No. 91, 13 May 1993

RUSSIA



YELTSIN PREPARES TWO MAJOR DECREES. Radio Rossii "Information-Analytical
Program" on 11 May reported that President Boris Yeltsin is working
on two decrees-one on prohibiting former party apparatchiks to
work in government structures for five years, and another on
the transfer of legislative functions from the parliament to
the Council of the Federation until a new constitution is adopted.
The deputy head of the presidential administration, Vyacheslav
Volkov, indicated in an interview with "Rossiiskie vesti" on
12-May that the next parliamentary elections should be held on
a multi-party basis,stating that Yeltsin may soon issue a decree
on elections and on political parties. -Alexander Rahr

KHASBULATOV ON WAYS OUT OF THE CRISIS. Parliamentary speaker
Ruslan Khasbulatov has published an article in Rossiiskaya gazeta
on 12 May describing his idea of solving the constitutional crisis.
Khasbulatov warned Yeltsin from "anti-constitutional moves to
adopt a new constitution" through by-passing the Congress. He
suggested that a government of national trust should be formed
by the parliament which would then receive special powers (from
the Congress), until new presidential and parliamentary elections
are held. Khasbulatov stressed the need to direct reforms toward
the social protection of the population. He said a joint economic
program, which would reflect the ideas of the government and
of parliament, should be adopted as a basis of reform. -Alexander
Rahr

PRESIDENT TAKES FURTHER STEPS TO SPEED UP CONSTITUTION ADOPTION.
On 12-May, President Yeltsin issued a decree setting up a working
commission for the preparation of a new Russian Constitution,
ITAR-TASS reported. The group consists of Yeltsin and forty two
officials, including reformist politicians from the government
as well as members of the parliament and representatives of republics
and regions. Presidential spokesman Vyacheslav Kostikov said
the commission will be functioning until a Constituent Assembly
convenes in early June. -Vera Tolz

PARLIAMENTARY COMMISSION OUTLINES ITS OWN TIMETABLE. Speaking
on 12 May at a meeting of Russia's regional leaders, parliamentary
speaker Ruslan Khasbulatov called "criminal" the president's
attempts to by-pass the Congress of People's Deputies in the
adoption of a new constitution, ITAR-TASS reported. Meanwhile,
the parliament's constitutional commission has worked out a timetable
for the preparation of its own version of the new constitution.
The commission said deputies should begin final debate on a parliamentary
draft constitution on 6 July, after a series of legislative hearings
and discussions to be held in Russia's republics and regions.
The commission's executive secretary Oleg Rumyantsev said a Constituent
Assembly and the Congress should jointly work out a new Constitution,
instead of starting a confrontation. -Vera Tolz

GAIDAR CONSIDERS COMEBACK. Egor Gaidar, ex-Acting Prime Minister,
has been quoted by Izvestiya on 12 May as saying that he may
consider returning to the government because it would be "unforgivable"
not to exploit the positive results of the referendum, in particular
the support which the second question on economic reform had
received from the electorate. According to Gaidar, nothing can
stop the privatization policy in Russia now. Meanwhile, the chairman
of the board of the Democratic Party Valerii Khomyakov told Ekho
Moskvy on 11-May that the departures of the Secretary of the
Security Council, Yurii Skokov, and Deputy Prime Minister, Georgii
Khizha, were probably connected with President Boris Yeltsin's
desire to return to the idea of implementing special rule. Skokov
had resisted that move earlier. -Alexander Rahr

BLACK SEA FLEET NEGOTIATIONS REACH IMPASSE. According to Russian
Deputy Prime Minister Yurii Yarov, negotiations between Ukraine
and Russia concerning the apportioning of the Black Sea Fleet
have stalled over the issue of basing the Russian portion of
the fleet. According to an ITAR-TASS report of 12 May, Yarov
noted that Russia considers the fleet's shore facilities to be
covered under the Yalta and Dagomys agreements which provide
for the fleet's assets to be shared between the two states. Russia
wants to base its share of the fleet in Sevastopol, and thus
insists on a share of the port facilities there. Ukraine views
this as a Russian demand to create a military base on Ukrainian
territory, which it regards as impermissible and a potential
violation of its sovereignty. Yarov argued, however, that Russia
was not making territorial claims, but simply claims parts of
the base, and that solutions such as a long-term lease might
be possible. A way out of the impasse, Yarov suggested, might
require another summit meeting between Yeltsin and Kravchuk.
-John Lepingwell

RIGHT OF SECESSION INCLUDED IN TUVIN CONSTITUTION. The Tuvin
parliament has defied Moscow and amended the republic's constitution
to include the right to self-determination and the right of secession,
Radio "Mayak" reported on 11 May. Secession could be a possibility
given that two-thirds of the population is Tuvin, and that the
territory enjoyed at least nominal independence until 1944. Local
nationalists have argued that Tuva's incorporation in the Soviet
Union was no more legal than that of the Baltic states. The republic's
economy is, however, heavily dependent on subsidies from Moscow.
The current Russian constitution makes no provision for secession,
nor does the presidential draft. The draft produced by the constitutional
commission makes it virtually impossible by requiring the approval
of a federation-wide referendum. -Ann Sheehy

CHUKOTKA'S SEPARATION FROM MAGADAN OBLAST LEGAL. The Russian
Federation's Constitutional Court has recognized the separation
of the Chukchi Autonomous Okrug from Magadan oblast to be in
accordance with the Russian constitution, Ostankino television
reported on 11 May. The okrug soviet had proclaimed itself an
autonomous republic as far back as September 1990 and taken a
"final decision" on its separation from Magadan oblast in March
1991, but Magadan oblast had contended that the okrug could only
secede if a referendum were held. In 1989 Chukchi accounted for
only 7.3 percent of the population while Russians and Ukrainians
made up 83 percent. The decision of the constitutional court
could lead to other okrugs seceding from the oblasts of which
they now form part. In particular, Tyumen oblast could be reduced
from 1.4 million sq. km. to 161 thousand sq. km. and lose most
of its oil industry if the secession of the Khanty-Mansi and
Yamalo-Nenets autonomous okrugs were recognized. -Ann Sheehy


COMMONWEALTH OF INDEPENDENT STATES



CIS EXPERTS DISCUSS POSSIBILITY OF ECONOMIC UNION. As part of
the preparations for the CIS summit meeting on 14 May, a meeting
of experts from CIS countries in Moscow on 12 May discussed the
possibility of the creation of an economic union from those Commonwealth
countries that have demonstrated their readiness to give up part
of their sovereignty in this cause, ITAR-TASS learnt from circles
close to CIS coordinating organs. The chairman of the Russian
State Committee for Economic Cooperation with Commonwealth States
Vladimir Mashchits presented Russia's concept of such a union,
which includes such elements as a customs union, an interbank
union, an external economic union, and also the harmonization
of national legislation. It has been reported that Russia, Belarus,
and Kazakhstan are ready to form such a union. -Ann Sheehy

TRANSCAUCASIA AND CENTRAL ASIA



AFGHAN CONSUL REJECTS TAJIK CHARGES. Afghanistan's Consul in
Dushanbe, Muhammad Umar Asir, met with correspondents on 12 May
in order to publicly deny charges by Tajik government officials
that a "government-in-exile" has been set up by Tajik opposition
leaders in Afghanistan, ITAR-TASS reported. The consul also denied
the existence in northern Afghanistan of armed groups of Tajik
oppositionists who are alleged by the Tajik government to be
preparing for an incursion into their homeland. For at least
a year Russian border guards stationed on the Tajik-Afghan border
have been trying to prevent Tajiks from slipping into Afghanistan
and returning with weapons supplied by sympathetic Afghan groups.
At the CIS summit in early 1993 four CIS states agreed to participate
in a peacekeeping force to seal the Tajik-Afghan border. The
peacekeeping force has yet to be deployed, and in the last month
the Tajik government has warned of the existence of a government-in-exile
and plans for an attack across the border. -Bess Brown

AZERBAIJAN SENTENCES FIVE RUSSIAN SERVICEMEN TO DEATH. Azerbaijan's
Supreme Court passed the death sentence on five Russian servicemen
on 11-May on charges of having fought alongside Armenian troops
in Nagorno-Karabakh, Western agencies reported. A sixth man was
sentenced to 15 years' imprisonment. They had been arrested in
September, 1992, in Kelbadzhar, between Nagorno-Karabakh and
the Armenian-Azerbaijani frontier, and were said to have killed
30-Azerbaijani troops in fighting in Mardakert raion in the north
of Nagorno-Karabakh. Russia will appeal to Azerbaijan to have
the men, who had asked to be considered prisoners of war, handed
over to Moscow, according to RIA. -Liz Fuller

KYRGYZSTAN BANS FOREIGN CURRENCIES. The Kyrgyz government announced
on 12-May that its new national currency, the "som," would be
the exclusive legal tender of the republic as of 15 May, Reuters
reported. The move is intended to support the value of the som
by eliminating the use of competing currencies such as the ruble
and dollar. The reaction of neighboring countries to the introduction
of the som has been drastic. Both Kazakhstan and Uzbekistan are
implementing broad ranging restrictions on bank and cash transactions
with Kyrgyzstan. Uzbek president Islam Karimov has criticized
the Kyrgyz move as "ill prepared" and "not thought out well."
The International Monetary Fund, however, has shown its confidence
in the Kyrgyz reform effort by approving a $62 million line of
credit available over the next year and a half, according to
an RFE/RL Washington correspondent. -Erik Whitlock







CENTRAL AND EASTERN EUROPE



CROATS HOLD OVER 1,300 MUSLIMS PRISONER. The BBC's Serbian Service
on 12 May quoted UN observers as saying that the Croatian military
are holding Muslim civilians against their will at several locations
near Mostar. The two sides' army commanders managed to reach
a cease-fire agreement by which the respective forces will return
to barracks and the civilians be released by noon local time
on 13 May, but intense fighting continued in the night with each
side blaming the other for it. The Croats furthermore claim they
are holding the Muslim civilians to get them out of harm's way,
but Radio Sarajevo says that the Croatian military are burning
down Muslims' homes in an apparent attempt at ethnic cleansing.
The BBC's Croatian Service quoted British Foreign Secretary Douglas
Hurd as saying that this state of affairs could harm Anglo-Croatian
relations and that it might be time to reconsider imposing sanctions
on Zagreb. The Croatian news agency Hina reports that UN ambassador
Mario Nobilo said that the current fighting comes at the worst
possible time, and he added that Serbian President Slobodan Milosevic's
moves against the Bosnian Serbs have helped divide the United
States from its EC allies on the Bosnian issue. Reuters meanwhile
quoted top UN officials as saying that the fighting in Herzegovina
could lead to another 300,000 people having to flee their homes.
-Patrick Moore

OTHER DEVELOPMENTS IN THE YUGOSLAV AREA. The BBC's Croatian Service
on 13 May reported that Bosnia's UN ambassador called for UNPROFOR
troops to stay in his republic in contradiction to Bosnia's foreign
minister's request the previous day that they leave. The broadcast
said that this reveals serious policy differences in the Bosnian
leadership. Meanwhile in Croatia, Russian Deputy Foreign Minister
Vitalii Churkin on 12-May completed his talks with Croatian President
Franjo Tudjman and goes on to Knin, Hina reports on 13-May. On
10 May Tudjman signed a bilateral cooperation agreement with
visiting Albanian President Sali Berisha, and their delegations
discussed cooperation in the military field as well as in trade,
transportation, and industry, particularly oil. Vecernji list
of 12 May quoted Berisha as saying that Milosevic must be deterred
from extending the violence to Kosovo, which could lead to a
general Balkan war. Finally, Croatian dailies reported on the
visit by a delegation from the Council of Europe to investigate
media freedom there. -Patrick Moore

UKRAINE ACCUSES ROMANIA OF "UNFRIENDLY ACTIONS" ON THE DANUBE.
Ukraine has accused Romania of abusing UN sanctions against rump
Yugoslavia to hold up Ukrainian trade, Reuters reported on 12
May. Foreign Minister Anatolii Zlenko told a ministerial meeting
in Kiev on sanctions that since early April about 160 Ukrainian
barges, mostly carrying commodities for the metallurgical industry
in Hungary and Austria, have been detained for lengthy searches
of up to three or four weeks in the Romanian port of Galati.
He stressed that UN sanctions do not ban freight from transiting
the Yugoslav stretch of the Danube, and another Ukrainian official
suggested that UN inspectors could travel with the Ukrainian
barges to guarantee that they did not stop in the Serbian stretch
of the river. "The Romanians," Zlenko claimed, "are using UN
sanctions against Yugoslavia as sanctions against Ukraine," and
warned that Ukraine is considering retaliating against "these
unfriendly actions." Talks held last week between Ukrainian and
Romanian officials about this problem were apparently "without
progress." -Bohdan Nahaylo

SERBIAN RADICALS RATTLE SABERS. Vojislav Seselj, head of the
Serbian Radical Party-Serbia's second largest-told Italian TV
on 12 May that missiles would be launched at Italy, Croatia,
Austria and all other countries serving as logistical bases in
the event of air strikes against Bosnian Serbs. He boasted, "we
have FF-22 missiles which can reach your country, but we will
not target military compounds, because their defense is prepared.
In case we are attacked, we will fire at your civilian targets."
Seselj also claims that the Bosnian Serbs have not yet employed
even one-third of their forces in the war, and warned that the
UN troops deployed in Bosnia would be immediately attacked in
the event of foreign military intervention. Seselj slammed the
Serbian government's decision to limit aid to Bosnian Serbs,
saying "most of the people in Serbia support their brothers in
Bosnia and we will do our utmost to block Milosevic's decision."
In a related development the "Serbian Hawks," the paramilitary
wing of the Serb Royalist Movement, warned it will transform
itself into a terrorist group and kill 100 UNPROFOR soldiers
for every Serbian life lost if NATO or any other Western power
carries out an invasion against Bosnian Serbs. The group also
said that Serbia is "plagued by pacifism and vowed to rid the
country of "this plague," said a spokesman, adding that the Serbian
Hawks are currently training about 350 young volunteers near
Subotica in Vojvodina. Radio Serbia and Austrian TV carried the
reports. -Milan Andrejevich

MILOSEVIC MEETS OPPOSITION. Belgrade media reported on 12-13
May that Serbian President Slobodan Milosevic conducted talks
with leaders of nearly all the party organization committees
represented in Serbia's national assembly. The reports say that
the talks focused on the Vance-Owen peace plan for Bosnia-Herzegovina
and the forthcoming joint session of the assemblies of the rump
federation, Serbia, Montenegro, and the self-proclaimed legislatures
of the Bosnian and Croatian Serb republics due to be held in
Belgrade on 14 May. Representatives of the ruling Socialist Party,
the Democratic Party, DEPOS coalition, and the Democratic Community
of Vojvodina Hungarians expressed their approval of the peace
plan and most supported the idea of the joint parliamentary session.
The Serbian Radical Party, the second largest party represented
in the federal and Serbian assemblies, opposes the peace plan,
but agrees that an All-Serb parliament should convene sometime
after the Bosnian Serb referendum. DEPOS representatives welcome
the peace plan but are divided over the issue of the joint session
of parliaments. Vuk Draskovic, leader of the Serbian Renewal
Movement and the major party in DEPOS, said the proposed session
"has neither constitutional nor lawful justification." -Milan
Andrejevich

CZECH REPUBLIC TO UNBLOCK TRANSFER OF SHARES TO SLOVAKS. On 12
May the Czech government reversed its decision of 17 March to
freeze the transfer of shares in Czech companies to Slovaks who
purchased them in 1992 under the voucher privatization scheme.
The 17 March decision was designed to put pressure on the Slovak
government to be more forthcoming in dealing with settling disputes
over the former Czechoslovakia's assets and pay back what the
Czech government claimed were Slovakia's debts to the Czech Republic.
However, the move was criticized by international business community
and it delayed the privatization process in the Czech Republic.
The decision to unblock the transfer of shares follows talks
between Czech and Slovak officials on 7 May, during which some
progress in settling mutual property claims was achieved. Czech
Prime Minister Vaclav Klaus told reporters on 12 May that shares
will be issued to both individual Slovak shareholders and investment
funds. -Jiri Pehe

SOLIDARITY GIVES GOVERNMENT A "LAST CHANCE." Meeting in Gdansk
on 12 May, Solidarity's national leadership decided to present
the government with an ultimatum in the ongoing wage conflict,
but stopped short of demanding an immediate vote of no-confidence.
The union instead voted to call a national "strike alert" beginning
13 May. Industrial workers are to stage strikes to show solidarity
with the 600,000 teachers and health care workers who have been
holding a general strike to demand pay increases since 10 May.
Should the government fail to yield to Solidarity's demands by
18 May, the union's parliamentary caucus will submit a motion
to remove the government and, that failing, call a general strike.
Solidarity would need the support of other parliamentarians to
lodge a no-confidence motion, and finding suitable allies may
be difficult. -Louisa Vinton

SUCHOCKA FIRM ON STRIKES. Prime Minister Hanna Suchocka met personally
with union representatives from the Walbrzych region and assured
them of the government's concern for their problems. This move
improved the climate of negotiations, and the text of a new resolution
on restructuring the depressed region was quickly hammered out.
This agreement seems likely to end the Walbrzych strike. The
prime minister also met with parliamentary party leaders on 12
May; for the first time, representatives of all the Sejm caucuses
attended. Suchocka called the meeting to drum up support for
the legislative package linked with the "pact on state firms,"
which the Sejm is to debate during its current session. In remarks
to reporters, Suchocka stressed that the government's approach
is business as usual, despite the strikes. Those demanding the
government's ouster, she said, need to ask themselves what would
come next. "Printing worthless money is no solution," she continued.
"We want to give the budget sphere wages that have value, and
only an effective economic system can ensure this." Deputy Prime
Minister Pawel Laczkowski reported that, in keeping with the
president's request, a review of the state's finances had been
conducted. "There is no money," he said. -Louisa Vinton

HUNGARIAN PROSECUTOR ON MONEY TRANSFERS TO MOSCOW. A spokeswoman
told MTI on 12-May that the chief prosecutor will not press charges
against officials of the Hungarian Socialist Workers' Party who,
between 1950 and 1987, channeled at least $14-million to a solidarity
fund set up by Moscow to sponsor communist parties worldwide.
She said that an investigation of the case completed last March
found that leading officials of the Hungarian National Bank and
the communist party acted in accordance with regulations in effect
at the time and committed no crime. The statement came in reaction
to a formal request to the prosecutor by a Hungarian Democratic
Forum parliamentary deputy and a university teacher to renew
the investigation and press charges against the officials. -Edith
Oltay

REVIVAL OF EXTREME RIGHT IN ROMANIA. A communique released at
a press conference of the Democratic National Salvation Front
on 11 May condemned the revival of the "Legionary phenomenon,"
Radio Bucharest reported on the same day. The legion of the Archangel
Saint Michael was Romania's interwar fascist movement. The statement
singled out the Movement for Romania and the Party of the National
Right. According to a Rompres dispatch of 11 May, at a news conference
at the end of last week the leader of the Movement for Romania,
Marian Munteanu, said he admires the legion's "organizational
formula and iron discipline." Munteanu added that unlike the
legion, however, his party believes in the values of democracy
and repudiates violence. Nonetheless, the press conference ended
in listening to a recorded 1937 speech of the legion's leader,
Corneliu Zelea Codreanu and the legion's anthem was played. -Michael
Shafir

BULGARIANS IN IRAQ. Zemya of 12 May reports of a visit to Iraq
by two prominent Bulgarian deputies, Zahari Zahariev of the Bulgarian
Socialist Party and Ivan Palchev of the Movement for Rights and
Freedoms. On this first trip to Iraq by Bulgarian legislators
since the 1991 Gulf War, Zahariev and Palchev met with foreign
minister Tariq 'Aziz, the chairman of the Iraqi parliament, and
other top officials. Citing previously close economic ties, Baghdad's
$1.5 billion debt to Bulgaria, and the fact that Iraq remains
a key player in the Middle East, Zahariev said the intention
behind the trip was to "clear a passage toward normalization"
of bilateral relations. He noted that Bulgaria could already
resume export of items not covered by the United Nations embargo,
such as pharmaceuticals and food products. -Kjell Engelbrekt


UKRAINE'S TRADE TIES WITH TURKMENISTAN, IRAN. In its search for
ways of reducing its dependence on Russia for sources of energy,
Ukraine is continuing to develop trading relations with Turkmenistan,
Iran, and the Gulf States. On 12 May several new Ukrainian-Turkmen
agreements were signed in Kiev fixing the terms and mechanisms
of trade between the two states whereby Ukraine will receive
natural gas and cotton from Turkmenistan in return mainly for
industrial and agricultural products, Ukrainian Radio reports.
Meanwhile, a Ukrainian parliamentary delegation headed by Speaker
Ivan Plyushch has been visiting Teheran this week. Last week,
a governmental delegation headed by Deputy Prime Minister Yulian
Yoffe was also in Iran. On 13 May Radio Ukraine accused Ostankino
TV of deliberately spreading disinformation by alleging that
Ukraine is selling rockets to Iran. -Bohdan Nahaylo

OPPOSITION PARTIES ENDORSE BELARUS REFERENDUM. Representatives
of eight opposition parties and movements have endorsed a proposal
put forward by Supreme Soviet Chairman Stanislau Shushkevich
calling for a national referendum on Belarusian neutrality and
its participation in the CIS collective security pact. Radiefakt
reported on 12 May that apart from the neutrality issue, the
opposition representatives insisted that the referendum also
ask people to vote on the disbanding of the Supreme Soviet and
the early holding of elections. Ustina Markus

GAGAUZ AUTONOMY IN MOLDOVA AT HAND. Moldova may be about to become
the first post-communist state in Eastern Europe to grant territorial
autonomy to an ethnic minority. The parliament began on 11 May
to debate a draft constitutional law on Gagauz territorial autonomy,
which should come to a vote in the next few days. Prepared by
a joint commission of Moldovan and Gagauz representatives, the
document establishes a self-governed territory in southern Moldova
encompassing almost the entire Gagauz population, with locally
elected political and administrative bodies endowed with substantial
powers and also with full cultural autonomy. The Gagauz in turn
recognize Moldova's sovereignty and territorial integrity, thus
settling for less than a Gagauz republic as they have been demanding
since 1990. The draft requires a two-thirds majority for passage,
and the Popular Front and its allies may try to block it because
it provides for Gagauz self-determination if Moldova "forfeits
its state independence" (i.e. unites with Romania). -Vladimir
Socor

SECOND LIST OF ESTONIAN ENTERPRISES TO BE PRIVATIZED. On 12 May
the Estonian State Property Department Council approved the second
list of 46-state enterprises that will be privatized, primarily
in light industry, but including timber, furniture, and metal
industry firms as well as Tallinn's Viru Hotel, BNS reports.
The Eesti Erastamisettevote Privatization Company, modeled on
the German Treuhand, has decided on the purchasers of 25 of the
38 enterprises in the first list. After determining which enterprises
can be sold to foreign investors, the full list will be published.
-Saulius Girnius

ESTONIA, EC SIGN 10-YEAR FISHING PACT. On 12-May in Brussels
Estonian ambassador to the EC Clyde Kull signed a 10-year fishing
pact between the EC and Estonia, Western agencies report. Danish
ambassador Niels Henrik Sliben signed on behalf of the EC since
Denmark is currently holding the EC presidency. The accord offers
fishermen from Estonia and the EC's 12-nations access to each
other's markets and to fishing waters in the Baltic. Both sides
agreed to yearly consultations and joint efforts to conserve
fish stocks. -Saulius Girnius

GRACHEV TO VISIT LITHUANIA. On 12 May Lithuanian Defense Minister
Audrius Butkevicius told a press briefing in Vilnius that his
Russian counterpart, Pavel Grachev, will pay an official visit
on 16-18 May, Radio Lithuania reports. Butkevicius said that
he has also invited his Latvian and Estonian counterparts to
use the occasion to meet with Grachev. There are now 11,800 Russian
troops in Lithuania fully engaged in the withdrawal process,
Butkevicius noted. Grachev will also meet with President Algirdas
Brazauskas and Prime Minister Adolfas Slezevicius. -Saulius Girnius


LATVIA PROTESTS NAVAL MANEUVERS. Radio Riga reported on 12 May
that the Latvian Foreign Ministry has sent a protest note to
Moscow concerning the maneuvers of Russia's Baltic Fleet. These
exercises, involving the firing of missiles and other weapons
from 11 to 15-May, effectively halts the activities of Western
Latvian commercial ports. The Latvian authorities were not consulted
when the maneuvers were being planned, but later the Baltic Fleet
leadership said that the missile firing would be limited to 14
May. -Dzintra Bungs

LATVIA INVESTIGATES $400-MILLION FRAUD. Local media reported
on 10 May that a special committee headed by Deputy Finance Minister
Valentina Andrejeva will investigate the emission and attempted
sale of promissory notes worth $400 million. The notes, issued
in December 1992 as collateral for credits to modernize the Broceni
cement and slate plant, were not properly backed and authorized;
if sold, they could have led to Latvia's bankruptcy. The credits,
which were to have come from German investment firms, were not
received. After reporting irregularities concerning the notes,
Latvia's Investment Bank President Ilze Jurkane resigned on 30
April. The committee and the Supreme Council are inquiring about
the role played by Jurkane, former Finance Minister Elmars Silins,
director of the Broceni plant Juris Reisons, and Architecture
and Construction Minister Aivars Prusis. The notes have been
declared invalid. None of them were sold, thus Latvia has not
suffered financial losses, but the EBRD has temporarily suspended
credits to Latvia. -Dzintra Bungs

[As of 1200 CET]

Compiled by Ustina Markus and Charles Trumbull











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