Interim report on the situation of Local and Regional Democracy in the Republic of Moldova - CG (4) 20 Part II

Rapporteurs: Mr George LYCOURGOS, Cyprus and Mr Xavier MULLER, France

1. Introductory note

Further to Resolution 58 (1997) on the situation of local democracy in the member states, Moldova was chosen as one of the countries to be covered by a specific report. To this end, the Bureau of the Congress appointed Mr Lykourgos (Cyprus) rapporteur for the Chamber of Local Authorities and Mr Xavier Muller (France) rapporteur for the Chamber of Regions. The two rapporteurs visited Moldova from 4 to 6 December 1997.

It should be noted that the delegation was very well received throughout the visit, the only problem being the last-minute withdrawal of the representatives of the Moldovan Parliament. This was all the more regrettable since, according to the information gathered, the main obstacle to new legislation on local and regional self-government lies within Parliament. The following programme was arranged for the visit:

Reception of the CLRAE delegation by Mr Valeriu BULGARI, Deputy Prime Minister of the Republic of Moldova
Meeting with Mr CAPATINA, Deputy Minister for Foreign Affairs
Meeting with the Parliamentary Legal Committee on Appointments and Immunities
Meeting with Mr URECHEAN, Mayor of Chisinau and President of the Federation of Local and Regional Authorities of the Republic of Moldova
Meeting with the Association of Mayors of the Republic of Moldova
Meeting with Mr Petru PASALI, Speaker of the People’s Assembly of Gagauzia (Gagauz-Yeri)
Review of the delegation’s visit to Moldova with Mr BULGARI
Meeting with the Mayor of Tocana District (Chisinau)

2. General remarks

The Republic of Moldova only gained sovereignty following the break-up of the Soviet Union after the coup d’état against Gorbachev (27 August 1991). Its road to political and economic independence has therefore been – and remains – a difficult one. Moldova decided to join the “Commonwealth of Independent States” (CIS). It depends on the countries of the former USSR, especially Russia, for its exports in the agri-food sector and its imports in the energy sector. A significant proportion of its territory (11%) is still outside its control. The territory in question is the area on the left bank of the River Dniestr known as Transnistria. In principle, Moldova is a unitary state, but special autonomy has been granted to the Region of Gagauzia (in the south of the country). We were informed that Moldova had just made an application in principle for admission to the European Union, the aim being for the process leading to an association agreement with the latter to begin as a matter of priority. This takes account of the fact that the European Union’s share in Moldova’s foreign trade grew from 5% to 35% between 1994 and 1997. The Republic of Moldova also takes part in the co-operation organisations in south-east Europe and in the parliamentary and governmental co-operation organisations of the Black Sea countries.

3. Review of the legislation on local and regional self-government

At present, local-self government is governed by legislation passed in 1994, under which local elections were held in 1995 with the participation of CLRAE observers. In addition to the local tier of government, this legislation established a regional tier, comprising 37 “judets” or districts and 4 urban areas (major towns). There are also the autonomous region of Gagauzia (since 14 January 1995) and Transnistria (for which no solution has yet been found).

In 1995, Parliament amended the legislation on local elections, after the Constitutional Court had declared unconstitutional the provisions in the previous legislation under which the government appointed the mayors of towns or municipalities where the voter turnout had been under 50% in both rounds of the elections.

During our visit, we were informed that Parliament had just passed an Electoral Act, which also included provisions on local elections and local referendums. This legislation has now been promulgated by the President of the Republic, in particular with a view to the next parliamentary elections, which are scheduled for March 1998.

After consulting Council of Europe experts, the Government has also tabled two other bills in Parliament, respectively concerning:

- local and regional administration, and
- administrative division of territory.

The delegation had been aware of the preliminary draft legislation and of the opinions of the Council of Europe experts, and received copies of the two amended bills in Moldovan. Translation of the two is now in progress. The two documents have been translated and the expert who assisted the delegation, Mr De Bruycker, has drawn up an opinion which is appended to the draft Recommendation.

However, it seemed that Parliament would be unable to pass the two bills before the parliamentary elections in March 1998.

The Government is also preparing bills on local finance and on local and district authority property. The drafting of these bills is still encountering serious difficulties within the Government, and the Moldovan authorities have requested technical assistance. This assistance will be provided under the LODE programme.

Moldova ratified the European Charter of Local Self-Government on 1 July 1997. It should be noted here that Moldova is dualist in its approach to the application of international conventions, ie the provisions of a convention are not applicable until a law has been passed incorporating them in domestic legislation. However, if Parliament passed legislation contrary to a convention, the Government could challenge that legislation before the Constitutional Court.

The main shortcoming identified by the Congress following Mr Chénard’s report last June concerned the problems posed by the appointment of the mayors in the towns and municipalities where voter turnout in both rounds of the elections in 1995 had been below the 50% threshold. On 6 November 1995, the Constitutional Court ruled that the relevant provision should be amended within four months and that the legal consequences of the provisions of the law declared unconstitutional should be rectified. In practice, the law has been amended to the effect that it now imposes a turnout threshold of 30% in the first round and none in the second. This provision has been copied into the new Electoral Act. This appointment by the Government of local councillors concerned 98 municipalities and towns, apparently the larger ones, including Chisinau, the capital. It thus affected 10% of the country’s municipalities, but a much higher percentage of the population. The delegation discovered that, with the exception of six municipalities, mainly in Gagauzia, no fresh elections had been held after the legislation was amended following the Constitutional Court ruling. This means that 92 towns and municipalities, including Chisinau, still have Government-appointed mayors, deputy mayors and municipal clerks, and that these municipalities also have no elected councils and thus no democratic controls. In Chisinau, there are a number of “district mayors” who are appointed by the mayor, himself appointed by the Government, and are not assisted by any elected councils. The delegation had no option but to express the strongest possible reservations about this situation, which has persisted after the amendment of the legislation. When it asked why fresh elections had not been called, the following three replies were given:

- the legislation was not retroactive and therefore only applied in cases where elections had to be called when a mayor resigned;

- in addition, there was not enough money to pay for such elections;

- Parliament, which was apparently responsible for deciding to call such elections, had chosen not to do so.

The delegation was not convinced by these arguments and, in view, in particular, of the wording of the Constitutional Court ruling, asked the Government authorities to submit a memorandum on the legal effect of the ruling. This memorandum has not yet been received.

Apart from this significant shortcoming in local democracy, the delegation noted that the minister responsible for local government, Mr Bulgari, did seem willing to proceed with the necessary reforms contained in the bill currently held up in Parliament. The same appeared to be true regarding the question of local finance, although the present situation in that area is very far from the requirements of Article 9 of the European Charter of Local Self-Government (see below).

This impression is borne out by the content of the two aforementioned bills which, if adopted with the few changes proposed by the Congress’s expert, would represent a major step down the road towards local and regional democracy in Moldova.

4. Financial autonomy and the local authorities

The Deputy Prime Minister, Mr Bulgari, and his staff have sought the support of Council of Europe experts to help them to prepare draft legislation that complies with the basic principles of the European Charter of Local Self-Government. The experts are also to consider the bill on local authority property. The CLRAE Secretariat has already forwarded this request to the head of the LODE programme. It would be useful if a qualified member of the Congress could accompany the experts on their fact-finding visit.

The current financial difficulties of the local authorities were mainly discussed with officials from the two local authority associations. The mayor of Chisinau and President of the Federation of Local and Regional Authorities indicated that the current situation is almost worse than under the communist regime. In his view, the state in practice monopolises the local finance system, as it is the Finance Minister, and not even the national Parliament, who sets the level of the central government transfers to local authorities, which in fact make up around 90% of local budgets, as local taxes produce very low revenues. There is no municipal ownership of transport, water or energy utilities or of rented housing, etc. The mayor of Chisinau also complained that his town receives only 24% of the tax revenues collected on its territory by the state and, although the latter figure is growing every year, the proportion received by the town is falling. This would appear to be the result of a system of equalisation designed to help less prosperous municipalities, but the system does not seem to be based on any objective criteria prescribed by the law, and is apparently operated at the discretion of the Finance Minister. It is clear that the adoption of legislation on local finance is absolutely crucial if the financial independence of Moldovan local authorities is to be brought into line with Article 9 of the Charter.

5. State control of local and regional authorities

In the legislation currently in force and the draft bill sent to the delegation, provision is made for the state to control expediency, through measures against any local authority action which is “counter to the general interests of the citizens”. This has caught the attention of the Council of Europe experts and is highlighted in Mr De Bruycker’s opinion because insofar as state control of expediency is contrary to the European Charter of Local Self-Government. Furthermore, under the current legislation municipal Secretaries are appointed by the Government. The delegation took note of the statements of the Mayor of Chisinau and President of the Federation of Local and Regional Authorities to the effect that state control was highly “effective” in Moldova. The Mayor complained that “an army of inspectors” interfered in the business of the municipality. It would be interesting to know whether this applies solely to the capital, for as we saw earlier, there is no democratic control in Chisinau over the government-appointed mayor.

6. Regional autonomy at district level

As stated above, there are 37 districts at present, plus 4 municipalities (large towns), and the autonomous region of Gagauzia and potentially that of Transnistria. At present the districts are run by an elected council and by an administrative officer representing central government at the local level. Currently, therefore, the districts do not have their own authorities, as distinct from the decentralised state authorities.

The new bill provides for the creation of 8 regions, plus of course Gagauzia and Transnistria and the city of Chisinau, which has special status. This is an attempt to create a regional level stronger than the districts. In the preliminary draft of the bill the Government had nevertheless maintained the former pattern, with no separation between the district council and the local representative of the state. The new bill makes provision for this separation in accordance with the opinion of the Council of Europe experts. There is now a Prefect representing the State on the one hand and the Chair of the District Council representing the District on the other. Representatives of local and regional government associations nevertheless voiced concern that the new Prefect would have the upper hand to all intents and purposes.

There did appear to be consensus within the two associations of local and regional authorities, however, in favour of the creation of these 8 regions, even if the Federation of Local and Regional Authorities is said to have tabled more than 100 amendments, only 30% of which were apparently adopted by the Government. The delegation felt that this showed a clear determination on the part of the Government to move towards a form of regionalisation in keeping with European standards.

The only reservations voiced by the Association of Mayors concerned the transition period between the old district system and the new regions.

7. The autonomous region of Gagauzia

The region of Gagauzia, in the south of the country, was granted special status by a law enacted on 14 January 1995, which had been prepared with the assistance of Council of Europe experts. The opinions expressed to the delegation, by representatives of both the Government and the President of the regional Assembly, concerning the functioning of the new region with its special status were generally positive. The special status is considered to have resolved the political problem of Gagauzia, but economic problems remain which are seen in a different light by the Government and the regional authorities. According to government representatives the economic problems there are no different from those encountered all over the country (high unemployment, little economic activity and serious budget problems).

The President of the regional Assembly disagrees, of course. For a population of 172,000 (78% of Gagauzian origin) spread over 3 towns and 27 villages, the region has a budget of the order of 18 million dollars: $3 million in own funds and the remainder in the form of a state subsidy fixed by Parliament. Furthermore, under an agreement concluded when the region was granted autonomous status, Gagauzia was obliged to contract a 40-million-dollar debt, which it must now repay.

In terms of the geographical area covered by the region, the representatives of Gagauzia mentioned only one problem which remained unsolved, namely that of the city of Bucanesti, which had been split in two by the results of the referendum on devolution. Local self-government seems to be working in Gagauzia as far as democratic elections are concerned, as mayors are no longer appointed and the six municipalities concerned elected their mayors when the new law on local elections was enacted. There does seem to be a lack of financial autonomy, however, as municipal budgets are determined by the regional Assembly, which determines the size of the appropriation the municipalities receive.

The regional institutions are run by an elected President and a regional Assembly of 35 members, who are also elected. The 11-member executive works under the authority of the President of the region.

If the political problems have been resolved in principle, operating problems nevertheless persist in respect of the application of certain provisions of the statute on which no implementing acts have been passed. One example is Article 12, which grants the Gagauzian Assembly legislative powers over a wide range of areas broadly defined as “culture, education, public health, sport, economics, environment, local budgets, etc”. The statute empowers the Assembly to adopt “local legislation”, which seems to imply a sharing of power.

In practice, however, legislation is passed both by the Gagauzian Assembly and by the national Parliament. According to its President, the regional Assembly has endeavoured thus far to reach a compromise solution, but this is never easy. The Gagauzian authorities complain that the national Parliament pays no heed whatsoever to the statute granting the region autonomous status. Under Article 12, paragraph 3.i of the statute, the region may challenge legislation passed by the national Parliament before the Constitutional Court if it considers that it encroaches on its powers. The same applies to the national Parliament. Thus far no cases have been brought before the Constitutional Court, whose rulings could be instrumental in establishing precedents to help enforce the statute. The next major step will be the definition of a “Gagauzian Legal Code”, under Article 12 of the Statute, to be adopted by the regional Assembly. The President told us that the Code should take the form of statutes or a “regional constitution”, also covering the question of the sharing of power. Although the devolution Act makes no provision for the adoption of such a “Code” by the Moldovan national Assembly, the national authorities could always challenge this Code before the Constitutional Court, if they considered that it was contrary to the Constitution or the law on the special status of Gagauzia of January 1995. The President of the regional Assembly indicated that a regional referendum would be held on the subject.

There is an evident risk of conflict here. The delegation noted with interest that the Venice Commission and the Congress had been asked to assist the Gagauzian regional authorities in drafting the Code; this should help to ensure that it had a legally sound content.

8. Transnistria

This question was discussed mainly with the Government authorities and in particular with the Deputy Minister for Foreign Affairs. This region is located on the left bank of the river Dniestr, on the border with Ukraine, and is characterised by a large Russian and Ukrainian minority and the presence of the Russian Federation’s 14th Army. Following referendums organised by local and regional leaders, this region is not now under the control of the Moldovan Government. It is a region of 6 to 700,000 people, whose principal city Tirospol is home to a Russian/Ukrainian majority.

An agreement between the Moldovan authorities and the Prime Minister of the Russian Federation was concluded in 1995, providing for the gradual withdrawal of the 14th Army and its large weapons arsenal in the region. Thus far this agreement has not been ratified by the Russian Duma and very little has been done to implement it, with the exception of a slight decrease in the number of soldiers and weapons. Talks are in progress with Russia, Ukraine and Moldova, under the aegis of the OSCE. According to the Moldovan authorities, the agreements reached during these talks are always challenged either by the authorities in place in Transnistria or by the Duma. The Moldovan authorities say that the withdrawal of the 14th Army was one of the conditions for the Russian Federation’s admission to the Council of Europe.

According to the Deputy Minister for Foreign Affairs, the Moldovan authorities are prepared to agree to a federal-type self-government status, but remain intransigent on the following points:

- Transnistria belongs to the state of Moldova.

- Moldova must remain responsible for border control, currency, the armed forces and foreign policy, while all other responsibilities could be assumed by an autonomous region of Transnistria.

On the question of whether the Moldovan Government wishes the Congress to take an interest in the problems of Transnistria, the Deputy Minister for Foreign Affairs replied that the Congress could play a part in defining the autonomous status of Transnistria.

The working group on the situation of local democracy has concluded that the question should be raised in the report and the draft Recommendation.

9. The associations of local and regional authorities

The delegation made a point of meeting representatives of both associations, ie the Federation of Local and Regional Authorities, which seems to be the association with official government recognition, and the Association of Mayors.

The Federation of Local and Regional Authorities is made up of towns and districts. We met the President of the Federation, who is also the government-appointed mayor of Chisinau and deputy mayor of the capital, and municipal Secretary. The Mayor of Chisinau spoke more of the problems of the city than about the Federation. It would appear, however, that the latter has developed its activities in the field of dialogue with the government authorities with a view to preparing the devolution bill. The Association works with other national associations, especially in Romania, and is actively seeking new national associations with which to co-operate. The Federation’s activities seem to suffer somewhat from political divergence. According to the President, there are no differences of opinion between towns and districts. The Deputy Prime Minister, on the other hand, was in favour of setting up separate associations, one for the districts and another for the towns and municipalities. In principle the Association supported the new bill and the creation of the new regions, although it expressed concern about the introduction of Prefects.

The Association of Mayors of Moldova received the delegation in a small meeting room hired specially for the occasion in an hotel. There the delegation met the President and 3 other members, all mayors of municipalities, and two experts. The Association covers small towns and municipalities in the main, and has 78 members representing 19 of the country’s 37 districts. The members are mainly mayors, deputy mayors and municipal secretaries, who join on an individual basis. The Association has no offices of its own, and has unfortunately been unable to come to an agreement with the Federation of Local and Regional Authorities on this question. According to its leaders, the Association’s activities are politically neutral and impartial, its purpose being to defend local and regional autonomy. The Association supports the reform and the creation of new regions and qualified the ratification of the European Charter of Local Self-Government as revolutionary. It feels the need in the country’s legislation not only for laws on local finance and on local authority property but also for a local civil service bill and a law on administrative proceedings. One of its noteworthy achievements has been the organisation of a round table between local officials from both banks of the Dniestr, which to our knowledge is one of the only settings where dialogue with Transnistria is encouraged. The Association needs the assistance of associations in western Europe to strengthen its structure and step up its activities.

10. Transfrontier co-operation

The delegation had been warned by the opinion of the experts on the preliminary draft of the local administration bill of the lack of legal provisions governing inter-municipal and interregional co-operation, and in particular transfrontier co-operation.

The Deputy Minister for Foreign Affairs assured us that the Moldovan Government encouraged such co-operation with its two neighbours, Ukraine and Romania. In fact, the Government is in the process of concluding a transfrontier co-operation agreement with Romania, and is on good terms with Ukraine. Moldova has submitted a request to the Director of DELA at the Council of Europe to hold a seminar on transfrontier co-operation by the local and regional authorities of Moldova. There is every reason, therefore, to expect positive developments in this respect. The Association of Mayors even told us that it organises transfrontier meetings of local officials on the Romanian border. The bill on local and regional administration also deals with this matter.

11. Training

At present, according to the President of the Federation of Local and Regional Authorities, municipal staff receive adequate training at the National Public Academy. Elected officials are also trained by this Academy and by the two associations of local and regional authorities. The Association of Mayors in particular, however, expressed the hope that the Council of Europe would provide assistance for the training of local and regional staff and elected officials.

The need was also felt for Council of Europe assistance in resolving a key problem in Moldova, namely civic training and public awareness of the rights and duties of the citizen. The two members of the delegation proposed co-operation at the level of their own towns and regions. The Secretariat of the Congress informed the Association that this question was one of the priorities in the action plan adopted by the Heads of State and Government at their Summit, and that the Congress was currently working on a Charter of citizen’s rights and responsibilities.

12. Presentation of a draft Recommendation and Resolution at the meeting of the Standing Committee (5-6 March 1998)

The Working Group on the Situation of Local Democracy in the Member States and the Working Group on Regionalisation, having examined this report, considered it appropriate to present an interim report accompanied by a draft Recommendation and a draft Resolution for the following reasons:

- the next parliamentary elections are due at the end of March and it would be a good idea for the new parliament or indeed the government emerging from these elections to be presented with the Congress’s recommendations immediately;

- the report should focus on two areas in which the bills are seriously at variance with the European Charter of Local Self-Government, namely the fact that about 10% of towns and municipalities are deprived of any democratic supervision by an elected council, and the financial dependence of the municipalities;

- finally, the government and the parliament emerging from the March 1998 parliamentary elections should be informed of the Congress’s opinion on the two bills prepared by the present government, which are aimed at providing Moldova with modern regional authorities.

The rapporteurs intend to visit Moldova again as soon as the new parliament and government are in a position to continue with their legislative work in the area of local and regional democracy.



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