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 -------------- ¶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 CHISINAU 00000419 002 OF 002 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