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OMRI DAILY DIGEST

No. 127, Part II, 1 July 1996

This is Part II of the Open Media Research Institute's Daily Digest.
Part II is a compilation of news concerning Central, Eastern, and
Southeastern Europe. Part I, covering Russia, Transcaucasia and Central
Asia, 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/Index.html

CENTRAL AND EASTERN EUROPE

UPDATE ON UKRAINE'S NEW CONSTITUTION. Crimean parliamentary speaker
Yevhen Suprynyuk said the new Ukrainian constitution, which passed last
week, was not ideal but rather a compromise between all sides, Ukrainian
Radio reported on 29 June. He added that he was pleased that it defines
Crimea's status as that of an autonomous republic, which, he noted,
allows the peninsula to work out its own constitution in accordance with
the new Ukrainian basic law. Some 20 articles in Crimea's draft
constitution have to be reworked to harmonize with the new national
constitution. Meanwhile, Black Sea Fleet personnel have expressed
pleasure at the clause allowing for a transitional period during which
Russian fleet bases can be stationed in Crimea, Ukrainian TV reported on
30 June. They described the clause as an expression of good-will on
Ukraine's part aimed at establishing good-neighborly relations with
Russia. Fleet personnel added that it will facilitate a settlement of
the ongoing dispute between Russia and Ukraine over the fleet. -- Ustina
Markus

UKRAINIAN ECONOMY SHOWS FEW SIGNS OF IMPROVEMENT. Prime Minister Pavlo
Lazarenko on 29 June announced that there has been almost no improvement
in Ukraine's economic situation over the past month, UNIAN reported. He
said a key problem was increasing wage arrears, which on 1 June amounted
to 81 trillion karbovantsy ($444 million) in the state sector. By 28
June, this figure had risen to 86 trillion ($472 million). Lazearenko
said the government was using 80% of external and internal revenues to
clear the wage debt. -- Ustina Markus

BELARUSIAN PARLIAMENT CONFIRMS SOVIET-STYLE NATIONAL SYMBOLS. The
Belarusian parliament has ruled that the national flag and emblem
adopted in 1991 are no longer valid state symbols, Radio Rossii reported
on 28 June. This decision is in accordance with the May 1995 referendum,
in which 75% of voters were in favor of changing the state symbols to
Soviet-style ones. The new official Belarusian national flag is red and
green with an embroidered border but without the hammer and sickle. The
national emblem is also a replica of the Soviet emblem but replaces the
hammer and sickle with an outline of Belarus. -- Ustina Markus

BELARUSIAN ECONOMIC NEWS. Belarusian Radio on 28 June reported that
Belarus has the highest per capita agricultural output of all CIS
states, producing 722 kilograms of grain, 398 kilograms of potatoes, and
571 kilograms of milk per head. At the beginning of the year, around
half a million people were involved in private business. But 27 banks
were found not to have sufficient capital and only 26 financial
establishments had the minimal charter capital of 2 million ECU. Only
20% of young families have their own homes, and it is estimated that by
the end of the year, some 15% of Minsk's work-eligible population will
be unemployed. More than 90% of property remains in state hands. --
Ustina Markus

ESTONIA, LATVIA INITIAL SEA BORDER AGREEMENT. Estonian Foreign Ministry
Vice Chancellor Raul Malk and Latvian Foreign Ministry State Secretary
Maris Riekstins initialed an agreement on sea borders at their meeting
in Stockholm on 28 June, ETA reported. The accord still has to be signed
by the respective governments and approved by a majority of Latvia's
Saeima and two-thirds of Estonia's deputies. Sweden hosted seven secret
meetings of Latvian and Estonian officials during which the details of
the agreement were worked out. -- Saulius Girnius

LATVIA PLANS TO HAVE BALANCED BUDGET IN 1997. Finance Minister Aivars
Kreituss told BNS on 29 June that next year, Latvia will draft a
balanced budget for the first time. The draft will be based on the
assumption that inflation will be 15.9% in 1996 and 13% in 1997 and that
GDP will increase by 0.3% and 1.2%, respectively. Kreituss also noted
that while the 1996 budget foresees a deficit totaling 59.4 million lati
($107 million), the government will seek to reduce it to 38.9 million
lati in accordance with an IMF recommendation. He added that on 26 June,
the budget deficit stood at 27.3 million lati. -- Saulius Girnius

LITHUANIA, AUSTRIA SIGN AGREEMENTS. Lithuanian Foreign Minister Povilas
Gylys and Austrian Vice Chancellor and Foreign Minister Wolfgang
Schuessel, meeting in Vienna on 28 June, signed a bilateral treaty on
investment promotion and protection as well as an aviation accord
initialed in 1992. They also put their signature to an agreement on the
abolition of visas for people with diplomatic passports, BNS reported.
During his two-day visit, Gylys met with National Council President
Heinz Fischer to discuss prospects for cooperation in EU integration. --
Saulius Girnius

SOLIDARITY HOLDS NATIONAL CONGRESS. Solidarity's Eighth National
Congress, which ended on 28 June, decided that the union will run in
next year's parliamentary elections, Polish media reported. Last month,
Solidarity and several rightist parties formed a coalition called
Solidarity Electoral Action. The union asked all organizations that
agree with its program to join the coalition. This invitation is
targeted in particular at the Movement for Poland's Reconstruction, led
by former Prime Minister Jan Olszewski, which has placed second--after
the co-ruling Democratic Left Alliance--in recent opinion polls.
Solidarity also proposed a "non-aggression pact" with other parties,
singling out the Polish Peasant Alliance, a junior coalition partner in
the ruling coalition, and the opposition Freedom Union. Former
Solidarity leader and Polish President Lech Walesa was present at the
congress but was not invited to speak. -- Jakub Karpinski

POLISH SOCIAL DEMOCRATS DISCUSS NEW PROGRAM. Izabella Sierakowska, vice
president of the Social Democracy of the Republic of Poland, told the
SdRP Supreme Council on 29 June that the party must have more "social
sensitivity," Polish media reported. The SdRP has been a ruling
coalition party since the 1993 parliamentary elections. The party
stressed that it is in favor of a parliamentary democracy, Church-state
separation, a market economy "oriented toward the fulfillment of social
needs," privatization, and joining NATO and the EU. A program based on
these principles could be adopted at the SdRP congress scheduled next
year, according to the media. -- Jakub Karpinski

CZECH PRESIDENT IN IRELAND, ENGLAND. Vaclav Havel, arriving in Ireland
on 28 June for an official visit, met with President Mary Robinson and
other Irish officials to discuss, among other things, European
integration, Czech media reported. He also discussed the role of the UN
with Robinson, who has been proposed to head the organization. On the
way back to Prague, Havel stopped off in London to watch the finals of
the European Soccer Championship, in which the Czech team lost to
Germany by 2:1. He met briefly with Queen Elizabeth II, British Prime
Minister John Major, and German Chancellor Helmut Kohl, all of whom also
attended the match. -- Jiri Pehe

SLOVAK COALITION CRISIS RESOLVED. Prime Minister Vladimir Meciar
announced that at talks on 28 June, the leaders of the three ruling
parties agreed that the composition of the boards overseeing the
National Property Fund (FNM) will not be changed at the parliamentary
session scheduled to continue on 1 July, Slovak media reported. Meciar
said the governing coalition will now remain in place. It is uncertain
whether the FNM, the secret service, and the TV and radio boards will
ever be expanded to include opposition representatives. The opposition
said an opportunity had been lost, blaming the Party of the Democratic
Left (SDL), which broke an opposition agreement on the expansion of the
boards overseeing the FNM and the secret service and offered to back a
minority government led by Meciar's Movement for a Democratic Slovakia
under certain conditions. Meanwhile, the SDL took credit for averting
the fall of Meciar's government and ensuring that the premier takes
responsibility for his policies. -- Sharon Fisher

HUNGARY'S SOCIALISTS WANT TO POSTPONE FINAL VOTE ON NEW CONSTITUTION.
The Hungarian Socialist Party (MSZP) has suggested that the final vote
on the new constitution be postponed until September, Hungarian dailies
reported on 1 July. While the coalition Alliance of Free Democrats
(SZDSZ) and the opposition both supported the much-discussed draft
constitution in the ballot on 27 June (see OMRI Daily Digest, 28 June
1996) several MSZP deputies voted against it, despite having signed an
all-party agreement in favor of the draft basic law. The vote, which
SZDSZ leader Ivan Peto described as a "scandalous fiasco," came as a
surprise, since the governing parties seemed to agree on basic
principles. Opponents of the draft constitution, among whom are several
ministers, want references to a "social state" to be included, as well
as a provision stipulating that the president be elected directly. They
also want to ensure "interest coordination" among the governing parties.
-- Zsofia Szilagyi

HUNGARIAN INCOME TAX RATES TO BE LOWERED NEXT YEAR. The government has
proposed to lower the top rate of personal income tax from the record-
high of 48% to 44%, Hungarian media reported on 1 July. It also intends
to implement further reform measures in the tax system in 1997,
including increasing capital gains payments and introducing a new tax on
tobacco, alcohol, and oil products. The proposal is scheduled to be
debated by the parliament in August. -- Zsofia Szilagyi

SOUTHEASTERN EUROPE

KARADZIC'S SLEIGHT OF HAND... Bosnian Serb civilian leader and indicted
war criminal Radovan Karadzic on 30 June announced he will delegate all
his powers as president of the Republika Srpska (RS) to his hard-line
vice president, Biljana Plavsic. He will continue to retain the title of
president, the chair of his governing Serbian Democratic Party (SDS),
and the option of running in the 14 September Bosnia-wide elections, the
BBC reported. The move comes in connection with the SDS's election
convention and following threats by representatives of the international
community and Serbian President Slobodan Milosevic that Karadzic must go
or the republic will face renewed sanctions (see OMRI Daily Digest, 26
June 1996). The Dayton agreement states that there is no place in public
life for war criminals. Karadzic had earlier delegated some of his
duties to Plavsic, and recently made any resignation conditional on
political and territorial concessions to the Republika Srpska. --
Patrick Moore

...AND THE WEST'S RESPONSE. The major Western allies found Karadzic's
conditions unacceptable last week, and it appears that his latest move
has not impressed them, either. White House spokesman David Johnson said
on 30 June that "Our policy on him remains what we have said in the
past: that he needs to be not only out of power but he needs to be out
of influence, out of town and in the dock." Reuters also reported that
Germany, France, and the U.K. agreed with the U.S. but that Johnson
admitted that there has been "some confusion" regarding the Western
reaction in general. This stemmed from the initial position taken by
some international representatives dealing with Bosnia, such as High
Representative Carl Bildt, who seemed to be content with Karadzic's move
as "a step in the right direction." The BBC added that the Bosnian
government denounced Karadzic's announcement as a sham but that entire
affair has served to boost Karadzic's popularity with the Bosnian Serbs.
-- Patrick Moore

EU SAYS MOSTAR ELECTIONS WERE SUCCESSFUL. EU Administrator Ricardo Perez
Casado said the Mostar municipal elections on 30 June were well
organized and a significant step toward the re-establishment of
structures that will enable "political and social coexistence" in the
city, international media reported. No significant disruptions were
noted during the ballot. While Bosnian Prime Minister Hasan Muratovic
complained that 20% of Muslim names did not appear on the polling
stations' registers, an EU spokesman claimed that only some 400 people's
names were omitted, even though they were registered centrally.
Muratovic called for new elections in some districts. Voter turnout was
put at more than 50%, with over 3,000 international troops and hundreds
of Bosnian Muslim and Croatian and international police ensuring freedom
of movement in the city. Thousands of refugees from Mostar voted in
Stockholm, Bonn, Bern, and Oslo. The EU organized bus transfers to these
polling stations from other European cities. Final results are expected
on 3 June. -- Fabian Schmidt

MONTENEGRIN PRESIDENT RENEWS CALL FOR KARADZIC'S REMOVAL. Momir
Bulatovic, in an interview with RFE/RL on 28 June, has once again called
for Bosnian Serb leader Radovan Karadzic to step down from the
presidency of the Republika Srpska. He noted that Karadzic has "refused
to meet [conditions] he has already agreed to." But when asked whether
rump Yugoslavia would send to The Hague the three Yugoslav army officers
accused of involvement in the massacre of at least 260 Croatian
civilians near Vukovar in 1991, he said that question was "too sensitive
to answer with just a 'yes' or a 'no.'" Bulatovic also said he believed
that the Yugoslav United Left's (JUL) electoral prospects were bleak and
that the group "has no chance in Montenegro." -- Stan Markotich

MACEDONIAN PRESIDENT ENDS VISIT TO TURKEY. Kiro Gligorov on 30 June
concluded a four-day official visit to Turkey, Macedonian and
international media reported. Gligorov held talks with his Turkish
counterpart, Suleyman Demirel, on strengthening bilateral ties. Other
discussions focused on improving bilateral economic and trade relations
as well as Turkish investment in Macedonia. Bilateral trade reached $126
million in 1995, a 60% increase over 1994. In an address at Istanbul
University on 29 June, Gligorov called for open borders in the Balkans
and respect for individual, minority, and religious freedoms, noting
that the improvement of norms for democracy and social justice must be a
common objective. Meanwhile, the Macedonian Komercijalna Banka and the
Turkish Ziraat Bank signed a protocol on the creation of a Turkish-
Macedonian bank. -- Stefan Krause

CHINESE PRESIDENT IN ROMANIA. Jiang Zemin on 29 June began a four-day
state visit to Romania aimed at boosting bilateral relations, local and
Western media reported. Jiang, currently on a one-month tour of Europe
and Central Asia, is accompanied by more than 90 officials and experts,
including Foreign Minster Qian Qichen. He met with his Romanian
counterpart, Ion Iliescu, Prime Minister Nicolae Vacaroiu, and the
chairmen of the parliament's two chambers, Oliviu Gherman and Adrian
Nastase. The two countries are expected to sign agreements on economic,
technical, and scientific cooperation. They concluded a treaty of
friendship in 1994. Before the collapse of the communist regime in
Romania in 1989, annual bilateral trade amounted to an average of $1
billion; by 1995, that figure had sunk to $300 million. -- Dan Ionescu

BREAKTHROUGH IN MOLDOVAN-DNIESTER NEGOTIATIONS. Moldovan and Dniester
officials, meeting in Chisinau on 28 June, initialed the final version
of a memorandum "On the Basic Principles for Normalizing Moldovan-
Dniester Relations," BASA-press and Infotag reported. Russian Deputy
Foreign Minister Boris Pastukhov attended the talks, which were brokered
by envoys of the Russian and Ukrainian presidents as well as OSCE
representatives. He was quoted as saying that the document was "a
constructive step toward a final, full-fledged settlement of the
Dniester conflict." According to ITAR-TASS, Boris Yeltsin has invited
Moldovan President Mircea Snegur, president of the self-styled "Dniester
republic" Igor Smirnov, and Ukrainian President Leonid Kuchma to attend
the signing ceremony at the Kremlin on 1 July. -- Dan Ionescu

BULGARIAN UPDATE. Dimitar Moskov, head of the Bulgarian economic police
force, has revealed that the state lost 17.9 billion leva ($115 million)
in the first five months of 1996 because of white-collar crime,
according to Standart. Moskov said 4,344 cases of white-collar crime
were registered during that period, up 300% on the same period last
year. Moskov said nobody knows just how widespread corruption is within
the state apparatus, but he admitted that it takes place at all levels.
In other news, prices for fuel, cigarettes, alcohol, public transport,
and other goods and services went up on 1 July, Trud reported. A number
of taxes, including VAT, also increased. Bulgarian economists predict
that inflation will go up in July, possibly reaching 20%. -- Stefan
Krause

ALBANIA'S SOCIALIST PARTY BOYCOTTS ROUND-TABLE. Albanian Socialists on
29 June boycotted a round table that President Sali Berisha had invited
them to attend, Reuters reported. Only parties represented in the new
parliament were invited to the talks. The Socialists said they would
only take part if all parties were represented. They also explained that
Berisha had wanted to discuss only the formation of a new government,
whereas they had demanded that new election regulations be included on
the agenda. The Council of Europe has called for new regulations to be
drawn up following an outcry over massive ballot irregularities.
Meanwhile, the new parliament is due to convene on 1 July to elect a new
government. -- Fabian Schmidt

[As of 12:00 CET]

Compiled by Jan Cleave

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