Human life is but a series of footnotes to a vast obscure unfinished masterpiece. - Vladimir Nabokov
RFE/RL Daily Report

No. 126, 6 July 1994

                              RUSSIA

CLINTON ON REFORMS IN RUSSIA. Speaking in Washington before a
group of business leaders on 5 July, US President Bill Clinton
said the Russian government deserved "enormous credit" for staying
on the path reform, an RFE/RL correspondent reported from the US
capital. Clinton was quoted as saying that "slowly, but surely,
reform is working in Russia." He said that while life for many
Russians was still difficult, the people now had "tangible"
reasons for hope. The US president noted that Russian President
Boris Yeltsin would be a full participant in political discussions
at the upcoming G-7 summit in Naples.  Vera Tolz, RFE/RL, Inc.

ZHIRINOVSKY DECLARED UNWELCOME IN VIENNA. Ultranationalist leader
Vladimir Zhirinovsky's remarks at a meeting of the CSCE in Vienna
on 5 July provoked a sharp protest in Austria, AFP reported. The
president of Austria's parliament, Heinz Fischer, declared
Zhirinovsky unwelcome at a reception in parliament for the
meeting's delegates. Earlier in the day, Zhirinovsky outraged the
meeting on European unity by saying Europe should be divided again
and that Russia would win a third world war.  Vera Tolz, RFE/RL,
Inc.

DOES RUSSIA FACE "DEINDUSTRIALIZATION?" Echoing criticisms that
have become standard fare in transitional economies suffering from
deep recessions, the chairman of the State Duma's economic policy
committee charged on 5 July that the government's fiscal policies
are destroying national industries. In a report presented to the
parliament to open a debate on Russia's current social and
economic situation, Sergei Glazev argued that the government's
stress on fighting inflation has proved too crippling a blow to
Russia's industries. The continued pursuit of current policies
threatens "deindustrialization" that could reduce Russia to the
third-world status of a raw materials exporter, he argued. Glazev
noted that output has dropped far more drastically in
technologically-advanced branches, such as machine-building and
defense, than in mining and other raw materials sectors. Other
speakers argued that criminal operations have perverted new
economic freedoms, and faulted voucher privatization for failing
to establish clear ownership and leaving industrial
decision-making in the hands of poorly organized employee and
management bodies. Glazev demanded policy changes to protect
threatened industries, Interfax reported. Government supporters
have argued, in contrast, that huge statistical drops in
production distort the true picture of the economy; the recession
also reflects the cleansing impact on output of real prices and
tight credit, they say.  Louisa Vinton, RFE/RL, Inc.

PROBLEMS FACED BY FEDERAL COUNTERINTELLIGENCE SERVICE. The Federal
Counterintelligence Service (FSK) supports President Yeltsin's
decree on combat against organized crime, but faces legal problems
with respect to its implementation, ITAR-TASS reported on 29 June,
quoting FSK director Sergei Stepashin. Stepashin blamed the court
system, the State Procuracy, and the Russian legislature for
ineptness in combating corruption. Although investigating
corruption among high ranking officials is backed by President
Yeltsin, Stepashin said, the Procuracy is reluctant to open legal
cases against such officials. Stepashin also admitted that his
agency faced difficulties in shutting down leaks of information,
attributing the problem to the fact that the FSK inherited many
officers from the Soviet KGB who lack democratic convictions.
Stepashin called for adoption of a law aimed at rectifying this
problem.  Victor Yasmann, RFE/RL, Inc.

LEBED AIMING HIGH? The command of Russia's 14th Army in Moldova
has leaked to the press in Tiraspol the results of a purported
opinion survey among officers of the Moscow garrison and staffs of
Moscow military academies, Basapress reported on 28 June and 2
July. Of the 1,867 respondents in the sample, 84% favored a full
shakeup of the Russian Defense Ministry's senior staff; 76%
favored Lt.-Gen. Aleksandr Lebed, commander of the 14th Army, for
the post of Defense Minister, with 19% favoring Col.-Gen. Boris
Gromov, and 3.5% favoring Gen. Mikhail Kolesnikov. An unspecified
majority blamed the incumbent minister, Gen. Pavel Grachev, for
dragging his feet on military reform. Lebed himself has, in past
interviews, indicated frustration with his long-time protector
Grachev's performance on military reform. Whatever the accuracy of
the survey in Moscow, the fact that it was leaked by Lebed's staff
may reflect a stake in its purported findings. Vladimir Socor,
RFE/RL, Inc.

                  TRANSCAUCASIA AND CENTRAL ASIA

PERES IN TURKMENISTAN. Israeli Foreign Minister Shimon Peres,
accompanied by Israeli businessmen and economic experts, began an
official two-day visit to Turkmenistan on 5 July, Russian news
agencies reported. Peres met with Turkmen President Saparmurad
Niyazov to discuss economic cooperation between the two countries;
the Israeli foreign minister told a news conference later that he
had also discussed Muslim fundamentalism and the political
situation in Central Asia and the Middle East with Niyazov. The
Turkmen president insists that Muslim extremism is no threat to
his country. Russian sources noted that Turkmenistan is
particularly interested in Israeli food-processing know-how. Bess
Brown, RFE/RL, Inc.

IRAN BLASTS PERES VISIT. The semi-official Tehran Times, other
newspapers, and Tehran Radio have sharply criticized the visit of
Israel's foreign minister, Shimon Peres, to Uzbekistan and
Turkmenistan, Western agencies report. Remarkably, the criticism
focused as much on Uzbekistan's leadership as on Peres; the Tehran
Times said that Uzbek President Islam Karimov had been reinforcing
dictatorial rule through a "brutal repression of democratic and
Islamic forces." The Iranian comments apparently mark a rapid
deterioration of relations between the two countries, which had
seemed close to a rapprochement when Iranian president Ali Akbar
Rafsanjani visited Tashkent in October 1993. Disagreements between
the governments over Tajikistan, Afghanistan, and the
implementation of bilateral accords, as well as the resurgence of
hardliners in the Iranian government have all strained bilateral
relations over the last months. Turkmenistan, Peres' last stop,
was apparently not criticized by the Iranian media; the two
neighboring countries have established close, friendly relations.
Keith Martin, RFE/RL, Inc.

                               CIS

RUSSIAN PEACEMAKING IN CIS PRAISED BY "DNIESTER" LEADER. The
liberal, pro-Yeltsin Rossiiskie vesti and the procommunist
opposition's Sovetskaya Rossiya published on 5 July separate
interviews with "Dniester republic" leader Igor Smirnov arguing
the case for Russian peacemaking in the "near abroad," a topic on
which he had recently been invited to speak at an international
conference on the subject organized in Moscow by the Russian
government. According to ITAR-TASS, Smirnov said in the interviews
that the "Dniester," Abkhaz, and Ossetian peoples were grateful
for Russian peacemaking, that only Russian troops could function
as "blue helmets" in CIS states, and that the latter ought to
finance Russian peacemaking. He also chastised Western reluctance
to legitimize and finance Russia's operations. A citizen of the
Russian Federation, Smirnov said that Moldovans and Ukrainians on
the Dniester "consider themselves Russian" and that the region
(only 25% Russian and situated 1,000 kilometers from Russia) is
"ancestral Russian land." He said that talk of Russian military
bases in Moldova is unnecessary since the "Dniester republic"
wants Russia's 14th Army to stay where it already is.  Vladimir
Socor, RFE/RL, Inc.

"UNRECOGNIZED STATES" SIGN "TREATY." During the last days of June,
a delegation from South Ossetia, headed by its Supreme Soviet
Vice-Chairman, Z. N. Naseev, signed in Tiraspol a "treaty of
friendship and cooperation" with the "Dniester republic,"
Basapress reported on 29 June and 4 July. Abkhazia and "Dniester"
had signed a similar document in Tiraspol in 1993. At a conference
in the same city in May 1994, Abkhazia, South Ossetia, Karabakh,
and "Dniester" founded an "Association of Unrecognized States,"
invited others from the former USSR to join, and endorsed
integration within the CIS.  Vladimir Socor, RFE/RL, Inc.

                    CENTRAL AND EASTERN EUROPE

US PRESIDENT APPROVES RFE/RL MOVE TO PRAGUE. International and
Czech media report that US President Bill Clinton approved the
relocation of Radio Free Europe/Radio Liberty from its
headquarters in Munich to Prague. A White House statement issued
on 5 July said Clinton had accepted the offer of the Czech
government to make the former parliament building in Prague
available for RFE/RL. The decision is subject to congressional
approval; consultations are currently under way. The statement
said that in making the decision, Clinton praised the radios for
making a "significant contribution to the victory of freedom
during the Cold War." He also expressed thanks to the German
government and, in particular, to Bavarian officials for their
support over the last four decades. "With this move, the radios
begin a new chapter in continuing struggle to consolidate
democracy throughout the former communist bloc," said Clinton. The
statement said Clinton made the decision "only after being
assured" by RFE/RL, the Board for International
Broadcasting--which administers the two radios--and the US
Information Agency, that the move could be completed within the
budget limits set by the Congress.  Jiri Pehe, RFE/RL, Inc.

CLINTON ARRIVES IN RIGA. Clinton arrived in Riga on 6 July and was
welcomed by the presidents of Estonia, Latvia, and Lithuania and
Latvian government officials. On the eve of his arrival, Russian
demonstrators accused Latvia of promoting "fascism" and
"apartheid" because they had not been granted Latvian citizenship.
Latvian protesters, in contrast, demonstrated for the speedy
withdrawal of Russian troops from Latvia and the removal of US
objections to the citizenship law passed by the Latvian
parliament. The Baltic presidents focused on security issues.
Estonia's Lennart Meri said that "the colonial and expansionist
tradition [in Russia] is still strong and that is worrying us."
Latvia's President Guntis Ulmanis said that the Baltic States want
"a guarantee that they will no longer be occupied," Western media
reported on 5 July. Dzintra Bungs, RFE/RL, Inc.

YELTSIN LINKS TROOP PULLOUTS TO RUSSIAN MINORITIES. Prior to his
departure for Latvia, Clinton telephoned his Russian counterpart,
Western media reported on 5 July. President Yeltsin expressed "his
concern over the unending violations of the rights of the
Russian-speaking population in Latvia and Estonia," according to a
statement released by the Russian president's office. Yeltsin
added that if the Baltic States cancel "discriminatory
legislation, Russia will be prepared to sign a schedule for
withdrawing its troops." Similar accusations were expressed in
stronger terms by Abdullakh Mikitaev, chairman of the Russian
president's commission on citizenship, Interfax reported on 5
July. Mikitaev termed what was happening to "our compatriots" in
Estonia and Latvia as "genocide." He added Estonia and Latvia
should grant citizenship to every resident who wants it and noted
that 80% of the "Russian-speaking" populations want to stay in
those countries. As of 1 July the Russian embassies in the Baltics
had granted Russian citizenship to 42,000 residents of Estonia,
25,000 residents of Latvia, and 15,000 residents of Lithuania.
Dzintra Bungs, RFE/RL, Inc.

ESTONIAN-RUSSIAN BORDER CONFLICT. On 5 July the Estonian Foreign
Ministry's Press Secretary, Mari-Ann Rikken, told Interfax that
the ministry will not officially respond to the Russian Foreign
Ministry's statement of 4 July declaring that the law on borders,
which Estonia adopted on 30 June, has opened the Estonian-Russian
border and the whole region to destabilization. She noted that
Russia had not properly examined Estonia's previous statement in
which Estonia expressed its willingness to work out "mutually
acceptable solutions to the problem with no haste and mutual
accusations." She also noted that the meeting that day in Geneva
between Russian and Estonian Deputy Foreign Ministers Vitalii
Churkin and Raul Malk had made "no breakthrough" on the issues of
the Russian troop withdrawal from Estonia and residence permits
for military retirees. This was the fourth such meeting between
the two deputy foreign ministers since an agreement to hold talks
on the subject was reached in May.  Saulius Girnius, RFE/RL, Inc.

BOSNIAN PEACE PLAN BEING PRESENTED. International media reported
on 5 July that the foreign ministers of the US, Russia, and EU
countries had agreed on a map that would give the Bosnian Croats
and Muslims together some 51% of the embattled republic's land and
the Serbs 49%. The Serbs make up less than a third of the
population but have conquered some 70% of the republic, and it is
not clear exactly how the major powers intend to get them first to
withdraw and then to come to an overall political settlement with
their neighbors. It appears, however, that a carrot-and-stick
approach is in the offing, with the Muslims threatened with an
easing of sanctions on Serbia if President Alija Izetbegovic's
government balks, while the Serbs could face the lifting of the
arms embargo on the Muslims if the Radovan Karadzic leadership
proves too stubborn. Russian Foreign Minister Andrei Kozyrev
called the approach "a peaceful ultimatum," while his US
counterpart warned the Bosnian factions that they would be
ill-advised to reject the plan. No details have been made public,
but both CNN and Newsweek have shown what they say is the final
map. Reuters quoted Izetbegovic as saying that "our answer will
not be some radical 'no,'" but Prime Minister Haris Silajdzic
charged the plan would legitimize mass murder and "ethnic
cleansing." Patrick Moore, RFE/RL, Inc.

UN SAYS SERBS BEAT MUSLIMS OUTSIDE ITS DOOR. The New York Times
and the Washington Post report on 6 July that officials
representing the UN High Commissioner for Refugees charge that
Serb police beat up 40 Muslims on 4 July. The civilians were
waiting outside UNHCR offices to file their requests for
evacuation when the Serbs attacked. A UN spokesman said that
"beating people up right outside the United Nations office is
taking things to a new level of intimidation." There is an
additional element of irony to the story, in that the evacuation
of Muslim and Croat civilians actually serves the Serbs' goal of
"ethnically cleansing" the Banja Luka area. Meanwhile in Croatia,
the press and top officials continue a prominent theme of recent
weeks in stressing that UNPROFOR must cease being a de facto
protector of Serb conquests in Croatia if Zagreb is to renew its
peace-keeping mandate and if a new Serb-Croat war is to be
avoided.  Patrick Moore, RFE/RL, Inc.

KOSOVO UPDATE. "The Kosovo crisis could reach a crucial point in
the coming weeks." This is how the Frankfurter Allgemeine Zeitung
on 4 July described the chances for a dialogue between the ethnic
Albanian "shadow state" and the Serbian government. Kosovar
President Ibrahim Rugova said that the Albanians are ready for
negotiations under international mediation, adding that talks
about autonomy could resume as a first step towards independence.
To date officials of Rugova's Democratic League of Kosovo (LDK )
have ruled out the return of the self-declared republic to some
sort of autonomy within rump-Yugoslavia, arguing that a referendum
for independence was held in 1991 and that only another referendum
could change their policy. Now, however, Rugova says he is "open
to all kinds of proposals," but said that Kosovo should be
declared either an EU or UN protectorate to help build up a civil
administration. The LDK's party congress is scheduled for July.
Elsewhere, trials of 14 Albanians charged with founding an alleged
Defense Ministry of the Republic of Kosovo continued in Pristina,
Rilindja reported on 1 July. The paper charged that the detainees
had been tortured.  Fabian Schmidt, RFE/RL, Inc.

CRACKDOWN ON RADIO AMATEURS IN RUMP-YUGOSLAVIA. Since the
leadership of the rump-Yugoslav Amateur Radio Association banned
the broadcasting of humanitarian messages in March, most hams have
stopped broadcasting, The Humanitarian Law Fund reported on 30
June. That ban was followed by even further limitations by the
defense minister on 19 April, who forbade the transmission of
messages without the specific approval of the ministry for
transport and communications. The measures are allegedly aimed at
"harmonization of amateur radio frequencies with the needs of the
army." Infringements allegedly committed by hams included: failing
to identify the radio station linking the amateur radio with the
telephone network, passing messages with suspicious contents and
thus "providing logistical support to the enemies of the Serb
people," and working with Muslim radio stations in Bosnia and
Sandzak as well as with others in Kosovo. Media in Serbia had
formerly reported favorably about the work of radio amateurs, who
kept contact between displaced persons and their relatives in
Bosnia. Fabian Schmidt, RFE/RL, Inc.

BAN ON SERBIAN PRESS IN MACEDONIA. On 5 July Reuters and on 6 July
Politika reported that Macedonia has prohibited the import and
distribution of a number of rump Yugoslav publications. However,
prominent and independent Serbian dailies, notably Politika and
Borba, remain available. Evidently among the most contentious
publications from the Macedonian perspective is the propagandistic
and state-backed Serbian daily Vecernje novosti which, according
to an anonymous Macedonian Interior Ministry source, has been
notorious for "not objectively portraying the situation in
Macedonia." Stan Markotich, RFE/RL, Inc.

ZHELEV APPEALS FOR BALKAN ECONOMIC COOPERATION, REJECTS LAW. On 5
July AFP reported, citing the Turkish daily Milliyet, that
Bulgarian President Zhelyu Zhelev used an official state visit to
Turkey to launch an appeal for regional economic cooperation.
Meanwhile, on 5 July RFE/RL's Bulgarian service reported that
Zhelev had recently requested that parliament reconsider a law
that could effectively limit service in the nation's highest
courts. Zhelev outlined his objections to the legislation in a
seven-page document in which he concluded that at least parts of
the law are unconstitutional. If the law is not revoked or
amended, only individuals with at least five years experience as
justices or prosecutors will be able to sit on the highest courts,
thereby effectively restricting the country's highest judicial
offices to persons who served during the communist era.  Stan
Markotich, RFE/RL, Inc.

RUSSIA SUPPORTS KEBICH FOR BELARUSIAN PRESIDENCY. While the
maverick Alyaksandr Lukashenka appears to have won the hearts of
many ordinary Belarusians in his bid for the presidency, Prime
Minister Vyacheslau Kebich is still the choice of the
establishment. On 5 July Kommersant reported that the Russian
deputy prime minister, Aleksandr Shokhin, told a press conference
that if a "new man" were to be elected president of Belarus, the
agreements regarding the Russian-Belarusian monetary union would
have to be "renegotiated from the start." He also downplayed the
widely publicized meeting between Russian Prime Minister Viktor
Chernomyrdin and Lukashenka during Chernomyrdin's visit to Minsk,
stressing that it did not last more than five minutes and took
place during a ceremony honoring Belarus's WW II dead. Kebich is
also the choice of the Popular Movement of Belarus (PMB), the
umbrella organization for conservative and pro-Russian parties and
movements. In the first round, the PMB supported Vasil Novikau,
leader of the Party of Communists of Belarus. On 1 July Interfax
reported that PMB leaders had issued a statement supporting Kebich
in the second round of elections, saying he was "the most reliable
guarantor for a union with Russia and domestic stability." Ustina
Markus, RFE/RL, Inc.

ROMANIAN LEADERS EYE FORMER TIES WITH RUSSIA. President Ion
Iliescu told a news conference in Bucharest on 4 July that Russia
"has been, is, and will remain a great power, the largest country
in the world...and remains our great neighbor, even if it does not
directly border on Romania today." The remarks were reported by
ITAR-TASS but not by Romania's official media. The latter did,
however, on 1 July quote Romanian Prime Minister Nicolae Vacaroiu
as noting both governments' wish to "overcome this unnatural
regress in our bilateral relations" and "return to the normal,
traditional dimensions of our relationship." Vacaroiu proposed
reactivating joint Russian-Romanian projects in the extractive
sector in Russia and in the metallurgical, machine-building, and
chemical industries in Romania--a pattern of economic relations
which had developed among the two countries in the last years of
communist rule.  Vladimir Socor, RFE/RL, Inc.

ROMANIAN SENATE PROTESTS FRENCH SOCCER REPORT. Romania's Senate on
5 July voted to convey a strong protest to the French Foreign
Ministry, the French embassy in Bucharest, and Agence France Press
over an AFP report on Romania's 3-to-2 victory over Argentina on 4
July. An AFP reporter used the word "Tsigan" (Gypsy) in the
context. Senator Emil Tocaci from the Party of Civic Alliance said
during the debates that the report's wording was reminiscent of
Vladimir Zhirinovsky's insulting statements about Romanians. In an
interview with Rompres, Romanian Premier Nicolae Vacaroiu joined
in the protest and asked AFP to retract the commentary. In a fax
to Rompres, AFP apologized and explained that the word was used to
evoke the generally recognized virtuosity of Gypsy musicians. The
editors, the communique added, were unaware of the word's
offending nature.  Dan Ionescu, RFE/RL, Inc.

CONTROVERSIAL ARCHEOLOGICAL DIGS IN CLUJ APPROVED. In a statement
broadcast by Radio Bucharest on 5 July, the ultranationalist mayor
of Cluj, Gheorghe Funar, said that the town council had approved,
in an extraordinary session, the start of archaeological digs in
Unity Square. According to Funar, the excavations will not affect
either King Matthias Corvin's statue or the Catholic cathedral
there. The controversial Cluj mayor accused the Hungarian
Democratic Federation of Romania of having tried to block the
excavations. Funar's earlier plans to move King Matthias's statue
from the center of Cluj had triggered heavy protests from the
Hungarian minority in Transylvania.  Dan Ionescu, RFE/RL, Inc.

HUNGARIAN MILITIA MEMBERS DENY 1956 GUILT. On 5 July, Judge Janos
Strausz of the Budapest District Court concluded a hearing of
twelve former members of the special militia unit that helped to
put down the 1956 revolution, MTI reports. The men are charged
with firing into a defenseless crowd in the city of Salgotarjan on
8 December 1956. At least 46 people were reported killed.
According to MTI, none of the twelve pleaded guilty. Lajos Orosz,
who had previously acknowledged firing into the crowd and admitted
his guilt, withdrew his previous testimony. The judge was then
forced to read the protocol of previous hearings in which Orosz
made references not only to his own guilt but to the wrongdoing of
others who are now charged with crimes against humanity. The trial
is scheduled to continue on 7 July.  Judith Pataki, RFE/RL, Inc.

POLAND'S BROADCASTING COUNCIL SURVIVES REVIEW. The Sejm voted on 2
July to approve the National Broadcasting Council's first annual
report, prolonging the embattled body's existence for another
year. The council, which supervises public broadcasting and issues
radio and TV licenses, won approval by an unexpectedly large
margin; the vote was 255 to 16, with 41 abstentions. The council
was criticized from all sides, however, particularly for
appointing Wieslaw Walendziak to head public television. Left-wing
deputies charged that Walendziak has a right-wing bias, while
right-wing parties accused him of catering to the government's
whims in news reporting. The Sejm vote was crucial, as the council
reports to the three institutions--the Sejm, Senate, and
president--that selected its nine members. If all three reject the
annual report, the council is dissolved and new members are
selected. President Lech Walesa had long indicated his hostility
to the council's membership, and the Senate had already rejected
the report on 1 July, by a vote of 35 to 10, apparently because
Polish TV aired a satirical program the night before the vote that
peasant deputies found demeaning. The Sejm seemed to prefer to
avoid giving Walesa the final say on the council's future.  Louisa
Vinton, RFE/RL, Inc.

IRAQ'S FOREIGN MINISTER IN PRAGUE. On 5 July Czech Foreign
Minister Josef Zieleniec told visiting Iraqi Foreign Minister
Muhamad Said Kazim Al-Sahhaf that it is in Iraq's interest to
accept conditions set by the UN Security Council so that trade
sanctions against Iraq could be lifted. The sanctions were imposed
after Iraq invaded Kuwait in August 1990. Recognition of the
existing Iraq-Kuwait border is one of the conditions for having
them lifted. CTK quotes Zieleniec as saying Iraq and the Security
Council are still at odds over the border issue. He said Sahhaf
showed an accommodating approach. Meanwhile, Czech President
Vaclav Havel told journalists in Prague on 5 July that he had not
known about Sahhaf's visit until last week. He said he was assured
it did not change Prague's "firm determination" to maintain the
sanctions against Iraq. Havel said Sahhaf's visit was the subject
of a telephone conversation he had with US President Bill Clinton
on 4 July, while on a private visit to the US. He said he
expressed to Clinton a "certain doubt about the propriety of this
visit." Jiri Pehe, RFE/RL, Inc.

PRIVATIZATION IN UKRAINE CRITICIZED. On 4 July Ukrainian
television carried a report blasting the slow pace of growth of
small private enterprises in Ukraine. According to the report
there are some 70,000 registered small enterprises in Ukraine,
although the real number of such businesses is actually closer to
130,000. Only some 130 of the registered small businesses are
completely independent of government ownership. This is due to
complications in the Law on Small Businesses which prevents many
from registering. According to the deputy minister of economics,
Yurii Ekhanurov, there are currently more obstacles to the
establishment of small enterprises than stimuli for the spread of
such businesses. Only about 5% of all production in Ukraine is
carried out by private enterprises. Ekhanurov claims that the
"instability" of the laws, periodic changes in the "rules of the
game," unfairness in taxation, and other factors hinder the growth
of small enterprises. Under such circumstances he says it is
simply too difficult to engage in production; businesses instead
operate outside of the law in the realm of the "shadow economy"
and do not report their true earnings. This situation, Ekhanurov
says, is the fault of the government and National Bank of Ukraine.
The deputy economics minister also charged that while the bank was
supposed to distribute credits to small private enterprises, the
money allotted for this purpose has instead gone to state
enterprises.  Ustina Markus, RFE/RL, Inc.

MOLDOVA'S ECONOMIC REFORMS PRAISED. In an address in Chisinau on 4
July the US Ambassador to Moldova, Mary Pendleton, said as quoted
by Basapress that "Moldova has, since independence, become an
example with regard to economic reforms, worth being emulated by
other states of the former USSR." She also pointed out that
Moldova's currency is the most stable among the currencies of CIS
states. For his part Valentin Tolkachev, chairman of the
"transnational" Russian electronics firm TVT which is investing in
Moldova, told the Moldovan business weekly Logos Press on 1 July
that Moldova's business climate is favorable, the government
supports foreign investors, and customs duties and VAT are lower
than in Russia.  Vladimir Socor, RFE/RL, Inc.

FRANCE WANTS BALTIC STATES AS EU ASSOCIATES IN 1995. On 5 July,
speaking after a one-day Franco-Danish conference in Copenhagen to
promote closer relations with the Baltic States, French European
Affairs Minister Alain Lamassoure said that his country wants to
see the Baltic States conclude association agreements with the
European Union in the first half of 1995, Reuters reports. France
takes over the six-month rotating presidency of the EU from
Germany in January 1995. He said: "Some of the Baltic States have
problems but they have made great progress economically and
politically since becoming independent" and "France wants them to
continue their gradual process of integration with the rest of
Europe." Saulius Girnius, RFE/RL, Inc.

  [As of 1200 CET]
  Compiled by Stephen Foye and Louisa Vinton
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Please write to us with any comments, questions or suggestions -- Natasha Bulashova, Greg Cole