MOLDOVA: DAS MERKEL'S MEETING WITH PRIME MINISTER

C O N F I D E N T I A L SECTION 01 OF 02 CHISINAU 000419

SIPDIS

SIPDIS

STATE FOR EUR/UMB

E.O. 12958: DECL: 04/16/2018
TAGS: PGOV PREL PBTS ECON MD
SUBJECT: MOLDOVA: DAS MERKEL'S MEETING WITH PRIME MINISTER
GRECEANII

Classified By: Ambassador Michael D. Kirby for reasons 1.4(b) and (d).


1. (C) SUMMARY: In an April 14 meeting with Prime Minister
Zinaida Greceanii, DAS David Merkel expressed the USG's
continued support for Moldova and a resolution to the
Transnistrian (TN) conflict, noted Greceanii's positive
reputation in Washington and Brussels as a reformer, and
thanked her for her leadership of the Moldovan Government's
(GOM) MCC process. The two also discussed President
Voronin's recent meeting with TN leader Smirnov, relations
with Ukraine (the Ukrainian Foreign Minister was visiting
Chisinau the same day) and trafficking in persons issues.
END SUMMARY.

MOLDOVA'S EFFORTS AT TN RESOLUTION
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2. (C) In her introductory remarks Prime Minister Greceanii
noted her close working relationship with Ambassador Kirby,
thanked the USG for continued development assistance,
reiterated Moldova's support of and respect for USG
positions, and noted that the resolution of the TN conflict
was the paramount goal of the GOM. Focusing on TN, DAS
Merkel asked Greceanii for her thoughts following the April
11 meeting of President Voronin with TN leader Smirnov.
Greceanii noted the meeting was very important, and
positively assessed Voronin's efforts to reach out to the
people of TN and facilitate TN trade. She added that the TN
conflict was neither ethnic nor religious, which, in theory,
should simplify a resolution. Greceanii stood firm that
foreign troops should be removed from the territory of
Moldova and that the TN side must return to the negotiating
table.

ANTI-TIP EFFORTS: TIER III LOOMS
--------------


3. (C) On MCC, DAS Merkel thanked Greceanii for her
leadership on the MCC process and noted that qualifying for
an MCC Compact was a positive reflection on the GOM's reform
efforts. That said, DAS Merkel noted the danger of Moldova
slipping to Tier III from Tier II Watchlist on the
trafficking in persons (TIP) rankings and the concomitant
impact on bilateral and multilateral USG foreign assistance.
In a defensive tone, Greceanii noted that TIP was not
specific only to Moldova and that all countries in transition
faced this challenge. However, she acknowledged Moldova's
"migration problems" and cited a resolution to the TN
conflict and promoting economic growth as important factors
that would contribute to a solution. She promised continued
transparency in the GOM's anti-TIP efforts. DAS Merkel
reiterated the need for strong political will to combat TIP.

RELATIONS WITH UKRAINE
--------------


4. (C) Turning to relations with Ukraine, Greceanii noted
positively the visit of the Ukrainian Foreign Minister. She
added that Moldova and Ukraine would submit a joint request
to the European Commission for assistance with the
demarcation of the Moldovan-Ukrainian border along the TN
region of Moldova. She suggested this was a positive
indication of Ukraine's support for a TN settlement.
Greceanii also commented openly about economic irritants with
Ukraine, including energy (electricity supplies) and
transport issues (the Port of Giurgiulesti). Greceanii noted
that she had agreed with the Ukrainians to expand economic
discussions at the expert level.

ECONOMIC REFORMS CONTINUE
--------------


5. (C) On economic issues, Greceanii noted her experience as
the head of the former government's economic sector,
highlighting the GOM's efforts to liberalize the economy.
She noted the GOM's capital and tax amnesty legislation and
the introduction of a zero rate for corporate income tax.
Greceanii believed that these reforms would help formalize
Moldova's large informal sector and attract much-needed
foreign direct investment. Greceanii also took the
opportunity to raise the issue of Moldova's bilateral P.L.
480 debt to the United States. Now that Paris Club
negotiations are completed, the GOM would like to discuss
forgiveness of this debt. She indicated that the GOM would
contact the Ambassador to discuss further.

COMMENT
--------------


6. (C) Friendly and business-like, Greceanii seems

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comfortable in her new position after three weeks on the job.
As always, she was best prepared when discussing economic
issues (including disputes with Ukraine),making only general
comments on Transnistria. We've now delivered to her twice
the message about the possibility of a TIER III ranking for
Moldova and the complications which that would cause for our
assistance efforts including MCC and other bilateral and
multilateral funding. We believe Greceanii understands the
seriousness of the situation and will promote greater efforts
by the GOM to combat trafficking in persons.


7. (U) DAS Merkel has cleared this cable.
KIRBY