By Richard Balmforth
TIRASPOL, Moldova (Reuters) - Troops goosestep Soviet-style across the square saluting the VIP podium as martial music plays through loudspeakers and tannoyed voices exhort citizens to greater efforts to build the homeland.
Bolshevik revolutionary Vladimir Lenin gazes from a granite bust as a raucous wedding cavalcade zips down Tiraspol's main boulevard, the wind immodestly whipping up the dresses of bridesmaids standing in an opentop limousine whooping with glee.
Independence Day in Trandniestria, an unrecognized self-declared republic of half a million people in an obscure niche of former Cold War Europe, is a bizarre mix of old Soviet ritual and post-Soviet abandon.
The territory - a ragged strip 50 kms (30 miles) at its widest part and about 220 km (138 miles) from end to end running down Moldova's eastern border with Ukraine - has been cut off from mainstream Europe for most of the past 20 years.
With de facto independence from Chisinau, the Moldovan capital only 45 minutes away by car, Transdniestria has its own currency and police force, has mandatory military conscription and runs a tough border regime deterring the casual traveler.
As international problems go, it is easy to ignore.
But the stalemate illustrates Moscow's continued influence in former Soviet republics and its capacity to hamper any drive to Western integration. Moldova - a poor country of 3.5 million people - would struggle to gain acceptance into the European Union with territorial dispute simmering within its borders.
In 1992, the post-Soviet standoff erupted into a brief war which cost the lives of 860 people from Transdniestria and about 460 on the Moldovan side. The shadow of that conflict remains.
An unexpected election victory last year by 44-year-old lawyer Yevgeny Shevchuk, ousting a veteran leader 20 years in the post, raised hopes for an end to a two-decades-long 'frozen conflict'.
But sitting under a portrait of Russian President Vladimir Putin and sporting a tie in Russian national colors, Shevchuk could have been reading from the script of predecessor Igor Smirnov as he spelt out a defiant message to the international community oddly at variance with his reforming image.
He said he would continue pressing for world recognition of Transdniestria and dismissed Western calls for a force of 1,200 Russian peacekeepers to be withdrawn from the territory.
"The idea that Russian forces are a threat is a myth created by the (Western) media. Political leaders want this in order to justify not finding a political settlement," he said, his cuff rising to reveal a watch emblazoned with 'FSB Rossiya' - apparently a gift from Russia's FSB state security service.
State communism withered in the territory along with the collapse of Soviet rule. But Smirnov officially kept nostalgia for the Soviet past going as a weld to underpin national defiance after a war with Moldovan forces.
Soviet artefacts, erased elsewhere with the collapse of the old empire, have now become a quietly-tolerated - if bizarre - part of the fabric of everyday life in Tiraspol.
A long "Honours Board" portraying bemedalled town worthies going back decades resembles a prop from Soviet central casting.
Equally, tannoyed patriotic voices echoing across Suvorov Square, focal point of Independence Day celebrations on September 2, could have come straight from a Brehnev-era audio archive.
Few among the young attach any importance to the Soviet hark-backs around them. "It's the past. You should not take this too seriously," said Tatyana, a 35-year-old accountant.
The Russian-speaking region runs on subsidized Russian gas. Some observers put Transdniestria's gas debt at $3.5 billion, though this technically remains on Moldova's balance sheet.
Like Moldova itself, the Transdniestrian economy - 50 percent of whose product is sold to the EU - is kept afloat by cash sent back home from about 50,000 Transdniestrians working in factories abroad, chiefly in Russia.
But there are those who simply leave the territory for a future elsewhere. Transdniestrian figures put the population now at 511,000 compared to 720,000 when the Soviet Union collapsed.
Svatoslav, a 22-year-old security guard with two children will stay. He earns $400 per month but remains phlegmatic.
"That's not too bad, but you need $1,000 to live well."
Nikolai, a 30-year-old engineer returning from the independence parade with his wife and one-year-old son, said he and his wife got by on a joint income of $350-400 per month.
Smirnov and an elite round him remain big players. His family is said to control the customs sector.
Then there is the Sheriff chain, owned by a mysterious ex-KGB official. Its tentacles reach into huge chunks of the private sector from petrol stations and supermarkets, to a football team and stadium to the biggest brandy retailer, Kvint.
Big Russian money is evident. It appears to have been behind transformation of an old Soviet hotel called 'Druzhba' (Friendship) into the upscale 'Rossiya'. A 2,000-euro bottle of Kvint on display in the reception underscores its reputation as a weekend haunt for the region's well-heeled and well-connected.
On the hotel parking lot is a top-of-the-range jeep bearing South Ossetian registration plates and the number 001. The leadership of the Russian-backed Georgian breakaway region - a kindred spirit of Transdniestria - is in town.
Western governments say Transdniestria has become a "black hole" for smuggling arms, cigarettes and other contraband.
This is vehemently denied by Shevchuk as smears started by Moldova's former leadership and pounced on by Western media.
After his election, Shevchuk moved his administration out of its old Soviet headquarters to a glass-and-marble building - unadorned by any Lenin monument - across town.
Transdniestria and Moldova, whose populations each have kinsfolk in the other, have now agreed to re-establish full-scale rail links, a modest step. But there are still no direct phone links between Chisinau and Tiraspol, a town of 110,000.
International talks on the Transdniestrian problem have resumed after a break of more than five years. But their mandate is to look only at improving transport and travel links. The status of the territory does not even figure on the agenda.
A land unloved by the West and even, it seems, by its Russian patrons, Transdniestria seems doomed to limbo.
Russia has every reason to keep it alive though, asserting itself as a regional gas supplier and hampering Moldovan efforts to encamp to the EU, which would mean yet another ex-Soviet republic escaping Moscow's orbit.
So it provides Transdniestria with cheap gas and maintains troops there, while stopping short of diplomatic recognition - a move that would saddle Moscow with an economic and diplomatic liability it could do without.
Shevchuk stoutly defended Moscow's role and that of its troop contingent.
"We are grateful for the presence of representatives of the Russian group of forces who carry out peacekeeping operations," he said.
Moldova's pro-Europe leadership, supported by the West, continues to press for re-integration of Transdniestria with limited autonomy. But it wants Russian forces out.
Moldovan Prime Minister Vlad Filat was due to travel to Moscow on September 12 for talks with Putin on Trandniestria.
Shevchuk was dismissive of Moldovan policy. "I have the feeling settling relations with Transdniestria does not represent a priority for Moldova," he said.
Citing the precedent of Kosovo, he said it was down to the international community to recognize Transdniestria.
"I'd like this to be in the tightest, quickest possible time frame. I hope this will can be found in the next five years."
On independence day, Shevchuk stood alongside his defense minister as the latter denounced Moldova for turning to the West under the influence of the United States and the EU.
ON THE STREETS
Shevchuk's views find an echo on the streets of Tiraspol, where grand Stalinist buildings jostle with concrete and glass residential blocks, leading out to single-storey wooden peasant- style houses dotting the outskirts. Memories of 1992 die hard.
"There are simply no perspectives for working with Moldova now. We just have to settle for developing slowly to become gradually stronger," said Nikolai, the engineer.
"Even Russia doesn't look on us with pretty eyes. But without their support we would have no future."
Valery, a 73-year-old Russian living in Tiraspol since he was a young man was skeptical Transdniestria would ever be recognized and dismissed talk of joining the Russian Federation.
"I personally am in favor of union (with Moldova) though first of all order needs to be restored there in Moldova. I don't see order there right now," Valery said.
David Kramer, ex-U.S. negotiator in settlement talks, said if Moscow decided it was time to solve the problem, they could withdraw forces, end subsidies and give the order to Tiraspol.
"They have no interest or incentive to do so, and I'd argue that as Moldova moves closer to the West, Moscow will dig in even more to try to block its deeper integration. So I am not optimistic that we'll see movement any time soon," he said.
Another expert, Nicu Popescu of the London-based European Council on Foreign Relations, argued that Shevchuk had to be given time after winning an election against powerful interests.
"He was not elected to re-integrate. The hope is more that he is a kind of calculated pragmatic person with whom you can do deals which are favorable for conflict settlement and also for the population."
"We can expect small steps but not a quick integration."
(Additional reporting by Alexander Tanas in Chisinau; Writing By Richard Balmforth)