No. 124, 02 July 1992

SUCCESSOR STATES TO THE USSR

KOZYREV WARNS OF POSSIBLE COUP IN RUSSIA. Russian Foreign Minister
Andrei Kozyrev has warned of the possibility of a new putsch
led by nationalistic forces in an interview with Izvestiya on
30 June. He deplored the fact that parts of the liberal intelligentsia
have shifted to nationalistic positions. He also called for "deep
reforms" in the former KGB and armed forces, arguing that the
military had escaped political control and is arming separatists
in the Transcaucasus and Moldova. He also accused the Ministry
of Security of feeding tendentious information on ethnic conflicts
to the government and the president. The spokesman of the security
ministry, Aleksandr Gurov, rejected these accusations, on the
"Utro" TV program of 1 July (Alexander Rahr)

SECRET 29TH COMMUNIST PARTY CONGRESS. Some 150 communist intend
to hold a secret "29th Communist Party Congress" this weekend,
ITAR-TASS and "Vesti" reported on 30 June. The "All-Union Committee
of Communists" which claims to be organizing the event, have
called the meeting in order to chart the future of the Communist
Party. It is unclear who will be represented at the meeting since
the reports indicate that none of the leaders of the other various
parties which claim to be successors of the CPSU will attend.
Sergei Skvortsov, one of the organizers, noted that the meeting
would be held in secret "for security reasons" and out of concern
that President Yeltsin might move to enforce his decree banning
the Communist Party. (Carla Thorson)

ZHIRINOVSKY'S PLEA FOR DICTATORSHIP. The leader of the Liberal-Democratic
Party, Vladimir Zhirinovsky, told Rossiya (no. 27) that a majority
of Russians favor dictatorship. He said that he wants to reinstall
the Russian empire, first within the boundaries of the former
USSR, but subsequently along the borders of the former Tsarist
empire. He stated that right-wing forces will come to power in
Russia and Germany under the slogan of the protection of the
white race and divide eastern Europe among themselves. He added
that after the forthcoming demise of the United States, Alaska
will also be incorporated into the Russian empire. He noted that,
if elected president, he would strengthen the army and state
security forces. (Alexander Rahr)

BABURIN AND RUMYANTSEV JOIN FORCES AGAINST MOLDOVA. At the session
of the Parliamentary Assembly of the Council of Europe, just
held in Budapest, Sergei Baburin, leader of the ultranationalist
and pro-communist Russian Unity bloc in Russia's Supreme Soviet,
and Russian Social-Democratic leader, Oleg Rumyantsev, joined
in accusing Moldova of discrimination against Russians and of
aggression and atrocities in the Dniester area. They denounced
alleged Romanian deliveries of tanks and helicopters to Moldova.
Rumyantsev added that the evidence of Moldovan atrocities will
be presented in due course, an RFE/RL correspondent reported
on 1 July. The consensus on this issue among Rumyantsev and Baburin--who
otherwise are political adversaries--reflects the shift of some
leading Russian liberals toward hardline positions vis-a-vis
Moldova and other newly independent states. (Vladimir Socor)


MOLDOVA'S NEW PRIME MINISTER. President Mircea Snegur on 30 June
nominated Andrei Sangheli as Prime Minister of Moldova, in place
of Valeriu Muravschi who had resigned along with most of his
government on 8 June. An ethnic Moldovan born in 1944 in Bessarabia.
Sangheli is a trained agronomist and also a graduate of the Higher
[Communist] Party School in Kiev. From 1986 to 1992 he was Moldova's
first deputy prime minister and minister of agriculture concurrently.
He was a member of the Moldovan CP CC Bureau until 1990, and
became a full member of the CPSU CC in July 1990 as a supporter
of perestroika. Along with Snegur, Sangheli worked within against
the Moldovan leadership of the "era of stagnation." But unlike
Snegur, Sangheli is distrusted by Moldova's radical reformers.
Sangheli is the unofficial leader of the Agrarian Group of deputies.
(Vladimir Socor)

WHY SANGHELI? Snegur's nomination of Sangheli was approved on
1 July by a two-thirds majority of the parliament (in the absence
of left-bank Russian deputies). The nomination was virtually
imposed on a reluctant Snegur by the Agrarians, but other deputies'
groups including right-bank Russians rallied behind Sangheli
hoping that he would be acceptable to left-bank Russian and Gagauz
secessionists who have always shown a preference for dealing
with communist holdovers in Chisinau. From late 1990 to early
1992, Sangheli chaired the Conciliation Commissions impaneled
by the parliament to negotiate with the breakaway leaders in
the two areas. In his brief acceptance speech, Sangheli indicated
that he would not confine his role to economic management as
his predecessors did, but would actively seek a political settlement
with the left-bank Russians and the Gagauz. (Vladimir Socor)


BLACK SEA FLEET: BACK TO ZERO? The commander of the Black Sea
Fleet, Igor Kasatonov, said on 1 July that Ukraine wants 90%
of the disputed fleet while Russia is prepared to give Kiev only
22% of it, Reuters reported. The fact that these are roughly
the same numbers that have been bandied about for months suggests
that, despite the agreement reached by Yeltsin and Kravchuk in
Dagomys on 23 June, the two sides have made little progress in
resolving the impasse. Ukrinform-TASS also reported on 1 July
that, according to Kasatonov, the military council of the fleet
has protested the appointment Ukrainian Admiral Boris Kozhin
to the post of head of commander of the Sevastopol garrison.
Meanwhile, Lt. Gen. Leonid Ivashov, the secretary of the Commonwealth
Defense Ministers' Council, told journalists on 1 July that the
fleet issue would not be raised at an upcoming meeting of CIS
defense ministers in Moscow on 6 July because it was now the
object of negotiations at the level of state delegations, ITAR-TASS
reported. (Stephen Foye)

FIRST READING OF RUSSIAN BUDGET FOR 1992. On 1 July, the Russian
parliament approved, in principle, the 1992 state budget, Interfax
and Radio Rossii reported. It was sent back to committee for
revision. The second reading and vote were set for 10 July. In
presenting the budget, Acting Prime Minister Egor Gaidar said
that in May the budget deficit exceeded 60 billion rubles, and
in June "the situation became especially tense" as revenues dropped,
inflation rose, and the exchange rate deteriorated. Gaidar further
warned that the outlook for July and August was "particularly
difficult" and argued against any reduction in taxes. His presentation
met with virulent opposition from parliamentary chairman Ruslan
Khasbulatov and other critics. (Keith Bush)

RUSSIAN DEFENSE UPDATE: SPENDING AND THE DRAFT. Aleksandr Pochinok,
the chairman of the parliamentary budget committee, charged on
1 July that the proposed Russian state budget fails to provide
normal appropriations for defense, and undermines efforts both
to withdraw Russian troops from abroad and to provide social
programs for officers. His remarks were reported by ITAR-TASS.
Meanwhile, "Vesti" reported on 1 July that the spring military
draft, at least in Moscow oblast, was being extended by several
weeks because approximately one-third of eligible draftees had
not shown up for induction. The draft period traditionally ends
on 30 June but, according to the report, will be extended to
mid-July. (Stephen Foye)

RUSSIAN DECREE ON PRIVATIZATION. Russian President Boris Yeltsin
signed a decree on 1 July to speed up the privatization of state
enterprises other than sovkhozes, ITAR-TASS reported. Enterprises
are to be turned into shareholding companies within four months.
In some cases, the entire value of the firm will be up for sale,
but in others the state will retain a 50% share to be held in
trust for subsequent acquisition by employees and investors.
(Keith Bush)

RUSSIAN DECREE ON INTER-ENTERPRISE SETTLEMENTS. President Yeltsin
also signed a decree on 2 July on the normalization of settlements
in the economy. The text of the decree was not available, but
from the ITAR-TASS summary and from Egor Gaidar's references
in his budget speech, this appears to freeze inter-enterprise
debts incurred before 1 July, and to impose tough measures against
firms which fail to pay their bills after that date. They will
face bankruptcy proceedings, receivership, and could be sold
off. A state agency for settling debts is to be set up to adjudicate
on past inter-enterprise debts; it is to complete its work by
the end of 1993. Russian Deputy Prime Minister Georgii Khizha
recently estimated the gross value of these debts at over 2.5
trillion rubles: the net debt would be only a fraction of this
amount. (Keith Bush)

OIL JOINT VENTURES GAIN TAX CONCESSIONS. According to The Journal
of Commerce of 30 June, Western oil joint ventures in Russia
are applying for, and receiving, full or partial exemption from
the $6 a barrel oil export tax. A US oilman was quoted as saying
that "there have been many taxes and decrees issued over the
past several months, and when you put them all together, business
becomes uneconomical." He went on to say that his firm had, however,
worked out a tax regime "that we can live with." (Keith Bush)


BONN APPROVES PROTOCOL ON ETHNIC GERMANS IN RUSSIA. The German
cabinet approved on 1 July a protocol on cooperation with Moscow
for gradually restoring an autonomous German republic on the
Volga, the Russian and German media reported. With the signing
of the protocol, which is to take place in Moscow next week,
Russia will for the first time accept a binding obligation to
start restoring the Volga German republic, a German government
spokesman said. Both sides will undertake to create a viable
economy in the settlement area on the Volga. Germany will help
with the infrastructure, training of specialists, and equipment,
while Russia will arrange the transfer of ethnic Germans to the
area. (Ann Sheehy)

UKRAINIAN REFERENDUM ON NEW CONSTITUTION. The Ukrainian parliament
on 1 July continued its discussion on the draft of a new constitution,
Radio Ukraine reported. According to ITAR-TASS, the deputies
resolved to submit the approved draft to a "national discussion"
and to hold a referendum on the new fundamental law no later
than 1 November. President Leonid Kravchuk, summing up the discussion,
expressed his disagreement with those favoring a federal structure
for Ukraine. (Roman Solchanyk)

NAGORNO-KARABAKH TO SEND DELEGATION TO ROME PEACE TALKS. The
government of the self-proclaimed Nagorno-Karabakh Republic decided
on 1 July to send a delegation to the CSCE sponsored preparatory
peace talks that resumed in Rome on 29 June, ITAR-TASS reported,
in defiance of an earlier decision by the NKR parliament not
to attend in order to protest the fact that a delegation from
the NKR would not be accorded equal status as a negotiating partner.
Armenian President Levon Ter-Petrossyan had criticized the NKR
parliament's failure to send a delegation. The chief of the Armenian
delegation told Western agencies on 1 July that progress had
been made on the basis of a new negotiating document that calls
for an immediate truce in the region. (Liz Fuller)

ARMENIAN PRESIDENT ADAMANTLY REFUSES TO RECOGNIZE NKR. Addressing
the Armenian parliament on 1 July, on the third day of a debate
on Nagorno-Karabakh (NKR), President Ter-Petrossyan rejected
a demand by 7 of the 8 parties represented in parliament, which
have united to create a "National Union," that Armenia should
immediately recognize the NKR as an independent state, as this
would be interpreted by world public opinion as Armenian encroachment
on Azerbaijan's territorial integrity. He likewise rejected calls
for concluding a military-political alliance with the NKR, arguing
that such a step would inevitably involve Armenia in a war with
Azerbaijan and Turkey, Radio Moscow reported. (Liz Fuller)

TAJIK ELECTION RESULTS QUESTIONED. ITAR-TASS reported on 1 July
that the Tajik opposition's paper Adolat published the results
of an independent study of the November 1991 presidential elections
in that republic. The organization which conducted the study,
RF-Politika, found that while the official results showed President
Nabiev received two-thirds of the vote compared to one-third
for filmmaker Davlat Khudonazarov, a more likely result would
have been Nabiev--45%, and Khudonazarov--38-40%. RF-Politika
analyst Aleksandr Sobyanin stated that a closer study of local
polling results would be necessary to establish legal proof that
the election was falsified. (Cassandra Cavanaugh)

US EMBASSY DENIES AIDING TAJIK REBELS. The US Embassy in Dushanbe
issued a statement categorically denying that it had provided
military assistance to any political groups, including rebels
in Kulyab, ITAR-TASS reported on 1 July. In fact, an American
military aircraft had brought humanitarian aid which was then
transported to Kulyab oblast by Tajik helicopter, into the capital,
with the knowledge and cooperation of the Tajik government. The
press release emphasized that no American plane had landed in
Kulyab. (Cassandra Cavanaugh)

PROTEST AGAINST TSAR'S CANONIZATION. Moskovskie novosti (no.
27), published an article by Yakov Krotov on the canonization
of Tsar Nicholas II which is being considered by the Russian
Orthodox Church. Krotov protests against this move on the grounds
that this canonization would be a political and not a religious
act since those who mourn the Tsar plainly show their hatred
for those who killed him instead of demonstrating Christian love
and forgiveness. (Oxana Antic)



CENTRAL AND EASTERN EUROPE

LATEST DEVELOPMENTS IN BOSNIAN CRISIS. The BBC said on 2 July
that Canadian UN peace-keeping forces headed overland to Sarajevo
are running into difficulties from local Serbian units. Meanwhile,
the New York Times reports that Secretary of State James Baker
said on 1 July that two US C-130 transports will help in the
planned Sarajevo relief mission, but the paper adds that further
details are yet unclear. The major US east-coast dailies quote
President George Bush as saying that "we have two task forces
right now in the Mediterranean . . . [and] I have no plans at
this juncture to use those forces." The press also reports that
some of the ships in the Adriatic have already left the Yugoslav
coast for holiday leave in Italy and Greece. (Patrick Moore)


DEBATE OVER INTERVENTION IN BOSNIA CONTINUES IN THE US. The 2
July New York Times quotes Senate Majority Leader Robert Byrd
as saying the previous day that "the American people ought to
be told what the consequences are of a recess war in the Balkans."
The Washington Post presents misgivings among the American military
about a possible role in the area, with one officer "saying the
crisis in the former Yugoslavia may be too big to swallow and
too big to spit out." The 1 July New York Times, however, sums
up what seems to be the increasingly dominant view, saying: "no
one should underestimate the risks of moving from symbolic to
substantial involvement. But as the murderous battering of Bosnia
continues, the world sees the cost of allowing Serbian aggression
to succeed." (Patrick Moore)

CROATIA AND SLOVENIA PLEAD FOR HELP IN CARING FOR REFUGEES. An
RFE/RL correspondent in Budapest on 1 July quoted Croatian representatives
at a Council of Europe parliamentary session as saying that their
republic spends $57 million per month on refugees and cannot
afford it. Some $32 million goes for displaced persons from last
year's fighting in Croatia, while the rest is for victims of
the current war in Bosnia and Herzegovina. Slovenian deputy prime
minister Joze Pucnik also appealed for help, saying that 63,000
refugees are registered in his republic and more are staying
with relatives there. Austria also said that it was reaching
the limits of its possibilities. (Patrick Moore)

ILIESCU BRIEFS POLITICAL LEADERS ON MOLDOVA. During a close-door
meeting on 1 July, Romania's President Ion Iliescu urged the
leaders of the country's main political parties "to find a way
to voice a united position on developments in Moldova." Rompres
quoted Iliescu as describing these developments as "matters of
national interest for Romania." Iliescu is expected to meet Moldovan
President Mircea Snegur on 2 July, at festivities for the canonisation
of Moldova's medieval ruler Stephan the Great at the Putna monastery
in northeastern Romania, where the prince is buried. (Dan Ionescu)


ROMANIA'S FOREIGN MINISTER WRITES LETTER TO RUSSIAN COUNTERPART.
On 1 July, Rompres made public the text of a letter addressed
by Adrian Nastase, Romania's minister of foreign affairs, to
Andrei Kozyrev, his Russian counterpart. The letter, which is
dated 30 June, includes a strongly-worded attack on major general
Aleksandr Lebed, the new commander of Russia's 14th army, accusing
him of behaving like a self-styled "Dniestr governor." Nastase
depicted Lebed's stance as "arrogant and full of contempt towards
the authorities and the constitutional order of the Republic
of Moldova," and added that the 14th army's presence in Moldova
had no legal basis. (Dan Ionescu)

PAWLAK'S TIME RUNS OUT. Polish Prime Minister Waldemar Pawlak
announced he was resigning on the morning of 2 July, after nearly
a month of fruitless efforts to build a viable governing coalition.
Speaking before the Sejm, Pawlak attributed the failure of his
mission to the demand by his major potential partner, the tripartite
"little coalition" led by Tadeusz Mazowiecki, for total control
over economic policy. Pawlak wanted his own Polish Peasant Party
to supervise the economy. The "little coalition's" decision on
1 July to stay out of the cabinet torpedoed Pawlak's mission.
The Sejm can only vote on the prime minister's dismissal after
a motion from President Lech Walesa. According to PAP, however,
Walesa has informed the Sejm that he is not yet prepared to comply
with Pawlak's request for dismissal. (Louisa Vinton)

WALESA WEIGHS OPTIONS. President Lech Walesa was in attendance
on 1 July when Pawlak made his unusual presentation of a government
program without a cabinet. Speaking later at a press conference,
Walesa said he had a number of options in case Pawlak's efforts
ended in failure, including a "presidential government." New
elections were a last resort, Walesa said, adding that "the next
parliament will be worse." The president called Pawlak's tenure
a "step toward normality," signaling an attempt to reach beyond
the confines of the Solidarity movement. Walesa confirmed that
he had empowered Christian National Union member Henryk Goryszewski
to broker a new coalition. (Louisa Vinton)

"GRAND COALITION" IN THE WORKS? Eight parties spanning the entire
sweep of the Solidarity tradition--the tripartite "little coalition"
of liberal, free-market forces and a five-party alignment of
Christian-democratic and peasant forces--met on 1 July to discuss
the chances for a majority coalition. The meeting was held at
the initiative of Solidarity union deputies. The same parties
tried but failed to form a broad Solidarity coalition during
the tenure of Prime Minister Jan Olszewski, but talks may proceed
more smoothly now that the government crisis has deepened and
Olszewski is out of the picture. (Louisa Vinton)

HAVEL APPROVES NEW FEDERAL GOVERNMENT. Speaking in Bratislava,
where he had met with the Slovak government and, later, the leaders
of Czechoslovakia's two strongest political parties, Vaclav Klaus
and Vladimir Meciar, President Vaclav Havel announced the composition
of a caretaker federal government. CSTK reported Havel as saying
that the streamlined government, to be sworn in on 2 July , may
have a limited term but should be seen as "fully valid." Headed
by Jan Stransky, a former Czech deputy prime minister, the government
will have only 10 members. Slovak members of the cabinet will
have the foreign, defense, and economy ministries and two deputy
premierships. The Czechs will have two deputy premierships, as
well as the interior and finance ministries and the post of the
prime minister. Jozef Moravcik of Meciar's party will replace
outgoing Jiri Dienstbier as foreign minister. The defense minister-designate
is lieutenant general Imrich Andrejcak. Havel said he would have
preferred a civilian in the post and asked Andrejcak to become
a reservist. (Jiri Pehe)

AGREEMENT REACHED ON THE CZECH REPUBLIC'S GOVERNMENT. Four right-of-center
parties represented in the new Czech National Council (the Czech
parliament) signed a coalition agreement on 1 July, CSTK reported.
Among other things, the parties agreed on the composition of
the new Czech government. Vaclav Klaus, the leader of the Civic
Democratic Party, will become the new Czech prime minister. The
government will have three deputy premiers: Jan Kalvoda, the
leader of the Civic Democratic Alliance; Josef Lux, the leader
of the People's Party; and Ivan Kocarnik of Klaus's party. Kocarnik,
a former federal deputy minister of finance will also head the
ministry of finance. Vladimir Dlouhy of the Civic Democratic
Alliance, formerly the federal minister of economy, will be the
minister of industry and trade in the new Czech government. Klaus's
close ally, Jozef Zieleniec, will become minister of foreign
affairs. (Jiri Pehe)

TRADE AGREEMENT WITH CZECHOSLOVAKIA UNCERTAIN. The European Free
Trade Association says that an agreement with Czechoslovakia
may have to be renegotiated if the federation breaks up, Western
media reported. The accord came into force on 1 July and will
be reviewed in the fall after the situation in Czechoslovakia
becomes clearer. An EFTA spokesman said that if the Czechoslovak
custom union and common currency remain, it may not be necessary
to change the agreement. The accord with Czechoslovakia covers
trade in industrial goods and processed agricultural products.
(Jiri Pehe)

ESTONIAN PRESIDENTIAL CAMPAIGN UNDERWAY. On 1 July, the conservative
coalition "Pro Patria "(Isamaa) announced that former foreign
minister Lennart Meri had agreed to run for president on its
ticket, BNS reports. Elections in Estonia are due in fall, following
the approval of the referendum last week. Meanwhile, the leftist
coalition "Secure Home" said its nominee was the current Supreme
Council Chairman Arnold Ruutel, who is Estonia's most popular
political figure. (Riina Kionka)

GONCZ AGAIN REFUSES TO DISMISS BROADCASTING CHAIRMEN. Hungarian
president Arpad Goncz again rejected a motion by prime minister
Jozsef Antall to dismiss the chairmen of Hungarian radio and
television, MTI reported on 1 July. Goncz said that the dismissal
of the chairmen could endanger the independence of public broadcasting
because radio and television might not be able to withstand pressures
to give the government decisive influence over broadcasting.
The Hungarian Constitutional Court has recently ruled that the
president can only refuse to approve appointments to state positions
if the democratic functioning of the institution is endangered.
(Edith Oltay)

EXPERT SAYS KOZLODUY IN BETTER SHAPE. Following a visit to the
Kozloduy nuclear power plant, the head of the World Association
of Nuclear Operators (WANO) Lord Walter Marshall told journalists
on 1 June that management was "much better" than last year, Reuters
reported. Some 25 WANO experts have been working with Bulgarian
nuclear engineers since 1991, and Marshall said repair work on
the reactors should be completed by November and even the two
oldest 440-megawatt reactors would be ready in time for the coming
winter. Still, he deplored the fact that Bulgaria relied on Kozloduy
for 40% of its energy needs, suggesting that other possibilities
should be investigated. (Kjell Engelbrekt)

US SENATE LINKS RUSSIAN AID TO BALTIC TROOP WITHDRAWAL. On 1
July the US Senate voted 92 to 2 to impose restrictions on aid
to Russia after a year unless it made significant progress towards
withdrawing its troops from the Baltic States, Reuters reports.
By a vote of 60 to 35, the Senate defeated a stronger alternative
bill that would have imposed the restrictions immediately, without
the 12-month grace period. The bill authorized $620 million ($150
million for 1992 and $470 million for 1993) for economic aid
to Russia. The bill also included $400 million for 1992 and $450
million for 1993 as aid to Eastern Europe nations, including
the Baltic States. (Saulius Girnius)

LATVIAN, RUSSIAN EXPERTS DISCUSS TROOP WITHDRAWAL. At their third
meeting, which began in Jurmala on 30 June, Latvian and Russian
experts continued discussions on the withdrawal of ex-USSR troops
from Latvia, Radio Riga reported on 1 July. Latvia's deputy defense
minister Dainis Turlajs said Russia was disregarding previous
accords; he noted that in the 1 February communique, signed by
representatives of both countries, Russia had agreed to discuss
the withdrawal of all ex-USSR troops, adding that now Russian
experts insist the communique had only mentioned the pullout
of some troops. Latvian group member Juris Dobelis said that
the Russian side had, however, presented a list of 84 military
objects in Latvia that the military could vacate soon and said
that this would be compared with a similar list compiled by the
Latvians. Dobelis said that Latvia wants to take advantage of
any positive steps made by the Russians. (Dzintra Bungs)

450 PEOPLE TURNED BACK AT ESTONIAN BORDER. Some 450 people were
refused entrance into Estonia at the Narva border with Russia
on 1 July because they did not have Estonian visas. BNS reports
that four train loads of people wishing to enter Estonia were
checked for documents at the Narva rail station. Estonia began
requiring visas of former Soviet citizens on 1 July. All other
foreigners have been subject to a visa requirement since last
October. After Estonia's currency reform, the cost of a single-entry
visa jumped to $60. (Riina Kionka)

POLISH-LATVIAN TREATY OF COOPERATION SIGNED. While visiting Riga,
Polish Foreign Minister Krzysztof Skubiszewski signed a treaty
of cooperation between Poland and Latvia--the first such treaty
to be signed with one of the Baltic States--and accords on trade,
travel, and legal protection for citizens of the two countries.
Skubiszewski told the press that he was pleased with the development
of Latvian-Polish relations. He praised in particular Latvia's
generous policies toward its many national minorities. While
in Riga, the Polish foreign minister also met with representatives
of the approximately 60,000 Poles living in Latvia, Radio Riga
reported on 1 July. (Dzintra Bungs)

BULGARIA TO LOWER INTEREST RATES. On 30 June the Bulgarian National
Bank (BNB) decided to reduce the base rate from 54% to 49%, taking
effect on 6 July. As quoted by BTA, the BNB explained that the
measure was aimed at maintaining the relative stability of the
Bulgarian lev, at a time when demand for foreign currency was
dropping. The BNB also argued that a lower base rate might stimulate
domestic output and investments, whereas the currently high interests
threaten to boost inflation by suppressing production. The BNB
indicated that further reductions in the base rate may follow.
(Kjell Engelbrekt)

[As of 1200 CET]