RFE/RL NEWSLINE Vol. 1, No. 110, Part II, 4 September1997

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
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Headlines, Part II

* SOROS CLOSES OPERATIONS IN BELARUS

* CROATIA STARTS PROCEEDINGS AGAINST WAR CRIMINALS

* WESTENDORP SAYS BOSNIAN ELECTIONS WILL GO AHEAD

End Note
EU RETHINKS ITS FUNDING TO EAST

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EAST-CENTRAL EUROPE

SOROS CLOSES OPERATIONS IN BELARUS. Hungarian-born U.S.
financier and philanthropist George Soros on 3 September said he is
closing down the Soros Foundation in Minsk, RFE/RL's Belarusian
Service reported. In a statement, the foundation said the closure is
the result of harassment by tax authorities in Minsk, including
"politically motivated investigations, unjustified and exorbitant fines,
and the seizure of its bank account." The statement accused
Belarusian President Alyaksandr Lukashenka of conducting a
campaign to destroy civil society and independent mass media. Soros
denies accusations by Belarusian authorities that the foundation has
been involved in opposition political activities. Foreign Minister Ivan
Antonovich told state television on 3 September that the closure is
an attempt to provoke a "sensational" political reaction. Soros's Open
Society Institute has donated hundreds of millions of dollars to
former Communist countries to promote democracy and a free press.

EU COMMISSION PROPOSES $92.6 MILLION AID FOR CHORNOBYL. The
EU's Executive Commission on 3 September proposed 100 million ECU
in aid ($92.6 million) to help Ukraine repair the concrete sarcophagus
around the damaged nuclear reactor at Chornobyl, RFE/RL reported.
That sum is the EU's share of an aid package promised at the June
summit of the Group of Seven leading industrial nations. An EU
commission spokesperson told RFE/RL that safety precautions and
the plant's eventual closure are expected to dominate talks between
top EU officials and Ukrainian President Leonid Kuchma in Kyiv on 5
September. Disbursement of the EU aid requires formal approval
from EU finance ministers. The cost of making the Chornobyl reactor
safe in the aftermath of the 1986 explosion has been estimated at
$750 million. G-7 countries have pledged support worth $300
million.

LITHUANIAN PREMIER ON GENOCIDE SUSPECTS. Gediminas Vagnorius
has requested that the Supreme Court and the Prosecutor-General's
Office speed up the process of revoking the rehabilitation of persons
suspected of involvement in the Nazi-led genocide of Jews, BNS
reported on 3 September. "Neither at home nor abroad should there
be any doubt about the resolution of the Lithuanian people to create
a just state," Vagnorius commented. Shortly after Lithuania regained
independence, a universal rehabilitation for those who had resisted
occupying forces was declared. International Jewish organizations
protested that hundreds of people who had assisted the Nazis in
killing Jews were among those rehabilitated. Since then, the
rehabilitation of several war criminals has been revoked, but the
Supreme Court still has to make a ruling in 17 cases.

CENTRAL EUROPEAN MILITARY COOPERATION. Polish and German
military leaders are taking part in a two-day meeting at the Drawsko
military training ground, some 500 kilometers north of Warsaw, to
discuss cooperation between the Danish, German, and Polish armies.
The meeting follows the recent decision by the three countries'
defense ministers to establish a joint military force following
Poland's entry into NATO in 1999 (see "RFE/RL Newsline," 1
September 1997). The joint unit will have three divisions of up to
10,000 troops each and may have its headquarters in Szczecin, on the
Baltic coast near the German border. The joint force will aim, among
other things, to improve cooperation on humanitarian missions, such
as flood relief.

ENVIRONMENT MINISTERS GATHER IN POLAND. Environment
ministers from Poland, Belarus, Bulgaria, Estonia, Lithuania, Latvia,
Moldova, Romania, Slovakia, and Ukraine on 4 September gathered in
the Polish city of Torun, RFE/RL's Warsaw correspondent reported.
The ministers are expected to sign a cooperation agreement on
environmental preservation, waste processing, ecological education,
and soil and air pollution.

FORUM 2000 KICKS OFF IN PRAGUE. Leading intellectuals, writers,
religious leaders, and politicians began gathering in the Czech capital
on 3 September for informal discussions on humanity and its future.
Forum 2000 is taking place at Prague Castle under the auspices of
Czech President Vaclav Havel and Nobel Peace Prize winner Elie
Wiesel. In a recent statement, Havel commented that the "task of
participants in Forum 2000 [is] to review what we have learned
about ourselves and each other and to propose alternatives for the
future." Among the eight other Nobel Peace laureates taking part are
the Dalai Lama, former Israeli Foreign Minister Shimon Peres, and
former South African leader F. W. de Klerk. Other prominent
participants include Jordanian Crown Prince Hassan, former German
Chancellor Helmut Schmidt, and former German President Richard
von Weizsaecker. Forum 2000 closes on 6 September.

SLOVAK PREMIER WANTS EARLY PRESIDENTIAL ELECTIONS.
Vladimir Meciar told Slovak Television on 3 September that his
Movement for a Democratic Slovakia (HZDS) will seek to hold
presidential elections in December, some three months earlier than
planned. He declined to name a candidate but said that the head of
state "should not be a political president." Meciar also said that the
HZDS is conducting talks about the next president with other parties.
Incumbent President Michal Kovac officially ends his term of office
in March 1998. He and the premier have been at loggerheads since
1994, when Kovac helped bring down a previous Meciar government.
Kovac, who has the support of the opposition, has not yet announced
whether he will seek re-election but has said he is considering it.
Under the constitution, the president is elected by a three-fifths
majority of the parliament.

SLOVAK PRESIDENT NOT TO ATTEND VILNIUS CONFERENCE. A
presidential spokesman told an RFE/RL correspondent on 3
September that Kovac will not attend the upcoming summit of heads
of state in Vilnius because of a "very busy schedule that cannot be
changed." Slovak officials have denied speculation that Kovac turned
down the invitation because of the participation of Belarusian
President Alyaksandr Lukashenka. Czech President Vaclav Havel is
also unable to attend because of the Forum 2000 international
conference. The Czech ambassador in Vilnuis will participate instead.

TURKEY SUPPORTS HUNGARY'S NATO ACCESSION. Visiting Turkish
President Suleyman Demirel told his Hungarian counterpart, Arpad
Goencz, that his country backs Hungary's NATO membership,
Hungarian media reported on 3 September. Earlier this year, Turkey
hinted that it might veto the admission of new NATO members
unless its own application to join the EU was not treated more
favorably. Goencz told Demirel that Hungary supports Turkey's drive
to join the EU. Accompanied by a 130-strong business delegation,
Demirel said the volume of bilateral trade could reach some $100
million in the future. Demirel is scheduled to address the parliament
on 4 September.

HUNGARIAN INTERIOR MINISTER CRITICIZES ANTI-ROMA DECISION.
Gabor Kuncze has criticized the Satoraljaujhely local council for its
recent decision to expel a group of Gypsies on charges of endangering
law and order in the town, Hungarian media reported on 4
September. In a meeting with Mayor Karoly Laczko, Kuncze said the
council should pass a new resolution on the issue. He added that it is
regrettable that an "ethnic debate has developed in public over a
serious social problem." Laczko countered that "from a distance of
270 kilometers, the minister sees many things differently from how
we see [them] on the spot." Meanwhile, the government's minority
ombudsman has accused the town of "local apartheid."

SOUTHEASTERN EUROPE

CROATIA STARTS PROCEEDINGS AGAINST WAR CRIMINALS. The
Zagreb District Court on 3 September opened war crimes proceedings
against four former members of a special police unit who were
recently arrested (see "RFE/RL Newsline," 3 September 1997). The
four exercised their right to remain silent in response to the court's
questions, an RFE/RL correspondent reported from the Croatian
capital. The Split-based weekly "Feral Tribune," in which the story of
the crimes against Serbian civilians first appeared, has received at
least one bomb threat in connection with the article. Croatian
independent media noted that Tomislav Mercep, a politician and the
former commander of the police unit, has not been arrested. The
independent journalists added that the four accused might be able to
shed light on the role of some high-ranking officials in covering up
war crimes. The war crimes tribunal in The Hague has requested that
Croatia provide it with information about the case of the four
policemen.

WESTENDORP SAYS BOSNIAN ELECTIONS WILL GO AHEAD. Carlos
Westendorp, the international community's chief representative in
Bosnia, and his deputy Jacques Klein told Yugoslav President
Slobodan Milosevic in Belgrade on 3 September that the Bosnian local
elections must go ahead on 13-14 September. The two diplomats
rejected Milosevic's call for a presidential and parliamentary vote at
the same time in the Republika Srpska (see "RFE/RL Newsline," 2
September 1997). The same day, Milosevic told three of the leading
Bosnian Serb hard-liners -- Bosnian joint presidency member
Momcilo Krajisnik, Prime Minister Gojko Klickovic, and parliamentary
speaker Dragan Kalinic -- not to boycott the local elections.

BOSNIAN UPDATE. The U.S. State Department on 3 September
announced that SFOR will retake the television transmitter near
Bijeljina if the hard-line Serbs break the agreement whereby SFOR
recently returned the facility to police loyal to Radovan Karadzic (see
"RFE/RL Newsline," 2 September 1997). In Bern, the Swiss
government stated that Karadzic has no bank account in Switzerland.
In Sarajevo, a bomb exploded near Roman Catholic Church offices,
but no injuries were reported. And in the east Slavonian town of
Vukovar, a bomb went off near the post office.

ALBANIAN PARLIAMENT PASSES SWEEPING PRESS LAW. All parties
in the parliament voted for the new press law on 4 September,
Albanian state television reported. The new law states simply that
"the press is free" and "the freedom of the press is protected by law."
The October 1993 press law had restricted journalists' access to
information, allowed for confiscation of publications on vague
grounds, and provided for large fines on editors publishing
"punishable material." Meanwhile, U.S. and Albanian jurists told
RFE/RL that the recent changes in the statutes of state radio and
television on regulating use of news air time are not clearly
formulated and hence will allow much room for interpretation (see
"RFE/RL Newsline," 3 September 1997).

ALBANIAN FORMER PARLIAMENTARY SPEAKER IN HOSPITAL. Pjeter
Arbnori was taken to the hospital in a critical condition on 3
September, some two weeks after launching a hunger strike, "Dita
Informacion" reported. Doctors said, however, that his life is not in
danger. Arbnori is demanding that the opposition be legally
guaranteed one-third of political news air time. Meanwhile, a bomb
went off outside a lawyers' office in Tirana and destroyed a small
shop on 3 September, but nobody was injured, "Koha Jone" reported.
There is no information yet about the possible motive. Eye witnesses
told RFE/RL that another bomb exploded later that day in central
Tirana, but there are no reports of injuries or damage. Also on 3
September, police found a cache of arms, including machine guns and
hand grenades, in the house of a former presidential guard who
committed suicide after committing a murder, "Gazeta Shqiptare"
reported.

PURGES IN ALBANIAN MILITARY? The government has sacked a
number of high-ranking officers and is expected to appoint
replacements soon. Defense Minister Sabit Brokaj recently asked the
country's 25 generals to resign. A NATO military adviser, however,
told RFE/RL on 4 September that Western governments have urged
the Albanian government not to conduct political purges in the
military. The advisor added that the Albanian army is too large and
that a similar-sized NATO country would have only one general.

ROMANIA TO LIMIT DEBT PURCHASES BY FOREIGNERS? The "Wall
Street Journal Europe" reported on 3 September that Romania may
limit the amount of its debt that foreigners can purchase. The
newspaper cited what it called an "advance copy" of a government
decree. It said stockbrokers would have exclusive rights to sell
Treasury bills to non-resident foreigners and that the Finance
Ministry could impose limits on the amount sold to them. The decree
reportedly would impose a 1.5 percent tax on foreign purchases of
Bucharest's three-month and six-month Treasury bills. The "Wall
Street Journal Europe" said the decree is likely to be enacted within
the next few days.

CHISINAU CONDEMNS FOREIGN PRESENCE AT TIRASPOL
ANNIVERSARY. The Moldovan Ministry of Foreign Affairs has
condemned parliamentary deputies from other countries who joined
in Tiraspol's 2 September Independence Day celebrations. In a
statement issued 3 September, the ministry said leftist politicians
from Russia, Belarus, and Ukraine have complicated the situation in
the breakaway region by encouraging the idea of independent
statehood for the self-proclaimed Transdniestr Republic. The
statement singled out Oleg Mironov, a Communist Party deputy in
the Russian State Duma, who was quoted by the Infotag news agency
as saying that "Russia is interested in the Transdniestrian Republic's
existence and will promote its international recognition."

BULGARIAN BUSINESS BLOC EXPELS TWO MEMBERS. Two
parliamentary deputies from the Bulgarian Business Bloc were
expelled from the party on 3 September by party leader George
Ganchev, RFE/RL's Sofia bureau reported. The Business Bloc now has
10 deputies in the National Assembly, the minimum stipulated by
law for the existence of a parliamentary group. Ganchev accused one
of the expelled deputies, Christo Ivanov, of having worked as a secret
agent in the Soviet-era Security Service. Ivanov told a press
conference after his expulsion that Ganchev had accepted a $100,000
campaign contribution earlier this year from the controversial
business group Orion, which reportedly has close links to Socialist ex-
Prime Minister Zhan Videnov. Ivanov and the other expelled
member of parliament, Christo Petrov, have become independent
deputies.

END NOTE

EU RETHINKS ITS FUNDING TO EAST

by William Echikson

        The European Union set up its TACIS and PHARE programs five
years ago to aid the countries of Central and Eastern Europe and the
former Soviet Union. When the two programs were launched, they
focused on providing emergency food and transport aid. Since then,
they have expanded and evolved to embrace hundreds of separate
projects in 25 countries. Recent reports, however, criticize their
effectiveness.
        Under a mandate from the European Parliament, independent
consultants prepared so-called interim evaluations in August. At the
same time, the EU's Luxembourg-based Court of Auditors carried out
audits of the two programs. Significant overlap was uncovered in the
two aid programs. In theory, PHARE helps Central and Eastern
Europe, while TACIS is designed for the former Soviet Union, except
for the Baltics. But in practice, the two often duplicate each other.
        Worse, almost two-thirds of the aid money goes to highly paid
Western consultants, including wealthy multi-national consulting and
accounting groups. Those expensive consultants do not even record
their working hours, the Court of Auditors complained. In particular,
consultants working in Ukraine did not bother "to warn their
superiors of the alarming situation in the nuclear-power stations."
        The auditors found that, because of the heavy use of
consultants, the aid money produced few concrete, lasting results.
"About 80 percent of PHARE projects managed on a decentralized
basis are spent on contracts for services, supplies, or work," the
report concluded. Also, EU officials prefer to stay in comfortable
Brussels rather than resettle in the countries receiving the aid.
        The supposed benefactors of the EU's are furious. One Russian
member of parliament told EU investigators. "TACIS programs are
supervised now by foreign specialists whose work is paid at the
expense of funds allocated for our country.... In fact, TACIS [is
helping solve] the problem of unemployment in the EU."
        Bureaucratic bumbling means that much money approved by
the EU's political leaders is never spent. PHARE still has not managed
to disburse $2.2 billion. Nonetheless, PHARE's budget is scheduled to
rise from $1.4 billion in 1997 to $1.76 billion in 1999.
        TACIS's budget is about half that amount, even though the
countries in TACIS are more backward than their neighbors in
PHARE. But the EU Court of Auditors noted in its report that only a
third of the $180 million allocated to improve Ukrainian nuclear
safety has been disbursed.
        Months are needed to get EU programs up and running, but
many of the countries receiving the aid are moving fast toward
market economies. The EU's TACIS Interim Evaluation report
acknowledged that "most projects are outdated even before the
tenders make their bids and strategy proposals." At the same time, it
notes that "poor projects are rarely terminated." Only 10 TACIS
projects were canceled owing to poor performance. But 80 programs
were able to run their full course, despite signs they had failed to
reach their interim objectives. The two programs are funding too
many separate projects, the report concluded.
        PHARE and TACIS official are pledging to change their ways in
response to such criticism. "This is a wake-up call," an unnamed
PHARE official admitted. "We realize that our program has to be
revised." PHARE officials say that in the future only projects costing
more than $2.2 million will be approved in the hope that fewer
larger projects will be easier to control than numerous smaller ones.
        Instead of continuing to divide funds into 13 areas, PHARE will
focus on funding infrastructures. For example, the main Berlin to
Warsaw highway will be improved. Up to 70 percent of the overall
program will be spent on such projects. A second priority will be
preparing Central and Eastern European recipients to join the EU.
Money will go toward computerizing customs facilities and upgrading
other public institutions to meet EU standards.
        The poor -- or even nonexistent -- image of the two programs
has also been sharply criticized. Some PHARE and TACIS officials
would like to change the programs' names to something more
recognizable, such as "Europa." When the Rowland Company's
contract to promote the two programs ran out this summer, a new
public relations firm was hired for the job.

The author runs the Brussels-based East-West news agency.






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