Local Democracy in Moldova - CPL (12) 9 Part II

Rapporteur: Pascal MANGIN, France, Chamber of Local Authorities Political Group: EPP/CD



I. Introduction

1. This report has been prepared as part of the implementation by the Congress of Local and Regional Authorities of the Council of Europe of its programme for the monitoring of local and regional democracy in the member states of the Council of Europe1, further to the decision to prepare a 4th monitoring report on local democracy in the Republic of Moldova, taken by the Bureau of the Congress on 22 March 2004.

2. The Republic of Moldova joined the Council of Europe in 1995. It ratified the European Charter of Local Self-Government (hereinafter “the Charter”) in 1997, and the instrument came into force on 1 February 1998. The situation of local and regional democracy in Moldova has been the object of several information and monitoring reports prepared by the Congress2, both when the country was applying for membership of the Organisation and after it became a member state.

3. Pascal Mangin (EPP/CD, France) was appointed Rapporteur on local democracy in Moldova by the Institutional Committee of the Congress. In his task, he was assisted, as consultants by Professor John Loughlin (Ireland) and in particular by Mr Vadym Proshko (Ukraine), members of the Group of Independent Experts on the European Charter of Local Self-Government, and by members of the Congress Secretariat.

4. The decision to prepare this report was taken in the wake of:

5. The Bureau had also instructed the Rapporteur to look into the situation prevailing in Chisinau following the many appeals and statements by Mr Urechean, General Mayor of Chisinau (until April 2005), concerning the legal proceedings brought against him and City Hall employees, which are in keeping with the very tense political climate. The delegation also examined the case of the dismissal of the mayor of Comrat (Gagauzia), Mr Tausanji and the suspension of the Mayor of Durlesti, Mr Barbaneagra.

6. The monitoring team made two visits to Moldova, on 17-18 January 2005 (Chisinau) and 11-12 July 2005 (Chisinau and Comrat). Taking into consideration that the parliamentary elections were held on 6 March 2005, followed by the election of the President of the Republic and the formation of a new Government, the Congress delegation’ second visit to Moldova allowed in particular to go deeply into the problems identified during the first visit and to meet the representatives of the new Parliament and the new Government and to evaluate the progress of the ongoing reforms in the field of local self-government. In addition, the Rapporteur paid a visit to Transnistria (Tiraspol and Bender) on 26 July 2005.

7. In the course of the visits the Congress delegation had meetings, inter alia, with the Prime Minister of the Republic of Moldova, Chairman (former and current) and Vice-Chairmen of the Moldovan Parliament, and many other central government officials with responsibilities linked to local self-government (the Minister for Finance, the Head of the Government Apparatus, the Minister for Justice, the Head of the Agency for Regional Development, the Prosecutor General and his Deputies, leaders of the political parties present in Parliament and Chairs of parliamentary committees). In Gagauzia, the Congress delegation met the Bashkan (Governor), the Chairman of the Peoples’ Assembly and the Prosecutor.

8. At local level the delegation had meetings with Mr Serafim Urechean, General Mayor of Chisinau (until April 2005), Mr Vitalie Vrabie, Head of the Moldovan delegation to the Congress, Mr Mihail Formuzal, Mayor of Ceadir – Lunga, and other elected mayors and representatives of associations of local authorities.

9. At the end of the first visit a meeting took place at OSCE headquarters, which was chaired by Ambassador Hill, Head of the OSCE Mission to Moldova, and brought together the Ambassadors of Germany, the United Kingdom, France and Hungary. At this meeting encouraging support was voiced for the Congress's action in the country, which the OSCE is following with interest. The Head of the OSCE Mission also met the Congress delegation during its second visit. Details of the programmes of the three visits are set out in the Appendices to this report.

10. In addition to the information gathered during the visits to Moldova themselves, the monitoring team was greatly assisted by documentation and information provided by different Moldovan authorities. Legislative acts of the Republic of Moldova published in Russian and English and examples of the acts of the local authorities, particularly the budget of the Orhey rayon for 2005, the budget of the city of Orhey for 2005 and the budget of the Peresecina village (Orhey rayon) for 2005 also served as basis for this report.

11. A study on financial autonomy of local authorities in Moldova and local self-government in Transnistria prepared by Prof. Dr Igor Munteanu, Director of the Institute for Development and Social Initiatives (IDIS) “Viitorul” and member of the Group of Independent Experts on the European Charter of Local Self-Government, at the request of the Rapporteur represented a valuable contribution to the report and to the better understanding of the system of local finances in Moldova and the existing problems in this field.

12. The Rapporteur wishes to thank the Ministry of Foreign Affairs and the Permanent Representation of Moldova to the Council of Europe for their help in arranging the various meetings with central government and parliament representatives and their support in providing requested documentation. The Rapporteur conveys special thanks to Ambassador Vladimir Philipov, Special Representative of the Secretary General of the Council of Europe to Moldova, and his team for their unfailing support, which guaranteed the success of the Congress’ visits.

II. Current political background
II.1. Parliamentary Elections (6 March 2005)
13. In the recent parliamentary elections, on 6 March 2005, the Communist Party of Moldova won 45.98% of the votes, the Electoral Bloc “Democratic Moldova” 28.56 % and the People's Democratic Party of Moldova 9.07 %. In fact, the Communist party maintained its “leading role”, but its relative share in elections declined and its number of seats in Parliament has contracted. On the other hand, it would be wrong to say that the opposition finished out of the running, as the cumulative number of seats acquired in the Parliament is larger than in 2001, while several political goals were rapidly grabbed and marked by the Communist party leaders as “country outstanding priorities” – the EU integration, rule of law and Transnistrian conflict resolution, as well modernisation of the economy, a better quality of life, consolidation of society. After the elections, the opposition reached a kind of “provisional cooperation format” with the ruling Communist party.
14. Substantial decentralisation of the state power and local autonomy were listed among the main priorities of the “constructive cooperation” between the ruling party and the opposition. Earlier, the territorial reform planned by the ruling party already in 20016 gave rise to substantial criticism of the Government. This criticism was motivated by the concept, spirit, methods and ambiguities related to the planned changes of the public administration system in Moldova.
II.2. Local by-elections (10 and 24 July 2005) – election of General Mayor of Chisinau7

15. The early by-elections of a new General Mayor of Chisinau were made necessary by Mr Urechean's resignation in April 2005. Mr Urechean, Leader of the Electoral Bloc “Democratic Moldova”, was elected to the Moldovan Parliament in the parliamentary elections on 6 March 2005, and under the country's Constitution Members of Parliament are not allowed to engage in any other gainful activity.

16. At the invitation of the Central Electoral Commission of the Republic of Moldova, the Congress of the Council of Europe took part in the observation of the local by-elections held on 10 July 2005 to elect the mayors of 14 municipalities of Moldova, in particular the General Mayor of Chisinau. The mayors were to be elected for a two-year period – until the next general local elections. As the turnout in Chisinau did not attain the 1/3 required by the electoral Code, the elections held on 10 July 2005 were declared invalid and "repeat" elections were scheduled for 24 July 2005. The “repeat” elections were also declared invalid for the same reason. On 23 September 2005, the Central Election Commission adopted a decision to organise new elections of General Mayor of Chisinau on 27 November 2005.

17. The Congress delegation's observation work focused on Chisinau, in view of the importance of the capital city and of the very high political stakes consequently involved in the election of its mayor. Furthermore, numerous problems and irregularities had been reported by the Congress when it observed the local elections in Chisinau in 2003.

18. In the opinion of the Congress observers, the election of the Mayor of Chisinau went fairly well on the whole, generally meeting international standards, particularly in the actual process of voting, counting the votes and announcing the results. The delegation observed substantial improvements compared with the 2003 elections. Concerns were nevertheless voiced that the government's choice of election dates was perhaps not conducive to a good democratic turnout, hence the high level of abstention: less than 28 % of the electorate voted on 10 July and only 19,82 % on 24 July.

19. The Congress observation mission also stressed that progress needs to be made in the election campaign, particularly in respect of the principle of equality of opportunity for all the candidates. The main misgivings of the Congress delegation concern the persistence of certain problems linked, for example, to the secrecy of the vote, the use of public resources in the election campaign and state interference in the campaign.

20. The Congress observers recommended in particular that the Moldovan central authorities make sure that there are no modifications to any electoral provision related to local elections, nor any legislative provision or regulation affecting the status of Chisinau, before the ongoing electoral process is completed. The possibility which was raised by Moldovan central authorities of modifying the Constitution with the purpose of entitling the Parliament or the Presidency to name the mayor of the capital by a decision or a decree should be turned down as contrary to the concept and fundamentals of local self-government as enshrined by the European Charter of Local Self-Government.

III. Main problems of local self-government in Moldova identified by the Rapporteur

21. The system of local self-government in Moldova is formed of two tiers (levels). The first tier is presented by the local authorities in villages and cities. Mayors are elected by the whole community. The second tier is presented by local authorities in rayons and the municipalities of Chisinau and Balti. Territorial entity with special status – the autonomous region of Gagauzia – consists of three rayons, has its own parliament and government 8.

22. It should be noted that previous missions to Moldova and reports drafted on this basis had revealed serious shortcomings in adherence to the provisions of the European Charter of Local Self-Government by the Moldavian authorities both in legislation and in relations between the central government and the local authorities. The special territorial area of Gagauzia, which has its own constitutional status, had particular problems related to this status. The Congress delegation heard many reports of central government interference with local authorities' affairs and statements testifying to the lack of genuine decentralisation and local financial autonomy within the country.

23. During its missions, the Congress delegation wished to investigate four main areas of concern:

III.1. Financial autonomy of local authorities

25. During the discussions with Moldovan interlocutors the Rapporteur noted some worrying signs that local authorities in Moldova enjoy very limited financial autonomy, which is a key component of local self-government.

26. Constitution of Moldova (Article 131 Para 1) says: “National public budget is composed of the state budget, budget of the state social insurance and the budgets of rayons, cities and villages.”9 During the meetings with different officials, we heard several times that the country has a single integrated budget with the budgets of local authorities being part of it.

27. Article 2 (1) of the Law on Local Public Finance10: “The local public finances constitute an integral part of the state public finance system”.

28. The mentioned Orhey rayon budget, approved by the rayon council, contains revenues of the rayon budget itself, revenues of the communities on the territory of the rayon, a rather detailed list of expenditures of the rayon budget, as well as the bulk list of the expenditures of the local authorities of the first tier and the totals of each item. Thus, at least in the indirect way, the local budgets are approved by the regional (rayon) council.

29. Such a system of formation and approval of the local budget is regulated by the Law on Local Public Finance, which says (Article 2, Para 1, 1):

30. The general pattern of the budget drafting procedure in Moldova in the simplified way appears as follows:

31. It is interesting that the approved rayon budget does not contain the list of the communities with the exact figures of transfers to each of them but only the totals. Moldovan experts in the above mentioned study on financial autonomy of local authorities in Moldova highlight: “Following its subjective “preferences”, the rayon administration may authorise the extent of subsidies/transfers, more or less appropriate to the local needs”.

32. In fact, as a result of this system, local authorities are not free to dispose of the funds of their budget. The rayons, which transfer the state grants to the local authorities, exercise too tight a control over local financial management. The authors of the study give an example of the Badragii Vechi municipality, which “approved its local budget at 210 600 lei revenue and expenditure, but 174 000 lei are directly paid by the rayon council strictly for salaries. As a result, local public authorities have real authority to manage only 36 600 lei (app. 2 880 USD at the current exchange rate of the National Bank n.n.). But, even the remaining resources shall be managed only for the maintenance of town hall staff and educational institutions (schools and kindergartens) on their territories.”

33. The level of freedom of disposal of the budget funds is also illustrated by the study: “expenditures are spent as a rule according to the normative rates (indicative figures, which are not directly stipulated by law) drawn up by the Ministry of Finance. Even if the local councils and mayors do know that the real expenses are very different, they have no power to change their budgets accordingly, because then rayon councils will not approve transfers from the central budget. Therefore, mayoralties may have power to distribute and operate revenues which do not exceed 10% from the total local budgets; the rest can be operated only when they are specifically authorised by the rayon councils.”

34. We consider that the current system of calculating and distributing of the amount of transfers (subsidies) is imperfect, as the criteria on the basis of which transfers are set up do not correspond to reality and in many cases do not even cover salaries of budgetary employees and indispensable expenses for running public institutions.

35. This budgetary system is an attempt to solve the problem of very scarce public finances which are very unevenly distributed over the country’s tax base.

36. Thus, the local budgets (of the first tier) are, in fact, formed of the three parts:

37. There is another real own source of revenue, which the local authorities may use – income from privatisation of public housing, municipally owned land and facilities, payments for the lease of the municipal land plots, but all this income is included into the total revenue and the amount of subsidies/transfers are decreased against this sum.

38. Local authorities may impose 1112 local taxes and charges in the limits determined by the law. In total, these taxes give less then 3% of the bulk local budget, according to the information from the Ministry of Finances. It should be also noted that many of these taxes cannot be used at all in the small towns and villages. These are, for instance, tax on the commercial use of the city symbols, parking charges, charges on the commercial filming and photography etc. As an example, we may see that in the village of Peresecina they use only three local charges – the market charge – 0.07% of the total budget; the territory beautification charge – 0.44%; and the charge for the facilities of the retail and services – 1.54%. In the city of Orhey the market charge gives 2.9% of the total budget revenues; beautification charge – 1.23%; hotel charge – 0.10%; charge for the facilities of the retail and services – 2.50%; charge for the use of the local symbols – 0.65%: parking charge – 0.04%.

39. The Rapporteur was informed that local budgets have been recently deprived of one of the main sources of supplementary income – a part of the Value Added Tax (VAT), which has been replaced by transfers. This measure could be regarded as an obvious regress, as this situation led to the diminution of role and interest of local authorities in stimulating economic activities in towns and significant reduction of capacity of local budgets to finance investments from their own income.

40. It should also be noted that the communal services like water supply and sewage collection, centralised public heating, garbage collection, public housing maintenance are provided by the semi-independent public owned companies, which have their own budgets not included into the city budget, so the percentage of the local taxes and charges in the total public cash flow is even significantly lower.

41. Municipalities receive transfers without any earmarking. As the responsibilities of the local authorities include the delegated ones (including such “expensive” responsibilities as public safety and social security), which are supervised not only by legality but also by efficiency of execution, these responsibilities, especially under the conditions of very limited resources, may be financed at the expense of the own responsibilities.

42. This way of formation of the local budget makes the next year’s financing very uncertain resulting in a very disputable long-term borrowing. The authors of the study mark out: “Neither of the largest municipalities in Moldova has employed so far other financial instruments, such as – municipal bonds, or other stock exchange papers in order to attract new resources at their disposal.”

43. The Law on local public administration, as well as the Law on local public finance do not provide a sufficient and necessary framework for supplying necessary financial resources for the functioning of local public authorities. Many of the responsibilities of local authorities do not have financial coverage.

44. It seems that currently there is an obvious absence of an efficient mechanism of local tax collection, rights and capacities of local authorities being limited.

45. From our point of view, a number of provisions of the Charter are not properly fulfilled in the area of finances, particularly:

III.2. Administrative autonomy of local authorities

46. Administrative autonomy is assured by the clear system of distribution of responsibilities between different levels of public powers (“Powers given to local authorities shall normally be full and exclusive”, Article 4.4 of the Charter). Articles 10 to 13 of the Moldovan Law on Local Public Administration13 put forward some questions. Social welfare is a function of the local authorities of the first tier (10.1.e), of the second tier (11.1.e), it is also a responsibility, delegated by the state to the local authorities of the first tier (12.1.a), and delegated to the authorities of the second tier (13.1.a).

47. Quite astonishing is the fact that town planning is the responsibility of the first tier (10.1.a) and of the second tier (11.1.a), as second tier authorities must be the territorial ones, without any settlements under their jurisdiction.

48. It is interesting that managing the school system as well as local libraries, other cultural institutions etc. is the own responsibility of the local authorities of the first tier, but in accordance with the Law on Local Public Finance (Article 8 Para 3) employees’ salaries of these institutions are paid by the local authorities of the second tier, which means that the local authorities in even comparatively large cities can not define their own policy in education and culture.

49. Such intermixture of responsibilities needs an intensive coordination of activities between the two tiers of local authorities and the national government; a system of reporting and a system of unification of activities also must exist to make the provision of public services efficient.

50. Additionally, there is a huge volume of responsibilities delegated to the local authorities by the state, including social protection, health care, public safety, environmental protection etc. In these areas, in accordance with the law, the local authorities are subject to administrative supervision with regard to expediency. Keeping in mind the bulk system of financing, such supervision may involve the indirect supervision of the own responsibilities too.

51. Generally speaking, local authorities in Moldova are under total supervision. Article 71 of the law on Local Public Administration provides a list of items which are subject to the obligatory supervision of the Government Apparatus. It includes all municipal council decisions, mayor’s orders, orders concerning hiring and firing city hall employees, all bank operations with the sums over 30 000 lei (about € 2000) for the first-tier authorities and 300 000 lei for the second-tier authorities.

52. It looks as though the law does not defend the local authorities of the redundant and non-commensurable supervision but it makes the supervision overwhelming.

53. In accordance with the law, local officials are “state servants”. The law makes no difference between state agency employees and the employees of the local authorities. This fact makes the local self-government officials feel themselves responsible before the state, not before the local community. Their salary is not controlled by the local authorities, but is determined by the state.

54. The Law on Local Public Administration (Article 18.2.f) obliges the local councils to form their executive bodies in accordance with the standard structure approved by the national government, that is, here again the autonomy of the local authority is also limited.

III.3. Dismissal of the mayor of Comrat, Mr Tausanji, by decision of the People's Assembly of Gagauzia in April 2004

55. It is not possible for us to judge on the accusations made against the mayor of Comrat but we do have concerns about the procedures adopted for his dismissal by the People's Assembly of Gagauzia and the Bashkan (Governor). The Congress delegation was informed that on 23 March 2004 the People's Assembly rendered the decision on dismissal of the mayor from office, on the basis of the decision of the Comrat Municipal Council on the illegal acts of the Mayor of Comrat. On 5 April the Bashkan signed the decree removing the mayor. Moreover, the Comrat Court of Appeal issued a decision confirming the legitimacy of this dismissal. Since then, new elections for the mayor of Comrat took place on 18 July 2004, notwithstanding the joint letters expressing concern by the Council of Europe (Congress’ President and Special representative of the Secretary General to Moldova) and Head of the OSCE Mission to Moldova concerning the dismissal of the mayor of Comrat, addressed to responsible Moldovan authorities.

56. The Congress delegation received some very contradictory information as to the procedure followed, on the legality of this procedure and whether this decision was well-founded. The authority of the People's Assembly of Gagauzia to dismiss a directly elected mayor from office and the Bashkan's decree confirming this decision also appear open to challenge.

57. The Minister of Justice of Moldova informed us during the visit in January that a municipal council cannot dismiss a mayor in this way. Other representatives of the central authorities informed us that it is possible in Gagauzia, which has a special statute but that this is not in accordance with the situation in the rest of Moldova. If this is the case in Gagauzia, there is a case for examining this procedure and revising the constitutional set-up that permits it.

58. The former mayor of the city of Comrat, Mr. Tausanji was dismissed from his position in accordance with the Articles 51 (8) and 79 of the Statute of Gagauzia14. It is notable, that the Statute does not mention at all the reasons for dismissing “the public officials in Gagauzia”.

59. The problem is that the Statute of Gagauzia was adopted by the Peoples’ Assembly of Gagauzia and was not approved by the Moldovan Parliament. In accordance to this Statute: “Public authorities, public officials, citizens and their associations shall abide by the Constitution of the Republic of Moldova, this Statute and the laws of Gagauzia” (Statute of Gagauzia, Article 2.3). A number of legal conflicts between the local legislation and the national legislation may appear as a result of the fact that the laws of Moldova do not apply directly in Gagauzia.

60. It should be noted that the legislation applicable in Gagauzia differs from that covering the rest of the country and the Moldovan authorities have acknowledged that it is partly at variance with the Constitution of Moldova and national law. They have recognised the need for future reform in this area.

61. One of the other possible grounds for conflicts is that in Gagauzia the second tier of local self-government – in the rayons – does not exist, in accordance to the Statute of Gagauzia, citizens elect the municipal councils and the Peoples’ Assembly, rayons are governed by the administrations (Article 82).

62. After the first visit in January, we received written information from the Parliament that the dismissal of Mr Tausanji, Mayor of Comrat, was performed in conformity with the special proceedings set by the normative acts of the public authorities of Gagauzia as the issues related to the dismissal of persons that hold a position of responsibility within the public administration authorities of Gagauzia are governed by the Law on Special Legal Status of Gagauzia and the Statute of Gagauz Yeri. The position of the Moldovan central authorities is that it was not necessary to organise a local referendum to dismiss a mayor in Gagauzia, in spite of provisions of the Law on Local Public Administration (Article 33.3) and the Electoral Code (Articles 176.4, 180.d, 181.1 and 181.2), under which the initiation of local referendum on the mayor’s dismissal by the local council or citizens is foreseen.

63. Mr. Tausanji’s case is also an example of non-distinguishing the status of the state officials and the local elected representative.

64. During the visit in July, the Bashkan of Gagauzia, commenting the case of Tausanji, said that as this case got such a wide publicity, the authorities of Gagauzia decided not to use this procedure of dismissing the mayors in future, but we consider this decision as political, and not a legal one.

65. From the point of view of the European Charter of Local Self-Government and in particular Article 7 on the “Conditions under which responsibilities at local level are exercised” and Article 8 on the “Administrative supervision of local authorities’ activities”, the People’s Assembly and the Bashkan should have the right to take a decision on dismissal only of officials designated by them and not the mayors, who are officially elected through democratic, universal and directly expressed vote by the respective local community. The mayor being a publicly elected authority is not subordinated to either local council (which cannot dismiss the mayor except by organising a local referendum), or any other public authority of another level. The dismissal of the mayor should be ruled by special and unique procedures, stipulated in the Law on local public administration and the Law on the status of locally elected persons. In this particular case, the dismissal of the mayor seems moreover to be a disproportionate measure.

III.4. Allegations of pressure on local politicians from the opposition parties

66. A number of local politicians, including Mr Urechean, former Mayor of Chisinau, and several members of his staff, have been subject to legal proceedings because of alleged irregularities and corruption in the carrying out of their political and administrative responsibilities and abuse of powers. The body charged with investigating such offences is the Centre for Combating Economic Crime and Corruption (CCECC), which seems to be under the direct control of the Government although it was claimed that the Parliament might have some oversight as well.

67. There are numerous appeals from several mayors in Moldova, that they were groundlessly accused of violating the law and suspended from carrying out their duties. As a rule, these appeals come from representatives of the opposition (the representatives of the majority, as we believe, cannot refer to such reason as “political persecution”).

68. For instance, the accusations levelled against Mr Urechean and employees of the City of Chisinau, including against a close ally of Mr Urechean, Mr Sarban, the Government’s decisions to transfer some of the Chisinau city authority’s powers to central government without financial compensation and the Chisinau Court of Appeal's judgments concerning the suspension of a number of decisions taken by the Chisinau City Hall could be perceived as a political ploy to jeopardise Mr Urechean's chances in the recent parliamentary elections and to put pressure on him, since he is the leader of an opposition faction.
69. The proceedings against the mayor of Chisinau were based on charges of abuse of authority and budgetary means. The latest criminal case against Mr Urechean was submitted to the General Prosecutor's Office on 13 May 2005 by the CCECC. He is charged in particular with abusing his former position in the purchase of 40 ambulances for a municipal hospital.
70. The Rapporteur was also informed by letter, signed by Moldova's Ambassador to the Council of Europe, that a parliamentary Committee has been set up to examine the lawfulness of bringing criminal proceedings against Mr. Urechean. During his meetings in January 2005 with the Chairperson and Vice-Chairman of former Parliament, the Rapporteur was unable to obtain further information on this Committee's work or any clear replies to his questions on this subject, apart from the information that the Committee had been established at the request of opposition members of Parliament.
71. Since Mr Urechean’s resignation from the position of General Mayor of Chisinau in April 2005, following his election to the Moldovan Parliament in the parliamentary elections on 6 March 2005, now this case rather falls under the competence of the Parliamentary Assembly, which is following this issue closely15. According the Parliamentary Assembly report, on 8 July 2005 the Juridical Commission of the Moldovan Parliament asked the Parliament to lift the immunity of four MPs, so that the Prosecutor General could file criminal cases against them. Three of the parliamentarians are from the biggest opposition faction, “Our Moldova” Alliance, including the faction leader Mr Urechean. No decision has been taken by the Parliament yet.
72. The Congress delegation was particularly concerned about the case of Mr Barbaneagra, mayor of Durlesti, with whom the delegation met, at his request. Criminal proceedings have been instituted against him and a court of first instance accordingly decided to suspend him temporarily from office. A mayor ad interim, who is a member of the Communist party, has been appointed for the duration of his suspension. No judicial decision on the merits of the criminal case has been taken since September 2004, but the suspension remains in force.

73. Mr Barbaneagra, who has been left without any income and is unable to find other employment for the entire duration of the proceedings (despite the fact that he is still presumed to be innocent), sought refuge in Romania for several months. When he returned to Moldova, he was called to the Prosecutor’s Office and forbidden to leave his town without permission from the Prosecutor’s Office. Mr Barbaneagra was arrested on 13 June 2005 but released three days later.

74. The law provides for such measures as suspension, but neither the terms of such a suspension, nor the question of paying a salary to the suspended mayor have been settled. During the time of suspension the mayor can not have another paid position but, as Mr. Barbaneagra, the suspended Mayor of the town of Durlesti, reports, he received no salary for almost a year of suspension.

75. During the time of suspension of the mayor, the vice-mayor acts as the acting mayor. The vice-mayors are approved by the council, their candidacies being proposed by the mayor. However, the council may dismiss the vice-mayor at any time: “Dismissal of the vice-mayor shall be done by the local council after the mayor’s suggestion or the proposal of one third of the councillors by the decision made by the majority of the elected councillors16” (Law on Local Public Administration, Article 36 Para 2). Therefore, during the suspension of the mayor, the council (especially if the majority is in opposition to the Mayor) may dismiss the vice-mayor and appoint another person (from the council’s majority) to perform the functions of the acting mayor.

76. The Congress President Di Stasi addressed two letters to the President of the Republic of Moldova concerning the case of Mr Barbaneagra. In reply to the first letter, the Moldovan authorities informed the Congress that there was no infringement of Moldovan legislation in force17 in this case, underlining that the procedure of adoption of a judicial decision in respect of the mayor of Durlesti would be accelerated. On 4 July 2005, the Congress President received another letter from Vice-Prosecutor General with the details concerning the charges against Mr Barbaneagra and the procedure applied.

77. The Rapporteur was also informed of criminal charges brought against Mr Formuzal, Mayor of Ciadr-Lunga (Gagauzia), on alleged misuse of public property or budgetary money. Mr Formuzal considers that the criminal investigations have been initiated on the orders of the Gagauz authorities, having regard to Mr Formuzal's recent performance in parliamentary elections, during which he led the campaign for the left-wing "Patria-Rodina" Electoral Bloc, which won the majority of the votes in Gagauzia, and his position of a big favourite from the opposition for the Bashkan elections in autumn 2006.

78. Suspended mayors report that no real progress has been seen in the investigations of their cases for months. They say that often the accusations prosecuted against them are found to be groundless, but that new accusations are formulated instead. If the case is finally sent to the court, the judges, after a long time of studying the case announce their recusal basing, for instance, on the fact of personal acquaintance with the mayor accused.

79. At the same time, Mr. Mejinschii, Director General of the Center for Combating Economic Crimes and Corruption, informed that during 2004-2005 about 70 criminal cases with the top officials of the local self-government being accused were initiated by the Center, but he could give neither the example of the case with the final decision of the court, nor the general statistics of the number of cases sent to the court at all.

80. Mr. Balaban, Prosecutor General, also gave no examples of the mayors being convicted by the court, however he said that the number of top officials belonging to the governing party against whom the accusations and investigations by the prosecutor’s office is under way is also rather large.

81. The Congress Rapporteur should like to express a strong criticism of the Moldovan central authorities regarding the use of the mechanism of initiating criminal proceedings against the opposition local politicians, including a long delay of sending these cases to court and unreasonably long court procedures without final sentence. He regrets the lack of clear statistics of the percentage of such proceedings initiated against the representatives of the ruling party and those against opposition mayors. The Rapporteur also considers that the measures taken against the opposition mayors and their local staff often seem not to be proportional to the charges brought against them, and expresses misgivings about the lack of final sentence in these cases which could be a means of putting pressure on the opposition local politicians.

82. In line with Parliamentary Assembly co-Rapporteurs, the Congress Rapporteur does not have the intention to take sides in any lawsuit as these should exclusively be a matter for national justice. Although we are not able to comment on the substance of the allegations against the local politicians and officials, we were struck by the fact that such measures seemed to be applied primarily if not exclusively against local politicians from opposition parties rather than against local politicians loyal to the governing party. This raises the issue of whether the drive against corruption is being carried out in a political and partisan manner rather than according the principles of fairness and legality. In this connection, it is worrying that the CCECC seems to be under the control of the government rather than an independent judiciary. We were also concerned by the procedures adopted, which seemed to paralyse the functioning of local government and to cause considerable and unnecessary hardship to the individuals concerned as well as to their families.

83. Members of the international community in Moldova who have been attentively following developments also made the allegations that the legal processes was being used in a political and partisan manner. This is especially the case, as the legal authorities have not demonstrated a sense of urgency in investigating the charges.

84. The Congress will continue to exercise special vigilance with regard to legal proceedings instituted and pressures brought to bear by central government against local elected representatives who are members of the opposition and expect a transparent and objective investigation.

III.5. Tvarditsa village case

85. The initiative group for organisation of the referendum to dismiss the Mayor of Tvarditsa (Taraclia rayon) was formed about a year ago, but until the moment of the Congress visit in July 2005, they could not get the permission to hold the referendum. There are three possible explanations for such a delay:

IV. Recent changes and developments

IV.1. Governmental structures responsible for local affairs

86. It should be said that Moldova's Government was reorganised before the parliamentary elections, resulting, as regards local self-government, in the elimination of the State Chancellery, which is replaced by a Directorate of Local Public Administration within the Government Apparatus. Following the March 2005 parliamentary elections, the Moldovan government undertook structural reforms. In June 2005, the Head of the Government Apparatus resigned and the Directorate of Local Public Administration within the Government Apparatus has also been recently dissolved. The new government structure includes an Agency for Regional Development responsible for the Moldovan government’s policy in the field of local self-government.

87. According to the Moldovan Prime-Minister, there are no plans for establishing the Ministry responsible for the local affairs, the philosophy of the new government being to decrease a number of ministries and governmental staff. Mr. Tarlev also informed that instead of the position of the councillor on the local affairs at the Government Apparatus, the new government created this special Agency responsible for the cooperation with the local authorities, directly subordinated to the Prime-Minister.

88. However the Rapporteur’s impression was that the Agency for Regional Development has no real influence upon the changes in local democracy. During the meeting with Congress delegation in July 2005, Mr. Seminovker, the Head of the Agency, spoke mainly about the economic development of communities and not about any development of the local democracy.

89. Thus, according to this recent information collected by the Congress delegation during the visit in July, the presidential initiative to set up a Ministry of Local Authorities, which was supposed to concentrate and co-ordinate the entire work related to local public governance issues, put forward in February 2005, seems to have been abandoned.

IV.2. “The Moldovan village” programme

90. Though in the preamble to the Programme decentralisation and strengthening of the local self-government are mentioned, the whole Programme has nothing in common with the further development of the local democracy. The action plan of the Programme contains tasks of the economic and social development of Moldovan villages, development of engineering infrastructures and so on. Local authorities are announced to be responsible for fulfilling of many tasks of this state Programme. The point of view expressed by the Chairman of the Parliament, Mr. Lupu, is that at first the state should develop the economic base of the villages all over the country and only after that one should speak about the development of local self-government.

IV.3. Ad hoc task force on local self-government reform within the Parliament

91. During the visit in July, the Congress delegation was informed that the Parliament created 8 ad hoc working groups, which will develop proposals on legislation amendments. One of these task forces deals with the issues of decentralisation of power and local public administration. Mr. Lupu, Chairman of the Parliament of Moldova, stressed that the task force is composed of representatives of all political parties and will look for a consensus in the Parliament on these issues. According to the Chairman of the Parliament of Moldova, the package of amendments should be ready soon, but there is no sense in making any changes in the legislation in the near future, because without a strong and developed economic base local authorities are unable to fulfil their tasks. It should be noted here that, for instance, the Moldovan Village programme will be carried out until 2015.

92. Mr. Untila, Member of the Parliament, Head of the Parliamentary Commission for Public Administration, Ecology and Territorial Development, the representative of the oppositional faction (“Our Moldova” Alliance), informed the Rapporteur that neither his Commission nor the faction were informed about the local self-government task force and their representatives do not work there.

93. The Rapporteur’s general impression was that the new government has no real political will for change and has a pronounced ideology that a developed local self-government may exist only in an economically developed environment.

IV.4. Law on the status of the City of Chisinau

94. During the visit in January, the Rapporteur also raised the question of the two draft laws concerning the status of the City of Chisinau and the association of local authorities. The aim of those texts (prepared by the Government) was to introduce substantial changes in the capital's administrative structure and the powers of the mayor of Chisinau and in the organisation of the associations representing the country's local authorities. They were the subject of heated discussions during the Rapporteur’s previous visit to Chisinau in March 2004 and met with fierce criticism from the Council of Europe's experts, to whom they were referred for opinion following the Congress Rapporteur's visit. The Prime Minister and the former Chairman of Parliament assured the Congress delegation that both draft laws had been withdrawn from the Parliament’s agenda for the time being. The parliamentary representatives nonetheless stated during the meetings in January 2005 that new draft laws on local finance and the status of the City of Chisinau were being prepared and could probably be examined by the Parliament, newly elected on 6 March 2005.

95. During the visit in July, the Rapporteur did not receive any precise information on this issue. However, since this visit took place, the Rapporteur has learnt from the Moldovan press that a new draft law on the status of the city of Chisinau has been approved by the Moldovan Government and is to be submitted to the Parliament after the summer holiday. Taking into consideration the importance of the law on the status of the capital for the right appraisal of the situation of local democracy in the country and the strong criticism from the Council of Europe's experts and Congress Rapporteur of the previous draft, the Congress President addressed the letter to the Moldovan Prime Minister asking to transmit to the Congress the above mentioned draft law, in the framework of the ongoing monitoring report.

96. According to our recent information, the new Parliament has now revised the draft law on the status of Chisinau and is planning its adoption. As we did not receive any reaction from the Moldovan authorities to our request to be informed of the new draft law, the Rapporteur regrets the lack of co-operation of the Moldovan central authorities concerning this issue.

97. The Rapporteur should like to stress that particular care must be taken to ensure that new draft laws concerning local self-government issues, are in due course submitted to the Council of Europe for opinion.
IV.5. Implementation of the Action Plan between the Council of Europe/European Commission and the Moldovan authorities
98. With regard to the action plan between the Council of Europe / European Commission and the Moldovan authorities, adopted in 2003 with the aim of improving legislation on local self-government in a number of areas, the representatives of the Government Apparatus (formerly the State Chancellery) stated that, despite some delay, the implementation of the action plan was going ahead and they had forwarded a draft law amending certain items of legislation on local government to the Council of Europe for an expert opinion. Since the Rapporteur’s visit in January, this law has been adopted by the Moldovan Parliament. The vote of this law occurred in defiance of the commitment undertaken by the Republic of Moldova to wait for the opinion of the Council of Europe experts.
99. The Rapporteur was informed that the implementation of this Action Plan finally started in February 2005, after its revision and definition of an implementation calendar. It was agreed between the Council of Europe and Moldovan authorities to focus the work on three issues that had been identified during the course of the previous co-operation:

100. Furthermore, the Government assured the delegation that it was taking local and regional democracy seriously and informed the Rapporteur that President Voronin had declared 2005 “The Year of Local Government”. Nevertheless, they gave very few precise details of any tangible measures to be implemented in this field in 2005.
V. Conclusions and recommendations

V.1. Conclusions

101. The official visits by the Congress delegation can generally be considered fruitful as regards the information obtained by the Rapporteur and the experts. The Rapporteur noted, however, that few developments are perceptible since his visit in March 2004, although the Moldovan authorities affirm to be doing everything they can to ensure that the country is endowed with efficient, autonomous local government authorities, based on a legislative framework proposed by Council of Europe bodies.
102. On the contrary, the Rapporteur's impression was that the pursuit of the introduction of a vertical power structure, source of inspiration of local and regional government reform, seems to continue. Mention has been also made on a number of occasions of the ongoing problem of corruption.
103. There is an evident lack of financial and administrative autonomy of the local authorities in Moldova, which are denied decision-making powers regarding their own administrative structure and bound by some very heavy delegated responsibilities and are thus more dependent than ever before on the central authorities. Distribution of reponsibilities between different tiers of public power is, in fact, the system of deconcentration of power, which is rather far from decentralisation.

104. Under such a system different party affiliations of the local officials and the officials at the central level create managerial conflicts, which may result in different forms of confrontation, including political persecution of the officials of the local level.

105. Confusion surrounding the distribution of powers and responsibilities in practice allows central government to impose its dictates on virtually all of the country's local authorities. Mayors belonging to opposition parties consequently come under pressure and are subjected to judicial harassment or even forced to resign.

106. There continues to be a great deal of tension between the Communist authorities – the President, the Government and the Parliamentary majority as well as the regional authorities in Gagauzia, the People's Assembly and the Bashkan (Governor) – and local politicians from the opposition parties. The latter claim that the Communist authorities are engaged in a process of undermining the position of the local authorities in general and certain mayors and municipalities and claim these developments are in grave violation of the European Charter of Local Self-government.

107. The central and regional authorities, on the other hand, deny these claims and assert that their legislation and policies towards local authorities are in accord with the Charter and that they have taken fully into account the recommendations of experts from the Council of Europe in drafting and re-drafting legislation.

108. However the Rapporteur’s impression was that at the central level the strategic approach is to reach stable economic development in the country through strong centralised governing and only after this to start the processes of real decentralisation.

V.2. Recommendations

109. The general definition of the local budgets should be changed. Local budgets should be treated as independent budgets of local communities with adequate sources of revenue, own taxes, which may be varied by the local authorities in the limits defined by the law. Local taxes and charges should finance the major part of responsibilities of the local authorities with the state subsidies used only for “protection of financially weaker local authorities” (Article 9 of the Charter). This will foster high interest of local authorities to the issues of local economic development.

110. Responsibilities of the local authorities of the first and the second tier should be fixed in the law in detail. They should not overlap with each other and with the responsibilities of the state and be “full and exclusive” and distributed between the state and local authorities on the basis of the respect for the principle of subsidiarity (Article 4 of the Charter).

111. Only delegated responsibilities should be financed by the state through earmarked subsidies or grants.

112. The provisions of the Statute of Gagauzia concerning the procedure of dismissal of mayor should be revised with a view to bringing them into line with the Constitution and legislation of the Republic of Moldova and in particular the principles of local self-government as enshrined by the European Charter of Local Self-Government.

113. The state law enforcement bodies and courts should keep in mind that any criminal case against the local politicians or the top official of the local authorities will inevitably be subject to political interpretation. Some special regulations should be implemented to make the investigations of such cases as fast and as transparent as possible.

Appendix I

Programme of the first visit of the Congress delegation for the preparation of a 4th monitoring report on local democracy in Moldova
(Chisinau, 17-18 January 2005)

Congress delegation:

Mr Pascal MANGIN, Congress Rapporteur on local democracy in Moldova, Deputy Mayor of Strasbourg (France)

Prof. John LOUGHLIN (Ireland), expert, Vice-President of the Group of Independent Experts on the European Charter of Local Self-Government

Congress Secretariat : Mr Günter MUDRICH, Secretary of the Chamber of Regions, and Mrs Irina BLONINA, Administrative Assistant to the Institutional Committee of the Congress

Monday, 17th January


08:00 – 08:40


Breakfast with Rapporteur

9.00 – 09:50


Meeting with H.E. Vasile TARLEV, Prime Minister of the Republic of Moldova (RM)

10.00 – 10:50


Meeting with Mr Serafim URECHEAN, Mayor General of Chisinau municipality, Leader of Electoral Bloc "Moldova
with participation of :
Mr Tudor LAZAR, Head of Legal Affairs Department of the City Hall of Chisinau,
Mr Ion CAPATINA, Head of International Relations Department of the City Hall,
Mrs Iulia IESANU, Head of Local Public Administration Department of the City Hall

11:00 – 11:50


Meeting with Mr. Pantelei TÎLTU, Head of the Government Apparatus of the Republic of Moldova
with participation of :
Mr Vasile VARTIC, Deputy Head of Local Public Administration and Public Relations Department,
Mr Sergiu TATAROV, Principal consultant, Local Public Administration Department,
Mr Constantin NEAGA, Councillor to the Head of the Government Apparatus of RM

12:00 – 13:00


Meeting with Mr Mikhail FORMUZAL, Mayor of Ceadir-Lunga, and Mr Viorel FURDUI, Legal councillor of Mr TAUSANJI, former Mayor of Comrat

13:00 – 14:00


Lunch break

14:00 – 14:50


Meeting with Mr Nicolai DUDOGLO, acting Mayor of Comrat

15:00 – 15:40


Meeting with Mrs Zinaida GRECIANII, Minister of Finances of RM
with participation of :
Mrs Feodosia FURCULITA, Vice-Minister,
Mr Gheorghe COJOCARI, Vice-Minister,
Mr Vasile BULICANU, Director of Budgetary Synthesis Department,
Mr Oleg HIRBU, Head of European Integration Department

15:50 – 16:30


Meeting with Mrs Victoria IFTODI, Minister of Justice of RM
with participation of :
Mr Nicolae ESANU, Vice-Minister
Mr Vitalie PARLOG, Director of International Relation and European Integration Department

16:40 – 17:20


Meeting with Mr. Valeriu GURBULEA, Vice General Prosecutor of RM

17:30 – 18:20


Meeting with Mr. D. BRAGHIS, Leader of the Parliamentary faction “Alliance Moldova Noastra”



Working dinner with Ambassador Vladimir PHILIPOV, Special Representative of the Secretary General of the Council of Europe to Moldova, and Mr Edgardo RUGGIERO, International Monetary Fund Representative in RM


07:15 – 07:40



08:00- 08:50


Meeting with H.E. Eugenia OSTAPCIUC, Chairperson of the Parliament of RM, with participation of Mr Mihail CAMERZAN, Vice-Chairman of the Parliament

09:00 – 09:50


Meeting with Mr. Vadim MIŞIN, Vice-Chairman of the Parliament of RM
with participation of Mr Jon CREANGA, Head of Legal Affairs Department of the Parliament

10:00 – 10:40


Meeting with Mrs Maria POSTOICO, Chairman of the Legal Commission and Mr. Anton MIRON, Chairman of the Local self-government Commission of the Parliament of RM

10:50 – 11:20


Meeting with Mr Stefan SECAREANU, Vice-president of the Christian Democrat People’s Party faction and Mr Ion NEAGU, Secretary General of CDPP, President of the Association of Christian Democrat Mayors

11:20 – 11:50


Meeting with Mr Victor STEPANIUC, leader of Communist Party faction

12:00 – 13:00


Meeting with Mr Igor MUNTEANU, IDIS “Viitorul”, Member of the Congress Group of Independent Experts on the European Charter of Local Self-Government

13:00 - 14:30


Lunch break and meeting with Mr Gheorghe BARBANEAGRA, suspended Mayor of Durlesti

14:30 – 15:45


Meeting with
Ambassador William HILL, Head of the OSCE Mission in Moldova,
Mr Edmond PAMBOUKJIAN, Ambassador of France in RM,
Mr Wolfgang LERKE, Ambassador of Germany in RM,
Mr Bernard WHITESIDE, Ambassador of UK in RM
Mr Sandor ROBEL, Ambassador of Hungary in RM

 16:00 – 17:00


Meeting with Mr Vitalie VRABIE, Chairman of the Association of Mayors and Local Communities, Head of the Moldovan delegation to the Congress, and Mr Mihail PEREBINOS, Secretary of the Moldovan delegation to the Congress



Press conference


10:00 – 10:50 Meeting with Mr Vasile TARLEV, Prime Minister of the Republic of Moldova

1 See Committee of Ministers Resolution 2000 (1)

2 CG/BUR (2) 35, CG (4) 20 Part II, CPR (7) 4 Part II, CG (9) 6 Part II, CG/BUR (8) 95, CG/ BUR (9) 29, CG/BUR (10) 103

3 See Recommendation 110 (2002)

4 CG/Bur (10)19

5 See information report - CG/BUR (10) 103

6 The new Law on territorial-administrative organisation abolishes the existing 10 regions (judets) set up in 1998 and replaces them with 32 districts (rayony).

7 See the report on observation of these elections adopted by the Congress Bureau on 19 September 2005 [Doc. CG/BUR (12) 34]

8 For more details, see previous Congress monitoring report on local and regional democracy in Moldova [Doc. CG (9) 6 Part II]

9 Our translation from the Russian text of the Constitution: http://xiv.parlament.md/ru/legalfoundation/constitution/t3/8.html

10 Law No 397-XV of 16 October 2003

11 Data of the Ministry of Finances of the Republic of Moldova

12 General number of local taxes and charges varies in different informational sources because of the fact, that some local taxes are not the national wide but may be used only in some special zones – close to the boarder of the country.

13 Law No.123-XV of 18 March 2003

14 The document itself has a name “Regulamentul” in Romanian or “Ulozhenie” (“Establishment” or “Code”) in Russian, the word “Statute” is not used

15 See the Report on Functioning of democratic institutions in Moldova (Doc 10671) et Resolution 1465 (2005) adopted by the Parliamentary Assembly at the fourth part of its 2005 Ordinary Session (4 October 2005) - explanatory memorandum by Mrs Josette Durrieu, France, Socialist Group and Mr André Kvakkestad, Norway, European Democrat Group

16 Non official translation

17 Law No.123-XV of 18 March 2003 on Local Public Administration

18 www.president-pmr.org

19 Law 173-XVI 22.07.2005