(Bloomberg) -- With all eyes on Ukraine as it strives to mount the first rung of the process to join the European Union, neighbor Moldova worries that its own push to join the bloc may be forgotten.
Sandwiched between Ukraine and Romania on the EU’s eastern frontier, Europe’s poorest nation has struggled since independence in 1991. It has suffered from rampant corruption, political swings between Moscow and the West and a frozen conflict in separatist-held Transnistria, where the presence of Russian troops poses a risk of spillover from the war next door.
Pressing the message that Moldovans were ready to anchor themselves to a European future, even before Vladimir Putin invaded their neighbor, Prime Minister Natalia Gavrilita took to the World Economic Forum in Davos, Switzerland to drum up support.
She said the land-locked country of 2.6 million was pushing ahead with strengthening its institutions and bolstering the rule of law, key requirements to be considered an EU candidate. But with the economy struggling and at the mercy of Russian gas supplies that transverse Transnistria, she said there was only a narrow window for action to assess Moldova’s application for entry, which it submitted on March 3.
“The time is now,” she said in an interview on Tuesday. “It’s very important for us not to be forgotten, left behind or become a gray area. The people of Moldova have voted massively for European integration a while before the war even started.”
As recently as 2018, the EU suspended aid to Moldova, exhausted by a seemingly perpetual carousel of broken reform pledges and spectacular money-laundering scandals. A year later, a government led by Prime Minister — now President — Maia Sandu came to power pledging to improve governance, clean out revenue-sapping state enterprises and overhaul a chronically politicized judiciary.
Those efforts were set back by her temporary removal, followed by Covid-19, soaring natural gas prices, and now the costs of the war in Ukraine, including the need to support tens of thousands of refugees. The economy is getting hammered, with inflation accelerating to a record-high 27% from a year earlier in April, while growth is expected to stagnate this year after a 14% rebound in 2021.
While tensions have also flared in Transnistria, a sliver of land making up 12% of Moldova’s territory, the short-term concern of being dragged into the war in Ukraine is a “bit less now” that at the start of Putin’s invasion, Gavrilita said.
Still, Moldova’s leadership is “concerned in the medium term what it means for our region and the stability of our region,” she said. While Moldova will stick to its military neutral status, Gavrilita said it isn’t excluding defense investments.
“In the light of increasing risks we have to be better prepared to defend ourselves,” she said.
Gavrilita also urged other countries to provide aid. Moldova needs at least 400 million euros ($428 million) in grants to keep its debt sustainability and currency in check. While the EU has pledged 53 million euros, and Moldova is in talks with Germany, France and others for more, there’s still a way to the goal.
“It looks like we will receive some additional grant support, but this is not enough,” she said.
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