Foreign Policy Association together with FriedrichEbert-Stiftung offer you a newsletter on foreign policy and European integration issues of the Republic of Moldova. The newsletter is part of the “Foreign Policy Dialogue” joint Project. NEWSLETTER MONTHLY BULLETIN JULY 2024 NR. 7(221) Synthesis and Foreign Policy NNTheeewwnsselleewttttseelrre--tuutell reessistteedrreeevaaellliiozzpaaettdddeebyMMMăăddăăădllăiinnlinNNNeecceșșcuușțțuuuț,,urr,eeedddaaitccottoor-rrc--occooooordrrddinooanntaaottroorr Debates TOPICS OF THE EDITION: 1. Interview with Marin Gherman, political analyst: It’s hard to build a logistics for the reconstruction works in Ukraine because missiles can fall and destroy everything you’ve built 2. Analysis of Brian Milakovsky, political expert: It’s the real economy, stupid: why FDI is not enough to save Ukraine 3. Interview with Angela Grămada, director of ESGA: Romania insists that the Republic of Moldova should be included in the process of Ukraine’s reconstruction News in Brief The Moldovan authorities have made noticeable progress in implementing the recommendations of the European Commission in the EU accession process, states a report produced by the Independent Analytical Center “Expert-Group”, the Institute for European Policies and Reforms, Institutum Virtutes Civilis, and the Friedrich Ebert Foundation, publicly presented on July 23, in Chisinau. The authors of the Independent Evaluation Report on the progress of the Republic of Moldova, for the period June 1, 2023- July 31, 2024, the experts rated the progress made by the authorities in the Fundamentals chapter with an average of 3.2 points out of 5: democracy, public administration reform, justice reform, fight agaist corruption, fundamental rights, freedom of expression, security, the existence of a functional market economy, public procurement, statistics, financial control, social policies and employment. On June 25, accession negotiations with the EU officially began. The Chisinau authorities hope that they will be concluded by 2030 and the Republic of Moldova will become a full member of the European Union. The eVMS.md platform dedicated to the trading of state securities(VMS) will be launched in the Republic of Moldova. This is the first of this kind in Moldova. Citizens will have more options to make safe investments, to ensure a stable financial future, while also contributing to the financing of the country’s development projects. The eVMS.md page, which will be launched on July 31, 2024, will allow direct transactions, without intermediaries and commissions, by all citizens of the Republic of Moldova. The new platform was developed by the Ministry of Finance of the Republic of Moldova with the support of the USAID Project“Financial Sector Transparency in Moldova”. The launch of the eVMS.md platform will provide the opportunity for citizens in the country or abroad, who have a bank account in the Republic of Moldova, to invest in VMS, and for the Ministry of Finance to borrow from individuals, to finance various development projects in the country- social, infrastructure, etc. The Minister of Foreign Affairs, Mihai Popșoi, presented his activity report to the deputies of the Parliamentary Committee on Foreign Policy and European Integration. The document contains the MFA’s actions from the last two years, as well as the priorities set for the next period in order to make the diplomatic service more efficient. “We opt for a pro-active, anticipatory, coherent and predictable foreign policy, oriented towards concrete results. Thus, we focus on the professionalization of the diplomatic staff, but also on the expansion of the diplomatic presence in the countries where the number of Moldovan citizens from the diaspora has grown exponentially”, emphasized Mihai Popșoi. Two strategic priorities of the MFA, resulting from the Government’s public policies for 2025-2027, proposed by Mihai Popșoi, aim at expanding the diplomatic presence of the Republic of Moldova, by opening new embassies in Egypt and Kazakhstan and additional consulates in USA, Germany and Canada. Reconstruction of Ukraine: future plans or necessary pre-established plans The ruins of the pediatric hospital in Kyiv, after the Russian bombings of July 8, 2024. Photo: Presidential Administration of Ukraine It is very difficult to predict how and with what kind of damage the Russian military invasion of Ukraine will end. Specialists do not give a deadline for the cessation of hostilities, and everything will depend on several factors, mainly on the ability of Ukraine to resist, the ability of Russia to advance and on the positioning of the actors supporting the two camps. The ideal scenario would be for Ukraine to be able to turn the tide of the war and drive the Russian military out of the country to the level before 2014, when the Crimean Peninsula was annexed. However, with still modest support from the West and the uncertainty of massive support from the US, which is dependent on the next occupant of the White House, Ukraine can only hope that the Western world will be interested in pumping in massive aid that is crucial for the military liberation from Russian forces. Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

2 JULY 2024  and Foreign Policy Debates Nor does the Russian side propose in the Republic of Moldova, and the more at this stage than a war possibility of the return to power of attrition and the hope of tough of the pro-Russian forces cannot be negotiations to form new pro-Russian completely ruled out, after next year’s enclaves on the Ukrainian territory. parliamentary elections. The goal is to derail Ukraine from any attempt to join the EU or NATO in the What is certain is that the Republic near future. of Moldova must be in the books for the future reconstruction of Ukraine, Based on these data, the Republic which can also mean an engine for of Moldova seems safe for now, the country’s development. It is very but Russian militarism and the important that the Republic of Moldova aggressiveness with which Vladimir goes along this path of helping the Putin hopes to restore the defunct reconstruction of Ukraine in a package USSR can produce unpredictable with Romania, which also has greater scenarios. The Republic of Moldova capabilities as it is an EU country and suffers for now in terms of resilience can ensure the logistics of such a largeagainst the hybrid war waged by Russia scale operation. For this it is imperative that the Republic of Moldova stay on the European governance course. Ukraine will not want a pro-Russian government behind its front and that will surely quickly mean isolation from Ukraine and problems for Romania. Without the economic support of the EU, the Republic of Moldova could fall into a catastrophic socio-economic scenario, with a leadership other proEuropean. The stake is not only internal for the Republic of Moldova, but for the whole region, for the Republic of Moldova to develop in regional tandem with Romania and Ukraine, preferably with all three under the umbrella of the EU. Madalin Necsutu It’s hard to build a logistics for the reconstruction works in Ukraine because missiles can fall and destroy everything you’ve built T he political analyst and journalist from Chernivtsi, Marin Gherman, spoke for the FES/APE foreign policy bulletin about Kiev’s plans regarding the war, but also the approach to rebuilding Ukraine. We discussed tactical aspects of the battlefield, the political stakes of the European and US elections, but also the strategic triangle in the region that Ukraine, Romania and the Republic of Moldova could form. All these aspects can be found in the following interview: How is the situation in Ukraine currently? How are the Ukrainian troops coping and what are Kiev’s expectations in the confrontation with the Russian army? First of all, it seems that the most difficult periods and moments of this confrontation have passed for Kiev this year in the context of the offensive in the east, in the Kharkiv region and other provocations that were organized and planned by Russia. Kiev has managed and three is no longer that great danger as it appeared at the beginning of this year in Karkov, Sumy and the opening of a front for Ukraine. The parties cannot achieve spectacular and quick results in a short period of time, a game of chess in which Russia from time to time takes the initiative and control over some territories, in other words, Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

occupies them, then Kiev makes efforts and liberates them, and also a game of ping-pong in which Russia has a tactical but not a strategic initiative. So we cannot expect something spectacular, similar to the Ukrainian offensive from September 2022, but neither can we expect a collapse of the front, as the Russian propaganda is telling us. There are certain problems, of course, in Ukraine, and not only with ammunition, but also with encouraging the population, maintaining the fighting spirit, encouraging mobilization, a war fatigue. These are all problems that have accumulated and it remains to be seen how Ukraine will be able to successfully manage them, as the obsolescence of this war also implies a change in communication tactics with society, which for now I do not see it happening very well for Kiev. Compromise scenarios Are we far from a peace agreement at this point? Can Russia be forced by the international community to accept a peace on the terms of the withdrawal of its troops from the conquered Ukrainian territories? We have no peace formula in the year 2024. We only have names, but no peace formulas. Volodymyr Zelensky’s peace formula means Russia’s capitulation, Vladimir Putin’s peace formula means Ukraine’s capitulation. The other peace formulas do not include mechanisms to resolve this conflict. When we talk about a peace agreement on the territory of Ukraine, I do not think that this could happen in the coming months. I do not rule out that there could somehow be a fragile truce, but not a peace. Second, what does peace mean in this war? That is another discussion, and what a victory and defeat means for all parties involved in this conflict is another discussion. 3 JULY 2024  and Foreign Policy Debates At the same time, I don’t think there will the date of 24 February 2022 meant a be enough arguments, but also strategic dilemma for the Ukrainian leadership, capabilities from the West and Ukraine to whether to fight or accept the conditions force Putin to withdraw, but the discussion of the Russian Federation and take is whether or not Zelenskiy and Ukrainian revenge later. society will agree to accept a armistice in the context in which not all Ukrainian Both Ukraine and the Ukrainian society territories were liberated. agreed to the continuation of the struggle against the aggression of the Russian So, about a peace that would mean a Federation. At the moment, after two and cease-fire, de-escalation, demining the a half years of war, many Ukrainians are territories and the withdrawal of troops wondering, as sociological polls show us, from both sides, I don’t think it will whether this very great effort was worth it happen next year either. A truce will only in the context of the destruction that was be possible if both sides understand that caused. they do not have enough resources for combat operations, they need to regroup. Why is this happening? Because some The stakes and resources have changed a believe the Russian propaganda which lot, which could happen by the end of this is telling the Ukrainians that in reality year, so that early next year we’ll have a we have electricity, but the Ukrainian new setup. Until then, I think that in this oligarchs are selling it to the European hybrid context, the war will continue as we Union. see it at the moment. The Ukrainian authorities have also not In addition, Ukraine has changed its been very good at communicating with legislation, is trying to mobilize new and the citizens and explaining to them in new forces and men in this war, and is the third year of the war what is really keeping an eye on the elections in the happening with the Ukrainian energy United States of America, which are likely system. And this war fatigue creates to change this discussion greatly after many, many difficulties, but the issue of November-December, when there will Ukrainian renovation and reconstruction be elections for a new head of the White will be topical, regardless of how this war House. ends. Strategies for the reconstruction of Ukraine What effects has the war left so far and what are the estimates, if any, for the reconstruction of Ukraine? How expensive and difficult will this process of rebuilding Ukraine be? It is a very painful subject, because the Kiev School of Economics calculates the cost of the war every day and also has a website with all the destroyed targets, including those under reconstruction. Even now they are renovating some of the facilities, spending billions of dollars on this process, and the numbers are increasing day by day. It’s a painful subject from two perspectives: a symbolic one, namely The discussion goes on. If in 2022 we were discussing a possible victory of Ukraine, or a cessation of fighting for a Ukrainian reconstruction, at the moment the question arises how to do it today, because there are increased needs in this process today, in the context of the destruction of the energy infrastructure, critical infrastructure and many other challenges that need to be addressed as they arise. I have read a very interesting study recently estimating that about 80% of the resources needed for the reconstruction of Ukraine are already on the territory of Ukraine and should not be imported precisely in order to boost Ukraine’s war-affected economy. How do you see it, should Ukraine primarily use these domestic resources and then export Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

4 JULY 2024  and Foreign Policy Debates certain raw materials needed in the reconstruction process, or simply leave the market open for the reconstruction of Ukraine? And it was somehow left out. Kyiv did not consider developing its relations with the Republic of Moldova and Romania as its priority. I think that the best example was that of the European states after the end of the Second World War. And there was even talk of a“Marshall Plan 2” for Ukraine last year. The European Union did not bring cement and sand from the United States of America after the Second World War, but used its domestic resources. It is true that Ukraine has very important natural resources for the reconstruction - building materials, labour, technologies, and experienced people. This process would greatly stimulate the Ukrainian economy. But this discussion is again about a possible peace or armistice in Ukraine. It’s hard to build a logistics of these works, because missiles can fall and destroy everything you’ve built. This happened and they destroyed the construction sites as well as the people who worked there. In times of peace, the paradigm and the way of thinking are different when the resources are sufficient, but we need, of course, financial resources to start this economic engine in Ukraine and we also need the support of the neighbours, including the Republic of Moldova, Romania and other neighbouring states, which could help through consultancy and expertise. The perspectives of trilateral collaboration How do you see the trilateral collaboration at this moment between Ukraine, Republic of Moldova and Romania? How important is the development of cooperation between the three states in the region? This geopolitical triangle that I and other international relations scholars have long promoted has been overshadowed by major geopolitical challenges in the past. But things have changed a lot after 2014, and especially now. The misfortune of the war makes Kiev look more and more closely at the Republic of Moldova and Romania, as a space of friendship. Of course, through the prism of the political decision-makers in Kiev, the Republic of Moldova is seen, on the one hand, as a partner, and on the other hand, as a source of destabilization in the context of the electoral processes and the communities there, as a friend, not an enemy, and this changed in Ukraine tremendously after February 24, 2022. When we talk about Romania, we are talking about a NATO member state and a member of the European Union. Romania represents a pillar of support for Ukraine in the context of defensive efforts. Many of the problematic files from the past, are being solved, step by step, including the issues of the Bâstroe canal, Snake Island, the problem of the Romanian national minorities in Ukraine. These discussion files have started to be separated and segmented as they should be, in a European spirit. Step by step, things are changing, moving towards a normalization of the relations. In addition, we also have this initiative- to create a strategic partnership between Ukraine and Romania. Of course, things are not moving as fast as we wanted, but they are changing a lot, step by step. And last but not least, we must mention the fact that Romania can turn into an important actor that exports stability and security to Ukraine. Romania in Ukraine are now mentioned in terms of stability, security, NATO. This matters a lot to the political decision-makers and expert community in Kiev. We wanted very much for this trilateral Kiev-Bucharest-Chisinau to develp. Much also depends on the results of the elections to be held on the territory of the Republic of Moldova, so that it is a cemented geopolitical triangle, from all points of view. We also have a geopolitical small train that goes from Kiev and Chisinau to Brussels. Both states have launched the process of negotiations for joining the European Union and, of course, both capitals need the support of Bucharest, so that Romania continues to be a reliable advocate for both capitals. And there are, as you can see, many aspects that can be developed in the future if the military, geopolitical configurations are favourable. Regarding the opening of the negotiation chapter with the European Union, both by Ukraine and the Republic of Moldova, how difficult will it be for Ukraine in war conditions to make reforms because we know that this is a technical process that usually takes many years, many resources that need to be invested, administrative capacity and so on? The war is a challenge. At the same time, the war is no longer an excuse when talking about Kiev’s promise to carry out reforms. Once you undertake these reforms, you must move on. And the second problem in this context is the possible resistance that will be manifested if we talk about the western regions, where there is openness to change the administrative configurations, as requested by the European Union, but there are also other Ukrainian regions where this resistance will be present. Why do we need to change certain things? Why do we need to be much more transparent as political decision makers and local administrations, why do we need all these things? The idea of ​E​ uropean integration is not seen the same way everywhere. This is generally supported, and for this, in fact, the Ukrainian military, who fight Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

5 JULY 2024  and Foreign Policy Debates against the aggression of the Russian Federation, give their lives. But when we talk about Europe and European integration, these notions are seen differently in different regions of Ukraine, and this is also shown by sociological studies. the chapter in which we must work and demonstrate through concrete and real facts the availability of Europeanization of society and administrative mechanisms in Ukraine. The US election stakes If somewhere in the south of the country, when we talk about European integration, people do not agree with the change of the way of life. And the European integration means giving up many things that are not good for us. In the west of the country, things are seen much more realistically, because the contact with the European Union in the west of the country was much more accentuated during the last decades. People have seen what the spirit of freedom means and how a European institution is built anywhere in the world. How Kiev manages these two challenges— war and resistance and opposition to reforms by local elites and the population—will determine Kiev’s success or failure. The Ukrainian authorities must come up with plausible explanations and some related to strategic communication with the population, and all this in the context of the Russian aggression. It’s very complicated and I don’t think any of the political analysts would have the guts to say when all these things might come to an end. And perhaps the saddest thing for Kiev is that there are no more ways to shorten this process, there are no more shortcuts. Kiev found a shortcut and managed to open the file of negotiations with the European Union, but there will be no more. From now on, any shortcut, when we talk about an institutional, economic and political rapprochement with the European Union, would call into question the functionality of the European Union as such. And I think that we have closed the chapter of the celebration, we are opening How important for Ukraine is what happens with the elections of the White House? Ukrainian President Volodymyr Zelensky maintained good relations with Joe Biden, but recently spoke on the phone with Donald Trump. How important is it to Kiev who will be the next president in the White House, and especially how will the US military support for Ukraine relate to this? It is precisely this second aspect that is actually the important one. For Ukraine, it does not necessarily matter who will be the president of the White House, but to what extent it will continue to support Ukraine, at least as well as the Biden administration. And it doesn’t matter if it’s Donald Trump or somebody else, and it doesn’t matter which party he/she represents, those things are less important. The number one concern in Kiev is that the Ukrainian state is not left by itself, and having to fight by itself against Russia. Let’s not forget that from May 2022, Ukraine is totally dependent on resources, ammunition, Western support, and especially the American support, which mattered a lot. Let’s just observe how many serious, tragic things for the lives of the people of Ukraine have happened in six months, while the United States of America delayed the support given to Ukraine in the context of this war. And of course, Kiev thinks that a possible change in the American presidency would mean certain risks for the preservation of the Ukrainian state as such, for its resistance. The latest talks between Volodymyr Zelensky and the Ukrainian leadership with the Biden and Trump Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de teams once again demonstrated that Kiev is preparing for any scenarios. No matter who will be the president, Ukraine will discuss with him/her. And if Trump has a very good chance of becoming president, we will enter another scenario in which the leaders of the Eastern European countries, one by one, will try to create new symbolic ties with the leader of the most important state on the planet- the United States of America. There are also internal messages for the population of Ukraine, somehow as if there is a preparation for the darkest scenarios. The Zelensky administration says that even if the US will not help us as it used to, Ukrainians are willing to fight to the end, even without US support. But this communication resource of Kiev is somehow exhausted. In 2022, Zelenski was able to get the support of the public opinion, he was on the front pages of newspapers, he was invited by world parliaments and he tried to change the international community’s approach to this war. Now it’s getting harder and harder for him to do this. Now the interests and agendas of the world’s states have changed and the electoral configurations in Europe do not seem favourable to Ukraine. We have also seen the elections in France and the elections taking place and to be held in other states of the European Union, in addition to the elections in the United States of America— all this could generate a fundamental change in the approach to the subject of the war in Ukraine. Kiev’s approval or disapproval of a ceasefire will depend on all of these things. So we are talking about the resources and the stakes in this conflict that could change depending on the electoral context. Thank you!

6 JULY 2024  and Foreign Policy Debates Analysis It’s the real economy, stupid: why FDI is not enough to save Ukraine Analysis by Brian Milakovsky for Journal for International Politics and Society(IPG) I nvestment in Ukraine’s productive economy is critical to its resilience in the war and the sustainability of its recovery. At the recent Ukraine Recovery Conference(URC), in Berlin, Ukraine’s economics minister Yuliia Svyrydenko said that her country will need$10-30 billion in annual investment to reach the GDP growth needed to recover from Russia’s destructive invasion. The highpowered audience of western leaders and development bankers certainly understood her to mean foreign direct investment(FDI)— as the topic of attracting external investors to Ukraine’s devastated economy absolutely dominated the conference. While no one can deny the importance of FDI, focusing on it so intensely risks narrowing the horizons of economic policy for the country’s domestic enterprises and investors.‘FDIfriendly’ policymaking usually comes in one ideological basket with maximal economic openness and the avoidance of local content and industrial policies. But Ukraine’s domestic enterprises face massive war-caused market failures and need active state policies to restore their competitive position with EU peers. Even in these awful wartime conditions, Ukrainian companies appear to invest more actively in their country’s economy than foreigners. Minister Svyrydenko announced that her country had received$4.3 billion in FDI in 2023, a huge increase from the miserable 2022 level of $250 million and well on the way to the pre-war$7.95 billion. While data on domestic investment is not available for 2023, in 2022, Ukrainian enterprises reported$10.5 billion in capital investment, itself down from $20 billion in 2021. Made in Ukraine It should not be surprising that Ukrainian firms that have decades of accumulated investment in their existing facilities and significantly fewer alternatives for their money would be more willing to make further domestic investments. And their risk tolerance is truly remarkable; factories are investing in new production in rocket-scarred Kharkiv and in Nikopol, just across the Dnipro River from a Russian-occupied nuclear power plant. Even among FDI sources, the largest in 2023 were firms that already had facilities in Ukraine, such as Kronospan wood panels or Carlsberg brewing. The largest entirely new FDI project mentioned in Berlin is the same one lauded last year at the URC in London: the cluster of factories that the Irish construction materials firm Kingspan is erecting in the Lviv region. The next FDI success stories are likely to be in the defence sector, but most of this money is only committed, for the time being. Ukraine absolutely should be thinking about creating attractive conditions for future FDI and should facilitate any opportunity that comes along during this war to attract new investors. But given the enormous challenges associated, might it not make sense to prioritise activating the capital of domestic companies, the very same that are providing the lion’s share of wartime investments? Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

7 JULY 2024  and Foreign Policy Debates The Ukrainian government deserves credit for its existing efforts to bring more resources to domestic companies under an umbrella of policies called Made in Ukraine. The 5-7-9 loan subsidised program through state banks(which refers to the preferable interest rates offered) has been well funded in wartime, and Kyiv is working vigorously with donors and international financial institutions to bring more financing into the banking system. Ukraine has finally established incentives for industrial park development similar to its EU neighbours and is offering additional incentives to investors of more than $12 million. Rebates are offered to Ukrainian farmers to buy domestically manufactured equipment. The need for a Ukrainian development bank But these excellent efforts should only be the beginning. There is an enormous funding gap for the large capital projects needed to revive and modernise Ukrainian industry and supply the reconstruction. For example, one Ukrainian investor is pursuing $180 million in financing to combine with his own$80 million to construct Ukraine’s first sheet glass factory since Soviet times. Before the war, Ukraine imported most of its sheet glass from Russia and Belarus and now needs huge volumes to repair damaged homes. At an order of magnitude higher, the metallurgy giants Metinvest and Interpipe(owned by Ukrainian oligarchs Rinat Akhmetov and Andrii Pinchuk, respectively) have announced their need for$3.6 billion in financing for green steel investments to avoid being locked out of the EU market by the Carbon Border Adjustment Mechanism. In all, Ukraine’s metallurgy industry group has identified$15 billion of such decarbonisation investments needed across the industry. Many policymakers and analysts point to a Ukrainian development bank as the right institution to bring the large sums of‘long’ money needed for such ambitious projects. Kyiv should work with its Western partners to pursue the initial fund and guarantees needed to begin financing of this scale to Ukrainian enterprises. Beyond access to finance, Kyiv should investigate policy levers to direct more resources to domestic enterprises. For example, research shows that Ukrainian producers could provide 80 per cent of the building materials needed for the country’s reconstruction(priced at nearly$40 billion!), but as state reconstruction tenders grow the proportion of imported materials being purchased is growing. The Ukrainian producers identify weak consumer demand as one of the primary barriers to their recovery, so government tenders are especially important for their survival. The most radical way for Ukraine to counter this trend would be to declare a‘national security exemption’ to its commitments to the European Union and the World Trade Organization, and pass a government tender localisation law that applied to all foreign companies. But such a unilateral approach could add tension to Ukraine’s crucial relationship with the EU. Kyiv could attempt to negotiate a temporary local content requirement with the EU to apply during wartime and the early reconstruction period. Setting a minimum proportion(for instance, 60-70 per cent) of domestic sourcing of building materials and other key goods that Ukraine already produces well would increase confidence amongst Ukrainian companies about market access and spur more domestic investment. It would also speed the recovery of the tax base, which will, after all, be the source of funds to pay off Ukraine’s reconstruction loans to the EU. Ukraine’s nascent raw minerals sector simultaneously shows the need for both increased financing and targeted industrial policy. EU officials at the URC enthusiastically lauded Ukraine’s huge supplies(by one estimate, 22 of the 30 critical minerals on Brussels’ list), playing up their importance for the bloc’s‘strategic autonomy’ and even for‘European sovereignty.’ All speakers agreed that the maximum amount of added value should be captured within Ukraine, but how to ensure the necessary enrichment, processing and manufacturing plants will be built? Will there be enough FDI and will its investors be motivated to do more than facilitate the flow of raw ore across the border? A Ukrainian development bank could help ensure that domestic companies can become players in this infant industry and that value-added processing is prioritised, and local content requirements will be needed to ensure that the FDI that does enter this sector engages Ukrainian suppliers to push the effect deeper into the Ukrainian economy. Ukraine strives to enter the EU common market and should not lurch towards unrealistic models of autarkic self-sufficiency. At the same time, a greater focus on domestic investors and enterprises is timely and logical at a time when Russia can easily spook foreign investors with new waves of destruction. Reinforcing domestic capacity at this juncture will help ensure Ukrainian businesses are prepared to compete and collaborate when foreign direct investors finally enter at the scale called for at the URC. Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

8 JULY 2024  and Foreign Policy Debates Romania insists that the Republic of Moldova should be included in the process of Ukraine’s reconstruction T he director of Experts for Security and Global Affairs(ESGA), Angela Grămada, gave an interview for the FES/APE foreign policy bulletin in which we discussed how Romania and the Republic of Moldova are helping the neighbouring country Ukraine in the times of the Russian military invasion. Romania and the Republic of Moldova can help the reconstruction of Ukraine through their strategic position, and a combined strategy between Chisinau and Bucharest is needed in this regard. Continue reading the interview in the following lines: How important is the economic and logistical support that Romania offers to Ukraine through its ports on the Danube and the Black Sea? How much does this support matter for the economy of Ukraine, taking into account the Republic of Moldova as a point on this logistic route? It matters a lot, because the official number given by the Romanian authorities and confirmed by the Ukrainian side is four million tons of grain per month for the exports passing through Romania. And that means money for the state budget. That is, farmers who sell these grains in Ukraine pay taxes and duties to the Ukrainian state budget. And we know very well that the financial assistance coming from the European Union cannot be used by the Ukrainian side for the purchase of ammunition. European money is allocated for ​s​ ocial and economic policies, which is practical assistance for the citizens directly affected by the war, and for the economic and social needs of Ukraine. When taxes and fees are paid to the Ukrainian state budget, the authorities already have financial resources under their management to be able to make purchases, including ammunition. All this assistance goes to the front line. So, the organization of this grain transit is extremely important for Ukraine, especially in the context where different countries were involved in this economic circuit of Ukrainian grain export. Also, in many countries involved in this process of helping Ukraine, various crises appeared— communication, economic, political crises, because many politicians used the topic of Ukrainian grain in their election campaigns. These crises were also penetrated by the Russian propaganda and disinformation. We cannot say that all parties involved in this logistical support were correct or behaved flawlessly. I am sure that certain elements were found on the Ukrainian side that could be reprehensible in this regard. But this belligerent attitude of the partner states regarding the grain transit from Ukraine was certainly not useful to the Ukrainian side. We should understand that Romania was present in all the conferences for the economic reconstruction of Ukraine— from the meeting in Locarno to the ones recently organized in 2024. Romania said it is interested in participating in the reconstruction of the civil infrastructure in Ukraine. It is again a very important thing, but in this regard, Romania must think very seriously about its own port infrastructure, storage, roads, i.e. transport for construction materials that will go to Ukraine. Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

Romania must strengthen its own capacity. Romania insists that the Republic of Moldova should be included in this process of reconstruction of Ukraine. The Moldovan side will have a lot to gain from this, because it will not only be a transit country, but also a translator for the two sides, because Moldova is somehow at the interference of economic realities in Ukraine and Romania. On the one hand, we have many standards already implemented thanks to the Association Agreement and the free trade agreement between the EU and the Republic of Moldova. On the other hand, there are still certain realities and certain particularities that the Republic of Moldova has in common with Ukraine in terms of the economic model. The Republic of Moldova can also be included in projects, it can also be a transit country, and it can also be a translator at certain times. Chisinau can serve as a valve for the energy system of Ukraine, because certain electrical networks also operate in the reverse system to and from Ukraine. I see here an attempt to understand, perhaps not at the level of political actors, but rather at the level of relevant public institutions with attributions in the field, what role can Romania play in the post-war period. This is an advantage, because Romania is trying to think long-term or rethink the long-term strategy towards Ukraine and include in that strategic partnership intention certain priorities it can develop.We are certainly talking here about the economic reconstruction of Ukraine. This will include security cooperation and assistance for European integration of Ukraine. In this sense, Romanian diplomacy will be much more active in different formats of international cooperation. 9 JULY 2024  and Foreign Policy Debates Romania is also part of the I am not a military expert, but I do not international tribunal that investigates agree with the military experts who war crimes against Ukraine committed claim that we have created a breach, by the Russian army. a vulnerability in our defence system. Because as long as you help Ukraine Consistent but discreet hold out, you won’t need this Patriot military support system to put it into operation. Also, how does it help that you have four How do you see the military support that Romania has provided to Ukraine since the active phase of the Russian military invasion in February 2022, especially after Romania’s recent decision to deliver a Patriot missile system to Ukraine? Patriot system and only two of them are operational? I mean, what does it do to have four Patriot systems as part of your security system if Russia is still advancing and intervening further inside the Ukrainian territory? More precisely, it also approaches the mouths of the Danube and Romania’s I think here we really have to start borders with the Black Sea. with 2022. We have to say from the beginning that Romania asked the Ukrainian side not to be very vocal about the assistance it will provide or was going to provide starting with the expansion of the war. A kind of“gentleman’s agreement”, in which Romania said that it will help Ukraine, but asked it not be Russia has never hidden that it has quite extensive territorial intentions over Ukraine. It is about the Odessa region, as part of the Novorossia project, which is again being discussed, namely the unification of the four occupied territories or regions of Ukraine. vocal about this”, that is, thanking is enough, but without detailing this assistance. I believe that Romania made a good decision to contribute to the security of Ukrainian citizens, because the First of all, it was about transit, i.e. transport corridors, in order for some Patriot system will be used in this sense, so that the Ukrainians resist of the ammunition needed by the and do not allow Russia to advance Ukrainian army to arrive in Ukraine, and approach Romania’s borders. In from the partner states. addition, if Russia does not advance, the Romanian citizens of the Republic It was also about certain shells or of Moldova are also under the shield. I small production that Romania had see a multiplication of positive effects in stocks. Romania ensured that it regarding Romania’s decision to deliver also talks with the Hungarian side, this Patriot missile system to Ukraine. so that it is co-opted in this transit Moreover, I do not believe that this for ammunition to Ukraine, because decision was taken without being certain transport routes could not consulted beforehand, that is, at the bypass that country. And we know it recent meeting of the Supreme Council very well that Hungary is not exactly of Defense of the country(CSAT) in a very good friend of Ukraine. Romania or without a coordination of these intentions with the NATO Further, things evolved in the direction partners. of securing transport corridors for grains. We are well aware that Romania We should pay attention to the fact played an essential role on the Danube that the Ukrainian side is very grateful and the Black Sea. Last weeks, Romania to Romania, without bringing many made the decision regarding the details, at Romania’s request. Romania delivery of Patriot missile systems. helps Ukraine with great discretion. Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

10 JULY 2024  and Foreign Policy Debates As we discussed, Romania prefers not to flaunt the military support it provides to Ukraine for several reasons. How do you see this communication style and is it a suitable one? Yes and no. It is good that Romania really supports Ukraine and it is good that the Ukrainian side recognizes this. And it does it consistently, in the sense that we can follow messages of gratitude from the Ukrainian Foreign Minister, Dmitro Kuleba, but also from the Presidential Administration in Kiev. The Ukrainian president, Volodymyr Zelensky, mentions Romania very often. We also hear such messages from the Minister of Defense in Kiev. Ukraine always thanks Romania. On the other hand, there are politicians in Romania who use the Ukraine theme for political dividends. Their objective is short-term, to create a scandal in the public space. With such messages, they want to draw the public’s attention to them and say they are concerned about the ethnic Romanians in Ukraine. Aid for refugees How do you evaluate the help given by Romania to the Ukrainian refugees? However, only about 80,000 Ukrainian refugees moved to Romania. Why do you think they didn’t choose Romania? I was talking the other day with a Ukrainian diplomat who said that there is a total figure of around 156,000 Ukrainians who have obtained the temporary status of persons in need of protection in Romania. Of this total, about 80,000 are in Romania. Many of them are in the southern part of Romania, i.e. Constanța or Bucharest county, but also near the border with Ukraine. They are basically in the localities that were more or less known to them, even before they arrived in Romania and obtained this status. On the other hand, from the discussions I had with several Ukrainians who travelled to several countries during this period, i.e. in these two years since the extension of the war in Ukraine, Romania is among those states of the European Union that has the most flexible and reactive protection system, in the sense that when a need arises, at least something is tried to be done to help the situation. However, we know that payments to Ukrainian refugees from Romania have been very late, but that does not mean it is better in other EU member states than in Romania. Those I spoke with also highly appreciated the fact that Romania had that National Refugee Assistance Plan in place since the first year of the war, from 2022. The states in Ukraine’s neighbourhood that received a large number of refugees could not boast with such a plan. Romania has tried to manage the relationship with the NGOs that have received quite a lot of money from international donors, so that it does not happen that all the NGOs work in one direction, and that the resources are distributed based on the types of needs of the refugees. Romania, through its programme, tried to integrate refugees economically, not to keep them in certain communities of big cities. And that made the difference. Why so few though? Because there were prejudices and mutual opinions about Ukraine and Romania. People, however, moved to localities that are in the immediate vicinity of Ukraine, that is, with the intention of going back. And some of them returned back to Ukraine, they did not go further to other member states of the European Union. It was quite difficult for Ukrainian refugees to learn Romanian, because it has nothing in common with Ukrainian, which is a Slavic language, and it’s quite difficult to adapt or find a job if you don’t speak English or do not speak another international language that the Romanian side can also speak. The issue of the Romanianspeaking minority in Ukraine How do you see the situation of Romanian speakers in Ukraine, which from the perspective of Bucharest, occupied the first place on the bilateral agenda between the two countries? Did Kiev understand this sensitivity of Bucharest and act as such by offering the right to education in the mother tongue to ethnic Romanian speakers? This theme was somehow the condition for the dialogue to be able to move forward. And this is not only during this period that we are witnessing now, that is, it is not only during the expansion of the war on Ukraine. Here we can talk about the entire period of thirty or so years of bilateral diplomatic relations. The rights and freedoms of the Romanian minority in Ukraine have always conditioned the development of other lines of interaction and cooperation between the two countries. At one point, Romania and Ukraine had advanced enough to resume discussions in bilateral working groups. There were commissions and working groups at the presidential and government level. The Ukrainian side claimed to have amended domestic legislation, adopted the law on language policy, but it Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, MD-2012, Republic of Moldova, Tel.+373 855830 Website: moldova.fes.de. E-mail: fes.moldova@fes.de

11 JULY 2024  and Foreign Policy Debates was cancelled in February 2014, after the Euromaidan events. However, the Romanian side insisted that the Ukrainian side reconsider the decision. Ukraine said it would amend its domestic legislation and introduce a clause on the languages o​​ f European Union member states. And Romanian is an EU language, because Romania is a member state of the European Union. Things did not evolve in a positive direction, in the sense that even if this was put on paper, the implementation mechanisms were missing. Later, the discussion was brought back to the moment when those recommendations or conditionalities of the European Commission were formulated and it was again returned to the legislation regarding national minorities on the territory of Ukraine. Romania and Hungary had most objections to this legislation at the time. Romania preferred to have face-toface talks with the Ukrainian side through diplomatic representatives. The Hungarian side approached the situation in a different way and made a public scandal. From what I understand from the Ukrainian side, Ukraine later adopted the model of the Romanian policy regarding the rights and freedoms of ethnic minorities. But, nowhere in the Ukrainian legislation there is mentioning that Russia is not part of this adopted model, because it is an aggressor state. The Ukrainian side took quite a few steps to meet the Romanian side to discuss the issues. Propaganda and disinformation How do you see the Russian propaganda acting in Romania against Ukraine and what would be the most important false narratives against Kiev in Romania? There is this constant theme that Romania must be excluded from NATO, a theme that has been intensively promoted even before the war in Ukraine escalated. That NATO should slightly modify its borders and strategy. The second big theme was the problem of Ukrainian refugees. Many narratives have been connected to the topic of Ukrainian refugees, such as that they cannot be integrated, that they behave reprehensibly, that the Romanian side does not cope and cannot manage such behaviour on the part of the Ukrainians. There are also political actors from Romania, i.e. extreme right-wing forces who claimed that the European Union takes our resources, that the European Union takes decisions against the member states, that the EU promotes values ​t​ hat are inappropriate for the Romanian state, and so on. But here already the problem is in the direction of internal political actors, who, by taking over some themes that we can see in many EU member states, try to influence internal public opinion, and you can’t necessarily accuse Russia of interference. Another topic that seems to me to be given quite a bit of attention in the public space is what the Embassy of the Russian Federation in Bucharest is doing. The latter, taking up old historical topics and false themes that it brings back into discussion, tries to arouse the dissatisfaction of public opinion in Romania. Russian propaganda pedals on the idea that Romania still wants to conquer the Republic of Moldova and has imperial claims on both Ukraine and the Republic of Moldova. Thank you! The opinions expressed in the newsletter are not necessarily those of the Friedrich-Ebert-Stiftung(FES) or of the Foreign Policy Association(APE). Foreign Policy Association(APE ) is a non-governmental organization committed to supporting the integration of the Republic of Moldova into the European Union and facilitating the settlement of the Transnistrian conflict in the context of the country Europeanization. APE was established in fall 2003 by a group of well-known experts, public personalities and former senior officials and diplomats, all of them reunited by their commitment to contribute with their expertise and experience to formulating and promoting by the Republic of Moldova of a coherent, credible and efficient foreign policy. Friedrich-Ebert-Stiftung(FES) is a German social democratic political foundation, whose purpose is to promote the principles and foundations of democracy, peace, international understanding and cooperation. FES fulfils its mandate in the spirit of social democracy, dedicating itself to Monthly newsletter, No.7(221), July 2024 111 Bucuresti St., Chisinau, t M h D e -2 p 0 u 1 b 2, li R c e d pu e b b li a c t o e f M a o n l d do f v i a n , d Te in l. g +3 i 7 n 3 a 85 t 5 r 8 a 3 n 0 sparent manner, social democratic solutions to current and future problems of the society. Friedrich-EbertWebsite: moldova.fes.de. E S -m ti a f i t l: u f n es g .m h o a ld s o b va e @ e f n es a .d c e tive in the Republic of Moldova since October 2002.