RUSSIA-MOLDOVA: DEAL IN THE WORKS?

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 012966

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/18/2017
TAGS: PREL ETRD MARR MD RS
SUBJECT: RUSSIA-MOLDOVA: DEAL IN THE WORKS?

REF: A) MOSCOW 12757 B) MOSCOW 12782

Classified By: PolMilCouns Alice G. Wells. Reason: 1.4 (b, d)


1. (C) Summary: The Romanian Embassy in Moscow alleged to us
that Moldova and Russia are close to a package bilateral deal
that would normalize bilateral political and economic
relations, guarantee Moldovan "neutrality" for 50 years,
resolve Transnistria along the lines of the Kozak Memorandum,
and guarantee Russian economic interests in Transnistria.
The Moldovans describe a more piecemeal process. They say
Russia is gradually phasing out economic sanctions, and
Moldova will ensure the rest are eliminated during
negotiations on a bilateral WTO agreement. A deal has been
reached to restore high-speed train service to Moscow
starting December 15, and Moldova is open about its
willingness to guarantee Russian economic interests in any
deal on Transnistria. However, our Moldovan contact grew
evasive when asked about peace talks with Russia outside the
"5 plus 2" format. End Summary.


2. (C) On November 30, at the CIS Summit in Minsk, President
Putin announced that Moldovan champagne would flow again in
Russia before the New Year. Subsequently, even before
modalities on wine have been worked out, Russia has begun
importing modest quantities of Moldovan meat. Romanian
polcouns Iani had one explanation for Moscow's sudden
relaxation of economic sanctions on Moldova: a backroom deal
is in the works. Iani told us December 11 that the Russians
and Moldovans are close to a package deal based on a "secret
proposal" Moldovan President Voronin made to Putin. Director
of Moscow's European Institute and member of the Council on
Foreign and Defense Policy Sergey Karaganov confirmed
December 18 that such a deal was being negotiated, driven by
a Voronin-Putin "understanding" and the realities of
Moldova's economic plight.


3. (C) Iani said that under the deal, Russian-Moldovan
relations would normalize and sanctions would end. The
Moldovan Constitution would stipulate 40-50 years of
neutrality. The Transnistria conflict would be resolved
along the lines proposed three years ago by Russian
negotiator Dmitriy Kozak. Transnistria would formally remain
part of Moldova, but would have its own President, Parliament
and state structures. The only common structure would be a
National Security Council with the Moldovan President as
Chair and Transnistrian President as Vice-Chair. Iani did
not know what the deal mandated for Russian forces in Moldova
(Karaganov believed they would stay).


4. (C) Moldovan PolCouns Ciornii described a piecemeal
process of rapprochement. He could not explain Putin's
turnaround on wine or the Russian decision to allow meat
imports -- never significant -- to restart. Moldovan and
Russian negotiators are still working out modalities for wine
imports. Ciornii said the agreement revolved around quality
guarantees: all wine exported to Russia would go through the
state wine organization Moldovavin. Tests would be carried
out in Moldova in the presence of Russian experts. Moldovan
experts would accompany the wine to Moscow and test it once
again on arrival.


5. (C) Ciornii said the Russian-Moldovan Bilateral Commission
had started meeting again and its Russian Chair, Education
Minister Fursenko, was visiting Moldova December 18. On the
same day, a Russian Duma delegation would begin a three-day
visit. The Bilateral Commission would also be the umbrella
organization for bilateral talks on an agreement for Russian
WTO accession. Ciornii said that in addition to seeking an
end to the current import embargoes, Moldova's principal
issue in those talks is Russia's charging VAT on gas it
exports to Moldova.


6. (C) On Transnistria, Ciornii said Moldova is calling for
the renewal of talks in the five plus two format, but the
Transnistrian authorities remain reluctant. Progress has
been made on one issue: agreement was reached to re-start
weekly high-speed train service between Moscow and Chisinau
along tracks through Chisinau, while Ukraine has reopened the
railroad bridge at Mogilev for twice-weekly slower trains.
Ciornii knew that the Russians are insisting on their variant
for a political solution, strongly resembling the proposal
made by Russian negotiator Dmitriy Kozak three years ago.


7. (C) Ciornii said Moldova has been open in offering to
guarantee Russian economic interests in Transnistria after a
settlement, especially with regard to export of electricity
to Russia from Cuciurgan. He also noted that Moldova has
declared itself a neutral state, though he thought NATO
membership was inevitable. Ciornii grew evasive and
uncomfortable, however, when asked whether the Russians had
proposed bilateral Russian-Moldovan talks on Transnistria

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outside the 5 plus 2 format.
RUSSELL