No. 118, Part II, 19 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

G-7 ON UKRAINE. G-7 leaders, meeting in Halifax, Canada, praised Ukraine
for its efforts to create a free market economy, saying Kiev could
receive additional aid, AFP reported on 16 June. They said they would
seek more international assistance to help Kiev shut down the Chornobyl
nuclear power station. The G-7 so far has decided to grant Ukraine $3.9
billion to support economic reform in the country. At the end of the
summit, it announced that if Ukraine continued to progress with economic
reform, international financial institutions could make an additional $2
billion in credits available by the end of 1996. Ukraine was not
represented at the summit, but Kiev made a number of statements that
Chornobyl' s closure hinged on additional aid. -- Ustina Markus, OMRI,
Inc.

UKRAINIAN PRESIDENT FOCUSES ON INDUSTRIAL RESTRUCTURING. Leonid Kuchma
recently visited Ukraine' s industrial centers to examine ways to
overhaul the country' s ailing industrial sector, Interfax-Ukraine and
Radio Ukraine reported on 16 June. During his trip, he said that some 40
so-called financial-industrial groups, which unite capital and
industries in Ukraine and Russia, were to be set up within a month to
make enterprises more viable. His administration has also set up a
bankruptcy agency to identify and close down failing enterprises. Kuchma
noted he intends to apply stricter discipline toward management in the
state sector and plans to issue a decree to review the contracts of all
directors of state-owned enterprises. In the meantime, he decreed the
creation of a state commission on a stock market for privatized
businesses. The decree is aimed at ensuring a single state policy on a
securities exchange. -- Chrystyna Lapychak, OMRI, Inc.

IMF REACHES PROVISIONAL AGREEMENT WITH BELARUS. The IMF has
provisionally agreed on an economic reform program with Belarus, Reuters
reported on 16 June. The IMF representative in Minsk, Willen Middlekoop,
said the program requires Belarus to approve a "revamped" budget, take
steps toward slowing monthly inflation to 1% by the end of the year, and
keep to a 3.2% budget deficit. Tariffs on rents and utilities are to be
increased by July, while monopoly price controls are to be abolished. In
addition, currency restrictions are to be eased. Keeping to the plan
could pave the way for the release of a $250 million standby loan from
the IMF. Earlier this year, part of the standby credit was denied to
Belarus because Minsk failed to implement various requirements of an
economic reform program that included freeing prices. -- Ustina Markus,
OMRI, Inc.

ESTONIA, FINLAND MOVE TOWARD VISA-FREE TRAVEL. Estonian Foreign Ministry
official Raul Malk and Finnish Foreign Ministry consular department head
Marcus Laurent, meeting in Tallinn on 16 June, initialed an agreement on
the readmission of illegal immigrants, BNS reported. The agreement will
probably be signed by Interior Minister Edgar Savisaar during his visit
to Finland later this month. It is one of Finland' s preconditions for
signing a treaty on visa-free travel with Estonia. The two countries
have signed an accord on cooperation in crime prevention and are
concluding a bilateral agreement on the extradition of criminals. --
Saulius Girnius , OMRI, Inc.

LATVIA SEEKS LOAN FROM JAPAN. Latvian Finance Ministry official Aivars
Veiss told a press conference on 16 June that talks were being conducted
with Japan on a 20-40 million lat ($39-78 million) loan, BNS reported.
The loan, to be received in late July or early August, will be used to
pay current government expenses. Veiss noted that the government has
already spent 16 million of the 20 million lati loan it received from
the Bank of Latvia on 25 May at an annual interest rate of 25%. The
ministry will begin selling state treasury bills on 21 June in an effort
to secure additional funds. -- Saulius Girnius , OMRI, Inc.

SOVIET DAMAGE TO LITHUANIA' S ENVIRONMENT. Representatives of the Danish
company Kruger Consult A/S, the Baltic consulting group, and the
Lithuanian Academy of Sciences released a report on 15 June saying it
will cost $1.1 billion dollars to repair damage caused to Lithuania' s
environment by Soviet troops, Interfax reported the next day. The group
inspected 426 former Soviet military installations covering a total area
of 67,000 hectares, or more than 1% of the republic' s territory. They
found heavy pollution from oil and other chemical products. Assessment
of the damage began in late 1993 and was financed by the European Union
PHARE program. -- Saulius Girnius, OMRI, Inc.

POLISH EPISCOPATE ON CONSTITUTION DRAFT. The Polish episcopate on 18
June criticized the draft of the new constitution, which has been
prepared in installments by a parliamentary commission. The bishops
stressed the need to include a reference to God in the preamble. They
had previously demanded constitutional guarantees for the protection of
human life from conception and religious instruction in schools, Polish
media reported on 19 June. Prime Minister Jozef Oleksy commented that
the bishops have "passed judgement on a document that does not exist
yet." President Lech Walesa said he would not support the constitution
draft. "I demand a presidential system and even the president' s rights
to issue decrees if need be," he said. He once again stopped short of
declaring his presidential candidacy. -- Jakub Karpinski, OMRI, Inc.

TWO CZECH GOVERNING PARTIES AGREE ON MERGER. The Christian Democratic
Party (KDS) on 17 June approved a merger with the Civic Democratic Party
(ODS) of Prime Minister Vaclav Klaus, Czech media reported. KDS chairman
and Minister of Education Ivan Pilip said the party leadership voted 23
to seven with one abstention for the merger. The ODS executive committee
had approved the merger agreement one day earlier. The pact guarantees
KDS candidates four seats in the next parliament or five if the ODS wins
more than 76 seats in the June 1996 elections. The KDS currently has
five deputies, with a breakaway faction opposed to the ODS merger
holding another five. The merger has to be approved by both the ODS and
KDS congresses, due to be held at the end of this year. -- Steve Kettle
, OMRI, Inc.

SLOVAK POLITICAL DEVELOPMENTS. The ruling Movement for a Democratic
Slovakia (HZDS) on 17 June demanded again the resignation of President
Michal Kovac, Slovak media reported. The party criticized a recent
interview Kovac gave to the Austrian weekly Profil in which he allegedly
questioned Slovakia' s democratic system and thus "damaged Slovakia' s
interests abroad." The HZDS claimed that Kovac has made a habit of such
actions. The party went on to back the recent changes in the government'
s privatization concept, stressing that the first wave of coupon
privatization gave an unfair advantage to those who had information
about firms being privatized. It also criticized investment funds for
defending business interests rather than those of shareholders. Chairman
of the HZDS parliamentary caucus Tibor Cabaj said the ratification of
the Slovak-Hungarian treaty will not be discussed at the next parliament
session, which begins on 21 June. -- Sharon Fisher, OMRI, Inc.

WORLD BANK EXTENDS CREDIT TO HUNGARY. The World Bank on 16 June approved
a $1.3 billion three-year credit line for Hungary, Reuters reported.
Millard Long, head of the bank' s Budapest office, called the
government' s recent measures to cut the 1995 budget and current account
deficits "much needed" and "very significant." But he stressed that
economic reforms must continue before Hungary will be allowed to fully
utilize the credit line. Hungary' s net debt of $21.4 billion is the
highest per capita debt in Central and Eastern Europe. A portion of the
credit line is conditional on Hungary signing a deal with the IMF.
Hungary hopes that working out a new standby loan agreement with that
organization will boost business confidence and raise foreign
investment. -- Sharon Fisher, OMRI, Inc.

SOUTHEASTERN EUROPE

BOSNIAN ARMY ADVANCES ON FOUR FRONTS. International media reported over
the weekend that Bosnian forces were advancing near Tuzla, to the north
and south of Sarajevo, and to the south of that city. The Frankfurter
Allgemeine Zeitung said on 19 June that key Serbian supply routes to the
north and south of the capital had been cut, leaving the Bosnian Serbs
attacking Sarajevo from the west under siege. The International Herald
Tribune noted on 17 June that it was the government army' s best
performance since the Serbs launched the war in the spring of 1992 and
that for the first time Croatian artillery was backing the mainly Muslim
army on the Sarajevo fronts. The Serbs responded by shelling the city,
killing two in a hospital and seven at a water distribution center. --
Patrick Moore, OMRI, Inc.

IZETBEGOVIC SAYS BOSNIANS WILL FREE SARAJEVO. Bosnian President Alija
Izetbegovic said over the weekend that the capital will be free sooner
or later and that the current offensive will not stop until the Serbs'
strangle-hold has been eased. He noted appeals from the international
community for a cease-fire but added that the world has done nothing for
Sarajevo and that his government does not feel obliged to listen to such
pleas. The Frankfurter Allgemeine Zeitung, the BBC, and the VOA carried
the stories. -- Patrick Moore , OMRI, Inc.

SERBS DECLARE SPECIAL MOBILIZATION, CONTINUE PRESS-GANGING. The BBC on
18 June said that Bosnian Serb authorities proclaimed a special
mobilization of civilians and declared a "state of war" in the Sarajevo
area. Nasa Borba notes on 19 June the continuing roundup of draft-age
Serbian males from Bosnia and Krajina in Belgrade' s student center, in
Valjevo, and elsewhere. Vreme adds that those in charge of the project
have a list of 18,000 "deserters" they want to round up and send back to
the front. -- Patrick Moore, OMRI, Inc.

SERBS FREE LAST UN HOSTAGES. The last group of 26 peacekeepers held by
Bosnian Serbs was released via Novi Sad on 18 June, just hours before
the Serbs'  own deadline of midnight for resolving the crisis. Serbian
intelligence chief Jovica Stanisic was again present among Bosnian Serb
leaders, as he was when the three previous large groups of hostages were
freed. International media also reported that UNPROFOR has effectively
withdrawn its peacekeepers from all Serb-held territory, including four
heavy weapons collection points near Sarajevo. -- Patrick Moore, OMRI,
Inc.

SERBIAN SANCTIONS UPDATE. European Commission reports on sanctions
against the rump Yugoslavia indicate that violations, especially
stemming from Albania and Macedonia, continue to take place, Reuters
reported on 18 June. The reports, which cover the first four months of
1995, also implicate Greek and Italian groups in the practice of
funneling contraband fuel shipments to Albania, from where they are
transported to the rump Yugoslavia. "Significant quantities of oil
products, including thousands of tonnes of A1 aviation fuel declared '
for heating purposes'  have been arriving in Albania during the reported
periods," according to one report. It is also suggested that the 3,050
officially reported cases of sanctions violations by Macedonia
"represent only a fraction of the consignments that have crossed the
border in violation of the sanctions." -- Stan Markotich, OMRI, Inc.

SERBIAN RADICAL RALLY FAILS TO MEET EXPECTATIONS. A 17 June rally
sponsored by the Serbian Radical Party (SRS) attracted an estimated
crowd of 5,000, Reuters reported the same day. SRS supporters had
planned a massive ultranationalist, anti-Milosevic rally, but public
interest did not meet expectations. Other major opposition parties--
including the Democratic Party (DS), the Democratic Party of Serbia
(DSS), and the Serbian Renewal Movement (SPO)--refused to endorse the
rally. Organizers also attributed the low attendance to the fact that
SRS leader and accused war criminal Vojislav Seselj was unable to attend
because he is serving a two month sentence for a 2 June incident in
which he clashed with the police. -- Stan Markotich, OMRI, Inc.

ARE RELATIONS BETWEEN ALBANIA AND MACEDONIAN ALBANIAN PARTIES IN CRISIS?
Koha Jone on 14 June claimed that relations between Albania and
Macedonian ethnic Albanian parties have deteriorated since the
opposition Albanian Socialist Party met with the Macedonian ethnic
Albanian Party for Democratic Prosperity (PPD) earlier this month.
According to sources within the PPD, Shaban Murati, the Albanian
ambassador to Skopje, was upset by "the warm reception and extensive
publicity" the PPD gave to the Socialists. Meanwhile, AKS carried a
report on 18 June stressing that the Albanian government has
consistently supported the Albanian-language University in Tetovo and
that Albanian President Sali Berisha repeatedly called for it to be
established. It added, however, that Albania has recently changed its
policy toward Macedonia to one of restraint. -- Fabian Schmidt, OMRI,
Inc.

ROMANIAN TRADE UNIONS SUSPEND PROTESTS. Leaders of Romania' s main labor
organizations on 16 June announced they have canceled a two-week protest
over wages and working conditions, Romanian media reported. A communique
released by the National Confederation of Romania' s Free Trade Unions-
The Brotherhood, the National Labor Bloc, and the Alfa Cartel accused
the government of staging a campaign to misinform and bully rank-and-
file union members, with the help of some union leaders. The statement
further charged the government with trying to divide the labor movement
and discredit union leaders unwilling to accept a compromise through a
communist-style campaign. According to Radio Bucharest, negotiations
between unions and the parties backing the current government over a
social pact will re-start on 19 June. -- Dan Ionescu, OMRI, Inc.

ROMANIAN ETHNIC HUNGARIAN PARTY CRITICIZES EDUCATION BILL. The Hungarian
Democratic Federation of Romania (UDMR), in a communique issued on 17
June, said that an education bill recently adopted by the Romanian
Senate curtails the rights of ethnic minorities in Romania. The
statement, signed by UDMR chairman Bela Marko, criticized the law for
failing to conform with both the principles of the Romanian Constitution
and European standards. The UDMR will make every effort, the communique
added, to expose what it described as "the anti-constitutional and anti-
democratic character" of the law. -- Dan Ionescu, OMRI, Inc.

ROMANIAN SOCIALIST PARTY HOLDS FIRST CONGRESS. The left-wing Socialist
Party held its first nationwide congress in Bucharest on 17-18 June. The
party, which split from the Socialist Labor Party earlier this year and
claims to have some 13,000 members, vowed to continue the traditions of
the Romanian socialist movement. More than 500 delegates attended the
congress and approved the party' s program and the statutes. Tudor
Mohora was elected chairman. -- Dan Ionescu , OMRI, Inc.

PROTEST OVER LEBED' S RESIGNATION IN TIRASPOL. 14th Army officers on 16
June protested the resignation of Lt. Gen. Alexander Lebed as their
commander, Interfax reported. They described Lebed' s replacement as
"unlawful" and expressed regret that neither the Russian president nor
the defense minister has found time to talk to Lebed. Also on 16 June,
Lebed, on returning to Tiraspol, said he does not intend to leave office
before being formally notified that his resignation has been accepted.
In a related development, a group of women on 16 June blocked the
runaway of a military airfield near Tiraspol for several hours to
prevent the new commander of the army, Major General Valery Yevnevich,
from landing. Hundreds of women later picketed the garrison' s hotel
where Yevnevich is staying. -- Dan Ionescu, OMRI, Inc.

BULGARIAN OPPOSITION UPDATE. The Internal Macedonian Revolutionary
Organization-Union of Macedonian Associations (VMRO-SMD) on 18 June
decided to support the Union of Democratic Forces (SDS) mayoral
candidates in those areas where the SDS has signed no agreement with the
ethnic Turkish Movement for Rights and Freedom (MRF), Demokratsiya
reported the following day. In these constituencies, the VMRO-SMD will
either nominate its own candidates or join forces with other "opposition
patriotic formations." Alliances with the Bulgarian Socialist Party were
categorically ruled out. VMRO-SMD local council candidates may run on
joint tickets with the SDS anywhere in the country, since the agreement
between the SDS, MRF, and the People' s Union (see OMRI Daily Report, 16
June 1995) concerns only joint candidates for mayor. In other news,
Demokratsiya reported that Ivan Kurtev was reelected chairman of the
Social Democratic Party on 18 June. -- Stefan Krause , OMRI, Inc.

COMMUNIST PARTIES MEET IN ATHENS. Representatives of 25 communist and
leftist parties met in Athens on 17-18 June to discuss perspectives of
communism and the reasons for the fall of communism in Eastern Europe,
AFP reported on 17 June. The conference was organized by the hard-line
Communist Party of Greece (KKE) and attended by representatives from the
Balkans, Russia, North Korea, Iraq, Canada, Australia, and several
European and Middle East countries. The French, Portuguese, Cuban and
Chinese parties failed to send delegates. Opening the session, KKE
member Makis Mailis called the fall of communism in Eastern Europe a
"step backwards for humanity" and urged delegates to fight "for the
final victory of communism over capitalism." -- Stefan Krause , OMRI,
Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

The OMRI Daily Digest offers the latest news from the former Soviet
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