Moldova’s broken system has united pro-European Union and Russian parties

Moldovan currency
Moldovan currency

Moldova’s government contends with widespread protests, as citizens grow furious with a system managed by oligarchs, according to Voice of America. Financial supporters from the West have frozen financial assistance until Moldovan leaders address corruption. Moldova is an Eastern European nation that neighbors Romania and Ukraine and is one of Europe’s poorest economies.

Although some Moldovans fear foreign interference from Russia and other powers, others feel that the primary problem threatening stability is corruption. Moldova’s broken system has united pro-European Union and Russian parties in combating corruption, but little progress has followed.

The poor country was plagued with a major scandal involving the disappearance of $1 billion from banks, which comprises one-eighth of the country’s GDP. No one knows where the funds went, but many suspect that oligarchs funneled the funds out of the system, forcing the government to issue refunds to banks.

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Prime Minister Pavel Filip was appointed in January 2016, but some analysts do not believe the new prime minister will achieve monumental progress as he looks to the International Monetary Fund (IMF) and Romania for help. Romania will not agree to a loan package unless the government tackles corruption and a tainted justice system, including an additional provision that requires Moldova to work with the IMF in solving major issues.

The government will have no choice but to comply, as the Eastern European nation faces economic collapse without loan assistance. However, analyst Arcadie Barbarosie of the think-tank Public Policy believes the new government will last anywhere from six to eight months due to low-level trust and credibility, notes International Business Times.

Filip believes the IMF help will bring stability, while unlocking other funding sources from European countries, but also the IMF help should be met with skepticism as the organization has a history of imposing crippling austerity measures that prevent further development.

Additionally, authorities face a harder time receiving assistance because they are losing international credibility, and the amount of help from the IMF remains a mystery. Moldova signed an association pact with the European Union in 2014, and it has looked to the IMF for further ties to the West, but the tide is turning as more people feel an alliance with Russia is a better alternative.

With that, closer ties with the West or Russia would not solve the country’s numerous setbacks. Many Moldovan workers send Russian remittances to Moldova, but the economy relies on EU exports as a vital revenue source. Going forward, policymakers have no choice but to appease the interests of Western powers and Russia to keep the economy intact.