This communicating of a man's self to his friend works two contrary effects; for it redoubleth joy, and cutteth griefs in half. - Francis Bacon
RFE/RL Daily Report

No. 131, 13 July 1994

                              RUSSIA

GOVERNMENT'S ECONOMIC PROGNOSIS UPBEAT . . . In a report prepared
for discussion at a special government session to be chaired by
President Boris Yeltsin on 15 July, the Russian finance ministry
presented a generally optimistic economic forecast for the rest of
the year. Monthly inflation is set to run at 6-9%, surging to
10-11% in September and October. Production will remain far below
1993 levels, but the decline will stabilize at roughly 25-27%.
According to official statistics, production dropped nearly 26% in
the first half of 1994, with declines as steep as 44% in
machine-building. GDP is expected to be 16-18% below the 1993
level. A $16 billion foreign trade surplus is anticipated for
1994, as compared to $17.5 billion in 1993. Interfax reported on
12 July that more than 200 State Duma deputies have accepted an
invitation to attend the special government session on 15 July.
Louisa Vinton, RFE/RL Inc.

. . . BUT PROBLEMS LOOM. Interenterprise debt and tax arrears
appear to be mounting, however, calling into question the
government's ability to meet revenue targets and draw the line on
deficit spending. Finance ministry officials reported on 11 July
that tax revenues for the first half of 1994 are running at only
64% of the target figure. In response to what officials called a
"deluge of appeals" from struggling enterprises, the government
has earmarked 1.4 trillion rubles ($700 million) for short-term
credits to big firms, although the 1994 budget does not
specifically allocate funds for this purpose. In a report prepared
for the cabinet meeting, the labor ministry noted that 100,000
workers had taken part in strikes in the first five months of
1994--nearly as many as struck in the whole of 1993. Most strikes
were set off by overdue wages; these arrears totaled 3 trillion
rubles ($1.5 billion) in June. Social tension is expected to rise
as the increase in real incomes slows. Despite the drastic fall in
production, consumption has actually increased this year; real
wages rose 11% in the first five months of 1994, and the
population's savings doubled. Unemployment was set at 4.5 million
(or 6% of the work force) in June, although only 1.2 million
(1.6%) are officially registered.  Louisa Vinton, RFE/RL Inc.

KOSTIKOV ON RELATIONS WITH BALTIC STATES. Vyacheslav Kostikov,
Russian President Boris Yeltsin's chief spokesman, was quoted by
BNS on 12 July as saying that "cooperation between Russia and the
Baltics depends on how the political, economic, and social rights
of ethnic Russians living in the region are secured." Kostikov,
whose remarks appear to reflect the obdurate position taken by
Boris Yeltsin in Naples vis-a-vis Russia's military withdrawal
from Estonia, also intimated that Western European governments had
nothing more than words of encouragement to offer the Baltic
States. "Western Europe . . . is unlikely ever to start hurrying
to open its stores for Baltic imports," he said, adding that "the
Baltics real market lies to the east of their borders." Although
suggesting that Estonia and Russia were close to an agreement on a
troop withdrawal deadline, Kostikov said that Moscow would
continue to link that issue to the treatment of retired Russian
military living personnel living in Estonia.  Stephen Foye, RFE/RL
Inc.

SINO-RUSSIAN MILITARY TALKS, AGREEMENT. Russian Defense Minister
Pavel Grachev and his Chinese counterpart, Chi Haotian, signed an
agreement on the prevention of "dangerous military activities" in
Moscow on 12 July, Interfax reported. The document, which is aimed
at preventing clashes along the 2,500 mile Russian-Chinese border,
was said not to be directed at any third country. According to
ITAR-TASS, Russian First Deputy Prime Minister Oleg Soskovets also
participated in the talks, and spoke of growing military-technical
cooperation between the two countries. Reuters, quoting the
Russian news agency, reported that Russia had offered Beijing
assistance in training Chinese military specialists to use advance
Russian Su-27 fighters and S-300 air defense missile systems.
Grachev used the occasion to urge the launching of multi-lateral
consultations on the creation of an Asia-Pacific collective
security system; he also said that the recent death of North
Korean leader Kim Il-sung is unlikely to have a destabilizing
influence on the region. Russian Foreign Minister Andrei Kozyrev
was quoted by Interfax as saying that it would be expedient to
sign a Russian-Chinese treaty on the mutual retargeting of nuclear
missiles during a planned visit of Chinese leader Jian Zemin to
Russia this fall.  Stephen Foye, RFE/RL Inc.

RUSSIA'S DECLINING MILITARY BUDGET? Segodnya's commentator on
military affairs, Pavel Felgengauer, writes in the newspaper's 7
July edition that representatives of Russia's Economics and
Finance Ministries are well aware that the 1994 military budget
fails to cover even the army's most basic needs and that no one in
the government takes seriously the notion that "extra-budgetary"
funding will make a serious dent in the expected shortfalls.
Felgengauer also claims that Finance Ministry officials admit that
actual defense spending for 1994 is unlikely to match the 40.6
trillion rubles officially allocated for defense needs because of
falling tax revenues. He reports, moreover, that to ease mounting
tensions among military personnel the Finance Ministry is devoting
65% of total defense allocations to personnel costs, with the
result that expenditures on procurement, research and development,
and capital construction will amount to only 25% of earlier
planned levels. Representatives of defense enterprises in the
government, according to Felgengauer, are pressing for more rapid
reductions in military personnel as a means of freeing up funding
for the defense industrial sector, a policy that he claims
regional leaders struggling with deteriorating local economies are
also embracing with increasing frequency.  Stephen Foye, RFE/RL
Inc.

LATEST ON PLANNED RUSSIAN-US MILITARY MANEUVERS. The chairman of
the Russian State Duma's defense committee, Sergei Yushenkov, was
quoted by Interfax of 12 July as saying that a Russian-US joint
peacekeeping exercise, originally scheduled to be held in the
Orenburg region of Russia in early July, is likely to take place
in late August-early September of this year. Planning for the
joint maneuvers was put on hold by Yeltsin in May of this year
because of opposition to the exercises in the Russian parliament.
Russian Defense Minister Pavel Grachev has been a strong supporter
of the exercises.  Stephen Foye, RFE/RL Inc.

COUNCIL OF FEDERATION APPROVES LAW ON CONSTITUTIONAL COURT. On 12
July the higher chamber of the Russian parliament, the Council of
Federation, approved the new law on the Constitutional Court by an
overwhelming majority. According to Russian TV, only two deputies
at the session criticized the bill and neither of them insisted on
the amendments suggested earlier by the Council of Federation but
rejected by the lower chamber of the parliament. The
Constitutional Court was set up in November 1991 but its
activities were suspended when President Boris Yeltsin issued a
decree to that effect after he dissolved the old parliament in
October 1993.  Julia Wishnevsky, RFE/RL Inc.

SOLZHENITSYN COMPLAINS OF INADEQUATE PRESS COVERAGE. On 12 July
Ostankino reported that the Nobel Prize winner, Aleksandr
Solzhenitsyn, currently traveling across Russia after two decades
of exile, visited the site of the Brezhnev-era camps for political
prisoners, the city of Perm in the Urals. According to the report,
Solzhenitsyn complained that the Russian media has been providing
"inadequate" coverage of his meetings with the ordinary Russians
during his trip. The writer plans to arrive at his final
destination, Moscow, at the end of July, Interfax reported on 8
July.  Julia Wishnevsky, RFE/RL Inc.

                  TRANSCAUCASIA AND CENTRAL ASIA

RUSSIANS COMMEMORATE TAJIK LOSSES. A ceremony took place on 12
July to commemorate the death of 25 soldiers one year ago at the
12th outpost of the Russian border guards along the Tajik-Afghan
border, Interfax reported. Russian military commanders, Tajik
officials and journalists were present at the wreath-laying
ceremony. The head of the guard's headquarters, Col. Vladimir
Novikov, said that the outpost had since been equipped with more
modern weapons and a larger number of troops; he claimed that no
Russian troops at the outpost had been killed since the 1993
attack, even though the outpost comes under attack at least twice
a week from Tajik rebels and their Afghan supporters. While
Novikov said that "the troops are so confident of their security
that even the servicemen coming on a business trip to the region
want to serve the rest of their conscription term in Tajikistan,"
this contradicts other reports that Russian servicemen and their
families often pay hefty bribes so as to avoid service in
Tajikistan. The 1993 incident was the single bloodiest attack on
Russian border troops in Tajikistan, and prompted Russia to
reinforce its troops all along the border.  Keith Martin, RFE/RL
Inc.

                               CIS

RUSSIA CONTINUES TO CONDITION WITHDRAWAL FROM MOLDOVA. Russian
Deputy Foreign Minister Sergei Krylov visited Moldova on 9 through
11 July for talks with the leadership on the future of Russia's
troops in that country and other bilateral issues. Very little
information has transpired on the visit. In brief remarks to
Interfax on 12 July, Krylov said that the withdrawal of Russia's
14th Army from Moldova is being "impeded by the undefined nature
of Transdniester's status." Similarly, the official release said
that the sides had discussed the troop issue and the Transdniester
settlement, also implying linkage of the two issues. The sides
also discussed the initiation of negotiations with Ukraine
regarding the transit of 14th Army convoys through Ukraine in the
event of a future withdrawal. Meanwhile, the "Dniester"
authorities announced on 12 July the appointment of a new team for
negotiations with Chisinau from which the most intransigent
promoters of secession have been dropped.  Vladimir Socor, RFE/RL
Inc.

RUSSIAN PEACEKEEPERS TOLERATE DNIESTER ARMISTICE VIOLATIONS.
"Dniester" forces illegally occupying a military stronghold in
demilitarized Bendery erected on 12 July protective screens
blocking the view to the site, Basapress reported. Vacated early
this year by a missile unit of Russia's 14th Army, the facility
was to have been turned over to Russian peacekeepers as part of
demilitarizing Bendery, but was occupied instead by "Dniester"
troops now estimated at 300 to 400. The Moldovan side has
repeatedly requested action by the tripartite Control Commission,
but the "Dniester" side has used its right of veto and the Russian
peacekeepers have demurred. The pattern recurred on 12 July when
Russian peacekeepers accepted a "Dniester" decision to deny the
Commission access to the site, Moldova's chief representative,
Maj. Gen. Victor Catana, told Basapress. Moreover, the "Dniester"
defense ministry is currently calling up city residents for
refresher training with local "Dniester" units. Vladimir Socor,
RFE/RL Inc.

                    CENTRAL AND EASTERN EUROPE

MORE ON KUCHMA'S ELECTION. On 11 July UNIAN reported that Leonid
Kuchma was elected as President of Ukraine by gaining the votes
which had gone to Oleksandr Moroz and Volodymyr Lanovy in the
first round of elections. UNIAN also reported that the Congress of
Ukrainian Nationalists (CUN) held a meeting on 10 July after which
one of its leaders, Slava Stetsko, told a press conference that
CUN expected the president-elect to repress that organization.
Kuchma himself addressed the issue of the country's east-west
divide in a 13 July Izvestiya article. According to Kuch-ma, the
"lack of understanding between the two parts of the country can be
overcome if reason prevails." Kuchma had won the majority of votes
in Eastern Ukraine and Crimea while the incumbent president,
Leonid Kravchuk, had been favored in Western Ukraine.  Ustina
Markus, RFE/RL Inc.

NEW SECURITY CHIEF APPOINTED IN UKRAINE. The Ukrainian parliament
approved the appointment of Valerii Malykov as head of Ukraine's
Security service by a vote of 226 to 23, Reuters and Interfax
reported on 12 July. According to Malykov, foreign intelligence
services are active in Ukraine gathering information on the
country's defense industries, nuclear weapons and conventional
weapons, and foreign and internal policies. Malykov replaces Evhen
Marchuk who has been appointed deputy prime minister with
responsibility for security issues.  Ustina Markus, RFE/RL Inc.

TUDJMAN SAYS NO MEETING WITH MILOSEVIC UNTIL SERBIA RECOGNIZES
CROATIA. The 13 July issue of Vecernji list reports at length on
President Franjo Tudjman's regular monthly press conference the
previous day. He was asked about a possible meeting with the
Serbian leader, with whom he has met many times and with whom he
is known to want a comprehensive deal. Tudjman has, however, been
widely criticized for this attitude, and many have pointed out
that Milosevic has taken him to the cleaners every time. Perhaps
in view of this pressure, Tudjman said at the press conference
that he would only meet with the Serbian leader if Belgrade first
recognizes Croatia within its internationally recognized borders,
i.e. including the territories currently held by Serb rebels.
Tudjman also dashed the idea of any kind of federal arrangement
within Croatia involving the Serbian minority, saying it would
constitute an historical step backwards and be "against the
interests of the Croatian people." That same Zagreb daily,
however, ran an article from Belgrade quoting the Serbian
president as saying that the Serbs of Croatia should decide their
future in a referendum, something that would be unacceptable to
the Croatian authorities.  Patrick Moore, RFE/RL Inc.

BRITISH AND FRENCH FOREIGN MINISTERS ON A "SALES TRIP." This is
how the VOA on 12 July described the latest visit by Douglas Hurd
and Alain Juppe to the former Yugoslavia to promote the
internationally-backed plan to partition Bosnia-Herzegovina. The
13 July Vjesnik reports that Tudjman gave the proposal his "full
backing," adding that the Croatian president used the opportunity
to remind the two visitors that Croatia insists that UNPROFOR stop
being a buffer protecting Serb conquests and begin reintegrating
the territories under its control into Croatia. Impatience is once
again on the rise in Croatia over the occupied territories. That
republic signed the Vance plan in January 1992 under the
assumption that those lands would be reintegrated, a point that
Zagreb has stressed repeatedly in renewing UNPROFOR's mandate
several times and in accepting the Washington agreements in March
1994. At issue is the right of refugees to return to their homes
and Croatia's need to restore the unity of its infrastructure.
Polls, however, suggest that the population does not trust the UN,
and UNPROFOR is popularly dubbed SERBPROFOR.  Patrick Moore,
RFE/RL Inc.

BOSNIAN UPDATE. In a series of developments that has often
bordered on the surreal, UN chief envoy Yasushi Akashi has spent
several days trying to persuade the various factions to renew for
another month a cease-fire that has been little respected. The
Serbs accepted earlier, and on 12 July Bosnian Vice President Ejup
Ganic agreed on behalf of his government while President Kresimir
Zubak approved in the name of the new Croat-Muslim federation.
Also in Sarajevo, news agencies added that US mediator Charles
Redman has demanded that all parties give a clear-cut "yes" to the
new peace plan that Hurd and Juppe, among others, are promoting.
Most observers believe that the parties will either try to give a
qualified acceptance from which they can later wiggle out, or
first agree and then break their word outright. Finally, the 13
July New York Times reports on the controversy surrounding a
proposed Bosnian government amnesty for draft-dodgers, which has
been launched in hope of wooing skilled workers home.  Patrick
Moore, RFE/RL Inc.

CRISIS IN THE MACEDONIAN PARLIAMENT. The Macedonian Parliament
failed to pass a new law on elections by 8 July and thus missed
the three-month deadline to introduce new legislation for the next
elections scheduled for 8 October, Borba reported on 10 July. Out
of a package of election laws, the parliament has to date passed
only a law on the election of the president. The ethnic Albanian
Party of Democratic Prosperity (PPD), the junior partner in
President Kiro Gligorov's coalition government, has been
boycotting parliament since ethnic Albanian ministers were
sentenced to prison over an arms affair. The party also claims
that the Albanians as an ethnic community are victims of
gerrymandering, in that the proposed new electoral districts are
allegedly "constructed to the detriment of the Albanians." Flaka
on 6 July quoted a deputy of the opposition Macedonian nationalist
party VMRO-DPMNE as saying that his group sympathizes with the PPD
for the "blockade" of the parliament. The old election law, which
will be used in the coming poll, was introduced by the communist
parliament before the 1991 multi-party elections and has been
criticized for certain shortcomings.  Fabian Schmidt, RFE/RL Inc.

POLISH STEEL STRIKE STALEMATE. In a protest organized jointly by
Solidarity and the former official OPZZ federation, striking
steelworkers have shut down the Lucchini steel mill (formerly Huta
Warszawa) since 9 June. The strikers are demanding a 30% pay
increase and the prompt modernization of the plant, PAP reports.
They charge that the firm's major shareholder, the Italian
Lucchini concern, has deliberately postponed promised investments.
The Italians note, however, that they received formal title to the
property only in June, after the strike began. The management has
refused to negotiate until the strikers go back to work; wage
increases will follow. The strikers have refused to comply.
Mediation efforts by Gdansk Archbishop Tadeusz Goclowski have so
far failed. Ten workers are on a hunger strike. Strikers pounded
hard-hats and tossed macaroni outside the Italian embassy on 8
July; similar protests were held at government headquarters on 14
June and 7 July. The government has so far adopted a hands-off
approach to the strike; Privatization Minister Wieslaw Kaczmarek
reported to the Sejm on 8 July that the strike is illegal. The
Stalowa Wola mill tested new production lines on 12 July, with an
eye to capturing Lucchini's neglected markets.  Louisa Vinton,
RFE/RL Inc.

GERMANY PLEDGES ADVOCACY FOR POLAND. Polish Foreign Minister
Andrzej Olechowski traveled to Bonn on 8 July to present officials
there with a memorandum detailing Poland's expectations with
respect to Germany's six-month presidency of the European Union.
They comprise four basic requests: to ensure that Poland is
treated as a future member; to liberalize trade; to include Poland
in such EU cooperation areas as crime-fighting; and to agree on
methods to adapt Polish agriculture to EU standards. Olechowski
also urged Germany to extend a helping hand to its neighbors.
German Foreign Minister Klaus Kinkel pledged to advocate Polish
membership in the EU but cautioned that economic standards must
still be met. Olechowski argued that the EU should assess the
"nature" of Poland's economic system rather than statistical
living standards. "We are even greater Euroenthusiasts than some
EU members," Olechowski reminded Kinkel. Olechowski also met with
Chancellor Helmut Kohl and President Roman Herzog, PAP reports.
Louisa Vinton, RFE/RL Inc.

EGYPTIAN PRESIDENT IN PRAGUE. On 12 July, Egyptian President Husni
Mubarak arrived in Prague for a two-day official visit. Mubarak
met with President Vaclav Havel, with whom he discussed "bilateral
relations and broader issues," CTK reported. Speaking to reporters
after the meeting, Havel said that "Egypt plays an important
stabilizing role in the Middle East." Mubarak, who is accompanied
by several ministers of the Egyptian government, is scheduled to
meet Czech Premier Vaclav Klaus and several ministers dealing with
economic affairs. Reuters reported on 12 July that Mubarak is
interested in learning about the Czech mass privatization process.
Jiri Pehe, RFE/RL Inc.

MECIAR ON UPCOMING ELECTIONS, ROMANIES. In an interview with the
Austrian daily Die Presse, published on 12 July, former Slovak
Premier Vladimir Meciar said that his Movement for a Democratic
Slovakia is opposed to a recently adopted law allowing the use of
bilingual road signs because "it is concerned about the welfare of
ethnic minorities." According to Meciar, the law is restrictive
because it should pay more attention to the language of Romanies.
Although only 80,000 people declared themselves Romanies during
the last census, says Meciar, it is likely that at least 300,000
people who claim to be Hungarians in southern Slovakia are in fact
Romanies. Meciar, who last year triggered controversy with what
international media described as disparaging statements about
Romanies, told Die Presse that his party plans to fight for
Romanies. Meciar predicted that his party will win at least 25% of
the vote in the October parliamentary elections and that the
politicians, such as current Prime Minister Jozef Moravcik, who
had left his party to found their own groups will be swept away.
Meciar said he wants to create a centrist government, "something
that will be appreciated by Czech Premier Vaclav Klaus, who would
otherwise be squeezed between Germans and the pink-red belt to the
East of the Czech Republic." Jiri Pehe, RFE/RL Inc.

LATEST OPINION POLL IN SLOVAKIA. According to an opinion poll
released by the Focus agency on 12 July, the Movement for a
Democratic Slovakia of Vladimir Meciar commands 28% of popular
support, followed by the post-communist Party of the Democratic
Left with 15%. The Christian Democratic Movement of former Premier
Jan Carnogursky is supported by 9.4% of respondents, followed
closely by the ultranationalist Slovak National Party (9%). The
coalition of ethnic Hungarian parties is supported by 8%, the
right-of-center Democratic Party by 7.1%, and the communist
Association of Slovak Workers by 6.1% of respondents.  Jiri Pehe,
RFE/RL Inc.

BEKESI SAYS PENSION INCREASES TO BE SCALED BACK. Laszlo Bekesi,
the Minister of Finance designate, said during a parliamentary
hearing that pensions will be increased by a factor of only 5%,
and not 8% as suggested earlier. Budgetary constraints have
prompted this latest announcement, reported MTI. In June 1994 the
Pension Self-governing Board (PSB) had proposed an 8% increase,
retroactive to January 1994, in order to compensate Hungarian
pensioners for this year's inflation, which was 18% in May 1994.
The PSB, which is the regulating body for pensions which are still
paid out of the central budget, announced yesterday that it will
cling to its original proposal.  Karoly Okolicsanyi, RFE/RL Inc.

BUDAPEST'S HUNGARIAN MINORITY POLICY IN THE MAKING. MTI reported
that Prime Minister designate Gyula Horn sent a draft of a new
minority policy to various domestic political leaders as well as
to representatives of religious groups of the Hungarian minority
in neighboring countries. Laszlo Kovacs, the Foreign Minister
designate said during a committee hearing that "in a cultural
sense, minority groups living outside Hungary's border are part of
the nation." He also stressed that these groups should "pursue
happiness where they live" and that the new Hungarian government
will strive to secure and promote rights for them. Results may be
expected through bilateral government negotiations and in talks in
international forums, Kovacs said Karoly Okolicsanyi, RFE/RL Inc.

HUNGARIAN PUPILS TO BOYCOTT ROMANIAN SCHOOLS. The Hungarian
Democratic Federation of Romania announced on 12 July that ethnic
Hungarian students will boycott schools in September, an RFE/RL
correspondent reported from Bucharest on the same day. The HDFR
said the move will be part of a "strategy of protest" against the
Law on Education. It added that rallies will be organized before
the law is discussed in the Senate. The law has already been
approved by the Chamber of Deputies, which rejected amendments
proposed by the HDFR. The HDFR objects in particular to those
provisions of the law that makes teaching of history, geography
and civic courses in the Romanian language obligatory even in
schools for the minorities.  Michael Shafir, RFE/RL Inc.

LI PENG ENDS, KINKEL BEGINS ROMANIAN VISIT. Chinese premier Li
Peng left Romania on 12 July after a four-day visit that ended in
the signing of several agreements on bilateral cooperation and a
joint political declaration, Rompres reported on the same day.
Before Li Peng's departure President Ion Iliescu said Romania
considered Taiwan to be an inseparable part of China, adding that
Beijing should deal with the problem of Taiwan as an internal
matter. German media reported on 13 July that Foreign Minister
Klaus Kinkel is flying to Bucharest for an official one-day visit,
his first to the country. Among other things, he will discuss
Romania's further integration into European structures.  Michael
Shafir, RFE/RL Inc.

BULGARIAN PARLIAMENT TO AUTHORIZE TRANSIT OF FOREIGN TROOPS. In a
ruling announced on 12 July the Bulgarian Constitutional Court
says the National Assembly is the only institution which can
permit the passage of foreign troops through Bulgarian territory.
A heated political debate on whether the cabinet or other state
agencies could be given the right to allow the transit of smaller
troop contingents, and especially those involving United Nations
peacekeepers, erupted in April as UN Secretary-General Boutros
Boutros-Ghali requested that Bulgaria help transport military
equipment to UNPROFOR in Macedonia. On that occasion parliament
approved the transport, but the Constitutional Court was at the
same time asked to resolve the general issue of jurisdiction. In
the decision now pronounced the court has apparently settled for a
broad definition of the concept "foreign troops," which requires
that, in principle, the transit of any organized military unit of
another state or international organization must receive separate
approval. Otechestven vestnik carried the report on 13 July.
Kjell Engelbrekt, RFE/RL Inc.

"DNIESTER REPUBLIC" SCORED FOR ANTISEMITISM. In its annual
Antisemitism World Report 1994 , recently issued in London, the
Institute of Jewish Affairs concluded that, in Moldova,
"antisemitism was confined effectively to the secessionist
Dniester republic." The report noted "commonplace" publication of
antisemitic articles in the Tiraspol press and anti-Jewish
utterances by "Dniester" Russian ultranationalists linked to
similar circles in Moscow. Regarding the main part of the country,
the report noted Moldova's "acceptance of ethnic diversity" and
the fact that "Moldova's performance on ethnic and human rights
was generally rated positively by the West." Vladimir Socor,
RFE/RL Inc.

THREE LATVIAN MINISTERS RESIGN. Following the 11 July announcement
by the Farmers' Union deputies in the Saeima that they are
suspending their participation in the parliamentary coalition with
deputies of Latvia's Way, three FU ministers resigned: Minister of
Agriculture Janis Kinna, Minister of Welfare Janis Ritenis and
Minister for Environment and Regional Development Girts Lukins. It
is expected that the respective state ministers and parliamentary
secretaries will also resign, Diena reported on 12 July. Prime
Minister Valdis Birkavs, who accepted the three resignations, said
that Latvia's Way deputies will meet on 13 July to discuss the
future of the government.  Dzintra Bungs, RFE/RL Inc.

BRAZAUSKAS REJECTS OPPOSITION'S CHARGES OF SELLOUT. In a regular
radio address to the people on 11 July , Lithuanian President
Algirdas Brazauskas rejected the accusations of his political
opponents, including Vytautas Landsbergis, that he was betraying
Lithuania's interests in the current negotiations with Russia. The
opposition held a rally earlier that day to urge the Lithuanian
leadership not to sign an agreement with Russia on military
transit to Kaliningrad region via Lithuanian territory. Brazauskas
explained that the same rules would apply to Russian shipments as
for those from other countries. Noting that 40% of Lithuania's
exports go to Russia, Brazauskas pointed out that the Lithuanian
economy cannot endure the 30% Russian tariff barrier against
Lithuanian goods and that the negotiators are trying to achieve a
cancellation of the tariffs, BNS and Interfax reported on 11 and
12 July.  Dzintra Bungs, RFE/RL Inc.

  [As of 1200 CET]
  Compiled by Ustina Markus and Stan Markotich
The RFE/RL DAILY REPORT, produced by the RFE/RL Research
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