Anual Report on evaluation regarding the progress in implementation of the EU-Moldova Association Agreement
European Institute for Politics and Reforms presented today, July 29, a new report on monitoring the implementation of the Moldova-EU Association Agreement.
The purpose of this Report is to undertake a comprehensive evaluation regarding the progress in implementation of the EU-Moldova Association Agreement, in the period 1 September 2015 – 1 July 2016. It includes an analysis on the EU-Moldova dialogue progress, ascertainment of the implementation rate of the Association Agreement National Implementation Plan (AANIP), with a particular focus on the progress level achieved during the last quarter (1 April – 30 June 2016). At the same time, the authors undertook a qualitative analysis on key areas of the EU-Moldova Association Agreement (Titles II-VI), particularly emphasising sectors such as justice and combating corruption, financial and banking, public administration reform, energy, agriculture and rural development, implementation of the Deep and Comprehensive Free Trade Agreement (DCFTA) and cooperation in the area of financial assistance. The report concludes with proposals regarding the objectives for implementation of the Association Agreement in the second half of 2016.
Latest developments of the Moldova-EU political dialogue in context of the AA
Despite the relatively low trust level demonstrated in the beginning of 2016 by the EU regarding the authorities from Chisinau, the relation between Moldova and the EU has been improving slowly. This is determined mainly by the pragmatic approach on behalf of the EU institutions regarding Moldova. Therefore, the European Union decided to structure the relation with the Moldovan authorities on the basis of the following principle – fewer declarations and more concrete results in accomplishing the reform agenda, including in context of the shortfalls regarding the implementation of the EU-Moldova Association Agreement recorded at the end of 2015. At the same time, we observe a greater intensity in the interactions on the ministerial level and less high-level interactions. This situation can be explained in part due to a higher concentration of the Moldovan Parliament and Government on the internal agenda. On the other hand, the reason for some apparent hesitation on behalf of the EU institutions could be the lack of desire to “legitimize” the Government from Chisinau until there are no factual progresses recorded in context of the priority reform agenda. Another reason that could be mentioned as well could be the challenges the EU is faced in the last half a year (i.e.Brexit).
At the same time, signing a cooperation agreement with the IMF is considered an important reference point in the EU’s attitude regarding the authorities from Moldova. In this context, we can anticipate that if a cooperation agreement is signed with the IMF, this will cause a chain effect, improving gradually the relations with the EU. In this sense, it is important to clarify in the dialogue with the EU whether a staff-level agreement with IMF will be sufficient for the EU to initiate the procedures for resuming the direct budgetary support during the course of the year. Otherwise, it is highly unlikely that until the end of 2016, the EU will resume the financial assistance tranches.
The Roadmap regarding the priority reforms agenda has contributed to the activation of the process for coordination the priority reforms starting with the month of March. Thus, on July 21 the Government reported a 77% degree of achievement of the roadmap. At the same time, an independent assessment undertaken by a group of non-governmental organizations, evaluated that at the beginning of the month of June, 51% of actions were implemented and 33% of actions were in progress. Nevertheless, the evaluation of the Moldova-EU Association Agreement progress will foremost depend on the level of achievement of the priorities identified in the Association Agreement and outlined in the AANIP, for which the deadline is set at the end of the year.
Overall implementation rate of the AANIP (1 July 2016) – 29%
Analysing the implementation of the AANIP until June 30, 2016, the current report concluded that out of 1774 outlined measures from the AANIP, 515 measures were implemented, including 89 measures that were implemented ahead of time. At the same time, 240 measures are in progress or have been partly accomplished; while 157 measures have not been implemented in the reference period.
Therefore, the overall implementation rate of the AANIP observed on July 1, 2016 is of 29%.
Additionally, comparing the implementation rate of the AANIP, using as reference 31 October 2015, 31 March and 30 June 2016, we can observe a constant progress in implementation of the outlined measures, despite a relatively low implementation pace. Therefore, considering that the implementation level doubled on March 31, 2016 compared to October 30, 2015, from 10,1% to 23,9%, on June 30, 2016 we observed a lower implementation pace in the latest quarter. Analysing the progress trend in each of the evaluated Title (Titles II-VI), it was found that most measures were implemented in Title V (ZLSAC).
Implementation Index during the second quarter – 46,7% + 9,8% (56,5%)
If we are to compare the implementation index at the end of second quarter against the implementation index at the end of first quarter, we find an improvement in the dynamic of the implementation of the AANIP, even if the implementation burden grew from 565 to 645 measures. Hence, on March 30, 2016, the quarterly index was 53% (46% accomplished + 7% implemented ahead of time), while on June 30, 2016, the quarterly index stood at 56,5% (46,7% accomplished + 9,8% implemented ahead of time).
Three important factors played an important role in maintaining a relatively positive dynamic of implementing the AANIP: (1) permanent monitoring of the progress by the Governmental Committee for European Integration (CGIE) (in more 18 meetings (during 1 Jan-21 Jul 2016); (2) prioritization of actions in the short term based on the Roadmap; and (3) constant pressure exercised on the authorities by the civil society and other partners.
Evaluating the quality of measures implemented in the reference period, we found that the Moldovan authorities have dedicated increased attention to the justice sector, legislative and institutional changes in the anticorruption system, promotion of legislative initiatives for reorganization of the banking sector, promotion of the central administration reform, and creation of a proper framework in order to negotiate and sign a cooperation agreement with the IMF. Despite these advancements, it is important to mention that the relative progress witnessed in the analysed period, refers mainly to changing the legal framework, rather than applying reforms. Even the Roadmap, to which the Government refers so often lately, addresses and focuses mainly on actions with legal implications rather than on actions with an administrative character.
Taking into consideration the above stated findings, Moldovan authorities have to implement the remaining 1250 measures until the end of 2016 (i.e. 71%). Most of the measures still to be implemented are contained in Title IV (i.e. 670 measures) and Title V (355 measures). The fewest measures to be implemented are contained in Title IV (i.e. 32 measures). In this sense, even if the implementation pace will be kept up during the next two quarters (i.e. on average + 10% quarterly); we can anticipate an implementation level of the AANIP of roughly 50-55% at the end of December 2016. This poses a threat of not implementing almost half of the AANIP in the previously foreseen period. Therefore, it is most likely that the remaining actions will be rolled over for 2017.
At the same time, we have to underline that the risk of not implementing all the measures from the AANIP in the second half of 2016, could be further influenced by the electoral process in context of the presidential elections from October 30, and by the reform of the central public authorities through the optimization of ministries announced for the fall of this year.
The activity of the Government should revolve around the following three major objectives: (1) promotion and implementation of the remaining actions from the AANIP, (2) negotiating the next Moldova-EU Association Agenda (2017-2019) and (3) drafting the new implementation Plan (2017). Adopting a new roadmap with short-term actions until January 1, 2017, could also be taken into account. It is beneficial for these priorities to include more actions that imply factual implementation of reforms, including de-politicization of law and regulatory institutions. At the same time, considering the European Commission will present to the EU Council an evaluation regarding the application of DCFTA on the entire territory of Moldova, a new eventual Roadmap should include actions focusing on this scope.
When speaking of the priority planning exercise in relation to the EU, and at the national level, it is recommended to limit the number of policy documents in context of implementing the Association Agreement, but rather establishing clear short and long-term priority actions.
Therefore, the new version of the Association Agenda that has to be convened upon until the end of the year will have to contain annual priority actions, measurable with impact evaluation indices (i.e. 2017, 2018, and 2019).
In relation to the national implementation instrument, it is important to avoid adoption of a great number of policy documents on the Government level, through optimization of these documents. We recommend that until 2017, the Government in coordination with the Parliament should adopt an Annual Implementation Program of the Association Agreement, which should start from the annual priorities as defined in the Association Agenda. This Program should unite multiple coordination instruments of the Government that are related to the Moldova-EU Association Agreement and to the internal reform agenda, namely: AANIP, Government’s annual action plan, Government’s annual plan for harmonizing the legislation etc.