Banking: Is Moldova unreformable?
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Banking: Is Moldova unreformable?

In 2014, a $1 billion bank fraud nearly bankrupted the tiny state. It came through in better shape thanks to reformist policymakers, an IMF bailout and the sale of big banks. But a Russia-leaning administration now threatens to undo those reforms.


A stall sells Putin merchandise in Chisinau, Moldova 

To visit Moldova is to be presented with a stark reminder of the difficulty of genuine reform. Since declaring independence in 1991, the Republic of Moldova, a tiny sliver of a country squeezed between Ukraine and Romania, has struggled for cohesion, meaning and identity.

Since 1991, its population has shrunk by around a third. Around 2.7 million people remain, a quarter of whom live in Chisinau. Venture outside the capital and silence descends.

When Dmitry Pankin, president of the Black Sea Trade and Development Bank, a Greece-based multilateral, visited a winery in central Moldova, he saw that “all the lights in the villages were off. So many have left the country.”

Depopulation is described as a “demographic disaster” by the Moldovan Red Cross. Juan Ortigosa, the chief executive of BCR Chisinau, the local division of Romanian lender Banca Comerciala Romana, itself part of Austria’s Erste Group, warns that unless government makes Moldova a more attractive place to live and invest in, “we will get to a point where there is no population left to govern and no taxpayers left to pay tax.”

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