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RFE/RL NEWSLINE Vol. 1, No. 84, Part II, 30 July1997
This is Part II of Radio Free Europe/Radio Liberty's Newsline. 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 RFE/RL NewsLine are available through RFE/RL's WWW pages: http://www.rferl.org/newsline/search/ Back issues of the OMRI Daily Digest are available through OMRI's WWW pages: http://www.omri.cz/ xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part II * BELARUSIAN KGB INVESTIGATES ACCUSATIONS AGAINST RUSSIAN JOURNALISTS * ALBANIAN GOVERNMENT WINS VOTE OF CONFIDENCE * SERBIAN AUTHORITIES HOUND LEADING INDEPENDENT DAILY End Note WHY ESTONIA RATHER THAN LATVIA OR LITHUANIA? xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx EAST-CENTRAL EUROPE BELARUSIAN KGB INVESTIGATES ACCUSATIONS AGAINST RUSSIAN JOURNALISTS... The criminal case against the three Russian television journalists accused of illegally crossing the Belarusian border has been handed over to the KGB in Grodno for investigation, Belapan reported. Russian Public Television (ORT) reporters Pavel Sheremet, Dmitrii Zavadskii, and Yaroslav Ovchinnikov are being held by the Belarus KGB in pre-trial detention in Grodno. A decision is expected on 30 July on whether they will be freed pending their trial. The three are charged with illegally crossing the Belarusian border with Lithuania while preparing a report on the Belarusian border guards. Belarusian President Aleksandr Lukashenka has accused the Russian media of waging an "information war" against Belarus (see "RFE/RL Newsline, 29 July 1997). ...WHILE YELTSIN DEMANDS EXPLANATION. Russian President Boris Yeltsin on 30 July asked reporters to convey to Lukashenka, that he is "indignant" over the Belarusian authorities' treatment of the ORT journalists and wants an explanation, Interfax reported. Speaking from Samara Oblast, where he is vacationing, Yeltsin warned that Russia may reconsider the union charter recently signed with Belarus. He added, "We do not touch Belarusian journalists." ORT management on 29 July had urged Yeltsin to "take a clear position on freedom of the press in Belarus." The same day, the Russian Foreign Ministry summoned the Belarusian ambassador in Moscow, Viktor Danilenka, to request the release of the journalists, Russian media reported. GERMAN FOREIGN MINISTER IN UKRAINE. Klaus Kinkel arrived in Kyiv on 29 July for two days of talks with President Leonid Kuchma, Prime Minister Valery Pustovoitenko, and Foreign Minister Hennady Udovenko, dpa reported. Kinkel is scheduled to visit NATO's information center in Kyiv, the new premises of the German embassy, and a Protestant Church. He is accompanied by a business delegation that will meet with senior government officials. The two sides will also discuss the issue of trophy art taken to Ukraine by the Soviets after the end of World War II. UKRAINE, IMF REACH TENTATIVE STAND-BY AGREEMENT. Goohoon Kwon, the IMF's resident representative in Kyiv, says an agreement has been reached in principle with Ukraine on a temporary loan, Reuters reported. The agreement is tentative and subject to the approval of the IMF board. Kwon did not say how much the one-year loan is worth, but Ukrainian officials have said it will total $750 million. Ukraine's last stand-by agreement with the IMF expired in February. The agreements are seen as a temporary measure until Kyiv fulfills conditions to qualify for a three-year credit valued at between $2.5 billion and $3 billion. RUSSIA URGES DIALOGUE WITH ESTONIA OVER ETHNIC ISSUES. Ethnic Affairs Minster Andra Veidemann met with his Russian counterpart, Vyacheslav Mikhailov, in Moscow on 28 July, ETA and BNS reported. Mikhailov said that direct contacts between the two ministers could lead to a solution to the problems of Russians living in Estonia. He urged Tallinn to sign a memorandum on cooperation between the two countries' immigration authorities. Veidemann promised to speed up the integration of the Russian-speaking minority into Estonian society following the European Commission's recommendation that Estonia be invited to begin talks on accession to the EU. On 31 July, Estonia's Citizenship and Immigration Department is to begin registering those people who have no valid identification documents. It is estimated that there are between 20,000 and 50,000 illegal residents in Estonia, of whom the overwhelming majority are ethnic Russians. CONSULTATIONS ON NEW LATVIAN GOVERNMENT UNDER WAY. Premier-designate and former Economics Minister Guntars Krasts on 29 July began consultations with the political parties represented in the parliament on the formation of a new government, BNS reported. Krasts told reporters that he believed the new cabinet should be as broad-based as its predecessor, which was composed of seven parties. He also said he was not categorically opposed to the nomination by Latvia's Way of Vilis Kristopans as transport minister. Kristopans resigned from that post after the Prosecutor-General's Office had announced he violated the anti-corruption law. Krasts's Fatherland and Freedom party, however, has urged other political groups not to nominate those former ministers who resigned amid the recent corruption scandal. POLISH GOVERNMENT UNVEILS RECONSTRUCTION PLANS. Government spokeswoman Aleksandra Jakubowska told journalists on 29 July that 150 schools damaged by the worst floods in centuries have to be repaired within the next month, before the end of the summer vacation. She said that, in general, priority would be given to rebuilding and repairing public buildings such as schools, courts, hospitals, local government headquarters, libraries, and some sport facilities. Many bridges, roads, and railways were destroyed by the floods. Jakubowska said the government planned to repair all protection dikes by the end of October, clear river beds by 30 November, and repair dams by the end of the year. The government does not yet have estimates of the costs of repairing the damage, but independent analysts say some 7.5 billion zlotys ($2.2 billion) will be needed. CZECH PRESIDENT TOURS FLOOD AREAS. Vaclav Havel on 29 July toured flood-damaged areas of the Czech Republic and urged residents to rebuild their communities so that they are "stronger and more beautiful," Czech Television reported. He said 40 years of communism had left many cities and towns run down and unattractive. The floods give Czechs a chance to improve that situation, he commented. Havel traveled with Defense Minister Miloslav Vyborny to one of the worst affected areas, some 150 kilometers east of Prague. The Czech government has announced that people whose homes were destroyed will each receive 150,000 crowns and be entitled to low-interest loans worth 850,000 crowns. FRANCE PRAISES SLOVAK CONSTITUTIONAL COURT'S DECISION. French Foreign Ministry spokesman Yves Doutriaux said on 29 July that the Slovak Constitutional Court's verdict in the case of former deputy Frantisek Gaulieder was in line with the "norms of a legal state that have to be respected by countries aiming for European Union membership." The court ruled on 25 July that the Slovak parliament violated Gaulieder's constitutional rights in stripping him of his mandate in December 1996. Doutriaux commented that "it is important that the parliament draw conclusions" from that ruling and allow Gaulieder to take up his place in the parliament once again. Gaulieder was stripped of his mandate after he left Prime Minister Vladimir Meciar's Movement for a Democratic Slovakia. Parliamentary chairman Ivan Gasparovic had produced a letter, allegedly signed by Gaulieder, in which the deputy stated he was giving up his mandate. Gaulieder, however, denied signing such a letter. RUSSIA TO REPAY DEBTS TO HUNGARY. Russia will repay $320-380 million of the $650 million it owes Hungary by the end of this year, while the remainder will be paid in equal installments between 1998 and 2000, Hungarian media reported on 30 July. The agreement was reached by Hungarian Industry, Trade, and Tourism Minister Fazakas Szabolcs during his visit to Moscow on 28-29 July. The two sides agreed that Russia will continue to make payments in the form of military equipment and consumer or industrial goods. Fazakas and his hosts also agreed on a $10 million credit to increase Hungarian exports to that country. TOBACCO COMPANIES TO PAY FOR HEALTH DAMAGE IN HUNGARY? Hungarian Welfare Minister Mihaly Koekeny suggested on 29 July that tobacco companies pay compensation for health damage caused by smoking, Hungarian media reported. The arrangement, similar to the recent U.S. draft agreement, would ensure tobacco companies of immunity from lawsuits regarding damage to health. The minister said smoking causes health damage totaling 90 billion forints ($475 million) each year in Hungary, including the costs of health care. Foreign tobacco companies say Koekeny's proposal is not feasible under present conditions, since taxes on cigarette sales are twice as high in Hungary as in the U.S. SOUTHEASTERN EUROPE ALBANIAN GOVERNMENT WINS VOTE OF CONFIDENCE. The new parliament overwhelmingly endorsed the government of Prime Minister Fatos Nano on 29 July. After the vote, Nano invited the legislators to "build together our common European future... The best times for every Albanian and the nation lie in its future and not in the past." His two most urgent tasks are restoring law and order and revitalizing the economy. Some 20 people were killed by illegally owned weapons on 28 July alone. Gross domestic product continues to decline, while vast amounts of industrial equipment are smuggled out to Montenegro and sold as scrap. Inflation is expected to reach 50 percent by the end of the year, and the government deficit is also on the rise. Finance Minister Arben Malaj told the parliament on 29 July that the IMF will send a delegation to Albania in August to reach a stabilization agreement. BIG SHAKEUP AT ALBANIAN INTERIOR MINISTRY. Interior Minister Neritan Ceka's office announced in Tirana on 30 July that he has sacked several senior officials, including the criminal police head, the special forces director, the head of the border forces, and the director of the logistics department. Ceka said that the individuals involved are incompetent political appointees from the Democratic Party and will be replaced by "experts" whom the Democrats had fired earlier. YUGOSLAV DEFENSE MINISTER CRITICIZES MONTENEGRIN AUTHORITIES. Pavle Bulatovic and officials of the Yugoslav Justice Ministry said in Belgrade on 29 July that Montenegrin Public Prosecutor Vladimir Susovic damaged Yugoslavia's interests and "struck a low blow" in linking Bulatovic to war crimes (see "RFE/RL Newsline," 29 July 1997). Neither Bulatovic nor the ministry, however, denied the charges that Bulatovic helped in the deportation of Muslims to Bosnian Serb territory, an RFE/RL correspondent reported from Belgrade. Meanwhile in Podgorica, Prime Minister Milo Djukanovic rejected President Momir Bulatovic's charges that the authorities encouraged the stoning of a visiting Serbian delegation (see "RFE/RL Newsline," 29 July 1997). SERBIAN AUTHORITIES HOUND LEADING INDEPENDENT DAILY. Dusan Malesevic, the director of the company that owns "Nasa Borba," wrote Serbian Prime Minister Mirko Marjanovic on 29 July that a $65,000 tax bill leveled against the company is "aimed at snuffing out 'Nasa Borba' and represents a threat to the independent media." "Nasa Borba" is Yugoslavia's leading independent daily and has been harassed by the authorities in the past. Yugoslav President Slobodan Milosevic said recently that the upcoming Serbian elections will be free and fair, while the Serbian authorities say that they have postponed planned measures against the independent media (see "RFE/RL Newsline," 28 July 1997). Independent human rights groups charge, however, that the authorities are proceeding with the shutdown of independent radio stations. EX-YUGOSLAV WAR CRIMES UPDATE. Croatian Foreign Minister Mate Granic on 29 July said that Croatia will not turn over to the Hague- based war crimes tribunal documents that the court has subpoenaed. Granic charged that the tribunal has no right to make such demands on a sovereign state. He added that Croatia is not obliged to hand over information that "is vital to its national security." The documents in question relate to the Croatian-Muslim conflict in Bosnia. Meanwhile in The Hague, Sefkija Djidic, the Muslim police chief in Vitez, claimed at the trial of Croatian Gen. Tihomir Blaskic that Croatian snipers killed children and old people in that central Bosnian town in 1993. Court officials, for their part, announced that international experts have begun excavating a mass grave near Brcko in Bosnia. The grave is believed to contain the remains of Muslims and Croats killed by the Serbs at the Luka concentration camp. CROATIAN GENERAL REPORTEDLY ARRESTED. Gen. Ivan Korade has been arrested after rejecting his recent retirement by President Franjo Tudjman and refusing to hand over the command at Varazdin to his designated successor There has been no official confirmation of the story, which is reported by Western agencies. Korade is a hero of the 1995 campaign against Knin, but the Varazdin district prosecutor charged him in May with "violent behavior" in that town. Korade has refused to appear in court to answer the charges. And on the island of Hvar, fire fighters and local citizens succeeded on 29 July in containing a fire that has already destroyed over 6,000 acres of forests, olive trees, and vineyards. The authorities have declared two towns on the island disaster areas. BOSNIAN ROUNDUP. Carlos Westendorp, the international community's chief representative in Bosnia, announced in Sarajevo on 29 July that he is setting up a commission to investigate corruption in the Bosnian government. Westendorp's agency will be independent of a similar body set up by President Alija Izetbegovic in response to criticism by visiting British Foreign Secretary Robin Cook, an RFE/RL correspondent reported from Sarajevo. Cook, for his part, said that all sides have failed to carry out the Dayton agreement sufficiently or ensure freedom of the media. Cook also slammed the existence of power centers outside state structures, and cited the Bosnian secret service as an example. Meanwhile, "The New York Times" reported on 30 July that the White House will send envoy Richard Holbrooke back to the Balkans to encourage implementation of the Dayton agreement. ROMANIAN PRIME MINISTER MEETS WITH TRADE UNIONS. Victor Ciorbea on 29 July met with representatives of the main trade unions to discuss the negotiations under way with the IMF. He said that in the coming weeks, four unprofitable state-owned refineries and several mines will be closed. The trade unions demanded adequate social protection for affected workers as well as the indexation of wages to reflect price increases, RFE/RL's Bucharest bureau reported. Also on 29 July, the National Commission for Statistics announced that inflation in June was 2.3 percent, similar to that in May. Inflation since December 1997 totals 101.2 percent. The Agency for Development reported the same day that foreign investment in Romania has reached $2.57 billion, of which $372 million have been invested since the beginning of 1997. CLUJ MAYOR ACCUSED OF INTER-ETHNIC INCITEMENT. Alexandru Farcas, the prefect of Cluj, on 29 July asked the Prosecutor-General's office to open an investigation into the local nationalist mayor, Gheorghe Funar. He accused Funar of having instigated the incident in which a Hungarian flag was stolen from the Hungarian consulate (see "RFE/RL Newsline," 28 July 1997). He said if the mayor is found guilty, he will be dismissed. Funar, for his part, said he will sue Farcas for slander, RFE/RL's correspondent in Cluj reported. The previous day, Funar had addressed open letters to Prime Minister Ciorbea and Foreign Minister Adrian Severin demanding that the government abolish the ordinance allowing bilingual signs, declare the Hungarian consul in Cluj "persona non grata" in Romania, and close the recently opened consulate. MORE DIE IN ROMANIAN FLOODS. Three more persons have died as a result of the floods in Vaslui County, eastern Romania, bringing the total of those who have drowned in the recent floods to four, RFE/RL's Bucharest bureau reported on 29 July. IMF STIPULATES CONDITIONS FOR LOANS TO TRANSDNIESTER. David Owen, who is heading an IMF delegation in Tiraspol, said on 29 July that the granting of credits to the breakaway region is conditional on the pace of normalization of relations with Chisinau, an RFE/RL correspondent in the Moldovan capital reported. Owen also said the fund will not approve credits to the Transdniester without first consulting Chisinau. BULGARIA, TURKEY SIGN MILITARY AGREEMENT. Turkish and Bulgarian officials, meeting in Ankara on 29 July, signed a military agreement providing for cooperation in defense and security, military technology, logistics, and instruction. At the signing ceremony, Turkish Chief of Staff Gen. Ismail Kakki Karadayi said the two sides will reduce the number of troops deployed near the countries' joint border to further enhance mutual trust. His Bulgarian counterpart, Gen. Miho Mihov, said the agreement was further proof of Turkish support for Bulgaria's drive to join NATO, RFE/RL's Sofia bureau reported. IMF PRAISES BULGARIA. In a statement released in Washington on 29 July, the IMF praised Bulgaria's efforts to stabilize its economy, Reuters reported. The fund says financial markets have reacted favorably to the introduction of the currency board in Bulgaria and that the country now has an "excellent opportunity to reinvigorate and complete the reform [process]." But it warns that there is "no room for slippage or complacency, as significant risks remain." In other news, it was announced on 28 July that Bulgaria's National Investigation Service will seize the passports of more than 1,5000 citizens suspected of involvement in corruption. The group includes former ministers and deputies, bankers, credit millionaires, and heads of insurance companies suspected of racketeering. END NOTE Why Estonia rather than Latvia or Lithuania? by Michael Wyzan On 15 July, the European Commission announced it was recommending that Estonia -- together with the Czech Republic, Hungary, Poland, and Slovenia -- begin negotiations on accession to the EU. Estonia may well be the most advanced economic reformer among the postcommunist countries. Equally important, with 1.5 million people and a gross domestic product of some $4 billion, it is so small that it will not present a burden to Brussels's coffers. Estonia is the wealthiest country to emerge from the former Soviet Union; in April, the average monthly wage stood at DM 406 ($235), about two-thirds of that in the richest Visegrad countries. It has a strong Western trade orientation: the top five export destinations in 1996 were Finland, Russia, Sweden, Latvia, and Germany. While 98 percent of exports went to other Soviet republics in 1990, that figure was only 40 percent (24 percent for the CIS alone) in 1996. One hallmark of Estonian economic policy has been liberalism toward domestic and foreign activity; for example, it has no import tariffs. It has modeled its privatization methods on those of the former East Germany, focusing on the search for cash-paying strategic investors, especially foreign ones. Estonia's use of such methods has resulted in unusually high volumes of foreign investment (DM 1.3 billion or some $800 million through the end of 1996). Another characteristic has been rigorous macroeconomic policy. In June 1992, Estonia became the first former communist country to introduce a currency board (since adopted by Lithuania, Bulgaria, and Bosnia), which eliminates most discretion on the part of the monetary authorities to stimulate the economy. Under such an arrangement, the central bank is barred from financing government budget deficits. Moreover, Tallinn has been unusually tough in closing failed banks and dealing with the consequences of such failures. The Estonian Central Bank imposed a moratorium on three banks in November 1992; and in January 1993, it proceeded to close one of those banks (without compensating shareholders or depositors) and to merge the other two, providing only partial compensation to their depositors. Those policies have paid off in macroeconomic performance. Monthly inflation, though slow to come down, was only 0.7 percent in the 12 months to March 1997. GDP grew by 4.3 percent in 1995 and 4.0 percent in 1996, after declining in previous years. The state budget has either been virtually balanced or in slight deficit, while the public debt is low. Estonia is closer to meeting the EU's Maastricht convergence criteria than many current members of the union. Even its worst problems, especially large and growing trade and current-account deficits, are similar to those of such obvious candidates for accession as the Czech Republic. The question to be asked is not why Estonia was invited to begin membership talks, but why Latvia and Lithuania were not invited to do so. The EC justified its decision not to include them on the grounds that they lagged behind in establishing market economies. But Latvia seems an only slightly less attractive candidate than Estonia. It used similarly tough methods to deal with a far more severe banking crisis than Estonia's. Between February and May 1995, five of Latvia's 10 biggest commercial banks became insolvent. Like Tallinn, Riga provided only partial compensation to depositors and tightened capital requirements and banking regulations. Those tough policies paid off. While Latvia weathered a bad year in 1995 (GDP fell by 0.8 percent), it saw a marked improvement in 1996 (GDP rose by 2.8 percent). Inflation has generally been lower than in Estonia (in 1995, Riga registered inflation of 13.2 percent and Tallinn 15 percent). Latvia is also the leader in pension reform among post-communist countries. Latvia's demerits include relatively slow and non-transparent privatization and trade oriented less toward the West (and a lower volume of foreign investment). It suffers from a high degree of political instability, with no fewer than five ministers resigning over the past two months and the premier following suit earlier this week. But Estonia has suffered from similar problems in the past. Lithuania seems a somewhat less alluring candidate than its northern neighbors, but the gap between it and the others is not so big. By 1996, inflation was running at 13.1 percent, while GDP growth has been positive since 1994. It was the first Baltic State to move ahead with privatization, although the voucher-based system introduced early on proved unsatisfactory. While Lithuania's relations with the IMF have been more difficult than those of the other two Baltic States, they nonetheless remain on track. However, it is the poorest state of the three and has the least welcoming attitude toward foreign capital. In conclusion, the EU may have to expend more effort justifying its decision not to invite Latvia and Lithuania to the negotiating table than was needed for the decision to invite Estonia. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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