(Bloomberg) — Moldova’s teetering economy may face the double shock of a cutoff in Russian gas and “extraordinarily high” energy prices as Europe’s poorest nation braces for winter, the country’s premier said.
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Prime Minister Natalia Gavrilita said the nation of 2.6 million wedged between Ukraine and Romania is preparing for all scenarios, with annual inflation exceeding 30% and an Oct. 1 deadline to negotiate a debt repayment with Russia’s Gazprom PJSC — despite Moldova’s five-year contract with the gas giant.
With no progress in the talks — and President Vladimir Putin’s government turning on the nation since it elected pro-European President Maia Sandu two years ago — a full cutoff of gas supplies may be looming.
“Even if Gazprom continues the deliveries, we still have to reduce consumption because the prices are very, very high,” Gavrilita, 44, said in an interview in Bucharest on Tuesday. The soaring prices are an “anomaly” for summer, she said, “and we don’t know how much they will continue to grow during the winter.”
Moldova has pressed its ambitions to join the European Union. EU leaders in June approved both Ukraine and Moldova as membership candidates as part of a fast-track process.
Its government has moved to alleviate the burden, switching the heating system in the capital Chisinau from gas to heating oil and targeting a reduction in consumption by 15%. Gavrilita’s government has also opened talks with Romania for potential gas supplies at an affordable price.
But with Russia’s invasion of Ukraine raging next door and relations with Moscow souring even before the conflict, the former Soviet republic has been at risk of being pulled into a broader conflict — particularly because of the Russian-occupied breakaway territory of Transnistria within its borders.
Gavrilita said the talks have intensified with the self-proclaimed authorities in Transnistria since the war began in February, because “we want to keep peace and stability in the country.”
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