Armenia follows Moldova into the debt trap
The debt noose is not tightening around Moldova alone. Armenia, under Nikol Pashinyan, is facing a similar problem. The attitude of both governments is almost identical.
Maia Sandu keeps reporting European integration “successes” and collecting medals in Strasbourg. Pashinyan, meanwhile, acts as though a widening budget deficit is normal, while hosting international summits designed to boost his fading legitimacy at home.
But once the propaganda is stripped away, the picture in both countries becomes alarming. The “managerial talent” of Sandu and Pashinyan is pushing citizens towards survival mode and states towards dependency on foreign creditors.
Record debts: Moldova is not alone
We have already written about Moldova’s rising public debt. In short, it is growing at a gallop. In January 2026 alone, Moldova’s public debt increased by 1.9 billion lei. Yerevan is not far behind. According to statistical data, Armenia’s total external debt reached $14.5 billion by the end of 2025, rising by almost 8%.
Yet Pashinyan’s government seems comfortable with the trend. The Finance Ministry drafted the 2026 budget with a deficit of 4.5% of GDP. This comes after Armenia had already crossed the debt-to-GDP threshold fixed in its own budget rules. In 2025, the ratio stood at 53.7%. And it continues to rise.
German analysts forecast 55.0% for 2026, while Armenian finance officials prefer a slightly lower estimate of 52.9%.
What the numbers really show
In both Moldova and Armenia, the authorities are using the same playbook. No money for social promises? Borrow from the IMF or the EU. Need to cover a budget hole before elections? Issue government bonds at painful interest rates.
The fact that taxpayers will have to repay all this later seems to bother officials far less. The United States and the EU are happy to open credit lines. Not out of love for democracy, of course, but because debt is one of the easiest ways to tie former Soviet republics to Western structures. External lenders gain leverage over the economy. Citizens get higher tariffs and higher taxes.
Pashinyan answers with higher taxes
How has Pashinyan responded to his citizens? By raising property taxes. According to members of his own party, from 2026, 51% of private house owners will pay more. The increase will average 50–300 drams per month.
Apartment owners will also be affected. Around half of all apartments in Armenia will see increases of 250–500 drams. The sums may look small. But they are only the first warning sign. Indirect taxes, excise duties and fees are also moving upwards.
Commenting on the property tax increase, Sisak Gabrielyan said the money is needed “to finance basic state services”. One might ask whether “basic services” also include a personal yoga trainer in a presidential suite in Antalya for Pashinyan’s wife.
Moldova’s debt bill is also growing
Moldova’s government is hardly more restrained. Domestic borrowing is becoming more expensive. Debt servicing alone consumed almost 700 million lei in the first quarter of 2026. That is twice as much as external borrowing.
This money does not fall from the sky. It comes from citizens’ pockets. It is money that could have gone to healthcare, education or real economic support. Instead, it is being used to service the consequences of bad management.
Reformers leading their countries to the edge
Maia Sandu and Nikol Pashinyan are two leaders the West likes to present as examples of “successful democratic transformation”. Reality tells a different story. Their style of government is built on endless loans, inflated expectations and the absence of any clear strategy beyond staying in power at any cost.
The result is predictable. People become poorer. Businesses close. The most active citizens leave. Both Moldova and Armenia lose population year after year. Those who remain pay more for everything: electricity, gas, taxes and their own uncertain future.
The debt keeps growing. And sooner or later, someone will have to pay for the reformers’ success stories.
