Treat your friends as you do your pictures, and place them in their best light. - Jennie Jerome Churchill
OMRI DAILY DIGEST

No. 106, Part II, 1 June 1995

This is Part II of the Open Media Research Institute's Daily Digest.
Part II is a compilation of news concerning East-Central and
Southeastern Europe. Part I, covering Russia, Transcaucasia and Central
Asia, and the CIS, is distributed simultaneously as a second document.
Back issues of the Daily Digest, and other information about OMRI, are
available through OMRI's WWW pages: http://www.omri.cz/OMRI.html

EAST-CENTRAL EUROPE

UKRAINIAN PRESIDENT CALLS NON-BINDING PLEBISCITE TO BREAK POLITICAL
DEADLOCK. Leonid Kuchma on 31 May ordered a legally non-binding
nationwide plebiscite on confidence in himself and the parliament,
international and Ukrainian news agencies reported the same day. The
plebiscite is to be held on 28 June. Kuchma, in an address to the nation
on state television, said he called the poll to break the deadlock
between himself and the divided legislature over his recently approved
law on separation of powers, which gives him increased executive
authority to preside over economic reforms. Communists deputies recently
blocked the enactment of the law by voting against changes to the
constitution necessary for it to take effect. Under Ukrainian law, the
president cannot alone decree a legally-binding referendum, so the
results of the poll will carry no legal weight. Kuchma has said he will
resign if he fails to muster the population' s support for his political
and economic reform efforts. -- Chrystyna Lapychak , OMRI, Inc.

CRIMEAN PARLIAMENT CANCELS CONSTITUTIONAL REFERENDUM. The Crimean
legislature on 31 May voted to cancel a regionwide referendum, scheduled
for 25 June, on its banned constitution, thereby avoiding a public
showdown with Ukrainian authorities, international and Ukrainian news
agencies reported the same day. The deputies also charged a
parliamentary committee with drafting a new constitution for the
autonomous region in line with a 1992 Ukrainian law on power-sharing
between Kiev and Simferopol. The Ukrainian parliament recently ordered
Crimean deputies to cancel by 1 June the controversial referendum on the
1992 Crimean Constitution, which Ukraine annulled as too separatist.
Crimean lawmakers have requested that a joint committee be established
with Ukrainian legislators to hammer out differences over their
autonomous status. -- Chrystyna Lapychak, OMRI, Inc.

BELARUSIAN ELECTIONS CRITICIZED BY DOMESTIC PRESS. Several leading
Belarusian newspapers, including Zvyazda, Sovetskaya Belorussiya,
Narodnaya hazeta, and Vyacherni Minsk, have criticized the recent
parliamentary elections in Belarus, which failed to produce a new
parliament, Belarusian Television reported on 30 May. The Presidium of
the Supreme Soviet, meeting the following day to discuss the situation,
said one of the main problems was that under the current electoral law,
elections can be repeated indefinitely. It was decided to call an
emergency parliamentary session on 14 June to amend the electoral law.
-- Ustina Markus, OMRI, Inc.

ESTONIAN PRIME MINISTER CRITICIZED FOR STATE OF NATION ADDRESS. Tiit
Vahi, in his 31 May state of the nation address, said the 3.2% decline
in GDP in 1994, reported by the Statistics Department, was due to
declining demand for Estonian-made products, BNS reported. He commented
that consumers seemed inclined to purchase imported goods rather than
those locally produced, sharply increasing the trade deficit. Opposition
deputies accused Vahi of painting an unfavorable picture in order to
claim greater achievements later. He was accused of purposefully
ignoring a Bank of Estonia report showing GDP in 1994 increasing by 4.7%
and an IMF estimate of an even greater increase. -- Saulius Girnius,
OMRI, Inc.

LATVIA' S BALTIJA BANK PARTIALLY RESUMES OPERATIONS. Latvia' s largest
commercial bank, Baltija Bank, resumed partial banking operations on 31
May, Interfax reported. Bank of Latvia President Einars Repse suspended
the bank' s operations on 23 May, and its shares were transferred to the
government two days later to prevent its bankruptcy. Baltija Bank
President Uldis Klauss said the bank resumed accepting deposits from the
population, the exchange of cash and non-cash currency, and the
repayment of money transferred to client accounts after 23 May. --
Saulius Girnius , OMRI, Inc.

LITHUANIA SEEKS MORE GERMAN INVESTMENT. Prime Minister Adolfas
Slezevicius, accompanied by several government officials, attended a
conference in Duisburg on 30 May on business and investment
possibilities in Lithuania, BNS reported the next day. The Lithuanian
government and Lithuanian Investment Agency had previously arranged
similar conferences in London and Copenhagen to encourage foreign
investments. The conference discussed a project, estimated to cost about
$350 million, to build a European-standard railway line from the Polish
border to Kaunas. The project would be carried out by a German
consortium including Siemens and Krups. Germany is Lithuania' s second
largest trading partner. -- Saulius Girnius, OMRI, Inc.

POLISH ANTIMONOPOLY COURT UPHOLDS VERDICT AGAINST FIAT. The Antimonopoly
Court in Warsaw on 31 May upheld the verdict against Fiat Auto Poland
issued by the Polish Antimonopoly Office in December 1994. The court
ruled that the Antimonopoly Office acted entirely appropriately in
finding that Fiat abused its dominant position on the Polish auto market
by requiring Polish buyers of small Fiat cars to pay the total amount
first and then wait three-six months for delivery. The court agreed that
this meant the involuntary granting of interest-free loans to Fiat by
Polish car buyers worth 30 million zloty ($1.4 million). The
Antimonopoly Office fined Fiat the same amount. A Fiat spokesman told
Gazeta Wyborcza on 1 June that his company is "surprised and disturbed"
by the court' s ruling which, he said, "restricts both the development
of the free market in Poland and Poland' s process of integration into
the EU." -- Ben Slay, OMRI, Inc.

CZECHS STILL WAITING FOR SLOVAK REPLY ON CLEARING SYSTEM. Czech Prime
Minister Vaclav Klaus on 31 May said he has received no reply from his
Slovak counterpart, Vladimir Meciar, about ending the payments clearing
system used for bilateral trade since the split of Czechoslovakia,
Hospodarske noviny reported. Klaus, in a letter to Meciar on 10 May,
proposed ending the system by 1 September and asked the Slovak premier
to respond by the end of May. Under the system, the Czech Republic has
run up a deficit every month for a year, which has to be made up in hard
currency. Slovak Finance Minister Sergej Kozlik has said the clearing
system could be modified, not scrapped. Slovakia revalued its currency
within the clearing system on 19 May, slowing down the rise of the Czech
deficit, which stood at 330 million ECU at the end of May, Hospodarske
noviny quoted Slovak officials as saying. -- Steve Kettle, OMRI, Inc.

AGREEMENT REACHED BETWEEN SLOVAK CONSERVATIVES. Democratic Party (DS)
chairman Peter Osusky and Permanent Conference of the Civic Institute
(SKOI) leader Jan Langos on 31 May signed an agreement to join forces
before the DS' s congress in November, Sme reports. The agreement was
referred to as a first step toward uniting the Right and encouraging
cooperation among Slovakia' s "non-socialist and democratic
politicians." The SKOI will cease to function as a political subject but
will remain a civic association. A number of SKOI members ran on the
election list of the Christian Democratic Movement in last fall' s
elections, and Langos is now a parliamentary deputy. The DS, which ran
as an independent subject, failed to pass the 5% threshold needed to
gain parliamentary representation. -- Sharon Fisher, OMRI, Inc.

SLOVAK ECONOMIC UPDATE. Narodna obroda on 1 June reported that
industrial production grew at an annual rate of 7.6% in March, a 1.2%
increase over the figure for 1994. Construction rose at an annual rate
of 3% in the same month, down from 8% in February and 5.3% in 1994.
Slovakia' s unemployment rate fell to 14.6%, down from 15.2% in January.
Hard currency reserves at the National Bank of Slovakia reached $1.969
billion, up from $1.745 billion at the end of 1994. The Slovak currency
strengthened to 29.4 koruny to $1 in March, an improvement over the rate
of 32 koruny in 1994. Annual inflation fell from 11.7% in 1994 to 11.3%.
Meanwhile, Slovakia' s GDP grew at an annual rate of 4.8% in 1994,
having dropped 4.1% the previous year. -- Sharon Fisher , OMRI, Inc.

HUNGARIAN PREMIER CRITICIZES WEST. Gyula Horn on 31 May told an economic
conference in Budapest that international financial institutions "do not
pay proper attention to the predicament of the Central and East European
region," international media reported. Horn argued that Western
countries are not showing enough understanding for the difficulties of
the transition from a centrally planned to a free market economy. Horn
did not specify which financial institutions he had in mind, but the IMF
and the World Bank have both said they will not extend further credits
or development assistance until Hungary sharply reduces government
spending and its huge current account deficit. -- Jiri Pehe, OMRI, Inc.

EAST EUROPEANS APPLAUD RUSSIA-NATO PARTNERSHIP. East European foreign
ministers, at a meeting of the North Atlantic Cooperation Council in the
Netherlands on 31 May, welcomed Russia' s decision to forge a new
partnership with NATO, international agencies reported the same day.
Romanian Foreign Minister Teodor Melescanu expressed the hope that the
participation of Russia will demonstrate that the enlargement of NATO is
a "beneficial process." His Polish counterpart, Wladyslaw Bartoszewki,
said that whatever "binds Russia into the international security system
is a very positive development for us." -- Michael Mihalka, OMRI, Inc.

SOUTHEASTERN EUROPE

BOSNIAN SERBS STEP UP ATTACKS ON SARAJEVO AND GORAZDE. Bosnian Serb
forces shelled Debelo Brdo on the Sarajevo front on 31 May and increased
their attacks on the mainly Muslim enclave of Gorazde, in eastern
Bosnia. Nasa Borba the following day noted that similar Serb shelling in
Sarajevo on 24 May prompted NATO air strikes. The Frankfurter Allgemeine
Zeitung says that the Serbs have captured a total of 36 UN vehicles,
including six light tanks. They have begun cruising around government-
held portions of Sarajevo using the vehicles with their original
markings and intimidating UN staff. The Serbs called for direct talks
with the Contact Group to discuss freeing the approximately 370
hostages, but the UN says that the Serbs must unconditionally release
their prisoners now. -- Patrick Moore , OMRI, Inc.

AKASHI REASSURES IZETBEGOVIC ABOUT BRITISH TROOPS. The Frankfurter
Allgemeine Zeitung on 1 June reports that UN special envoy Yasushi
Akashi told the Bosnian president that the approximately 6,000 British
soldiers currently arriving will be under UN command. The Bosnians
refused to let the contingent proceed beyond Gornji Vakuf to the British
base at Vitez, in central Bosnia, until it was made clear that they were
not part of any British effort to withdraw peacekeepers. Meanwhile, the
EU mediator in the Yugoslav crisis for the past three years, Lord Owen,
has announced he will step down at the end of June. He said the move was
unrelated to the latest developments but added that he feared Britain
was increasingly being sucked into a Balkan war, the BBC reported on 31
May. -- Patrick Moore, OMRI, Inc.

BOUTROS GHALI PRESENTS NEW PLANS FOR BOSNIA. UN Secretary-General
Boutros Boutros Ghali has issued a paper stating that the present
concept for UNPROFOR is untenable and suggested some alternatives. One
proposal would involve reduced operations and concentrates on
humanitarian aid and simply "monitoring" the UN-declared "safe areas"
rather than trying to defend them. The other proposal would scrap
UNPROFOR as an international peace-keeping mission and replace it with a
more active multinational force under individual national commands,
apparently on the model of the Gulf War. The world body is to debate the
suggestions, international media reported on 31 May. -- Patrick Moore,
OMRI, Inc.

CLINTON OFFERS U.S. GROUND TROOPS FOR BOSNIA. U.S. President Bill
Clinton, addressing the Air Force Academy on 31 May, for the first time
raised the possibility that U.S. ground troops would be sent to Bosnia.
The measure would be "temporary" and only if the allies requested the
soldiers to help UNPROFOR. He attached several additional conditions,
including the need to consult an increasingly isolationist Congress. The
VOA quoted Senate Majority Leader Bob Dole as saying that the U.S.
should drop the UNPROFOR concept entirely and concentrate on arming the
Bosnian government instead. -- Patrick Moore , OMRI, Inc.

NEW TRIALS IN KOSOVO. The trial of 72 ethnic Albanian former policemen
charged with separatist activities began in Pristina on 29 May, AFP
reported the same day. The policemen are charged with setting up a
shadow-state Interior Ministry, stockpiling large amounts of weapons and
equipment, and spying on Serbian police and the Yugoslav army. They face
up to 10 years in prison. The trial raises the number of former ethnic
Albanian policemen tried on the same charges to 160. Meanwhile, at a
trial in Gnjilan of ethnic Albanian policemen accused of "hostile
activities," the prosecutor submitted a "decree of the government of
Kosovo" allegedly signed by Prime Minister in exile Bujar Bukoshi in
1991. Defense lawyers, however, argued that the document was forged,
pointing out that it was in Serbian and that Bukoshi was not prime
minister in 1991, according to Kosova Daily Report on 31 May. -- Fabian
Schmidt, OMRI, Inc.

INVESTIGATION INTO JOURNALIST ACCUSING ROMANIAN PRESIDENT OF KGB LINKS.
International media reported on 31 May that Romanian police are
investigating Sorin Rosca Stanescu, the editor-in-chief of the
independent daily Ziua. Stanescu is suspected of having committed an
"offense against authority" by writing that President Ion Iliescu was
recruited by the KGB in the 1950s while studying in Moscow. The daily
Curierul national on 1 June reported that Virgil Magureanu, director of
the Romanian Intelligence Service, told the Senate commission
supervising the activities of his organization, that the accusations
were "pure invention." -- Michael Shafir , OMRI, Inc.

REPORT ON DISMISSED ROMANIAN MAYORS. The European Council' s Congress of
Local and Regional Authorities in Europe on 31 May debated the case of
recently dismissed Romanian mayors, Radio Bucharest reported the same
day. The debate followed a visit to Romania by a council delegation
earlier this month. The council recommended that the Romanian parliament
and government amend the law on local administration to curtail the
prerogatives of the prefects and increase the powers of the judiciary to
review the cases of mayors who are dismissed or suspended. It also
proposed speeding up the passage of laws ensuring the financial
independence of local government and the better use of PHARE funds
allocated to improve the training of local government officials. --
Michael Shafir, OMRI, Inc.

LUCINSCHI ON U.S. SUPPORT FOR MOLDOVA. The U.S. fully supports the
independence and statehood of Moldova, parliament chairman Petru
Lucinschi said in Chisinau on 30 May following his week-long trip to the
U.S. Infotag reported the same day that Lucinschi met with senators and
State Department and World Bank officials. Lucinschi said the U.S. shows
understanding for Moldovan attempts to cooperate with Iran, despite the
US-imposed embargo, because it realizes Chisinau must seek alternatives
to Russian-imported energy. -- Michael Shafir, OMRI, Inc.

SUSPECT CHARGED IN BULGARIAN INVESTMENT SCANDAL. An investment fund
clerk was charged with embezzlement on 31 May, international agencies
reported the same day. Desislava Chaneva was arrested on 30 May as she
tried to flee to Greece with 20 million leva ($310,000) belonging to
shareholders of the Alba Bul investment fund, based in Varna. Alba Bul
was the fourth fund in Varna within one week to stop paying dividends
and close. At least 15 other such schemes are still operating in Varna.
Investments in Alba Bul are estimated at $4.5 million. If convicted,
Chaneva faces up to 10 years in prison. * Stefan Krause, OMRI, Inc.

GREECE RATIFIES UN SEA CONVENTION LAW DESPITE TURKISH OBJECTIONS. The
Greek parliament on 1 June unanimously ratified the UN Law of the Sea
Convention, Reuters reported the same day. The treaty allows Greece to
extend its territorial waters from the present six to 12 miles at a
moment' s notice. Turkey opposes the treaty, saying an extension of
Greece' s water would seal off its Aegean coastline and turn the Aegean
into a Greek lake. Ankara has said any extension will be "cause for
war," and Turkish diplomatic sources have been cited as saying Ankara
will send warships down the Aegean if Greece implements the 12-mile
zone. Athens has not said it will enforce the treaty, but Deputy Foreign
Minister Georgios-Alexandros Mangakis commented that "Greece will
exercise its rights whenever its interests dictate." -- Stefan Krause,
OMRI, Inc.

BULGARIA' S LARGEST TRADE UNIONS TO BOYCOTT ILO SESSION. Podkrepa and
the Confederation of Independent Trade Unions in Bulgaria will boycott
the 82nd session of the International Labor Organization in Geneva,
Standart reported on 31 May. The decision was made after Labor Minister
Mincho Koralski named the Association of Free Trade Union Organization
as Bulgaria' s official delegate. According to the two unions, Koralski'
s move contravenes the ILO statutes, which state that trade unions are
to hold consultations over which representatives to send to ILO
sessions. -- Stefan Krause, OMRI, Inc.

ALBANIA' S NEW PENAL CODE TAKES EFFECT. Populli PO reported on 31 May
that the new penal code, which takes effect on 1 June, will open "one of
the doors to the Council of Europe." The council demanded that Albania
abolish the death penalty and ratify the European convention on
safeguarding minority rights before it decides on Albanian membership on
29 June. The new penal code enables communist party leader Fatos Nano to
bring his case to an appeals court. Nano is serving a prison term for
embezzlement and forging documents. His case has been treated as a human
rights issue by various opposition parties. -- Fabian Schmidt, OMRI,
Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

The OMRI Daily Digest offers the latest news from the former Soviet
Union and East-Central and Southeastern Europe. It is published Monday
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