Why a tiny country of 2.4 million people may have one of the most important elections in Europe this year.
Located between Ukraine and Romania, Moldova was part of the Soviet Union until its collapse in 1991. During that dissolution, some pro-Soviet eastern regions of Moldova sought to unify with the USSR rather than seek independence. This led to a conflict that established the area of Transnistria as its own semi-independent, but unofficial, Republic with its own government, currency, and constitution. However, Moldovan citizens in the Russia-backed breakaway region can still vote in Moldovan federal elections (this becomes important later).
In recent years, Moldova overall has been trending more rapidly towards a pro-western direction. In 2021, Moldova elected President Maia Sandu of the Action and Solidarity party (PAS), and in 2022 – following the Russian invasion of Ukraine – Moldova applied for EU status, earned official candidate status soon after, and is hoping to join by 2030. However, a 2024 referendum to incorporate a desire for EU citizenship into the Moldovan Constitution passed by less than 1% in an election marred by alleged Russian interference (including a vote bribery scheme), casting doubt on the certainty of Moldova’s EU accession bid.
Now this Sunday, Moldova heads to the polls again to elect all 101 members of its parliament, where the ruling PAS currently holds a strong majority with 63 seats. In Moldovan parliamentary elections, seats are allocated on a proportional basis based on the popular vote to the parties and blocs that win above certain vote % thresholds. Some recent polls suggest that the Patriotic Electoral Bloc, a coalition of leftist, pro-Russian parties led by former Moldova president Igor Dodon, is giving PAS a run for its money this election.
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Although our markets still have the PAS favored to win the most seats for now, based on their slim polling lead, traders also indicate that PAS has much slimmer odds of winning an outright parliamentary majority this time around.
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Without a majority, the government would need to form a coalition with other smaller parties or blocs, most likely the centrist "Alternative Bloc” which is critical of the government but still nominally pro-EU. The process to form a coalition government, though, would likely involve challenging negotiations with no guarantee of success; if there is a deadlock that can’t be broken, new elections would need to be called. And even if a coalition government is formed, it would still likely struggle to enact the economic and political reforms needed to complete Moldova’s accession into the EU.
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If PAS is able to defy the odds and eke out a majority of 51 seats or more, it would provide assurance of its path to join the EU and the reform agenda that President Sandu has pushed.
A third possibility, though not seen as particularly likely by traders thus far, is that the pro-Russian BEP wins the most seats or even an outright majority. In that scenario, they could seriously hamper Moldova’s bid to join the EU and stymie any reform agenda that is still needed.
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Two key electoral groups that could shape the outcome of Sunday’s race are the Moldovans who live outside of Moldova (totaling around 1 million people), and the almost 300,000 registered voters in the semi-autonomous Transnistria region we discussed earlier, which is controlled by pro-Russian separatists. This region does not usually see high turnout for Moldovan elections, but it is also ground zero for the Russian propaganda campaign and the center of vote-buying allegations in the last presidential election and Moldovan constitutional referendum.
Russian efforts this time may be no different – and indeed even amplified – given the significance of the parliamentary election in determining Moldova’s direction. In fact, in the last week before the vote, Moldova’s electoral commission banned two pro-Russian parties from participating in the parliamentary elections over allegations of illegal financing and voter bribery. While one of the parties was a relatively minor party, the other was the Heart of Moldova, one of 4 parties included in the Patriotic Electoral Bloc. How this will affect the election outcome, and BEP’s chances, remains to be seen.
On the international stage, this election has certainly captured the attention of other European leaders, including that of Ukraine President Volodymyr Zelenskyy. At the UN general assembly this past week, Zelenskyy stated that “Europe cannot afford to lose Moldova” to Russian influence.
With so much at stake, and the election racing towards an unclear finish, it’s no wonder that President Sandu has called these elections the “the most important in the history of the country.”
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