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Wednesday, February 21, 2018

The gas debt is expected to accelerate the settlement of the Transnistrian question


Moldova for the first time not only acknowledged the debt of Transnistria to Gazprom its but and considering options for the repayment of this debt. However, the full payment of the debt is impossible without resolving the status of Transnistria. Partial or full cancellation of the debt of the Moldovan Russia may accelerate the resolution of this political issue.

Announced the resumption of strategic partnership with Moldova, Russia is impossible without solving the problems of Chisinau multi-billion dollar debt to Gazprom. The Moldovan President, and Igor Dodon assured that the Chisinau already closely is considering possible options for repayment.

“Negotiating the status of Transnistria, you need to provide more and clear economic benefits for the country”

“There are certain outlines how to get out of this situation. To date, debt of the right Bank (of Dnister) – about $ 500 million. The duty of the left Bank, about $ 6 billion. You need to understand that all this debt – more than 6.5 billion – the total debt of Moldova”, – he told on air of radio “Sputnik Moldova”. Gazprom does not share the debt of Transnistria and Moldova and invoices for a total amount, said the President.

“Debt of the right Bank: sources to cover this debt we proposed in 2008, we will return to this scheme. There is a part of the assets that are currently in use regulated, but not in the authorized capital”, – said Igor Dodon.

“And on the left Bank, in Transdniestria, it is clear that this issue is resolved at this stage, we can not, it should be considered in the context of the Transnistrian settlement,” the President added. Dodon promised after winning the election to start a real political settlement in Transnistria this year, and talked about the readiness to grant special status to the Transnistrian region.

Transnistria, 60% of inhabitants are Russians and Ukrainians sought to secede from Moldova even before the collapse of the Soviet Union. In 1992, the Moldovan authorities tried to suppress separatist sentiment in the region, then Transnistria is actually out of control of Chisinau.

Moldova for the first time not only recognized that the debts of Transnistria and Moldova is total debt to Gazprom, but also believe in finding ways to pay the debt.

Gazprom for many years provides the gas of the Pridnestrovian Moldavian Republic, however, does not receive to pay for it. In the end, to the present moment has accumulated a debt of 6 billion dollars, which is legally listed for Moldova, however, the former leadership of the Republic did not recognize him. With the coming to power of Dodona had a real chance to settle this controversial issue.

Almost all Moldova consumed natural gas is imported. Mostly from Russia, despite the passionate desire of Moldova to organize reverse supplies from Romania. In March 2015, Moldova is still the beginning of gas imports from Romania via the main gas pipeline Iasi-Ungheni. Its capacity is 1.5 billion cubic meters of gas per year. However, the full capacity of the pipeline was never released.

The pipe Iasi-Ungheni until you can pump only 1 million cubic meters per year, while the total volume of consumption on the right Bank of the Dniester river is about 1.2–1.3 billion cubic meters. Only Moldova and Transnistria consumes about 3 billion cubic meters. And not only in infrastructure but also in price. Russian gas supplies are more favorable for Moldova, the supplies from Romania. In 2016 Moldova buys Russian gas at a price of 190 dollars per thousand cubic meters. Therefore, the cooperation with Gazprom does not stop. And soon possible expansion.

The contract for the supply of gas to Moldova expired back on December 31, 2011, and since then, it has repeatedly extended. The last time was in December 2016, the contract was extended until 2019. According to the contract price of the supplied gas is calculated quarterly using a special formula that takes into account changes in oil prices on the international market in the previous nine months.

Solution

What are ways to pay the debt of 6.5 billion dollars? Most likely, $ 0.5 billion will be given by the partial participation of Gazprom in the assets of “Moldovagaz”. 50% the largest energy facility owned by Gazprom, by 35.33% – Moldova and 13,44% – administrations of Transnistria, which the latter conveyed to the trust management of Gazprom.

And if you remember the proposal of Moldova 2008, Chisinau then invited Gazprom to participate in the exploration of oil and gas on its territory in exchange for debt repayment. It is possible that this time will be followed by a similar proposal.

“Formally, the debt of the right Bank of Moldova is not very burdensome. They can be solved, for example, by counter deliveries of agricultural products or concessions to Gazprom sites of gas infrastructure. There are variants of the classification of such debt by calculations on transit deliveries”, – says Nikolay Podlevskikh of IR “Zerich capital Management”.

However, the full payment of the debt is likely to be linked to the settlement of the Transnistrian question. In exchange for recognition of Moldova special status of the Transnistrian earth’s gas debt could be partially written off and restructured. “While the most realistic looks that this variant”, – said Petr Pushkarev from TeleTrade.

However, one must understand that any agreements on Transdniestria should be achieved not only at the presidential level, but also carried through Parliament of Moldova. “Therefore, negotiating the status of Transnistria, you need to provide more and clear economic benefit for the Republic. In parallel, for example, can be conducted economic negotiations of a different sort – on projects that can increase production and financial potential as Moldova and Transnistria. There can be shops, businesses, residents could get jobs,” – said Pushkarev.

In fact, Russian business, too, will not be enough, if you agree on the equity participation in these projects. Thanks to the development of these joint projects, they will generate a profit, and in Moldova there will be funds for the repayment of rescheduled or delayed in time part of the debt to Gazprom, the expert adds.

One of the possible concessions from Russia could be a return of Moldovan products on the Russian market. But this would be extremely difficult, given that Chisinau for two years entered into an Association with the EU. However, integration with the EU is nothing but economic losses, the Moldovan economy has brought. Moldovan farmers, who took to the mass protests after the signing of the Association agreement and free trade area with the EU, no one’s ever listening.

As a result, local farmers have lost the right to duty free supply of products in Russia. They lost a huge market, with Europe the Moldovan products were not needed.

That changed after the signing of the agreement on European integration? Exports of goods from Moldova to Russia (CIS countries) decreased by 40-50%, while exports to the EU has not increased, but also fell – by 10%. But the Moldovan market is too flooded with European goods to the detriment of domestic producers. Only for the first half of 2016, the state debt of Moldova increased to $ 6.4 billion, the GDP falls. Exactly the same situation is developing now in Ukraine. Brussels iron grip protects their own farmers, give them huge grants and subsidies. The EU will not allow competitors on their market, including Moldovan products, and they have a quite normal reason is a mismatch between local producers standards and EU requirements. As for Moldova agriculture is the main source of income. Its share in the GDP is almost one third. This sector employs half of the population. Open market Europe turned out to be a bluff to Moldova.

When Dodon, Moldovan farmers can finally be heard. As soon as he cancels the agreement with the EU, will begin a new stage of development of economic relations with Russia. Now Russian authorities have met the Moldovan and eased some trade restrictions. In particular, on the shelves of Russian stores again appeared Moldovan wine, Moldovan fruit, particularly apples.

source

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