No. 128, 08 July 1992

SUCCESSOR STATES TO THE USSR

YELTSIN IN MUNICH. . . On 7 July, President Yeltsin went to Munich
to meet with leaders of the G-7 major industrial democracies
for talks focusing on Western financial aid to Russia, Russian
and Western media reported. Before his departure, Yeltsin told
journalists that he was disappointed that economic relations
between Russia and the West have not developed sufficiently,
although the Cold War has ended. He said he was expecting concrete
results from his talks in Munich. Yeltsin is accompanied by acting
Prime Minister Egor Gaidar and Foreign Minister Andrei Kozyrev.
In the evening, Yeltsin met with the leaders informally at a
dinner hosted by the Bavarian premier. He is expected to hold
more substantive talks on 8 July. The Western leaders noted that
they understood the difficulty Russia faces in withdrawing troops
from the Baltic states, but called on Moscow to begin the withdrawal
and set a timetable. The G-7 leaders also expressed concern about
continuing ethnic conflicts in the former USSR. (Vera Tolz)

. . . ON THE KURILES DISPUTE. Before his departure from Moscow,
Yeltsin also noted that Russia's dispute with Japan over the
Kurile Islands was strictly a bilateral issue and should not
have been on the agenda of the G-7 summit, Russian and Western
media reported. He said that he would discuss the Kurile issue
directly with Japanese leaders during his planned visit to Tokyo
in September. At the Munich summit, Japan pushed its G-7 partners
to strongly back its position. On 7 July, a wide-ranging political
statement by the summit leaders included a brief mention of the
Kurile issue but only in broad terms. It said that the G-7 seeks
the "full normalization of Russian-Japanese relations through
the resolution of the territorial issue." (Vera Tolz)

OPENING SALVOS AT CONSTITUTIONAL COURT. On the first day of the
Constitutional Court hearings on the banning of the Communist
Party, preliminary statements and procedural issues predominated.
In his opening remarks, the court's chairman, Valerii Zorkin
noted, "this is not a case against the party." The president's
lawyers reiterated their position, this is "not a ban on the
idea of communism, but a case about the neutralization of an
anticonstitutional structure." On the other hand, People's Deputy
Viktor Zorkaltsev, representing the Party, argued that Yeltsin's
ban would lead to a dictatorship by democrats, and former politburo
member Egor Ligachev compared this hearing to the show trials
of the 1930's, Russian and Western agencies reported on 7 July.
The witnesses to be called in the case include American historian
Richard Pipes; and demands that President Yeltsin himself attend
the session were made by People's Deputy Yurii Slobodkin, but
the court overruled his request. (Carla Thorson)

COMMUNIST ALLEGES GORBACHEV INVOLVED IN COUP. Addressing the
Constitutional Court on 7 July, a pro-communist people's deputy,
Dmitrii Stepanov, said Mikhail Gorbachev was involved in last
August's failed coup, Russian and Western media reported. As
Soviet president and the CPSU's general secretary, Gorbachev
knew what was planned; the self-styled emergency committee that
tried to seize power did not want to dispose of Gorbachev, Stepanov
alleged. Gorbachev has denied any involvement in the coup and
declined to attend the court hearings. Meanwhile, the Russian
press continues to publish archival documents on the CPSU's illegal
activities. On 7 July, Kuranty published documents detailing
financial support, authorized by Gorbachev, to communist bureaucrats
in Poland who lost their jobs following the 1989 fall of the
communist government. (Vera Tolz)

RUSSIAN DRAFT LAW ON MILITARY SERVICE APPROVED. The two houses
of the Russian parliament, meeting separately on 7 July, approved
on first reading a draft law "on military obligations and military
service" in the new Russian army. According to ITAR-TASS, the
draft law eliminates several existing military ranks, shortens
the term of military service to 18 months in the army and to
two years in the Navy, introduces contract service, and establishes
mandatory retirement ages for the various officer ranks. Recently
appointed Deputy Defense Minister Valerii Mironov spoke on a
number of related issues, and recommended that the terms of alternative
military service contained in the draft be more carefully specified.
The draft will be submitted to a joint session of parliament
(Stephen Foye)

KRAVCHUK IN BRUSSELS: UKRAINE WANTS SPEEDY DISPOSAL OF NUCLEAR
WEAPONS. Speaking to journalists on 7 July during his visit to
Brussels, Ukrainian President Leonid Kravchuk said that Kiev
intended to destroy its entire nuclear arsenal as quickly as
possible, Western agencies reported. He emphasized that Ukraine
had no intention of moving these weapons elsewhere, and said
that, if possible, Ukraine would eliminate them in advance of
currently agreed upon timetables. That same day, Kravchuk met
with Belgian Foreign Minister Willy Claes and later addressed
an international conference on anti-Semitism. On 8 July, the
Ukrainian president is scheduled to meet with NATO secretary
General Manfred Woerner. (Stephen Foye and Bohdan Nahaylo)

FOKIN CABINET SURVIVES, BUT REFORMIST MINISTER RESIGNS. The Ukrainian
government headed by Prime Minister Vitold Fokin on 7 July narrowly
survived a vote of no confidence, Radio Ukraine and Western agencies
reported. Instead, lawmakers passed a resolution calling on President
Leonid Kravchuk to form a new cabinet by September, when parliament
reconvenes after the summer break. A further setback for reformers
was the announcement by Deputy Prime Minister and Economics Minister
Volodymyr Lanovy that he will step down. Lanovy argued that his
economic reform plans are not supported by Kravchuk. (Roman Solchanyk)


CIS SUMMIT DECIDES TO SEND PEACEMAKING FORCE TO MOLDOVA. At their
meeting in Moscow on 6 July, the CIS heads of state agreed in
principle to create joint peacekeeping forces and resolved to
deploy such forces in eastern Moldova within the next few weeks.
As reported by Western, Russian, and Moldovan media, the decision
on Moldova provides for a joint force of Russian, Ukrainian,
and Belarusian troops as well as troops from Romania and Bulgaria,
with a mandate to enforce and monitor a cease-fire and the separation
of the forces in the Dniester conflict. The forces are described
as "peacemaking" (rather than peacekeeping). Russian Foreign
Minister Andrei Kozyrev told journalists that the joint force
may number anywhere from 2,000 to 10,000 soldiers. The Russian
contingent will be over and above the 14th Army which will not
be involved in the peacemaking operation. The leaders of Belarus
and Kazakhstan, Stanislau Shushkevich and Nursultan Nazarbaev,
were reported as insisting on the preservation of Moldova's territorial
integrity and counseling against the creation of autonomous enclaves
within Moldova. (Vladimir Socor)

MOLDOVA REQUESTS THE TROOP DEPLOYMENT. Yeltsin told journalists
that the deployment was contingent on a Moldovan request and
that Moldovan President Mircea Snegur had promised that a request
would be forthcoming. On Snegur's proposal, the Moldovan parliament
on 7 July voted 225 to 3, with 9 abstentions, to appeal to Russia,
Ukraine, Belarus, Romania, and Bulgaria to send the peacemaking
troops to Moldova. The expenses involved are to be borne by Moldova.
(Vladimir Socor)

US TRADE PRIVILEGES FOR MOLDOVA. At a ceremony in Chisinau on
2 July, the US and Moldova exchanged the instruments of ratification
of their recently signed trade agreement which includes the most-favored-nation
clause. In an address at the ceremony, the US charge d'affairs
to Moldova, Howard Steers, said that the accord "means that the
US and Moldova are now real partners and that the US believes
in Moldova's chosen political course of asserting its presence
in the international arena and creating a new, democratic and
law-based society." Steers was further quoted as saying that
the policies of Moldova's leadership "inspire confidence" and
that President Mircea Snegur had shown "a very impressive capacity
for political conciliation." The remarks were reported by ITAR-TASS,
and an RFE/RL correspondent. (Vladimir Socor)

"DNIESTER" DEATH TOLL REVISED SHARPLY DOWNWARD. The self-styled
"Dniester republic Supreme Soviet" issued, on 30 June, a revised
casualty toll sharply scaling down earlier claims. As reported
by ITAR-TASS, the revised figure is 425 dead for the entire period
from 2 March (the beginning of war) to 22 June (the victory over
Moldova in Bendery). The revised toll is at odds with earlier
charges that the [defeated] Moldovan side had inflicted "hundreds"
of deaths in the battle for Bendery on 19-22 June. (Vladimir
Socor)

KAZAKHSTAN CREATES CENTRAL PRIVATIZATION AUTHORITY. The Kazakh
parliament passed a decree amending the law on privatization
in force since last year, according to a 7 July Kaztag-TASS report.
The change places all state property, including that formerly
controlled by local governments, under the authority of a centralized
organization charged with privatizing state assets. The new statute
is intended to speed the process of privatization, now stalled
by local bureaucrats; the commission will also examine the problem
of how the public can acquire shares of property with the vouchers
they received under the privatization law, now mostly unused
except to purchase housing. (Cassandra Cavanaugh)

TAJIK FORCES AGREE ON CEASE-FIRE. According to an RFE/RL report,
the Tajik government and guerrilla forces in the south of Tajikistan
reached a cease-fire agreement on 7 July. Democratic opposition
leader, Davlat Khudonazarov, was quoted by Interfax as confirming
the agreement, saying that negotiations between the two sides
would begin soon. Since fighting broke out in the southern region
of Kurgan-Tyube in late May, dozens of casualties have been registered
and scores have fled the area. (Cassandra Cavanaugh)

ABOLITION OF TURKESTAN MILITARY DISTRICT EXAMINED. Megalopolis
Express published an interview on 8 July with a recent graduate
of the General Staff Academy who chose to remain anonymous. He
noted that the Central Asian states' independence has forced
reform of the Russian Army's manpower policy, due to the loss
of the 500,000 recruits that these states supplied annually.
The capabilities of the new national armies fare poorly when
compared to the Soviet Army, he said, due to the loss of many
highly qualified Slavic officers with combat experience in Afghanistan,
and to the fact that the rank and file are on the whole technically
less literate. He also noted the danger that the new military
elite of these states might produce another Sadaam Hussein. (Cassandra
Cavanaugh)

MILITARY-INDUSTRIAL COMPLEX PUSHING RUSSIAN GOVERNMENT TO THE
RIGHT. The "New Russia" bloc of the Russian parliament believes
that the military-industrial complex is successfully pressing
for conservative appointees in Russia's government, according
to Interfax of 3 July. The bloc points to what they claim is
an emerging imbalance between conservatives and reformers in
key posts. In particular, it notes the recent appointment of
Deputy Defense Minister Boris Gromov whose 1990 appointment in
the Interior Ministry, they assert, had signaled a shift to the
right in USSR politics. A particular danger, says the bloc is
that this shift is not in line with Russian citizens' views and,
hence, could cause social unrest. (Brenda Horrigan)

TRILATERAL GROUP PROPOSES DEFENSE INDUSTRY POLICIES. At its 3
July meeting, according to Interfax, Russia's trilateral commission
of government, labor, and business resolved to present the cabinet
with a draft resolution on economic incentives for the defense
industry by 15 July. The draft will focus on developing a defense
doctrine for Russia and establishing a set volume of state orders
for defense industries for 1992-93. Another proposal is to pay
off government debts to defense industries and to establish a
conversion fund with state money and military industrial complex
profits. A plan to offer loans to converting enterprises was
also suggested. (Brenda Horrigan)

IMF CONDITIONS FOR RUSSIA REVEALED. In an interview with The
Financial Times of 7 July, Russian Deputy Prime Minister Aleksandr
Shokhin disclosed details of Russia's commitment to the IMF in
order to secure the first tranche of credit. The Russian government
has undertaken to reduce its budget deficit to 5% of GDP, down
from its present level which is believed to be heading towards
17%. To achieve this, Russia has asked for a rescheduling of
most of its $8.4 billion debt repayment due this year. It is
also committed to reduce the monthly rate of inflation from around
20% at present to no more than 10% at year's end. Subsidies on
grain and fuel are to be limited. (Keith Bush)

RUSSIAN TAX REDUCTION PROPOSALS TO BE VETOED? Egor Gaidar told
an RFE/RL correspondent on 6 July that he will ask President
Yeltsin to veto any attempt by the parliament to lower taxes.
He said that any lowering of taxes would be "suicidal" when inflation
remains high and is out of control. Such a move, he added, could
endanger reform and democracy in Russia. At the 2 July session
of parliament, Gaidar defended the value-added tax rate of 28%,
while some deputies proposed a reduction to 14%, and Khasbulatov
agreed to a rate of 20%. On 3 July, the parliament decided to
delay a vote on the issue pending talks between the government
and parliamentary leaders. (Keith Bush)

NO MORE RESIDENCE PERMITS IN RUSSIA? A draft law on the right
of freedom of movement and choice of residence within the Russian
Federation is almost complete, ITAR-TASS reported on 4 July (as
quoted by the TV program, "Moscow Telegraph"). If parliament
adopts the law, it would mean the end of residence permits, the
papers stipulating the right to reside in certain areas. Residence
permits restricted the ability of Russians to get apartments,
social benefits, and jobs to within the area in which they were
registered. The abolition of the system could bring an influx
of Russians to the cities, further straining the already overcrowded
housing and increasing the number of unemployed. (Sarah Helmstadter)


CENTRAL AND EASTERN EUROPE

G-7 ISSUES "DECLARATION ON FORMER YUGOSLAVIA." This document,
given to the press on 7 July in Munich, makes a number of key
points. First, it notes that "all parties have contributed" to
the crisis but adds that "the Serbian leadership and the Yugoslav
army . . . bear the greatest share of the responsibility." Second,
it declares that "the tragic humanitarian situation, especially
in Bosnia and Herzegovina, is unacceptable." Third, it goes on
to "warn the parties concerned, including irregular forces" not
to interfere with the relief of Sarajevo. The text then adds
that "should these efforts fail due to . . . [a lack of cooperation]
with the United Nations, we believe the Security Council will
have to consider other measures, not excluding military means,
to achieve its humanitarian objectives," including relief of
areas beyond Sarajevo. Fourth, the document urges aid for the
refugees. Fifth, it calls on Serbia and Croatia to respect Bosnia's
territorial integrity. Sixth, it warns against spreading the
conflict, and specifically urges Serbia to "respect minority
rights in full" and to begin "serious dialogue" in Kosovo. Finally,
it backs UN Resolution 757, which imposed sanctions on Serbia
and Montenegro, and rejects those republics' claim to be "the
sole successor state of the former Yugoslavia." (Patrick Moore)


ROMANIA AND THE EMBARGO. Western agencies report on 7 July that
delegates at the G-7 summit concluded that the oil embargo imposed
last month against Serbia and Montenegro is not working, in part
because of continuing Romanian assistance. According to the Canadian
foreign minister, oil continues to flow into Serbia through a
pipeline from Romania. The same day, however, Rompres released
a communiqué from the Romanian Ministry of Transportation denying
that oil shipments are originating at Constanta for the Montenegrin
port of Bar. The ministry insists that it is adhering strictly
to government instructions concerning the UN sanctions. (Dan
Ionescu)

HEAVY FIGHTING IN SARAJEVO. Even as the G-7 issued their warning,
international media were reporting on 7 and 8 July that Sarajevo
witnessed the worst fighting in three weeks. Reports differ as
to who is to blame. On 7 July the BBC quoted UN sources as saying
that the conflict so far has displaced two million persons, one
million from Bosnia and Herzegovina alone. Meanwhile, on 7 July
the Washington Post and on 8 July the New York Times argued that
Zagreb may be backing secessionist moves by Croatian extremists
in Bosnia, and called for considering sanctions against Croatia.
It is not clear, however, who or what is behind the secessionists;
a 7 July editorial in Vjesnik, which is close to Croatia's governing
party, slammed the idea of partitioning Bosnia. And it is difficult
to see how the international community could, on the one hand,
impose sanctions on Croatia while, on the other, use its territory
for relief of Sarajevo. (Patrick Moore)

SERB SEES HOPE. In an interview with the Los Angeles Times, Yugoslav
prime minister designate Milan Panic expressed hope that the
conflict in Bosnia-Herzegovina can be stopped and that the badly
damaged Serbian economy can be quickly resuscitated. Panic promised
to visit Sarajevo soon, and expressed confidence that the economy
of the new Yugoslav federation, composed now of only Serbia and
Montenegro, will quickly become the most robust of all the former
Yugoslav republics, even suggesting that the new Yugoslavia would
be willing to pay off the entire $14-billion foreign debt of
the old federation. As for possible problems in his relations
with Serbian President Slobodan Milosevic, Panic said "God help
him if he gets in my way." (Gordon Bardos)

MACEDONIAN GOVERNMENT FALLS. On 7 July Western agencies reported
that Prime Minister Nikola Kljusev's government had lost a no-confidence
vote in parliament. Critics blamed the government for the decision
by the EC and the US to accept the Greek position that Macedonia
must change its name before it can be formally recognized. Nationalist
parties are expected to benefit from Kljusev's defeat. (Patrick
Moore)

G-7, FINNISH ORGANIZATIONS ON TROOP WITHDRAWAL FROM BALTICS.
The G-7 nations also issued a statement on 7 July urging Russia
to agree to a timetable for the withdrawal of ex-USSR troops
from the Baltic States, an RFE/RL correspondent reports. The
statement, read by German Foreign Minister Klaus Kinkel, also
said: "It is impossible that these problems should contravene
the application of the principle of international law whereby
military forces may not be stationed on the territory of a foreign
state without its approval." On 7 July four Finnish organizations,
including The Helsinki Group of Finland, appealed to "governments
and civic organizations of Finland and other participating states
of the CSCE to make insistent demands for an end to the military
occupation of the Baltic States, and to support these demands
by reduction of all assistance to Russia, until her troops have
left Estonia, Latvia, and Lithuania." (Dzintra Bungs)

RUSSIA, BALTICS COMPROMISE ON STATEMENT. Meeting in Helsinki
prior to the CSCE meeting, Baltic and Russian delegations agreed
on a two-paragraph statement on the need to resolve through negotiations
"the problems that remain from the past, such as the stationing
of foreign armed forces on the territories of the Baltic States
without the required consent of those countries," an RFE/RL corespondent
in Helsinki reported on 7 July. The second paragraph says: "In
line with basic principles of international law and in order
to prevent any possible conflict, we call on the states concerned
to conclude, without delay, appropriate bilateral agreements,
including timetables, for the early, orderly and complete withdrawal
of such foreign troops" from the Baltics. The statement was accepted
by the 50 other CSCE members. Latvian delegation head Aivars
Markots said that the text is the "minimum acceptable" by the
Baltic States. (Dzintra Bungs)

BALTIC LEADERS PREPARE FOR CSCE. On 7 July in Jurmala top Baltic
leaders discussed a common strategy at the upcoming Helsinki
meeting. They focused on how to speed up the pullout of the ex-USSR
armed forces from the Baltic States, BNS reports. They also met
with Swedish Prime Minister Carl Bildt who was visiting Latvia.
(Dzintra Bungs)

POWELL IN HUNGARY. On 7 July Gen. Colin L. Powell, chairman of
the US Joint Chiefs of Staff, arrived in Budapest at the head
of a delegation invited by Hungarian armed forces commander Col.
Gen. Kalman Lorincz. Powell discussed further cooperation between
the armies of the two countries, while Lorincz briefed the visitors
about the state of the Hungarian army and its future plans. The
Americans visited an army unit near Budapest and held talks with
top Hungarian officials. Prime Minister Jozsef Antall stressed
that the survival of NATO and the American military presence
is vital for European security. At a final press conference Powell
said the US does not exclude the possibility of international
military action [presumably in Yugoslavia], but Lorincz said
that Hungary would not become involved in such action. He did
not address the question of whether Hungary would open its borders
to other forces should such military action take place. (Judith
Pataki)

POLISH CABINET LINEUP COMPLETED. Despite a final walkout by one
of the eight coalition parties, the Center Alliance (PC), prime
minister candidate Hanna Suchocka managed on 7 July to complete
a full cabinet list for consideration by President Lech Walesa.
Walesa is scheduled to meet with Suchocka early on 8 July, before
he leaves to attend the CSCE summit in Helsinki. The departure
of the PC, a party hostile to Walesa and inclined to confrontational
rhetoric, was greeted with mixed feelings, as it removed the
most controversial candidates from the cabinet list and forestalled
a potential showdown with the president. The remaining seven
parties quickly reshuffled the five posts set aside for the PC
and, in the process, opted to leave internal affairs in the hands
of acting minister Andrzej Milczanowski, as Walesa had wished.
(Louisa Vinton)

PROPOSED CABINET SPANS LEFT AND RIGHT. Party of Christian Democrats
leader Pawel Laczkowski is now slated to take the post of deputy
prime minister for politics. The proposed seven-party cabinet
features veterans from all three previous Solidarity governments,
including Jacek Kuron (labor), Jan Krzysztof Bielecki (EC integration),
Janusz Lewandowski (privatization), Jerzy Osiatynski (finance),
Janusz Onyszkiewicz (defense), Krzysztof Skubiszewski (foreign
affairs), and Gabriel Janowski (agriculture). The liberal "little
coalition" has won the key economic and political posts, while
justice, education, and culture have been awarded to the right-wing
Christian National Union. To avoid "unpleasant surprises" in
parliament, Walesa has demanded written guarantees from all coalition
parties that they accept the prime minister and her cabinet choices,
as a condition for his approval. (Louisa Vinton)

FARMERS' PROTEST ALARMS WALESA. About 250 farmers from the Self-Defense
union on 7 July renewed their threat to drive their tractors
into Warsaw. Polish TV reports that 73 farm vehicles are assembled
on the city's outskirts. At the president's urging, agriculture
minister Gabriel Janowski met with the group, but charged afterward
that Self-Defense is more interested in publicity than assisting
farmers. "No discussion is possible," Janowski said. A statement
issued by the president's office on 7 July calls the situation
in the country "very tense" and criticized protesters for violating
the law rather than attempting to solve problems through accepted
democratic means. Walesa announced the creation of a special
working group on "public order" attached to the National Defense
Committee (KOK), which he chairs. The purpose of the new body,
Walesa said, is to ensure that order and calm prevail. In a letter
to Prime Minister Waldemar Pawlak on 7 July, Walesa called for
effective measures to keep the roads open and added that, "in
building a state based on the democratic order, we cannot look
on as that order is undermined." (Louisa Vinton)

MECIAR WANTS ELECTION OF A SLOVAK PRESIDENT. According to a CSTK
report of 7 July, Slovak Prime Minister Vladimir Meciar announced
that his Movement for a Democratic Slovakia wants the Slovak
Republic to elect its own president at the end of August, adding
that the Czech Republic should do the same. He said that the
Slovak and Czech presidents could then serve as Czechoslovak
president and vice president. Referring to the rejection by his
party of President Vaclav Havel's reelection, Meciar said that
his party was not interested in causing a presidential crisis.
(Jan Obrman)

BULGARIAN EX-PREMIER STRIPPED OF IMMUNITY. Following an intensive
six-hour debate on 7 July, the Bulgarian National Assembly lifted
the parliamentary immunity of Andrey Lukanov, the former prime
minister and BSP deputy, BTA and Western agencies report. The
decision came after a request by Prosecutor General Ivan Tatarchev,
who intends to charge Lukanov with embezzlement and misappropriation
of state property. While BSP and UDF demonstrations in support
of Lukanov were taking place outside the parliament, Lukanov
charged that "the ruling political force"--the UDF--is preparing
a show trial against him. (Kjell Engelbrekt)

BULGARIAN BANK HEAD STEPS DOWN. On 7 July the head of the Bulgarian
National Bank, economics professor Todor Valchev announced his
resignation. The object of recent allegations of corruption in
the Bulgarian press, Valchev said he is leaving office so that
confidence in the central bank is maintained, Reuters reports.
Even though he was appointed by a socialist cabinet two years
ago, Valchev told BTA he had had only few substantial disagreements
with the current government and that the reason for his resignation
was not political. (Kjell Engelbrekt)

OPPOSITION RALLY IN TIMISOARA. A large rally was held on 7 July
in Timisoara, the Romanian city where the December 1989 uprising
against Nicolae Ceausescu started. According to an RFE correspondent,
the rally called for all former communist activists and members
of the former political police to quit public posts. The rally's
organizer, the Timisoara Society, a loose association of opposition
parties and movements, launched an appeal for Romanians to turn
out in large numbers in the parliamentary and presidential elections
scheduled for 27 September. The rally was attended by many leaders
of the Democratic Convention, an alliance of the main opposition
parties. (Dan Ionescu)

RUSSIA "FORCING LITHUANIA OUT" OF RUBLE ZONE. On 7 July Russian
First Deputy Prime Minister Egor Gaidar held talks in Moscow
with a Lithuanian delegation, headed by Deputy Supreme Council
Chairman Ceslovas Stankevicius, Radio Lithuania reports. The
meeting was prompted by Russia's unilateral decision to stop
bank transfers to Lithuania. Gaidar said Russia will no longer
guarantee purchase agreements signed by cities or companies,
although it will guarantee sales of food to the army. He suggested
that Lithuania should follow Russia's example and demand prepayment
for purchases. Further, Russia will not help Lithuania recoup
the $3 billion owed for previous food purchases. As a special
concession, Russia will guarantee a lower price for oil purchased
in July, but thereafter will charge Lithuania world prices. The
Lithuanian side expressed regret that Russia is unilaterally
breaking its trade agreements by no longer granting Lithuania
most favored nation trade status and is, in effect, pushing it
out of the ruble zone. (Saulius Girnius)

[As of 1200 CET]