons etc.); - existence of military structures (army, ministry of state security, ministry of internal affairs etc.); - inefficient actual negotiation format; - inefficient actual peacekeeping format; - Russian Federation position; - Ukrainian position; cultivation in mentality of tmr population of the negative stereotype concerning the Republic of Moldova; - worries of tmr population regarding the consequences after the reestablishment of territorial integrity of the Republic of Moldova; - absolute deficiency of democratic political experience in the eastern region of the Republic of Moldova; - isolation of the population from the informational space of the Republic of Moldova; - disapprobation of the people diplomacy actions by the separatist regime. Therefore, reintegration Program and statehood consolidation of the Republic of Moldova should contain necessary actions in support of removing the obstacles and the consequences of forced isolation of eastern region population from the rest of territory of the Republic of Moldova. 2.1.5. Priorities in the transnistrian conflict settlement Short term priorities NATO and EU enlargement, new Kiev administration intentions in promoting of the pro-European and pro-NATO policy creates favorable conditions for resolution of

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the transnistrian problem on Moldo-Ukrainian border and putting an end to the illegal economic activity. The Republic of Moldova in partnership with Ukraine and EU follow to succeed: a) closure of the air space for Russian military aircrafts, which land and take off from Tiraspol military airport without any control of the Republic of Moldova. In order to assist and maintain the Russian military forces necessary flights may be realized through Chisinau airport on condition that Moldovan custom and frontier guard services will strictly control their way under monitorization of the OSCE Mission to Moldova. b) establishment of ware crossing regime on transnistrian segment of Ukrainian border in accordance with Moldovas legislation. c) association of Ukraine to the restrictions regime of circulation for tmr leaders by declaring them persona non grata on the territory of Ukraine. d) active EU implication in transnistrian conflict resolution through: organization and implementation of the International Monitorization Mission of Moldo-Ukrainian border under the auspices of EU; establishment of closer institutionalized relations between the Republic of Moldova and the EU (opening of the EU Diplomatic Mission in Chisinau, appointment of the EUs Special Representative for the transnistrian issue); permanent inclusion in the working agenda of the EU-Russia-Ukraine of the transnistrian issues; consideration by the EU of its corresponding position within international reunions and organizations etc. The Republic of Moldova must specifically declare its withdrawal from actual peacekeeping forces format and ask for their replacement with police troops with international mandate. A legal framework must be elaborated, necessary for assisting the reintegration process of negotiation. This process should contain the following stages: a) Adoption of a documentation (Declaration) within the Parliament of Moldova which should: give an legal-political appreciation of separatist phenomenon in the eastern region of the Republic of Moldova; evaluate the conflicts cause; give an appreciation of the present negotiation process framework, of the peacekeeping forces and situation in the area controlled by separatist regime; fix the final term limit of the state reintegration process. b) Elaboration of the reintegration Program of the Republic of Moldova by the Government, with further approbation in the Parliament, starting with demilitarization and decriminalization of the eastern region, and democratization of integrated Moldova. c) Adoption in the Parliament a set of legislative acts necessary for implementation of reintegration Program of the Republic of Moldova. From the content of the document (Declaration) follows that for each inhabitant, from the conflict area, should result a clear perspective in all aspects, in case of loyal attitude towards the reintegration Program of the republic of Moldova as well as contrary possible negative consequence.

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The problem of re-establishment of unique informational space represents a distinct priority without solution of which will be impossible to objectively and impartially inform the inhabitants from the conflict area, and respectively it will be unachievable to transform them into conscious followers of the reintegration process of Moldova. This unique informational space will be carried out through technical means (radio and TV transmitters) by covering the entire territory of the Republic of Moldova, through foundation of specialized editorial office for spreading the objective information and maintaining the dialogue between inhabitants from both sides of Nistru river. Medium term priorities The complete settlement of the conflict will lead to a final and irreversible integration of eastern region into the unique space of the Republic of Moldova; transformation of the Republic of Moldova into a sustainable and durable state protected from any separatists recidivism. In order to achieve that goal it is necessary to ensure a controlled and gradual reintegration of informational, economical, legal, educational, military spaces etc. Reintegration of the Republic of Moldova demands creation of circumstances and levers for annihilation of antistate separatists manifestations and encouragement of the eastern region re-establishment process. Possible supporters of reintegration of the Republic of Moldova (EU, USA) will contribute to the implementation of the revitalization of national economy Program of reunited Moldova. At the same time consolidation of the state requires the adoption of a new Constitution of the Republic of Moldova within a referendum proceeded in accordance with legislation of the Republic of Moldova. This new Constitution will contain the following provisions: 1. Proceeding to election of the President through electors direct vote. 2. Renouncement of state neutrality in the purpose of opening possibility of Moldovas adherence to the NATO assuring the external guarantee of state security. 3. Reorganization of the administrative-territorial division of the Republic of Moldova based on geo-economical criteria (5-7 administrative-territorial units with a sufficient degree of financial autonomy towards central authorities; present territory of tmr being divided in at least 3 segments distributed among these administrativeterritorial units); 4. Fixation of the key-element of the electoral system which would combine the Parliaments arrangements on political criteria, simultaneously establishing of a closer relation with respective administrative-territorial unit (lists of candidates from all electoral contestants in each administrative-territorial unit; the number of contestants on the lists should be proportional to the number of the voters).

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2.4. Local and Central Government reform This chapter on the Strategy for European Integration derives from the need for continuing the process of legislative and institutional reform in public administration in order to facilitate and urge the process of adopting the EU community legislation. As a consequence of implementing the given strategy, the Republic of Moldova undertakes to establish an administrative system and public administration institutions capable to implement and put into practice the acquis communautaire and to come close to the fulfillment of criteria for obtaining the EU membership, adopted by the European Councils in Copenhagen, Madrid, and Luxemburg. The public administration system needs to be changed in four aspects: 1) strategic aspect, i.e. redefining the government conscriptions; 2) legal aspect, i.e. insuring legislative clearness (transparency); 3) organizational aspect; 4) cultural aspect. A functional and efficient public administration system capable to fulfill the European Union standards and to efficiently implement the acquis communautaire will be established by observing and applying the following principles approved by the European Commission and based on the political criteria for joining the EU: separation of the political functions from the administrative ones; consolidation of a corps of professional and politically neutral public officers; subordination; clarity regarding the role, responsibilities, and relations between the institutions; inter-governmental and administrative cooperation with EU members and candidates for membership; transparency in the act of governing and administration; simplification of administrative procedure; involvement of citizens in the decision making process; coherence of the administrative act; improving management in the public administration system; decentralization of public services and consolidation of the administrative and financial autonomy; consolidation of the decision making, institutional, ownership, budget, and fiscal autonomy. 2.4.1. Management and coordination of the European integration process To insure an efficient management of the European integration process, as well as an eventual possibility for inclusion in the stabilization and association process, the Republic of Moldova must develop structures and procedures for preparing the countrys positions in the negotiation and joining process. Legislative framework: - Decree of the President of the Republic of Moldova on Establishing the National Commission for European Integration No.957-III of 13.11.2002;

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- Decision of the Parliament of the Republic of Moldova on Establishing the Commission of the Parliament of the Republic of Moldova for European Integration No. 84-XV, of 28.02.2003; - Decision of the Government of the Republic of Moldova on Creating the Department for European Integration No. 960 of 04.08.2003; - Decision of the Government of the Republic of Moldova on Approving the Structure, Staff Limit, and Regulation of the Department for European Integration, No. 981, of 08.08.2003. Although the legislation forming the institutional framework of European affairs is constituted of normative acts subordinated to laws (government decisions and dispositions, parliament decisions, presidential decrees), the text of the latter contains references to laws, based on which they were issued (Constitution, Law on Government, Parliament Regulation, Law on Diplomatic Service, etc.). A draft Concept of Integration of the Republic of Moldova has been developed and submitted to the European Commission. Moldova has gained practice in approving some regulations regarding the constitution and organization of the activity of some inter-ministerial coordination organizations, such as the Government Decision on Developing Trans-boarder Cooperation within Euro Regions of 11.03.2003. The specific of program documents (foreign policy concept, government programs, etc.) approved until currently is that these documents contain appeals addressed to EU for accepting Moldova as a member rather than internally assumed obligations for approaching the EU. Institutional framework State structures for insuring the management and coordination of European affairs were constituted within the last two year, along with the relevant legislation. Thus, the National Commission for European Integration (NCEI) was constituted on 13 November 2002, through a Presidential Decree. According to the wording of the respective Decree, the NCEI is constituted for the purpose of accomplishing the following two objectives: - to develop and submit to the Parliament for approval the European Integration Strategy of the Republic of Moldova; - to develop and approve the action plan for implementing the European Integration Strategy of the Republic of Moldova, as well as to coordinate its implementation. Article 3 of the Decree provides that the European integration policy shall be implemented by a public administration body instituted under the law conditions, implying that such body will be constituted subsequently. The NCEI includes 29 persons representatives of the central public authorities: Government (Prime Minister, Vice Prime Minister, ministers (responsible for state policies in areas related to the European integration process), vice ministers, heads of other specialized subdivisions of the central government); Parliament (vice chairman, head of the parliament commission, parliament members); Presidents staff (President councilor, heads of subdivisions); National Bank of Moldova (the Governor); one local government unit: The Governor (Bashkan) of the Gagauzian Autonomous Territorial Unit (GagauzYeri); one educational institution and one NGO.

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The Prime Minister plays the main role in the European integration process, demonstrating the strategic importance attributed to the integration process. The NCEI is presided by the Prime Minister who is assisted by a Commission vice chairman, represented by the Minister of Exterior and two Commission secretaries vice ministers of the Ministry of Exterior and Ministry of Economy. The commission decisions are approved through consensus, having a form of recommendations for the public authorities rather than being strictly normative in character. Due to the fact that the Presidents Decree contains no references about the procedure of organizing the Commission activity, there is an impending need for a regulation on the activity of the latter. Such a regulation has been developed but not approved yet. It would be necessary to include in the respective Commission representatives of other local governments, such as the mayors office of Chisinau municipality, given the share of its contribution to the national public budget. Another drawback is the fact that the institution document does not specify clearly if the Commission member is the person nominated in the Decree or the title holder of the respective position, which makes it unclear if the persons comprising the Commission will remain its members when they no longer hold their positions. Although it is still unclear if the Commission continues its office or delegates its responsibilities to another public administration body after an eventual association of the Republic of Moldova with the EU, we shouldnt underestimate the importance of having an efficient institutional organization to manage the European affairs. The NCEI constitution is the first attempt to institutionalize through a national structure the relationships established between the Republic of Moldova and EU ten years ago. To date there have been created only structures established in compliance with the Agreement on Partnership and Cooperation Between the Republic of Moldova and EU, and namely: Republic of Moldova European Union Cooperation Council, Moldova EU Cooperation Committee, and Republic of Moldova EU Parliament Cooperation Committee. The NCEI is also responsible for creating and managing work groups, as well as for insuring communication with the public and coordinating training activities on European affairs. A Department for European Integration (DEI) was created within the Ministry of Exterior of the Republic of Moldova through the Government Decision of 4 August 2003 for the purpose of strengthening the national institutional capacity for participating in the actions and initiatives related to our countrys integration in European structures, as well as for promoting the strategy for Moldovas adherence to the European Union. On 8 August 2003, the Government approved the DEI structure, staff limit, and Regulation. The Department was created on basis of the General Division for European Integration within the Ministry of Exterior, National Bureau For Stability Pact in South-Eastern Europe within the same ministry, as well as through taking over the relevant functions from the Ministry of Economy. The Department staff limit is 29 employees. The DEI is managed directly by the Prime Vice Minister of Exterior, one of the responsibilities of the latter being also to carry out secretarial works within the NCEI. The fact that concurrently with the DEI constitution the Government gave an instruction to ministries and departments to insure within one month the creation of subdivisions for European integration within each ministry and department has also a great importance. Based on the functions specified in the DEI Regulation, this public administration body has several roles that are very important in the joining process.

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Thus the DEI has the role of a coordinator duet o availability of the means necessary for insuring good inter-ministerial coordination within the period before joining the EU, being authorized to coordinate the relations between ministries and other central public administration bodies from the Republic of Moldova and the European Union institutions, as well as with the Special Coordinators Office of the Stability Pact for South-Eastern Europe. Pursuant to the Regulation, The DEI has the right to request from ministries and other relevant central and local public administration bodies to submit within the established deadline information regarding the European Integration, as well as their participation in activities concerning the relations of the Republic of Moldova with the European Union and within the Stability Pact for South-Eastern Europe, as well as to submit instructions to ministries and other relevant central and local public administration bodies on issues relating to European integration, relations with the European Union, as well as on participation of the Republic of Moldova in the Stability Pact initiatives. The DEI also purses the goal for insuring harmonization of various government programs and actions with the European Integration objectives and with the actions on regional cooperation in South-Eastern Europe. The DEI plays the role of a mediator, as it has the function to facilitate the cooperation between the authorized public institutions of the Republic of Moldova and the European Union structures, funding states or organizations, insuring the compliance of projects to be submitted for funding with the priorities of European Integration Strategy of the Republic of Moldova. The DEI will insure financial management of UE assistance, including through community technical assistance programs. Finally, the DEI has an information role, as it coordinates the organization of information campaigns and public opinion polls in the Republic of Moldova regarding the perspective of joining the European Union and the effects of the European integration process. Discussions are currently held regarding the creation of 31 inter-ministerial groups that would given specific technical tasks according to the number of chapters negotiated when joining the EU. With the time, the respective groups will become rather big, including a large number of specialists involved and absorbing considerable resources, particularly the groups created within the key ministries, such as the Ministry of Economy, Ministry of Agriculture and Food Industry. The staff working within such structures will have to master English or another EU official language perfectly and to know in details the EU policies and legislation relating to the respective sector. One of the basic functions of these groups is to develop sector position-related documents for the central coordination structure (currently the DEI). Short term priorities: - completing the foundation process and defining the procedure for the European integration subdivisions functioning within the relevant central public administration bodies; - approving the Regulation of the National Commission for European Integration; - constituting a inter-ministerial coordination committee at the level of vice ministers and heads of European integration subdivisions within the ministries and departments;

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- involving representatives of the civil society in the development and monitoring of European integration policies through providing the latter with a consultative statute within the European integration administrative structures; - specifying in the legislation the responsibilities of each public authority for the implementation of European integration policies; - developing and implementing an action plan for optimizing the activity of public administration bodies responsible for the management of European affairs and coordination of the pre-joining process. Medium term priorities: - preparing the legal and institutional framework for the creation of administrative units within local governments of 2nd level (raion governments, mayors office of Chisinau municipality, and Executive Committee of the Gagauzian Territorial Administrative Unit (Gagauz-Yeri), which will be responsible for coordinating the prejoining process at the local and regional levels; - developing and implementing a training program for public officers working for the central and local governments and responsible for the management and/or coordination of the pre-joining process; - developing and implementing a training program for court employees and parliament experts responsible for harmonizing the legislation of the Republic of Moldova with the EU legislation; - insuring harmonization of the Moldovan legislation with the European legislation, there is a need for a separate public authority. Taking into account the experience of states-candidates for joining the EU, such separate public authority could be: a legislative council within the Parliament; a decentralized system, under which each minister would be responsible for the compatibility of the sectoral legislation (under the coordination of the Ministry of Justice); a legislative office within the Prime Minister or coordinated by the DEI. - constituting a separate Ministry of European Integration based on the interministerial coordination committee and European integration subdivisions within the relevant central public administration bodies. 2.4.2. Public administration The administrative reform is a long-term process that can be implemented by several consecutive governments under fast changing conditions at the EU level. To accomplish this objective it is necessary to create a public authority for monitoring and coordinating the reforms in public administration according to the model of candidate states, because to date, the responsibilities in this field are split between various government structures. The first thing that needs to be done when creating the respective structure is to insure the link between the public administration reform and the European integration.

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2.4.2.1. Central public administration Legislative framework The organization and functioning of central public administration is regulated by several normative acts, including: - Law of the Republic of Moldova on Government, No. 64-XII, of 31.05.1990; - Law of the Republic of Moldova on the Procedure for Electing the President of the Republic of Moldova, No. 1234-XIV of 22.09.2000; - Law of the Republic of Moldova on Investiture of the President of the Republic of Moldova, No.1073 of 27.12.96; Law of the Republic of Moldova on Insuring the Activity of the President of the Republic of Moldova, No.1111-XIII of 20.02.97; Decree of the President of the Republic of Moldova on the Staff Structure of the President of the Republic of Moldova, No. 716-III of 10.06.2002; Decree of the President of the Republic of Moldova on Approval of the Regulation on Staff of the President of the Republic of Moldova, No. 720-III of 12.06.2002; Law on Empowering the Government to Issue Orders (Decrees), nr. 304-XV of 11.07.2003. Institutional framework The country leader has real possibilities for increasing the executive power efficiency, as he can suspend the Government acts coming into contradiction with the legislation, reshuffle the cabinet, etc. Most of the public administration reform processes are base don presidential decrees, whether on instituting some public authority or on promulgating some laws. The President of the Republic of Moldova is empowered with the right to appoint prosecutors, while the recent amendments to the Supreme Law (Law No. 1471-XV of 21.11.2002) provides him the right to also appoint the chairmen of court institutions. The legislation does not prohibit the President to concurrently fill the position of a party leader, however, this situation does not comply with the European administrative standards, taking into account the important functions of the head of a state in relations with the judicial power. Pursuant to article 96 of the Constitution, the Government is entrusted to carry out the general management of public administration, which, together with the leader of the state represents the executive power of the country, performing both political and administrative functions. The Government participates in the development of political decisions necessary for the implementation of public administration reforms through preparing draft decisions on the one hand, and approves its own administrative decisions aimed at creating the organizational framework for the implementation of political decisions on the other hand. The Governments Staff plays a central role in the Government decision making process.

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Existent problems It is considered that the Government structure for a country like Moldova is inert and oversized. We are witnessing a plurality of Government functions in most of the public sector fields, and sometimes even in the private sector, instead of reserving the exclusive function of developing general regulation and control policies, and delegating the supervision, certification, and licensing functions to third autonomous organizations with which the Government would have to interact in an objective manner. Specialists in the field consider it rational to reduce the number of ministries through merging. The tasks that are not being fulfilled by the presidential institution do not justify the maintenance of a numerous presidential staff. Over the years, the change of governments entail structural and organizational changes, the number ministries, departments and other relevant central public administration authorities being in continuous fluctuation. The creation of every government structure has certainly a persisting problem at its origin, as well as the acknowledgement of the need for settling it, the most recent example of that being the creation of the Ministry of Integration (the successor of the Minister of Integration) for the purpose of coordinating the process of settling the Transnistrian conflict. But the frequent changes in structures and names diminishes the quality of state policy promoted in the areas subject to restructuring, because, as a rule, the specified powers and functions of central administrative authorities and of services and offices differ much from the moment when the new institution is created, causing conflicts connected with the competence. The Government Staff hasnt yet proved a strategic planning unit due to the fact that the central executive body is oftentimes submitted drafts (projects) without any alternative versions. Sometimes the respective drafts do not take account of the financial support required, and/or do not present the result of a consultation or consensus between all the interested ministries. The drafts are oftentimes focused on short-term actions. Although on 10.02.2000 the Government adopted the Law on Administrative Court, the subject matter of which constitutes the administrative acts of normative and individual character issued by public authorities or other relevant authorities, through which a right of a person acknowledged through law is infringed, the control over the constitutionality of Government decisions and orders continues being carried out by the Constitutional Court, thus impeding the citizens to directly request the observance of the infringed rights through a government decision or order (disposition). Speaking in the same context, there is no legal framework that would insure the responsibility of ministries for the quality of government. A mechanism for repairing the prejudices caused by top government officials and public officers is practically missing too. Although the Court of Accounts carries out controls over the use of public funds by central public authorities, the decisions on the control results oftentimes fail to be published in the Official Gazette within 10 days from the date of their enforcement, as provided by the Law on the Court of Accounts No.312-XIII of 8.12.1994. Thus the public is not informed about the legality and efficiency of expenditures, as well as about the procedure for managing the public property. Many requests are submitted regarding the reduction of the number of regulations and simplification of administrative procedures, particularly regarding the access of the public and press to information, relinquishment of unnecessary procedures

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and approval of new procedures, adjusted to a new, modern political system and to a functional market economy. Given the increased number of requests to various government structures, there is an urgent need for implementing some e-Government techniques in the activity of central public authorities for some categories of public service beneficiaries. Unfortunately, there are not many public authorities who have access to Internet or to a website containing at least the basic information. The cooperation with public authorities from EU member or candidate states and the implementation of joint projects with the latter are difficult to accomplish duet o the lack of information technologies. Although the legislation regulating the organization and functioning of the central public administration has a legal effect on the entire territory of our republic, the normative actions and acts of the central public administration have a total effect only on 88% of the national territory, because the remaining 12% of the territory is controlled by the self-proclaimed authorities from the left bank of the Dniester. This reduces the quality of the administrative process and the efficiency of the actions taken, because most of the decisions are affected by the consequences of the Transnistrian conflict, which requires additional time, human and financial resources. Short term priorities: - instituting a public authority responsible for coordinating and monitoring the public administration reform activities, which would take over all the authority for coordinating and monitoring the public administration reforms from the central public administration structures; - allocating a budget for supporting the actions for implementing, monitoring and evaluating the public administration reform; - developing a draft Law on Decision Making Transparency in Public Administration, which would raise the degree of responsibility of the public administration before the citizens and stimulate the participation of the latter in the decision making process, insuring a high degree of transparency in the entire public administration system; - approving the Law on Ministerial Responsibility; - approving and applying the practice of justifying the expenses incurred by the central public administration institutions; - introducing amendments to the legislation regarding the establishment of accountability for limiting the access to public information; - developing a medium-term action plan for observing the principle of separation and cooperation between the powers in the state; involving European Union and European Council experts in the development of the given plan upon their consent; - introducing amendments to the legislation regarding the incompatibility of the function of a President with that of a political party leader; - developing scenarios of integration in the public administration system structures existing in the localities from the left bank of the Dniester.

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Medium term priorities: - optimizing the number of employees in the central public administration structures and re-directioning the staff units to other central or local public authorities according to the real needs of the latter; - transforming the Government Staff into a strategic planning unit, which would also perform administrative and secretarial functions. Transferring the political functions currently performed by the Government Staff into the responsibility of a separate structure, such as the Prime Ministers Office; - increasing the transparency in the activity of the public administration, encouraging the citizens to use their right for participating in the public decision making process through adopting the Law on decisional transparency in public administration; - developing and systemizing the administrative legislation system through adopting the Administrative Code; - completing the donor funded programs for supporting the implementation of the public administration reform; - developing an integral information system for the central public administration bodies. 2.4.2.2. Sectoral administration Legal framework: Law of the Republic of Moldova on Government, No. 64-XII of 31.05.1990; Decision of the Government of the Republic of Moldova on the Structure and Staff Limit of the Demobilized Public Services of Ministries, Departments, and Other Central Administrative Authorities, No. 735 of 16.06.2003; Decision of the Government of the Republic of Moldova on the Organizational Structure, Staff Limit, and or Regulations of Ministries, etc. Institutional framework Sectoral administration (Moldovan Constitution defines this term as specialized central public administration) is comprised of ministries, and other central administrative authorities (services, bureaus, agencies, etc.). All the ministries will be involved in the European integration. The group ministries having an economic, financial, and infrastructure development character (Ministry of Economy and Commerce, Ministry of Finance, Ministry of Agriculture and Food Industry, Ministry of Industry and Infrastructure, Ministry of Transport and Roads, Ministry of Ecology and Natural Resources) will be directly involved in the coordination of European integration policies, particularly in the development of policies necessary for insuring a good functioning of the domestic market. An important role is attributed to the Ministry of Justice as a consequence of the priority provided to the legislation harmonization, which is extremely essential in the pre-joining process. The Ministry of Foreign Affairs and European Integration will play in continuation a central role in developing and implementing the European integration

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policies, as it is perceived as having a neutral position in inter-ministerial conflicts which generally arise during the joining process. While carrying its activity in the respective field, each ministry is responsible for developing its own reform strategy, achieving general results, as well as for purely administrative operations. Along with the constitution of the Department for European Integration, there were created specialized European integration units within the ministries and other central administrative authorities. The latter will now have to be standardized, establishing their work plan and schedule of meeting between the representatives of these subdivisions, which will contribute to improving the interministerial coordination capacity. Another form of coordination is represented by the inter-ministerial work groups carrying out permanent or non-permanent activity, depending on the issues addressed by the latter. The important thing here is to clearly state which public authority is responsible for constituting such work groups. If the respective groups are constituted and coordinated by the Department for European Integration, they will have a uniform structure and include the government policies on European integration in their agenda. Current problems The separation of political activities from administrative ones is a particular problem that relates to the internal restructuring of ministries. To outline the administrative functions of ministerial public officers, the experts of the EU Assistance Project on Improving the Staff and Modernizing the Functioning of Public Administration in the Republic of Moldova suggested instituting the position of State Secretary within each ministry. This position is a stable one, and the activity under it, like the activity of all other public officers, is not affected by the Government investiture procedure. In addition to other responsibilities, the State Secretary will take over the management of human resources from the Minister; the latter being attributed mainly political activities. The advantages of instituting this position include continuity in the staffs activity and, respectively, reduction of costs for training public officers; impartiality of employees; clear objectives for administrators; a better implementation of the Government activity program. There is an impelling need for a structural and functional adjustment of each ministry, because part of their functions have been delegated to local public authorities, demobilized territorial extensions, and private sector, while some of them have simply disappeared as outdated ones. New normative acts regulating various aspects of the activity of specialized central public administration institutions are oftentimes approved without abrogating the old ones. There are ministries that have several regulations. Most of these normative acts contain no provisions specifying the obligation of the public administration institution to provide information of public interest upon request, but all of them contain the provision specifying that the Minister shall insure keeping of state secrets within the Ministrys Staff and subordinated organizations. The execution of the citizens right for accessing information within ministries and other specialized central public authorities is limited to the fact that the press bureaus or public relation divisions hold some press conferences or provide information at the discretion of the public; however, some of the ministries have no such structures so far. The society is facing problems that cannot be included in the area of activity of one single ministry, however the latter are oftentimes not interested in having

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partnerships with the civil society, while in democratic country the policies result from the decisions made by different organizations at various levels, and not from the activity of one single actor. The normative acts of the specialized public administration are not applied in the localities from the left bank of the Dniester. This is why when developing the state policies and introducing corrections in macro-economic and fiscal policies, as well as in investment projects, the ministries have to subtract this region from the calculation. This leads to highlighting the differences in all the areas of public and private sectors, and to an increased discrepancy in the development between the localities from the left bank of the Dniester and the rest of the country. The administrative structures that are currently functioning in the Transnistrian region were created in an abusive manner, by neglecting the national and international legislation, carrying out activities in conditions of selfisolation, assuming the functions of specialized central public authorities in the localities from the left bank of the Dniester. Short term priorities: separating the political functions from the administrative functions through institution of the position of State Secretary within the ministries, who will be attributed administrative functions, including the management of human resource. The political functions are to be performed by the Minister; - developing weekly activity programs for the European integration subdivisions within the specialized central public administration and monitoring the implementation of the given programs on a weekly basis; - studying the administrative structures and practices of other member states and candidates for joining the EU; - involving a consulting structure from outside of ministries for carrying out experts reports on analyses, policies, and policy scenarios through attributing to some specialized NGOs the consultative statute within ministries and departments; - abrogating the old normative acts which overlap the new acts regulating the activity of ministries, agencies, etc., updating the Government decisions on organization and functioning of ministries; - developing a plan for optimizing the number of agencies, secretariats and offices through merging or transferring them to ministries as specialized divisions within the latter, or transforming them into totally or partially self-sustainable government agencies; - commissioning the Ministry of Reintegration with the task for coordinating the execution by ministries and other central administrative authorities of analyses, polices, and policy scenarios for integrating the administrative structures from the Transnistrian region in the national public administration system and for adjusting the latter to the European administrative standards.
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Medium term priorities: - improving the coordination and cooperation between government institutions and attracting the citizens in planning and carrying out control over the activities from the public sector;

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- separating the ministrys functions from the functions of subordinated agencies, thus improving the ministries decision making capacity, as the latter must perform the role of the main institutions responsible for formulating, analyzing, and supporting the policies in the respective area of activity; improving the decision making capacity of ministries; - developing modernization strategies for each public administration institution; - harmonizing the structures of the specialized central public administration with the standards from the EU member states. 2.4.2.3. Local public administration Legal framework Starting 1994, a number of laws were adopted for the purpose of applying the principles of local autonomy in practice, decentralizing the public services, insuring eligibility of local public authorities and consulting the citizens on local issues of special interest provided for in Article 109 of the Constitution. These included: - Law of the Republic of Moldova on Local Public Administration No.123-XV of 18.03.2003; - Law of the Republic of Moldova on the Status of Local Elect, No. 768-XIV of 02.02.2000; - Law of the Republic of Moldova on Territorial-Administrative Organization of the Republic of Moldova, No. 764-XV of 27.12.2001; - Law of the Republic of Moldova on Public Property of TerritorialAdministrative Units No.523-XIV of 16.07.99; - Law of the Republic of Moldova on Local Public Finance No.397-XV of 16.10.2003; - Law of the Republic of Moldova on Approving the Regulation on the Constitution and Functioning of Local and Raion Councils No.457-XV of 14.11.2003; - Title VII Local Fees of the Tax Code No.1163-XIII of 24.04.1997. The statute of Chisinau municipality and that of Gagauzian TAU (Gagauz-Yeri) are regulated through special laws. The European Charter of Local Self-Administration was ratified by the Parliament of the Republic of Moldova in 1997, and come into effect in the Republic of Moldova on 01.02.1998. Institutional framework In 1999, the Republic of Moldova followed the general tendency registered in the EU member states and started reducing the number of territorial-administrative units of 2nd level, substituting those 32 raions with 10 counties (judet). The number of territorial-administrative units was also reduced through merging some villages in communes. Chiinu municipality and the Gagauzian TAU (including three raions) maintained the statute of territorial-administrative units of 2nd level. The reform didnt affect those 5 raions formed and controlled by the self-proclaimed authorities from the left bank of the Dniester, for which the Moldova authorities provided an eventual statute of autonomy. One of the goals of this reform was to consolidate the regional and local

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systems that insure the financial autonomy through increasing the taxable basis of the territory and obtaining proper incomes for local needs. The county (judet) territorial-administrative organization system didnt last even one office term of local elects, which makes it difficult to appreciate its strengths and weaknesses. Nevertheless, in specialists opinion, the potential of counties differs radically from the potential of small raions. This time we can speak about the development of some potential regional centers, but compared to the former raions, the counties (judet) were supplied better from the economic and social points of view, having a much stronger infrastructure and even an identity in process of formation. For all that, in 2003 the country went back to the raion type territorial-administrative system, reorganizing the local public administration, as a result of which the number of territorial-administrative units of 1st level growing by 30% as compared to the precedent administrative system. Moldova has two local public administration levels - the first level (villages (communes), towns (municipalities)), and the second, intermediary level (raions, Chisinau municipality, and Gagauzian Territorial-Administrative Unit). On the first level, the administration of public affairs is carried out by the mayor (executive authority) and the local council (deliberative collegial authority). On the intermediary level, the executive authorities carrying out activities include: in raions raion chairman (president); in Chiinu municipality the General Mayor, in the Gazauzian TAU the Governor (Bashkan). The deliberative authorities include: in raions raion councils; in Chiinu municipality municipal council, in the Gguzian TAU Peoples Assembly. While carrying out their activity, the local public authorities approve normative acts subordinating to laws and Government acts. Existent problems The local public administration is the one that has been subject to most frequent reorganizations since obtaining the countrys independence in 1991, being the weakest chain in the Moldova public administration system. The analysis of the local public administrations activity carried out within the last years, including during the period after returning back to raions showed deficiencies that can be divided into several categories: 1) insufficient funds for covering the responsibilities given to local authorities, which can be considered as limitation of financial autonomy; 2) lack of a clear delimitation of competencies (powers) between the government and the local public authorities, as well as between different levels of local public administration; 3) interference of central public authorities in areas under the competence of local public administration; 4) incipient state of the institutional dialogue between the government and local public authorities, as well as between different associations of local public authorities. The local public finance system is marked by two phenomena. Thus, the fiscal decentralization is reduced, as the share of the own incomes of territorial-administrative units is relatively small, while the local public administration has limited rights in making decisions on local taxes and fees. At the same time, the local public authorities have limited rights in making decisions on the destination of budget expenditures and budget excesses. The diminished level of these two indicators (of fiscal and financial decentralization) shows a certain degree of limiting the local financial autonomy. The

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experience of European countries shows that at least one of these indicators should be higher in order to counterbalance the second one. The practice of deciding upon the majority of budget problems in the center discourages the partnership initiatives between the local administration and entrepreneurs on the one hand, favoring the hiding of incomes and tax evasions on the other hand, which have negative repercussions on the national public budget. There are serious doubts in the Republic of Moldova concerning communal responsibilities, and, respectively concerning their funding, moreover concerning the relation between the local administration and the government in this respect. The Law on Local Public Administration should specify the areas of activity of each local administration level in order to avoid overlapping of the responsibilities of territorial-administrative units of 1st level with the responsibilities of the territorialadministrative units of 2nd level in some segments. The formulation of powers delegated by the state to local public authorities in the same Law has a general character. Normally, the powers delegated to local public authorities should be specified in the legislation regulating various areas of activity with a possible limitation of the degree of discretionary actions in the management of public services. Sometimes, the central public authorities make decisions on issues that are under the responsibility of local public authorities. A good example of that serves the taking over by the Government of the sanitation engineering service in Chisinau municipality. In the same context, there is a discrepancy between the powers delegated to territorial-administrative units and the expenditures allocated for their exercising. The statute of local public property is another problem that caused confusion regarding the local powers as compared to central ones. Disputes would arise permanently regarding the division of administration authority, which impedes the insurance of an efficient local autonomy. The local authorities have not always been beneficiaries of the property transfer process or of changing the title holders as a result of unlawful privatization. This was one of the reasons leading to mass bankruptcy of some of the most important public services at local and raion levels. The problems arising in this situation are caused by overlapping of the property claims and the lack of inventory that would constitute the subject of distribution. Property administration envisions freedom in carrying out property sale/purchase or lease operations, but the current legal framework limits the right of local public authorities for administrating the local public property. At the same time, it is worth mentioning that the Civil Code, the Law on Public Administration, as well as the recent Government decisions have launched a process for delimiting the legal statute of the property of territorial administrative units, as well as for determining the statute of public assets and private assets of the territorial administrative units. The staff of mayors offices and raion councils is still regulated by the central government, which has created a discontinuity in the mayors office activity. Currently, if there is a need and available extra-budget resources for paying salaries to a larger number of local officer in a specific area, local public authorities can institute such functions based on the structure, sample staff number, and wage system for the employees of mayors offices and raion chairmans staff approved by the central executive authority, which is closer to the meaning of the provisions of article 6 of the European Charter for Local Self-Government. The imperfections admitted in the legislation would oftentimes generate wrong interpretations and even conflicts between local public authorities of different levels. In

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some cases, the lack of a clear delimitation of the competence areas leads to situations when the latter are sometimes established arbitrarily and non-uniformly by the central or raion authorities, to the detriment of local authorities. The term local autonomy also envisions reduction of possibilities for carrying out occasional controls. The current Law on Local Public Administration offers to any central government body the right to interfere in the activity of mayors offices or of raion public authorities under the pretext of an occasional control. The law contains no provisions stipulating the conditions and procedure for calling to account the higher administrative bodies exercising illegal control over the local public authorities. Despite of the approval of the Law on Administrative Court that regulated the control over the legality of acts issued by the local administrative authorities, the Law on Local Public Administration allows the central authorities to carry out administrative controls over the legality of actions, as well as occasional (opportunity) controls over the execution of functions delegated by the state to local public governments. Taking into account the recommendations of the European Council No. R (98)12 and No. R(2004)1, which establish the right and principles for carrying out administrative control over the activity of local public authorities by the central government bodies, as well as the actions for limiting the financial autonomy of local authorities, the provisions of article 8 of the European Charter on Local Administration should be added so as to specify the procedures and cases in which the central public authority can verify the legality and opportunity of administrative decisions or actions taken by local public authorities for the purpose of excluding the situations of ungrounded interference of the occasional administrative control authority in the activity of local authorities. In addition, the Law on Administrative Court is permanently modified in the part relating to the subject matter of an administrative court proceeding (what kind of normative acts can be subject to controls) and individuals who are entitled to claim the legality of administrative acts. After the territorial-administrative reform, the territorial offices of the Government Staff took over the function of carrying out control over the legality of acts issued by local public authorities, which was previously performed by the prefects offices that were dissolved as a result of the reform (which represented the Government in regions, performing the general management of territorial services of the ministries and departments). The territorial offices of the Government Staff are located in regions, and not in each raion center. The new version of the Law on Local Public Administration makes distinctions between the decentralized and disconcentrated public services, while the raion president does not manage to insure to the necessary extent the general management of both decentralized and disconcentrated services of the specialized central public authority (ministries, agents, national bureaus, etc.). The territorial offices of the Government Staff have not been offered the possibility to claim any act issued by the local public authority contradicting the legislation invalid. To exclude situations in which the central authorities use the given body for the purpose of exercising influence over the local elects representing a political party other than the ruling one, the officers working for such territorial offices should be appointed on basis of their professionalism, impartiality, without taking into account the political pertinence (affiliation). The priorities of the local government reform constituted the subject matter of an Associated Program of the European Commission for Developing a Stable Democracy in the Republic of Moldova. A Conference on the topic Decentralization in Moldova:

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current performance and future trends was held within this program on 8-9 July 2003, in Chiinu. The conference participants developed an action plan for strengthening the local democracy in Moldova. The priority objectives developed further on were based on the respective action plan, and their accomplishment will help accelerate the reforms in other fields of the public sector and will implicitly bring the Republic of Moldova closer to the European administrative standards. Short term priorities: - developing and approving the Law on Decentralization; - conducting a pertinent study on local public finance aimed at consolidating the financial autonomy through: establishing clear criteria for distributing the deductions between public governments of level I and level II; eliminating the intermediary authorities in the process of transferring the funds to local authorities; encouraging the cooperation of local authorities with the State Tax Inspection in collecting local fees; entitling the tax collectors within the mayors offices with the right to prepare official reports on individuals evading from tax payment and to submit them to court; consultation of local public authorities on making decisions related to the interests and rights of the latter; transferring to the local public authorities the share of public property that would help increase the economic potential of the given territory. - conducting a pertinent study on the areas of activity and responsibilities of local public authorities of different levels aimed at insuring a clear division of authorities through: introducing amendments to the legislation aimed at eliminating the overlap of the responsibilities attributed to local public authorities of level I and level II.; specifying the responsibilities and limitation of the degree of local governments discretion regarding the powers delegated to local public authorities by the state. - conducting a pertinent study for insuring an efficient administrative supervision through: establishing a clear procedure for performing occasional administrative supervision; identifying the priority areas of the administrative supervision; limiting the administrative guardianship (patronage) to a result-based supervision; establishing conditions according to which the territorial extensions of the Government Staff would perform legal supervision of the timeliness (opportunity) of acts issued by local authorities through approving qualified legal decisions in order to exclude the approval of ungrounded decisions; - promoting an institutional dialogue between the government and local public authorities through:

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introducing some institutional tools for permanent consultation on various aspects relating local democracy (public finance, delegated responsibilities, supervision, training, etc.), including through the associations of local authorities; - increasing the staff number in mayors offices, allowing the local authorities to independently decide upon the number of the staff needed. Medium term priorities: - preparing the legal and institutional framework for the constitution of some units responsible for European integration within the local governments of level II; - reviewing the legal and administrative framework regulating local taxation, reviewing the local tax system, examining the possibility for transferring the value added tax and income tax in whole and directly to the local budgets.; - approving the transfer of general state revenues directly to the local budgets of territorial-administrative units of level I; - monitoring the application of legal regulations on services, such as water supply, sewage, water purification, local transport, thermal energy, and public illumination services, as well as on owners associations and property administration; - reviewing and adjusting the legislation regulating the ownership relations of territorial administrative units; - strengthening the capacity of local governments for protecting their own interests in court; - systemizing the legislation on local public administration, insuring its compliance with the Constitution, as well as with the European legislation, including with the European Charter on Local Autonomy. 2.4.3. Public function Legal framework After the adoption of the Constitution on 29 July 1994, a legal framework specific to public functions and individual holding such functions was developed in the Republic of Moldova, including: Law on Public Officer No. 443-XIII of 04.05.95; Decision of the Government of the Republic of Moldova No. 192 of 01.03.2004 On Approving the Regulation on Filling in Public Position Vacancies; Decision of the Government of the Republic of Moldova on Approval of the Unified Classifier of Public Positions No. 151 of- 23.02.2001; Decision of the Parliament of the Republic of Moldova on Approving the Concept of the Staff Policy in Public Service No. 1227-XV of 18.07.2002, etc. The respective framework also includes legal provisions regarding special categories of public officers, such as tax service officers, customs and diplomatic officers, judges and prosecutors, etc. The Law on Public Service has a special role, as it regulates the terms public service, public officer, and public function (position), stipulating the principles, tasks, and administration bodies of the public service, categories of public functions (positions), procedure for instituting the latter, restrictions for holding a public function;

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procedures for hiring in a public position; professional training, labor remuneration and social insurance of public officers, dismissal, accountability of public officers, etc. The effect of the Law on Public Service extends over the individuals holding positions in central and local governments, judges, prosecutors and their deputies, investigators, employees of the diplomatic service, tax service, financial guard, customs control bodies, state security, police, military persons, but only in cases when the legal statute of the above-mentioned authorities is not regulated through special legal acts. Institutional framework As the public administration reform evolved, along with the adoption of a normative framework on public service, there were taken a number of actions directed towards development of the institutional framework and of a training system for public officers, and namely: Creation of the Academy of Public Administration Studies within the Government of the Republic of Moldova in 1993 (recently transformed into the Academy of Public Administration (APA) within the President of the Republic of Moldova); Creation of the Staff Policy Division within the Government of the Republic of Moldova in 1997 (currently the Government Staff Division). Existent problems A serious drawback of the legislation on public service is the fact that it makes no distinction between political officers and career officers working in public administration. The first category is threatened by a political risk, i.e. the risk to loose the work in cases when either the government of the local government changes as a result of elections or reorganizations. The second category cannot and shouldnt be subject to any political risk. The representatives of this category enjoy stability in their positions because the administration process quality depends on their activity. The instability in the staff reduces the public administration quality and requires additional funds for training new officers.. In general, the approved Law on Public Service is based on principles that are unanimously acknowledged in the practice of different countries, such as: designation, election, and appointment through contest. The designation in a function (position) was widely used in the Soviet system, persisting in the same form today as well, which fact impedes the creation of a highly professional, modern, and efficient service. Disfunctions arise in the moment when the above-mentioned officers are appointed in eligible positions or in positions requiring the announcement of a public contest. The appointment by the Government or by another central public authority of an executive authority pertaining to the responsibility of local public authorities is a direct assault upon the right of local communities to independently resolve and manage under the law the problems of local interest that are within their own responsibility. The legal framework that provides for the organization of contests for filling in public positions includes the Regulation on Filling in the Vacant Public Positions through Contest. The contest is organized by the public authority that has vacancies. The contest is held for persons involving or advancing in public service, as well as for officers previously included in the staff reserve. The contest includes two obligatory

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tests a written test, and an interview. Although the legislation includes a mandatory provision pursuant to which the information about organizing such contests and conditions for participation shall be published in the republican press, such information can be found very seldom, particularly as a result of general local elections, when the vacant positions in the local government are to be filled in, and no information can practically be found about vacancies in the central government. At the same time, the information about reorganizations of public authorities accompanied by staff dismissal is published frequently. The rights and obligations attributed to public officers through law do not differ at all from the rights and obligations of employees provided in the labor legislation, this is why there shouldnt be any difference between the officers and other employees (in reality, there is a difference in social guarantees). Within those 8 years of its effect, the Law on Public Services was subject to major amendments and additions, which leads us to the conclusion that this normative act is surpassed by time and than a new Law should be adopted. Specialists in public administration have concluded that this Law is in fact a labor legislation compendium, influenced by Europe in some way (pursuant to article 2, paragraph 2 of the given law, labor relations, insurance of pensions, and other public service relations that are not regulated by this Law shall be provided for in the relevant legislation.). A modern public administration system can create a balance between the responsibilities attributed and the trust reposed in public officers only within a well-outlined legal framework. Thus, we can feel the lack of an original Statute of public officer that would regulate all the aspects of exercising a public function. In May 2000, the European Councils Ministerial Committee voted for the adoption of an Ethical Code for Public Officers. Experts in the given field recommend formulating and structuring any ethical code in a way that would help the public officers easily assimilate the norms stipulated in it. The norms of such a code must stipulate observance by the public officers of the citizens dignity, loyalty to the institution they work for, abstention in expressing their political opinions, correct attitude towards colleagues and subordinates. Acceptance of a public function (position) must signify the acceptance of these standards. A modern public administration system is functional in conditions when the officers are remunerated according to their qualification and the importance of the work carried out by them. The current remuneration system is to a large extent based on advancement in career by fulfilling the conditions regarding the length of work, and on a bonus system to a smaller extent. The private sector, on the contrary, has a remuneration system based on the efforts of each employee made and measured through obtained results, as well as on the initial qualification level or the achieved one as a result of attending extension courses. Short term priorities: - preparation by every public administration institution of obligatory public officers training/extension plans;; - developing a draft Regulation on Public Officer and a draft Code of Conduct for Public Officers;

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- delimiting two types of public officers in the legislation on public service, and namely: political officers, and career officers in public administration who enjoy stability in their positions; - stipulating in details the public officers right to be informed about any action intervening in the fulfillment of work related obligations (work relations) and in the orders received from his/her superiors; - introducing an amendment in the legislation that would stipulate the filling in of administrative public positions exclusively through open competition; - modifying the legislation through establishing the accountability in cases of infringing the legislation stipulating the organization of open competitions for filling in the vacant public positions; - developing and approving the First Strategy for Training Civil Servants According to European Standards (2004-2007); - creating within the Academy of Public Administration under the President of he Republic of Moldova a subdivision for training the public officers on how to develop and implement European integration policies, studying the evolution of the public function regulations in the legislation of member states and of candidates for joining the European Union; - allocating a special fund for the staff formation, entered on a distinctive budget line. Medium term priorities: - establishing a remuneration system corresponding to the efforts made by the employees and measured by the obtained results and by the initial or the achieved qualification level as a result of a certain length of service; - simplifying the system of performance indicators (there are no specific indicators), used for measuring the results of the activities carried out by public officers; - approving the Regulation on Public Officers and the Code of Conduct for Public Officers; - harmonizing the latter with the European principles lying on the basis of a modern and efficient public service, performed for the purpose of meeting the public interest and put at the service of citizens; - specifying in details the regime of incompatibilities applicable to public officers to insure impartiality and neutrality in exercising the public function; - improving the regulations concerning the conditions for holding public functions in order to insure a staff of highly professional public officers and an attractive career; - analyzing and regulating trough law the reserve corps of public officers; - regulating the procedure for redistributing the public officers dismissed for non-imputable reasons and insuring the tools through which the central or local authorities could use this power; - increasing the observance of the public officers ethics and professional conduct; - improving the public service quality, as well as the relation between the administration and the citizens.

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2.4.4. Regional development Legal framework The legal and institutional framework for the regional development is in process of formation. The few existing normative acts regulating only certain relations and activities regarding the aspects connected with the territorial development. Regional policy constitutes a compartment of the medium-term Strategy for Social and Economic Development of the Republic of Moldova (up to the year 2005), No. 1415 of 19.12.2001, which defines the goal and strategic objectives of the regional development policy, as well as the action required for implementing thin policy. The lack of national regulations are partially compensated by international regulations, such as: European Convention for Trans-boarder Cooperation of Communities or Territorial Authorities (ratified through Parliament Decision No.596XIV of 24.09.99); European Charter Autonomous Exercising of Local Power (Authority) (ratified through Parliament Decision No.1253-XIII of 16.07.1997), as well as other constitutive acts of Euro regions to which the Republic of Moldova is a party.. Institutional framework The Ministry of Economy represents the government body authorized to develop and implement regional state programs, as it has a General Division for Regional Policy created for this purpose. Discussions are held today regarding the creation of a quaziautonomous structure for promoting the regional development policy according to the model of EU candidate states.. To date, the Republic of Moldova is a party to three trans-boarder initiatives, including: the Lower Danube (former Cahul county (Republic of Moldova), Brila, Galai, and Tulcea counties (Romania), and Odessa region (Ukraine)); the Upper Prut (former Bli and Edine counties (Republic of Moldova), Botoani and Suceava counties (Romania), and Cernui region (Ukraine)); the Siret-Prut-Dniester (former Ungheni, Chiinu, Lpuna, Soroca, and Orhei counties (Republic of Moldova), and Iai, Piatra Neam and Vaslui counties (Romania)). Thus, given the countrys form and geografic position, approximately 70% of its territory (except for Chisinau municipality, Gagauzian TAU, Taraclia county, and the localities from the left bank of the Dniester) and approximately 80% of the population of the Republic of Moldova is involved in trans-boarder initiatives. Existent problems Until currently, the creation of a territorial framework coordinated with the EU member states used to constitute the main concern of researchers rather than of the governors. Although the medium-term Strategy of the Social and Economic Development of the Republic of Moldova envisions the examination of possibilities for instituting a Fund for Regional Development which could finance various investment programs for developing the infrastructure, and for creating conditions to attract extra-

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budget investments in disfavored regions, the budget regulations approved until currently, including the Law on Budget for 2004 contained no provision on the creation of such fund. The main problem relating to regional development in the Republic of Moldova is the great difference of the social and economic development between Chisinau municipality and the rest of the countrys territory. This difference is characterized by three main particularities: a) relatively high concentration of economic activity in Chisinau municipality; b) well-marked difference in the living standard between the capital and the rest of the territorial-administrative units; c) Great difference in the development of infrastructure and production factors between the capital and the rest of the country. Although Chiinu municipality inhabits 21% of the countrys population, the latter insure approximately 50% of the GDP. Due to the fact that the Republic of Moldova is a small state and has no national system for insuring financial equality, the economic agents prefer registering their businesses in the capital. The economy is mainly oriented towards agriculture, so the economic activities are unfolded in provinces, while the taxes and fees are collected mainly in Chisinau municipality. The territorial-administrative reform of 2003 established a lower limit of 1,500 inhabitance for a locality with a mayors office, however some exceptions were allowed as well. But without associating with each other, such localities wont be able to provide efficient public services requiring funds accumulated only if having several sources that constitute the local budget revenues. The average number of inhabitants in those 32 raions created as a result of the reform to substitute the former 10 counties (intermediary territorial-administrative units located between the basic local communities and the state) is approximately 76,000, being the smallest among the Central and East-European states.. The localities from the left bank of the Dniester are not included in the regional policy related actions because the given 12% of the territory and 17% of the population are not controlled by Moldovan public authorities. This increases even more the difference in the regional development of the country. Another problem resides in the fact that the frequent territorial reorganizations and the conflict from the left bank of the Dniester have diminished the quality of regional statistics, which impedes the timely introduction of corrections in the regional policies, tax policy, investment projects, etc. Development regions can be created in the Republic of Moldova through association of neighboring territorial-administrative units upon voluntary consent. The Law on Local Government attributes to local and raional councils the right to decide under the law upon association with other local authorities for the purpose of carrying out some works or services of public interest, as well as for cooperating with local and foreign economic agents to carry out some actions or works of common interest. When delimiting the development regions one of the basic criteria should be the correspondence of the latter to the basic criteria of Euro states, defined through the Classifier of Statistical Territorial Units (CSTU) and the creation of prerequisites for the eligibility of the Republic of Moldova to be allocated funds for regional development from the EU. The conventional development regions created through voluntary consent of local public authorities should correspond to the optimal level of territorial structures

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for planting and implementing the regional policy actions from the EU (CSTU level II). Any state regional policy will obligatorily take into calculation those 5 self-isolated raions from the left bank of the Dniester that constitute approximately 12% of the national territory. Apart from the fact that the Republic of Moldova is not yet in the situation of addressing conception, implementation and evaluation of the regional development policy and of the EU social and economic cohesion programs, in case of a possible inclusion of Moldova in the stabilization and association process for the moment, we can only define in general the territorial structure of the Republic of Moldova corresponding to the CSTU: CSTU Level I: Republic of Moldova CSTU Level II: Doesnt exist CSTU Level III: 40 raions (3 raions of the Gagauzian TAU, 5 self-isolated raions from the left bank of the Dniester, and 32 raions from the rest of the national territory) CSTU Level IV: There are not associations institutionalized by the territorial units CSTU Level V: 5 municipalities (Chiinu (the capital), Tiraspol, Bli, Bender and Comrat; the capital can be constituted as a CSTU Level II region) 59 towns with 39 villages added to them 912 villages (communes) with 1,567 added to them The CSTU type regions will constitute the framework for collecting specific statistical data in compliance with the current communit regulations. Short-tem priorities: Adopting the Law on Regional Development; - Developing and adopting: State Concept for Regional Development National Plan for Regional Development - instituting the following mechanisms for coordinating the regional policy at national level: the Coordination Council for Regional Development (comprised of representatives of local and central governments, and of civil society representatives), and the National Agency for Regional Development; and authorizing the latter to insure the accomplishment of the regional development policy objectives; - creating a National Fund for Regional Development, providing technical assistance for its management, and attracting funds for the respective fund; - developing a national financial equalization system; - organizing preliminary consultations with local public authorities (local, raional, municipal councils, and the Peoples Meeting of the Gazauzian TAU) on development region delimitation; - forwarding requests to participants in the negotiations for settling the Transnistrian conflict, to local public authorities from the neighboring states and to the European Council regarding the inclusion of localities from the left bank of the Dniester in the Euro regions to which the Republic of Moldova is a party;
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- consulting with the local government of the Gagauzian TAU and of Taraclia raion regarding their inclusion in the Lower Danube Euro region; - collecting statistic data relevant to the regional policy within the population census carried out on both banks of the Dniester; - explaining and carrying out public debates on defining the development regions. Medium term priorities: - defining the development regions according to the specific territorial problems; - creating the institutional structure that would administer the regional development policy at the level of development regions (regional development agencies); - developing and adopting the National Strategy for Regional Development and regional development programs for each such region; - developing a unified methodology for estimating the development potential and living standard in territorial-administrative units and for identifying the disfavored zones according to the European standards; - implementing financial encouragement programs and schemes for encouraging the regions and contributing to infrastructure and businesses development; - attracting additional funds for regional development through trans-boarder cooperation projects; - improving the local and central government interaction mechanism both vertically and horizontally in the process of developing and implementing regional policies; - implementing the financial equalization system; providing tax facilities to economic agents carrying out activities and paying taxes in provinces, particularly in disfavored zones; increasing the tax percentage for the economic agents operating in the capital; - approving actions for registering economic agents in the localities where the latter are carrying out economic activities; - enhancing the economic activities in regions through creation of industrial parks (centers), business incubators, free economic zones, and provision of support to the existing ones, as well as through attracting local and foreign investments and facilitating their international (outside) economic activities.

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