No. 118, 24 June 1992

SUCCESSOR STATES TO THE USSR

UKRAINE AND RUSSIA REACH AGREEMENT. Ukraine and Russia signed
an 18-point agreement on 23 June in the Black Sea resort town
of Dagomys that both sides hailed as a major turning point in
the often stormy relations between the two countries, CIS and
Western agencies reported. The accord on interstate relations
encompasses political, economic, military, and other issues and
sets the framework for a future comprehensive political treaty.
The agreement confirms the terms of the November 1990 treaty
between the two countries as well as other accords. It provides
for the introduction of a Ukrainian currency and establishes
the principle of open borders with the gradual introduction of
customs controls. Both sides agreed that their economic relations
will in future be based on world prices. A joint commission charged
with working out the division of the assets of the former Soviet
Union is also to be established. As previously agreed, the thorny
Crimean issue was not on the agenda. (Roman Solchanyk)

RUSSIAN-UKRAINIAN ACCORD ON SECURITY ISSUES. The 23 June agreement
also contained a number of articles aimed at overcoming disagreements
between Russia and Ukraine in the security sphere. Both sides
restated their adherence to previously reached accords on the
status of strategic forces in the CIS, agreed to pursue consultations
on implementing the START agreement and other international accords
on limiting nuclear arms, and agreed to move quickly on ratifying
the Conventional Forces in Europe (CFE) treaty. They also attempted
to defuse tensions surrounding control of the Black Sea Fleet
by saying that both Russia and Ukraine would get portions of
the fleet with the rest remaining under CIS command; both sides
would contribute to the financial maintenance of the fleet. Agreements
were also reached on military oaths and utilizing housing for
servicemen made available by Germany. (Stephen Foye)

GRACHEV ON STRATEGIC FORCES. Russian Defense Minister Pavel Grachev
sounded a discordant note in Dagomys, accusing Kiev of continuing
efforts to establish administrative control over strategic forces
located in Ukraine. He stated that the "unambiguous" Russian
view was that the strategic forces must remain subordinated to
the CIS central military command. (Stephen Foye)

TERRITORIAL LOSS MAY FORCE MOLDOVA TO REUNIFY WITH ROMANIA. Interviewed
by Radio Free Europe on 23 June, Romanian Foreign Minister Adrian
Nastase dismissed the claim that the Russian insurgency in Moldova
stems from fear of unification with Romania as "an interesting
case of disinformation." However, Nastase said cryptically that
should Russian policy proceed on that assumption and try to deprive
Moldova of the Dniester region, it would probably produce the
result it wishes to avoid--i.e. Moldova's reunification with
Romania. In a report from Moldova, subtitled, "Most of the Population
Fears 'Reunification' with Romania," Die Tageszeitung of 23 June
cited a leader of the Moldovan Social Democratic Party and a
Foreign Ministry official as saying that continuing reverses
in the Dniester conflict and lack of international support would
force Chisinau to shift toward Romania, marking "the collapse
of its policy of [state] independence." (Vladimir Socor)

SHEVARDNADZE-SNEGUR COMMUNIQUE. On 22 June, Moldovapres released
a joint statement by Georgian State Council President Eduard
Shevardnadze and Moldovan President Mircea Snegur, on which the
two presidents agreed by telephone. The statement said that "the
newly independent states are faced with a recurrence of Russian
imperial thinking" and that "conflicts develop precisely in the
areas where Russian troops are located." "Russia supports authoritarian
and neocommunist forces [in the republics], a course of action
that endangers Russia itself." The joint communique also noted
that, "certain [Russian] circles seek new enemies ultimately
in order to end democracy and reforms in Russia and reestablish
a dictatorial and militarist regime there." (Vladimir Socor)


US URGES WITHDRAWAL OF RUSSIAN ARMY FROM MOLDOVA. US officials
told The Washington Post of 23 June that "it has been the US
position for months that Russia should withdraw its 14th Army
from Moldova," and that Secretary of State James Baker had taken
up the issue in previous meetings with Russian Foreign Minister
Andrei Kozyrev. State Department spokeswoman Margaret Tutwiler
also said that while the United States recognizes Yeltsin's concerns
about ethnic Russians, it encourages Russia to enter into discussions
with Moldova about withdrawing the Russian army from that country.
(Vladimir Socor)

RUSSIAN OFFICIAL ADVOCATES BORDER REVISION. Evgenii Ambartsumov,
chairman of the Russian Supreme Soviet's Committee on International
Affairs and a member of the Democratic Russia movement, told
Russian TV on 22 June that he "essentially agreed" with Vice-president
Aleksandr Rutskoi's recent statements threatening Moldova and
Georgia. Refuting Shevardnadze's and Snegur's responses, Ambartsumov
said that "the Dniester area was never part of Moldova" and that
"if any national-territorial community wants to become part of
the Russian Federation, it should not be denied that right."
[He omitted the fact that the left bank of the Dniester has been
legally Moldovan since 1924 and that Russians are only the third
largest ethnic group there.] Opining that "we sometimes overrate
the principle of the inviolability of borders," Ambartsumov said
that changing the borders of the newly independent states can
be justified by both human rights considerations and "the general
geopolitical interests of Russia." (Vladimir Socor)

MORE CALLS FOR PROTECTION OF RUSSIANS. Russia turned up the heat
on Moldova, Georgia, Estonia and Latvia on 23 June with an article
in the Russian government's official newspaper Rossiiskaya gazeta
on 23 June. In the article, Presidential Counselor Sergei Stankevich
criticized Russian foreign policy for its failure to stand up
for the rights of the Russian population in other CIS states.
He also accused the four named former republics of oppressing
their Russian minorities, and threatened the use of force to
protect "a thousand-year history [and] legitimate interests"
in those former republics. Stankevich called upon the 14th Army
stationed in Moldova to defend the Slavic minorities and noted
that Russia would soon reemerge as a power (derzhava), capable
of protecting its people. (Riina Kionka and Alexander Rahr)

"RUKH" PROPOSES UKRAINIAN GOVERNMENT OF NATIONAL ACCORD. The
former Ukrainian opposition grouped in "Rukh" has appealed to
President Leonid Kravchuk to form a government of "national accord"
that envisages the removal of Prime Minister Vitold Fokin and
his replacement by Kravchuk himself, Radio Ukraine reported on
23 June. In addition, "Rukh" has proposed that certain members
of the cabinet be replaced, arguing that they are representatives
of the discredited command-administrative system who are unwilling
or incapable of implementing the necessary reforms, and has suggested
a list of candidates in their stead. The struggle over Fokin's
cabinet has been a major issue inside and outside of the parliament
for the last several months. (Roman Solchanyk)

GAMSAKHURDIA SUPPORTERS SEIZE TBILISI TV TOWER. Some 300 supporters
of ousted Georgian President Zviad Gamsakhurdia attacked a CIS
military base and seized quantities of arms and a tank. They
then proceeded to occupy the Tbilisi TV tower in the early morning
of 24 June, and a statement that Georgia's "legitimate government"
had been restored was subsequently aired, Western agencies reported.
Gamsakhurdia's whereabouts are unclear. It is not known whether
Georgian State Council Chairman Eduard Shevardnadze will travel
to Dagomys on 24 June as scheduled for talks with Russian President
Boris Yeltsin on the Ossetian conflict. (Liz Fuller)

ARMENIAN OPPOSITION CALLS ON PRESIDENT TO RESIGN. On 23 June,
the opposition Dashnak Party called on Armenian President Levon
Ter-Petrossyan to resign, accusing him of "indecisiveness" in
the conflict with Azerbaijan over Nagorno-Karabakh, but the Dashnak
Party failed to force a vote on the issue, Western agencies and
ITAR-TASS reported. Ter-Petrossyan rejected calls for "an economic,
political and military union" with the Karabakh Armenian community,
arguing that Armenia should try to avoid a military solution
to the conflict and abide by internationally recognized principles.
(Liz Fuller)

UZBEKISTAN: A NON-ALIGNED STATE. During his official visit to
Indonesia, Uzbek President Islam Karimov announced that Indonesian
President Suharto has agreed to sponsor Uzbekistan's membership
in the non-aligned movement, Reuters reported on 23 June. Suharto
will take on the chairmanship of the movement at its September
summit. Uzbekistan and Indonesia also established diplomatic
relations, and concluded a series of trade, scientific and cultural
agreements, including barter deals for exchanging Uzbek cotton
for Indonesian products. (Cassandra Cavanaugh)

STABILIZATION IN TAJIKISTAN. The Presidium of Tajikistan's Supreme
Soviet has issued a demand that President Rakhmon Nabiev and
the Government of National Reconciliation restore stability to
the country, ITAR-TASS reported on 23 June. Fighting continues
in many parts of Tajikistan between supporters and opponents
of the former government and, according to the presidium's statement,
the economy is paralyzed. If Nabiev is unable to put a stop to
the disorders, the presidium has threatened to call a session
of the Supreme Soviet, which was supposed to be replaced by a
Majlis that has never met, and resign collectively. (Bess Brown)


RUSSIAN PARLIAMENT DISCUSSES MASS MEDIA. On 23 June, the Russian
parliament continued to discuss the situation of the republican
mass media, "Vesti" reported. Information Minister Mikhail Poltoranin
criticized the media for attacking the Russian political leadership.
In his turn, Dean of the Moscow State University Department of
Journalism Zasursky condemned Russian state and government officials
for interfering in the work of the independent media. Several
people's deputies criticized Russian TV for not giving the opposition
access to broadcasting. (Vera Tolz)

RUBLE LOSES GROUND. The ruble fell sharply for the second straight
week on the Moscow interbank currency exchange on 23 June, Russian
TV reported. On 9 June, the rate was 112 rubles to the US dollar.
It dropped to 129 rubles on 16 June, and to 146 rubles on 23
June. The Russian Central Bank reportedly did not intervene to
support the ruble. The bank also dropped its exchange rate to
100 rubles (from 85 rubles) to the dollar for Russian exporters
who are obliged to exchange part of their hard-currency earnings,
Izvestiya reported on 23 June. (Keith Bush)

ERSATZ MONEY FOR RUSSIA. The deputy director of the Russian Central
Bank, Vladimir Rasskazov, has ordered the issuing of "ersatz-rubles"
for internal use in Russia, Rossiiskaya gazeta reported on 23
June. Experts on the budget planning commission of the Russian
parliament suggested the printing of low denomination bonds using
simplified technology as a way of speeding up the emission of
cash. (Sarah Helmstadter)

RUSSIAN OUTPUT DECLINE ACCELERATES. Industrial output in Russia
fell by 13% during the first quarter of 1992, and is expected
to drop by 16% during the second quarter, Radio Rossii reported
on 23 June, citing Imapress. If this turns out to be correct,
it would run counter to recent Russian government claims that
the decline in output has been slowing in recent months. Imapress
also reported that inflation in May slowed to 14%. (Keith Bush)


MARKET FORCES AT WORK? Vodka prices in Moscow stores fell on
23 June "Vesti" reported. The price for a bottle of vodka now
ranges from 106 to 118 rubles. Competition brought prices down;
vodka was reportedly selling for less in other regions in Russia.
(Sarah Helmstadter)

PRIVATE FARMERS PONDER PROTESTS. Inspired perhaps by the example
set by their French counterparts, private farmers of the Moscow
Farmers' Union are considering holding mass demonstrations and
blocking the roads into the capital, Interfax reported on 23
June. Their chairman declared that the region's small farmers
are doomed unless the government takes emergency steps to help
them. The farmers claim that the present land allocations, averaging
three hectares per farmer, are too small to be viable and should
be increased by a factor of ten. They also maintain that government
credits are inadequate, and that the costs of buildings and equipment
are rising sharply. (Keith Bush)

SPACE MANUFACTURING IN TROUBLE. "Novosti" reported on 23 June
that all rockets used by Soviet astronauts were produced in the
city of Samar (formerly Kubyshev) at the factory "Progress."
Most of these rockets were used for defense purposes, including
satellite photography and electronic intelligence gathering.
The fundamental scientific research that took place on these
missions for civilian purposes is now being lost as manufacturers
of space technology like "Progress" lose their financing, state
orders, supply contacts and highly qualified personnel. Instead
of space technology, some factories have reportedly started producing
chocolate. (Chris Hummel)

OUTBREAK OF DIPHTHERIA IN MOSCOW. Since the beginning of the
year 346 people have been hospitalized with diphtheria in Moscow
and eight have died, according to a 20 June "Vesti" report. Some
80% of those affected with diphtheria are adults. Medics credit
the rise in the infectious disease to the refusal of parents
to inoculate children, the shortage of disposable needles, and
an ignorance of basic hygiene. (Sarah Helmstadter)

CENTRAL AND EASTERN EUROPE

US MAY TAKE ADDITIONAL STEPS IN BOSNIAN CRISIS, BAKER SAYS. The
Los Angeles Times and other major American dailies on 24 June
quote Secretary of State James Baker as saying the previous day
that Washington is making new diplomatic moves against Serbia
and may be considering further steps. The gist of the reports
is that the United States seems to be increasingly thinking of
multilateral military intervention in Bosnia-Herzegovina, at
least to ensure the safety of relief work in Sarajevo. Some 21
people were killed and 135 wounded in fighting there on 23 June
alone, the Frankfurter Allgemeine Zeitung notes. (Patrick Moore)


CROATIAN ARTILLERY TO BREAK SIEGE OF SARAJEVO? The 24 June Washington
Post says that the state-of-the-art German-built howitzers that
recently enabled Croatian forces to break the Serbian grip on
Mostar are now being put into place around Sarajevo. The Bosnian
authorities seem to welcome the development but remain uneasy
about the Croats' ultimate objectives in the multiethnic republic.
The Frankfurter Allgemeine Zeitung publishes a list of Croatian
and Bosnian doubts about the impartiality of UN peace-keeping
forces, while the New York Times suggests that the Croats would
like to have the UN out of the way in many places where the Croats
now feel they could otherwise consolidate their position militarily.
(Patrick Moore)

SERB POLICE PREVENT MEETING OF KOSOVO LEGISLATURE. The 24 June
Frankfurter Allgemeine Zeitung reports that "heavily armed Serbian
police" prevented ethnic Albanian legislators from meeting in
the parliament building in Pristina the previous day. The deputies
were elected in a clandestine vote on 24 May, despite a ban by
Serbian authorities. Some Albanian leaders were arrested during
the incident at the parliament. Serbian repression in Kosovo
is tight, but the Albanians, who make up over 90% of the population,
have organized an extensive network of underground schools, hospitals,
and other public functions. Meanwhile, Western news agencies
report from Tirana that Albania is expelling Belgrade's ambassador
in keeping with UN sanctions against Serbia and Montenegro. (Patrick
Moore)

DEADLOCK IN BELGRADE? The 24 June Frankfurter Allgemeine Zeitung
notes that Dobrica Cosic, the respected Serbian writer recently
named president of the rump Yugoslavia, has failed to find a
prime minister within the originally specified time. He has asked
Serbia and Montenegro for more time. The job is supposed to go
to a Montenegrin, and some politicians from that republic have
suggested that Montenegro should declare independence if Cosic
names a Serb to the post. Some observers regard Cosic as a tool
of Serbian President Slobodan Milosevic, while others see him
as a potential counterweight or even alternative to the man who
has increasingly made Serbia an international pariah. (Patrick
Moore)

CZECHOSLOVAK UPDATE. The new Slovak parliament at its constituent
session on 23 June elected former Czechoslovak prosecutor general
Ivan Gasparovic (Movement for Independent Slovakia--HZDS) as
parliament chairman. Peter Weiss, head of the Democratic Left
Party (the former Communists), became first deputy chairman.
Vladimir Meciar, leader of the HZDS, was charged with forming
the new Slovak government. Meciar told reporters that he expects
a new Slovak parliament to declare Slovak sovereignty in July
and adopt a new constitution in August. But he said that sovereignty
and independence are not the same thing and that there is no
need to write epitaphs for Czechoslovakia. Meanwhile, CSTK quotes
Jan Strasky as saying that he is the Civic Democratic Party's
candidate for federal prime minister but that nothing is official
yet. Strasky was deputy prime minister in the outgoing Czech
government. (Barbara Kroulik)

HUNGARIAN MINORITY LEADER ON AUTONOMY WITHIN SLOVAKIA. In an
interview with Radio Budapest on 18 June, Miklos Duray, chairman
of the ethnic Hungarian Coexistence political movement in Slovakia,
said the Magyars' demand for autonomy should Slovakia become
an independent state was not new but based on a concept devised
over a year ago. Duray sees three kinds of autonomy--cultural
and educational, minority, and territorial--each of which would
be achieved step by step over a number of years on the basis
of the characteristics of a particular region. The long-term
goal would be to have several autonomous territories comprising
a number of regional self-governing administrative units both
in Slovakia and Hungary and associated in a regional grouping.
Following talks before the Czechoslovak elections with Vladimir
Meciar, leader of the Movement for a Democratic Slovakia, Duray
concluded that Meciar had developed "no constructive concept"
in the area of minority policy. (Alfred Reisch)

DEADLOCK OVER POLISH GOVERNMENT CONTINUES. Although a majority
coalition has failed to coalesce around him, Prime Minister Waldemar
Pawlak has begun discussions on the composition of his cabinet.
In remarks to Polish Television on 23 June, Pawlak indicated
that three ministries--defense, internal affairs, and foreign
affairs--would retain their current chiefs in any new cabinet.
Other government "sectors" would be delegated to the control
of specific parties. Pawlak can now count on firm support from
170 of the 460 Sejm deputies. Five peasant and Christian-democratic
parties controlling 120 seats restated their opposition to any
"recommunizing" government on 23 June. The Confederation for
an Independent Poland (with 49 seats) continued to flirt with
both rival blocs, announcing its support for either a decisively
antirecessionary or a "presidential" government. Though not a
participant in negotiations, the postcommunist Democratic Left
Alliance continues to cast a long shadow; its 59 votes are likely
go to Pawlak, but they may seem too tainted to rely upon for
a majority. (Louisa Vinton)

ANTALL RENEWS CALL FOR DISMISSAL OF MEDIA CHIEFS. On 23 June
the Hungarian prime minister resubmitted to President Arpad Goncz
his request for the dismissal of the chairman of Hungarian Radio
and also asked for the dismissal of the TV chairman, MTI reports.
Goncz refused Antall's request last month on the ground that
the two should stay in their posts until parliament adopts a
new law on the media. In a letter to Goncz, Antall recalled a
recent ruling by the Constitutional Court that the president
can only refuse to approve appointments to state positions if
the democratic functioning of the institution is endangered,
and cannot attach conditions to approving appointments. Opposition
parties accuse the government of seeking to gain control of radio
and TV by appointing its own candidates as chairmen. (Edith Oltay)


BELARUS-POLAND TREATY. Belarus and Poland signed a friendship
treaty on 23 June securing their common borders and guaranteeing
the rights of the Belarusian and Polish minorities in each other's
countries, Western agencies report. Belarusian President Stanislau
Shushkevich and Polish President Lech Walesa signed the treaty
at the start of a three-day visit by the Belarusian leader in
Warsaw. The treaty creates a framework for closer bilateral political,
economic, and cultural ties between the two countries as well
as respect for internationally recognized rights of the minorities.
(Roman Solchanyk)

NATO AMBASSADORS MEET IN ROMANIA ON MOLDOVA. On 23 June Foreign
Minister Adrian Nastase convened a meeting of the ambassadors
of the 16 NATO countries to discuss the Dniestr conflict. Rompres
said that the meeting involved an exchange of opinions on the
situation in Moldova and prospects for a peaceful solution. No
other details were provided. (Crisula Stefanescu)

BAKER ON BUSH-YELTSIN MEETING. On 23 June at a meeting of the
US Senate Foreign Relations Committee Secretary of State James
Baker noted that presidents George Bush and Boris Yeltsin had
discussed the continuing presence of former USSR troops in the
Baltic States, a RFE/RL correspondent in Washington reports.
Baker said that Bush told Yeltsin that the US believes the withdrawal
could be achieved more quickly if new recruits were not sent
to the Baltics to replace troops whose terms of duty had ended.
(Saulius Girnius)

DISPUTE OVER BULGARIA'S BALKAN POLICIES. Sharp exchanges between
the government and the opposition were precipitated by critical
remarks by BSP legislator Nikolay Kamov on TV on 20 June. Kamov
said the government was playing down the risks from an expansion
of the Yugoslav crisis and had made statements interpreted as
detrimental to good relations with neighbor states, notably Greece.
He demanded that Bulgaria unambiguously declare support for a
peaceful settlement of the conflict and state that it would not
participate, either directly or indirectly in any armed foreign
intervention. The next day the Ministry of Foreign Affairs reacted
with a formal statement and a radio broadcast in which they accused
BSP leaders of acting "with destructive energy" against the confidence
and friendship Bulgaria has managed to build up with its neighbors.
At a BSP press conference on 23 June Kamov called the ministry's
reaction "neurotic." (Rada Nikolaev)

ZHELEV WILL SIGN PENSIONS LAW. In a TV address on 23 June, quoted
by BTA, President Zhelev said he will sign the amended pensions
law passed by the National Assembly on 12 June. The BSP caucus
had asked the president to postpone signing because of its objection
to the provision in the law that service as paid party functionaries
should not be counted toward pensions. Zhelev said remanding
the law might be interpreted as his fighting the government,
cause a conflict with parliament, and might put on him the blame
for a delay in updating pensions. He said, however, he would
ask the Constitutional Court to examine the legality of the controversial
provision. (Rada Nikolaev)

HUNGARY LAUNCHES THIRD STOCK MARKET TIER. On 22 June Hungary
established a third tier to its stock market in an attempt to
bolster interest in the Hungarian market, MTI reports. The new
tier, the "free market," was set up for stocks that do not meet
full listing requirements on the other two markets. Stock market
managing director Ilona Hardy told reporters that the new market
was launched on the second anniversary of the start of Hungary's
first securities market, the Budapest Stock Exchange. Trading
on the new market is expected to begin next week, with up to
40 public companies and about 260 bonds seen as likely issues
for trading. Budapest's official stock exchange currently lists
21 stocks and plans new offerings in the near future. (Edith
Oltay)

BOND EXCHANGE ESTABLISHED IN LATVIA. On 18 June shareholders
met to establish a securities and bond exchange, called the Riga
Fund Exchange, Diena reports. Gunars Slavinskis was elected chairman
and Aivars Kreituss director of the administration. The new financial
institution, with an initial investment capital of 28 million
rubles, still must be registered with the Latvian authorities.
(Dzintra Bungs)

LATVIAN BANK REFUSES INTEREST-FREE LOANS. Einars Repse, president
of the Bank of Latvia, told the press on 19 June that the bank
can meet the government's request for credits for only up to
2 billion rubles and only after the budget for the rest of this
year has been approved by the Supreme Council. Prime Minister
Ivars Godmanis wanted 4 billion rubles interest-free promptly
for the purchase of grain and energy to forestall serious shortages
of bread and fuel this fall. Repse indicated the additional emission
of Latvian rubles cannot be considered as a solution to these
problems. (Dzintra Bungs)

ESTONIA JOINS WORLD BANK. Ernst Jaakson, Estonian ambassador
to the US, signed the Articles of Agreement for the World Bank
on 23 June, RFE/RL's correspondent in Washington reports. International
Bank for Reconstruction and Development President Lewis Preston
said the bank looks forward to being a partner in Estonia's reconstruction.
Lithuania joined the World Bank and the International Monetary
Fund in April, and Latvia's membership is also expected soon.
(Riina Kionka)

POLAND POSTS TRADE SURPLUS. Poland recorded a positive balance
of trade for the first five months of 1992, PAP reported on 23
June. The trade surplus of $340 million compares favorably with
the deficit of $1.164 billion recorded during the same period
in 1991. (Louisa Vinton)

SERIOUS DECLINE IN LITHUANIAN INDUSTRY. Lietuvos rytas of 13
June reports statistics on the major decline in Lithuanian industrial
production in the first five months of 1992. Production of electrical
energy declined 25.4%, fertilizers--35.3%, laundry detergents--46.2%,
cement--35.6%; TV sets--12.3%, refrigerators--61.3%, meat--15.5%,
butter--21.6%, milk--36.7%, fish--52.8%, sugar--52.1%, flour--25.9%.
The loss in meat and milk production were caused by a 52.8% decline
in the production of grain feeds by state enterprises. While
total sales reached 68 billion rubles, in comparable prices Lithuanian
industrial enterprises sold 42.6% less goods than in the same
period in 1991. In comparison with 1991, prices increased 12.9
times, with the prices of production in the fuel industry increasing
47 times and in the chemical and oil industries 30 times. (Saulius
Girnius)

[As Of 1200 CET]

Compiled by Carla Thorson and Charles Trumbull



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