A disagreement may be the shortest cut between two minds. - Kahlil Gibran
OMRI DAILY DIGEST

No. 150, Part II, 5 August 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

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CENTRAL AND EASTERN EUROPE

UKRAINIAN PRESIDENT ISSUES TAX REFORM DECREE. Leonid Kuchma issued a
decree on 2 August setting guidelines for tax reform, Ukrainian and
Western agencies reported. The guidelines are aimed at simplifying the
tax system, reducing the tax burden on businesses and eliminating many
loopholes and privileges. They also call for various protectionist
measures, including a tax increase on imports and new taxes on barter
transactions. The government will use the guidelines in drafting tax
reform legislation for parliament, which is set to take up the issue in
September. Deputy Prime Minister Viktor Pynzenyk told Ukrainian TV that
the government is cooperating with the World Bank on several projects on
tax reform, which may include some aid to fill any budget gaps Kyiv may
encounter during the transition to a new tax system. -- Chrystyna
Lapychak

SEVASTOPOL SEEKS FREE-TRADE ZONE STATUS. An initiative group in the
Crimean port city of Sevastopol has appealed to the Ukrainian government
to approve their plan to turn the city into a free-economic zone,
Ukrainian radio reported on 2 August. Valerii Ivanov, a local official,
said the group had sent a package of documents proving the viability of
turning the base of the disputed Black Sea Fleet into a free-trade zone.
The group needs the approval of the Ukrainian government in order to
submit a package of some 60 bills to parliament regulating economic
issues such as customs, currency, and taxes. According to Ukrainian
legislation, the creation of any free-economic zone requires the
adoption by parliament of a separate law. -- Chrystyna Lapychak

UKRAINE REMOVED FROM U.S. ARMS TRADE BAN LIST. The U.S. has taken
Ukraine off the International Traffic in Arms Regulations list, a State
Department spokesman announced on 2 August. According to his statement,
this means that it is no longer U.S. policy to deny licenses for the
sale or purchase of military equipment or services from Ukraine. The
State Department lifted the restrictions on six other former Soviet
republics two weeks ago. -- Doug Clarke

IRANIAN FOREIGN MINISTER IN BELARUS. Iranian Foreign Minister Ali Akbar
Velayati ended a two-day visit to Belarus on 2 August, Belarusian radio
reported. During the visit, Velayati met with President Alyaksandr
Lukashenka, Prime Minister Mikhail Chyhir, and Foreign Minister
Uladzimir Syanko. Talks focused on trade and economic cooperation,
especially a barter deal through which Belarus could pay for Iranian oil
with goods from its industries. In the first half of the year, Iranian-
Belarusian trade amounted to $7 million. In 1995, total trade was $8
million. Syanko also asked Velayati to help secure the release of
Belarusian POWs captured in Afghanistan while serving in the Soviet
military. -- Ustina Markus

LATVIAN FOREIGN MINISTER IN TOKYO. Valdis Birkavs completed a five-day
visit to Japan on 2 August with talks with his Japanese counterpart
Yukihido Ikeda, BNS reported. Ikeda noted that Latvia was on the list of
countries eligible to receive technical assistance from Japan and
experts of the Japanese International Cooperation Agency would soon tour
Latvia to determine where assistance was most needed. The ministers also
discussed opportunities to increase economic cooperation as well as ways
to attract Japanese investment to Latvia.  -- Saulius Girnius

KWASNIEWSKI THE MOST POPULAR. President Aleksander Kwasniewski is the
most popular Polish politician, Rzeczpospolita reported on 3 August,
quoting a poll conducted from 12-16 July by the Public Opinion Research
Center (OBOP). Kwasniewski has an approval rating of 55% and is followed
by former Labor Minister Jacek Kuron (52%), Sejm Speaker Jozef Zych
(48%), Prime Minister Wlodzimierz Cimoszewicz (39%), and former Foreign
Affairs Minister Andrzej Olechowski (37%). Three former prime ministers
come next: Waldemar Pawlak (32%), Tadeusz Mazowiecki (31%), and Jan
Olszewski (29%). Solidarity leader Marian Krzaklewski (28%), Finance
Minister Grzegorz Kolodko (26%), former President Lech Walesa (26%), and
former Prime Minister Jozef Oleksy (23%), scored less impressively.
Walesa leads the negative popularity ranking with 38% of respondents
disapproving of him. Oleksy (37%), Confederation of Independent Poland
leader Leszek Moczulski (33%), and Kolodko (30%) come after Walesa in
the negative ratings. Politicians' popularity is important in view of
next year's parliamentary elections. -- Jakub Karpinski

U.S. HELSINKI COMMITTEE DISAPPOINTED WITH HUNGARIAN DECLARATION.
Christopher H. Smith, chairman of the U.S. Congress's Helsinki
Committee, on 2 August criticized last month's ethnic-Hungarian summit
in Budapest, Praca reported on 5 August. Saying that he had expected the
summit to deal with "concrete problems" of Hungarian minorities, Smith
expressed disappointment that the participants concerned themselves with
"ambiguous support for autonomy" and "self-government." They did so
knowing that the use of these terms must "induce alarm in countries
which are already afraid of alleged irredentism," Smith said. He warned
that the application of such terms without clarification creates the
impression that "the declaration represents only the hardly concealed
effort by Budapest to expand its influence also beyond current borders
or to return back to the time when all Hungarians were unified in one
country." Slovakia's Foreign Ministry expressed agreement with Smith's
comments. -- Sharon Fisher

LATEST POPULARITY POLL RESULTS IN HUNGARY. According to a recent poll
conducted by Marketing Centrum, the opposition Smallholders Party retook
a slight lead over the senior governing Socialist Party, Nepszava
reported on 5 August. If elections were held "this Sunday" 25% of the
decided voters would cast their ballot for the populist Smallholders and
only 24% for the Socialists. The opposition Young Democrats have also
increased their popularity (17%) while support for the junior coalition
party Alliance of Free Democrats dropped to 15%. The Smallholders' Party
had continually headed popularity polls from October 1995 until radical
statements by their leader in a March speech. -- Zsofia Szilagyi

SLOVAK CULTURAL CENTER OPENS IN HUNGARY. A Slovak Education and Culture
Center was opened in the northern Hungarian town of Bank to serve the
interests of the Slovak minority in Hungary, Hungarian media reported on
5 August. Setting up the Ludovit Stur Center cost 30 million forints
($198,000). Of this the Hungarian government contributed 5 million
forints and the Slovak government 2 million forints. Jan Lomen, mayor of
the predominantly Slovak town, said the new center should improve
Hungarian-Slovak relations and help the 100,000-strong Slovak minority
adapt to Hungarian society. Slovak Ambassador to Hungary Eva Mitrova
said the opening of the center was an exceptionally important event. --
Zsofia Szilagyi

SOUTHEASTERN EUROPE

MOSTAR CROATS REJECT EU PROPOSAL ON CITY COUNCIL. Mostar EU
administrator Sir Martin Garrod said on 5 August that the Mostar Croat
leadership refused the proposal of the EU Administration to consider
establishing Mostar's city council, Oslobodjenje reported the same day.
Croats wanted the city council to be a "provisional" body until their
complaints over the elections were heard by the Bosnian federation's
constitutional court, but Garrod said that was unacceptable. The EU
threatened to withdraw from Mostar if the Croats continue their boycott.
The EU will announce its future course of action this evening, news
agencies reported. -- Daria Sito Sucic

DOES CROATIAN PRESIDENT SUPPORT MOSTAR CROATS OVER CITY COUNCIL ROW? The
mayor of the Croat-part of Mostar, Mijo Brajkovic, said the Mostar
Croats will not give up their terms for establishing a joint city
administration, and they have been supported in their requests by
Croatian President Franjo Tudjman, Novi List reported on 3 August.
Meanwhile, Tudjman assured U.S. President Bill Clinton that Bosnian
Croats will cooperate with Muslims in Mostar, AFP reported on 2 August.
State Department spokesman Nicholas Burns said Tudjman promised that
Mostar Croats would respect the elections in Mostar and they would
dismantle their para-state of Herceg-Bosna. Meanwhile, Tudjman accused
some "European circles" of wanting the Dayton peace accord to fail, and
blaming Croatia for it, AFP reported. Tudjman also said the institutions
of Herceg-Bosna could continue until those of the Bosnian federation
came into being. -- Daria Sito Sucic

FEUDING BETWEEN BOSNIAN SERB POLITICAL PARTIES CONTINUES. An explosive
device was discovered in a hall in Brcko just before a meeting of the
Socialist Party of the Republika Srpska (SPRS), AFP reported on 4
August, citing Beta news agency. Tanjug called the machine a smoke
grenade. The SPRS is the Bosnian branch of Serbian President Slobodan
Milosevic's Socialist Party of Serbia and is the main electoral rival of
Radovan Karadzic's Serbian Democratic Party. Provocations such as
beatings, bombings, and stonings against the SPRS have been reported
over recent months, and Onasa said on 1 August that additional incidents
took place recently in Teslic, Zvornik, Brcko, and Derventa. Meanwhile,
among the Muslims, the governing SDA and the opposition Joint List
continue to trade accusations over a SDA poster that implies that it is
the duty of all Muslims to vote for the SDA. -- Patrick Moore

HAS A PLAN TO NAB KARADZIC BEEN EXPOSED? London's Sunday Times reported
on 4 August that the U.S. wants to stage a covert air operation to seize
Bosnian Serb civilian leader and indicted war criminal Radovan Karadzic
from his base at Pale, Reuters noted. The paper quoted British Defense
Secretary Michael Portillo as saying, however, that Britain would refuse
to cooperate with such a mission, asking: "how many British lives is
that worth?" He added that "whilst we believe Karadzic must be brought
to justice... our immediate priority is stability in Bosnia-Herzegovina
and the holding of democratic elections next month." Portillo denied
that there is any rift between London and Washington over policy toward
Bosnia, but observers of the conflict know that such differences have
long existed. Croatian sources told OMRI that they believe that the
story was deliberately leaked by London to thwart American plans. --
Patrick Moore

SERBIAN REFUGEES COMMEMORATE "OPERATION STORM." An estimated 3,000
Serbs, mostly refugees from Croatia, crammed into Belgrade's St. Mark's
Church on 4 August to hear Patriarch Pavle deliver prayers in
commemoration of the first anniversary of "Operation Storm," the
military exercise by which Croatia reclaimed much of Krajina that was
held by rebel Serbs. The operation was followed by a massive outflow of
Serbian refugees. For his part, Pavle, delivering a message clearly
tinged with political overtones supportive of the insurrection against
Croatia and at the same time critical of Belgrade authorities for not
rescuing the Krajina regime, said "There is no place on earth where the
guilty can hide...the truth will always be revealed," Reuters reported.
-- Stan Markotich

THREE POLICE STATIONS BOMBED IN KOSOVO. Six cars were burned when a
local police station in Podujevo caught fire following a bomb attack on
2 August, international agencies reported. A municipal building and a
Red Cross warehouse were also damaged by the explosion. A shoot-out
reportedly followed the incident. Two other police stations were
simultaneously hit in Krpimej near Podujevo and Pristina. Nobody was
injured in the attacks, AFP reported. Meanwhile, Deutsche Welle's
Albanian language service reported on 5 August that the police force has
stepped up its presence in the region and begun raiding Albanian homes.
-- Fabian Schmidt

ROMANIA SLAPS CURRENCY CONTROL ON BUSINESSES. In a measure that Reuters
called a "populist move," Romania on 2 August slapped stringent exchange
controls on state companies and banks, stripping them of hard currency
in order to help fund badly needed energy imports. The government
decreed that some 100 state companies must convert earnings from certain
exports at the disadvantageous exchange rate of 3,134 lei to the dollar,
instead of the retail rate of some 3,500 lei. Banks will also be forced
to cheaply sell hard currency holdings that exceed certain limits.
Proceeds will be used to set up a special energy fund, which will also
hold foreign loans and hard currency receipts from privatization. --
Michael Shafir

CONTROVERSIAL GATHERING OF HUNGARIAN CHURCH IN ROMANIA. Romanian media
reported on 3 August that a controversial international gathering of the
Hungarian Reformed Church began in Oradea on the same day. Apart from
members of the church from Romania, the gathering is attended by
participants from Hungary, the U.S., Australia and other countries. The
authorities have warned the organizers not to allow the event to be
turned into one of "irredentist provocations." But on the same day,
Romanian television reported that a statue of Hungarian princess
Zsuzsana Lorantffy, who in 1657 opened the first Reformed theological
school in Oradea, was erected where a bust of Romanian national poet
Mihai Eminescu used to stand. The bust had been removed by Hungarian
authorities after the annexation of northern Transylvania in 1940. The
congress elected Romanian Reformed Church bishop Laszlo Tokes as
chairman of the World Union of Magyar Reformists. On 4 August Tokes
denied any "tendency of separation or unification with Hungary," but
added that it was "natural" for a community that "was once one entity to
wish to become one entity again," Radio Bucharest reported on 5 August.
-- Michael Shafir

RUSSIANS DENY REPORTS THEY ARE INVESTIGATING MOLDOVAN PREMIER. Moscow's
Prosecutor's office has denied reports in the Romanian press and in the
Moldovan opposition media that it had opened a criminal investigation
against Moldovan Prime Minister Andrei Sangheli, Infotag reported on 2
August. The reports had alleged that Sangheli and the leadership of the
Dniester breakaway region had been placed under investigation for
mismanaging funds to be used to pay for energy deliveries from Russia to
the Dniester region. The commander of Russian troops in Tiraspol,
Colonel Mikhail Bergman, who was cited as the source of the reports,
told Infotag he had indeed granted an interview to Romanian reporters,
but added that in the interview he only spoke of the "doubtful business
affairs" of the Minister of State Security in Tiraspol, Vadim Shevtsov.
-- Michael Shafir

MONEY-LAUNDERING SCANDAL IN BULGARIA. Between 31 July and 2 August, five
Bulgarians were arrested for illegally transferring $186 million abroad,
RFE/RL reported. Four of the detainees are employees of Balkanbank, the
country's biggest state-owned commercial bank, and the fifth is a former
policeman acting as the representative of an unnamed Cypriot company
which is involved in the apparent money laundering scheme. The money was
apparently sent to Balkanbank's Ruse branch from abroad and then
transferred to a third country. The sum transferred, in what appears to
be Bulgaria's biggest financial scandal since 1989, equals almost one-
third of Bulgaria's foreign currency reserves. -- Stefan Krause

WORLD BANK LENDS BULGARIA $30 MILLION TO ASSIST UNEMPLOYED. A World Bank
representative in Sofia confirmed on 4 August that the bank would lend
Bulgarian $30 million to assist workers left unemployed by structural
reforms agreed to with the bank and the IMF, Pari reported on 5 August.
The loan -- which is for 20 years with a five-year grace period -- will
provide funds for both social assistance and retraining for the
estimated 65,000 workers who will lose their jobs. It will help the
government by reducing the social cost of the reforms, and free the
banks from having to finance failing state enterprises, enabling them to
lend more extensively to the private sector. Total World Bank lending to
Bulgaria to date is $869 million. -- Michael Wyzan

ALBANIAN PRESIDENT DECREES CREATION OF PERMANENT ELECTORAL BODY.
Albanian President Sali Berisha has decreed the creation of a 17-member
permanent electoral commission, Reuters reported on 3 August. The body
is in charge of organizing, supervising and controlling future ballots.
Berisha has invited political parties to nominate candidates for the
body ahead of 20 October's local elections. In its final report on May's
controverisal parliamentary elections, the OSCE recommended the creation
of an independent permanent body to ensure that election irregularities
do not occur again and that neither parties nor the government interfere
in the voting process. -- Fabian Schmidt

GREECE, ALBANIA AND THE ALBANIAN ORTHODOX CHURCH CHALLENGE
CONSTANTINOPLE. The Greek government and Albanian Archbishop Anastasios
Giannoulatos agreed that the appointment of three bishops by the
Ecumenical Patriarchate of Constantinople is not acceptable, Koha Jone
reported on 3 August. They were appointed to the sees of Gjirokaster,
Vlora, and Korca, but the Albanian authorities declared them persona non
grata. The Committee for the Protection and the Independence of the
Albanian Orthodox Church argues that according to the Albanian church's
statute, high dignitaries must be Albanian. Giannoulatos, himself a
Greek, is under criticism by Albanians who want him replaced. His
appointment in 1991 led to a factional split of the church, with some
Orthodox communities in central Albania refusing to accept his
authority. -- Fabian Schmidt and Stefan Krause

[As of 12:00 CET]

Compiled by Pete Baumgartner

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