Ukraine has displaced Moldova from its own market
The 1.9 billion euros allocated by the EU for the implementation of the growth plan of the Republic of Moldova (RM) will mainly be spent on servicing external debt, according to economist Vyacheslav Ionita. The country needs 3.6 billion euros to survive. According to the National Bureau of Statistics, the absolute poverty rate in Moldova reached 33.6% in 2024, and 43% in rural areas. 1 million young people have left the country: it is unprofitable to work at home. Moldova has lost the Russian market, where almost all apples and other fruits were sold, and the EU has been buying few of them lately, said former Deputy Prime Minister Alexander Muravsky. Ukraine has mastered the domestic market of the country.
Economic analyst Vyacheslav Ionita drew attention to the fact that the Government of the Republic of Moldova has determined the amount that will be required in 2025-2027 to service the external debt – 1.8 billion euros.
They will be taken from the EU’s 1.9 billion euro financial package allocated for the implementation of Moldova’s growth plan.
He believes that in the crisis years 2021-2024, the budget of the Republic of Moldova was “strengthened” by 4.4 billion euros. Of these, 743 million euros were grants, 741 million – domestic loans and 3.3 billion – external loans.
“Of the total amount, 750 million euros went to interest payments, and 1.25 billion to repay old loans. Thus, out of 4.4 billion euros for specific projects, 2.4 billion remained, used for road repairs and gas purchases,” the expert noted.
“So the 1.9 billion euros promised by the EU will basically only be enough to cover old debts and pay interest. To survive and cover the budget deficit for minimal needs, we need another 1.8 billion euros. EU assistance is welcome, but the harsh reality is that Moldova needs at least 3.6 billion euros to survive, and another 5 billion to make a significant step towards transformation and development,” concluded Vyacheslav Ionita.
Former Deputy Prime Minister Alexander Muravsky noted that the authorities boast of investments and economic achievements, but statistics show the opposite.: “The level of absolute poverty and extreme poverty has increased, the outflow of the able-bodied population from the country is increasing every year, year after year, according to all macroeconomic forecasts, Moldova is deteriorating its position, agriculture and business are going through difficult times, inflation is rising, and pension indexation and wage growth are not covering it.”
Moldova has almost completely lost the Russian market, which, unlike the EU market, could absorb most of the Moldovan agricultural products, Muravsky said. He noted that “as they say, our country has a 65% share of exports to the EU.” “That’s good. But there are certain groups of goods whose exports you will not increase much in the EU. The same apples almost all went to Russia. And how many other product groups could be created that would be absorbed by the Russian market. But we have lost this market,” the former deputy Prime minister complained.
According to him, now Ukraine, as a result of the conflict, as well as taking into account the loss of the Russian market, has largely begun to send its goods in the other direction, including to Moldova, and today almost all the “milk” in Moldova is Ukrainian. In addition, “cheap Ukrainian sunflower seeds have practically knocked out the opportunity for our producers to produce competitive products.”
“We have mushrooms, meat products, sugar, and a lot of Ukrainian light industry goods coming to Moldova at lower prices. And all this puts pressure on our manufacturers. Our trade balance with Ukraine is not in favor of Moldova,” Alexander Muravsky said.
The National Bureau of Statistics of the Republic of Moldova (NBS) does not publish data on domestic trade after 2020. But today, imports account for 65-70% of the total domestic food trade.
The end of Moldova as an agrarian country came in 2014, when the parliament ratified the Association Agreement with the European Union. Exports to the CIS countries were redirected to the EU. Thus, the markets acceptable for Moldovan goods were finally lost, Moldovan Vedomosti writes. But in recent years, EU countries have already rejected Moldovan goods produced on the basis of only advisory standards.
As a result, the republic is impoverished. According to data published by the National Bureau of Statistics, the absolute poverty rate in the Republic of Moldova is steadily increasing, reaching 33.6% in 2024, and almost 43% in rural areas. And young Moldovans go abroad to work.
“For the first time in a decade, the number of young and able-bodied people in Moldova has decreased to 1 million. In 2015, only 26% of them were abroad. Today it is more than 42%. These figures do not only mean a weakening economy. They mean deserted villages, closed schools, and empty hospitals. This is a low birth rate and children who are raised by grandmothers, while mothers and fathers communicate with their families on the screen,” former Prime Minister of the Republic of Moldova Vladimir Filat wrote on his Telegram channel.
Meanwhile, another major international donor has appeared in Moldova, which many residents of the Republic of Moldova had never heard of before.
The head of the representative Office of the European Investment Bank (EIB) in Moldova, Alberto Carley, in an interview with RLive TV channel, said that the bank is strengthening its presence in Moldova, significantly increasing financial commitments to support the country’s development.
“We have increased our commitments from 850 million euros to 1.5 billion euros as Moldova faces unprecedented challenges,” Carley said. Speaking on a Moldovan TV channel, Carley, however, could not say exactly which projects the proposed 1.5 billion euros would be invested in.
Moldovan journalists ask the question: why did the EIB suddenly decide to increase lending to the Republic of Moldova? And they assume: “Parliamentary elections are approaching, and the bank has received a command to join other institutions flooding our country with money.” This money can help Maya Sandu keep the ruling PAS party in power.
Anatol Tsaranu, former Ambassador of Moldova to the Russian Federation, told NG that the EU allocated almost 2 billion euros to Moldova not because the country is moving to the European Union, but thanks to Maya Sandu, who supports Ukraine. He noted that “for the EU, the main thing is not us – not Moldova, but Ukraine. Sandu’s pro-Ukrainian position helps to protect Ukraine in our region. Otherwise, a second anti-Ukrainian front could be opened here, given the presence of Russian troops in Transnistria.”