Change is always powerful. Let your hook be always cast. In the pool where you least expect it, will be a fish. - Ovid
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 1, No. 120, Part II, 18 September 1997



A daily report of developments in Eastern and Southeastern Europe,
Russia, the Caucasus and Central Asia prepared by the staff of Radio
Free Europe/Radio Liberty.

This is Part II, a compilation of news concerning Central, Eastern, and
Southeastern Europe.  Part I covers Russia,
Transcaucasia and Central Asia and is distributed simultaneously as a
second document.  Back issues of RFE/RL NewsLine and the OMRI
Daily Digest are online at RFE/RL's Web site:
http://www.rferl.org/newsline

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Headlines, Part II

*SLOVAKIA ACCUSES HUNGARY OF ANTI-SLOVAK CAMPAIGN


*TWELVE KILLED IN BOSNIAN HELICOPTER CRASH


*U.S. SUPPORTS DECISION NOT TO DISQUALIFY KARADZIC'S PARTY


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EAST-CENTRAL EUROPE

UKRAINIAN PRESIDENT AGAIN FACES IMPEACHMENT BID. A group
of deputies on 17 September launched a campaign to initiate
impeachment proceedings against Leonid Kuchma, whom they accuse
of compromising Ukraine's independence. Members of the Ukrainian
Republican Party and an informal grouping of lawmakers called
Nation and State signed the resolution calling for Kuchma's ouster.
They point to deals with Russia on the division of the former Soviet
Black Sea fleet as compromising the country's independence. Some
two weeks earlier, a parliamentary committee urged Kuchma's
impeachment over his refusal to sign a law on local government after
lawmakers had twice overruled his veto. Observers say this latest
impeachment bid is unlikely to succeed.

DAEWOO SIGNS DEAL WITH UKRAINIAN CAR PLANT. South Korea's
Daewoo Group on 17 September signed a deal creating a joint
venture with Ukrainian car maker Avtozaz. The venture, which will
also involve the U.S. company General Motors, is to produce 255,000
cars a year, half of which will be for export and the other half for the
domestic market. Some $1.3 billion will be invested over the next six
years to modernize the Avtozaz plant in Zaporizhia, increase
production capacity, and build a sales and service network in
Ukraine. An Avtozaz official told the Interfax-Ukraine news agency
that Daewoo will put up half of the venture's $300 million starting
capital, and the 85 percent state-owned Avtozaz will offer the other
half in property. The Daewoo Corp. also has factories in Poland,
Romania, and the Czech Republic.

ESTONIAN DEFENSE MINISTER RETAINS POST FOR NOW. Prime
Minister Mart Siimann has said that Defense Minister Andrus Oovel
and commander of the armed forces Johannes Kert will remain in
office for the time being, ETA and BNS reported on 17 September.
Siimann was speaking after a meeting of the National Defense
Council, convened to discuss Oovel's and Kert's tendered resignations
over the deaths of 14 soldiers during maneuvers off Estonia's
northwestern coast. The premier said that no decision on the
resignations will be taken until the government commission
investigating the accident has reported its findings on 29 September.

LATVIAN PREMIER TO SUPERVISE EUROPEAN INTEGRATION
BUREAU. Guntars Krasts has announced he will supervise the work of
the European Integration Bureau, whose task is to coordinate the
activities of the various agencies involved in country's bid to join the
EU. The previous head of the bureau was a cabinet representative
with the rank of minister-envoy, a post that Krasts eliminated when
he became premier in July. An adviser to Krasts said the prime
minister was "very disappointed over the negative assessment by
the European Commission" and had decided to raise the status of the
bureau, ITAR-TASS reported. The European Commission did not
include Latvia among those countries it recommended to begin talks
on EU membership. In other news, the government has approved a
balanced budget for 1998. The draft predicts that GDP will grow by 5
percent.

LITHUANIA TO BOOST BORDER SECURITY. Deputy Minister of Internal
Affairs Romas Kilikauskas has said that security on Lithuania's state
borders will be increased significantly next year, BNS reported on 17
September. He noted that significantly more funds will be requested
for that purpose and that the number of draftees serving on the
border will be reduced by 20 percent each year. Kilikauskas also
stressed that demarcation of the country's frontiers is a top priority,
commenting that "we cannot speak of violations of the border if the
border is unmarked."

PARLIAMENT COMMISSION TO INVESTIGATE KGB ALLEGATIONS
AGAINST LANDSBERGIS. BNS reported on 17 September that a
parliamentary commission set up to examine whether deputies had
ties with foreign secret services will investigate allegations that
parliamentary speaker Vytautas Landsbergis cooperated with the
Soviet-era KGB. The allegations were made in a book by former KGB
General Vyacheslav Shironin, who maintained that Landsbergis
offered to provide the KGB with information in return for permission
to visit his father abroad. Landsbergis has confirmed he asked the
KGB for a travel permit, but he says he withdrew his request when
the KGB demanded information in exchange for the permit.
Algimantas Sejunas, the chairman of the commission, noted that
Shironin's book contains "many mistakes and nothing new" but
added that the commission wants nonetheless to check the
allegations.

POLISH PREMIER SAYS WEST WORRIED ABOUT SOLIDARITY
VICTORY. Wlodzmierz Cimoszewicz on 17 September told private
Radio Zet said that Western confidence in the Polish economy would
be damaged if the Solidarity-led opposition won the 21 September
parliamentary elections. Citing what he said were intelligence
sources, Cimoszewicz said there is concern in the West that a
Solidarity-led government would undermine reform efforts. Also on
17 September, the government's press office announced that Health
Minister, Jacek Zochowski, had died, aged 56, following a long battle
with cancer. He had served as health minister since 1993.

CZECH, SLOVAK ARMY CHIEFS-OF-STAFF MEET. At a meeting in
Trencianske Teplice, Slovakia, on 17 September, the Czech and Slovak
army chiefs-of-staff agreed on a schedule for joint military exercises
in 1998. The Czech Republic's Jiri Nekvasil and Slovakia's Jozef
Tuchyna told journalists that the two armies will conduct 43 joint
exercises next year. Tuchyna said the idea of creating a joint Czech-
Slovak unit was rejected as unnecessary.

SLOVAK GOVERNMENT ON EU REPORT. The government on 17
September announced that a parliamentary committee for
monitoring the secret service will be set up and that opposition
deputies will be represented on the commission. The move is being
taken to comply with the political criteria set for Slovakia's invitation
to EU entry talks. The government also announced it will prepare a
bill on the protection of languages of ethnic minorities and reopen
political dialogue with the opposition, Slovak media reported. A
report released by the European Commission in July did not
recommend Slovakia as a candidate for the first round of talks on EU
membership, saying Slovakia had failed to meet political criteria laid
down by the EU 1993 Copenhagen summit. The government said it
"considered the report unbalanced." But it added that Slovakia is
seeking entry to the union and must therefore accept all EU
objections.

SLOVAKIA ACCUSES HUNGARY OF ANTI-SLOVAK CAMPAIGN. The
Slovak government has accused Hungary of conducting a campaign to
discredit Slovakia. The Slovak Foreign Ministry on 17 September
issued a statement saying it had summoned Hungarian ambassador
to Bratislava Jeno Boros to hand him a note protesting the "broad and
intensive discrediting campaign" against Slovakia. A meeting
between Slovak Foreign Minister Zdenka Kramplova and her
Hungarian counterpart, Laszlo Kovacs, scheduled for 20 September
has been canceled. Relations between the two countries deteriorated
sharply after Hungarian Prime Minister Gyula Horn accused his
Slovak counterpart, Vladimir Meciar, of having proposed Slovakia's
600,000-strong Hungarian minority return to Hungary. Meciar says
he merely noted that those ethnic Hungarians who want to return to
Hungary should be allowed to do so.

HUNGARY RESPONDS TO SLOVAK CRITICISM. The Hungarian Foreign
Ministry on 17 September said it accepts "with regret" Bratislava's
decision to cancel the planned meeting of the two countries' foreign
ministers. The ministry said the arguments listed in the diplomatic
note were "untrue and absurd." Hungarian Foreign Minister Laszlo
Kovacs said as far as Hungary is concerned, the invitation to
Kramplova still stands. He said Budapest sees no reason to make a
unilateral gesture, still less to apologize, as demanded in the
diplomatic note. The same day, the Slovak Foreign Minister
Kramplova rejected the statement by the Hungarian parliament that
the Slovak government was suffering from an "inferiority complex."

SOUTHEASTERN EUROPE

TWELVE KILLED IN BOSNIAN HELICOPTER CRASH. NATO
peacekeepers on 18 September began to recover the bodies of 12
people killed when a UN helicopter crashed the previous day into a
remote mountain in central Bosnia in heavy fog. The helicopter's
four-man Ukrainian crew survived the crash. Among the dead are
German diplomat Gerd Wagner, who was a deputy to Carlos
Westendorp, the international community's chief representative in
Bosnia. Westendorp said that Wagner was one of many dedicated
foreigners who had sacrificed much time and effort to help bring
peace to Bosnia.

U.S. SUPPORTS DECISION NOT TO DISQUALIFY KARADZIC'S PARTY. A
State Department spokesman said on 17 September that Washington
"strongly supports" the decision by U.S. envoy Robert Frowick not to
disqualify Radovan Karadzic's Serbian Democratic Party (SDS) from
the ballot in Pale in the 13-14 September local elections (see "RFE/RL
Newsline," 17 September 1997). The spokesman stressed that any
move to disqualify the SDS should have been made well before the
elections and not afterward, as a court tried to do. To ban the SDS
from the ballot after the elections, the spokesman continued, would
disenfranchise voters who cast their ballots for that party.
Meanwhile in Sarajevo, two legal advisers to the Organization for
Security and Cooperation in Europe, which organized the elections,
resigned to protest Frowick's decision.

MORE ARRESTS ON CORRUPTION CHARGES IN CROATIA. Police
officials announced in Zagreb on 17 September the arrests of seven
military men and four civilians for involvement in an auto theft ring,
an RFE/RL correspondent reported from the Croatian capital. The
gang operated both in Croatia and in Bosnia, where car-theft is
particularly lucrative business. In related news, the Croatian
government on 16 September identified Petar Petric and Sretan Juric
as the two top officials in the Economics Ministry arrested on 13
September for corruption (see "RFE/RL Newsline," 16 September
1997). The government said that the two had accepted a bribe of
$90,000 from a businessman in return for offering to sell to the
public $1.3 million worth of unspecified goods from state reserves.
The businessman tipped off police, who then arrested the two
officials.

NEWS FROM FORMER YUGOSLAVIA. In Zagreb, Development Minister
Jure Radic on 17 September told Metropolitan Jovan Pavlovic, the
head of the Serbian Orthodox Church in Croatia, that the Church will
get back all its property that the Communists nationalized 50 years
ago. Across Serbia, campaigning is coming to an end for the
presidential and legislative elections slated for 21 September. Police
have recently used force against demonstrators opposed to Yugoslav
President Slobodan Milosevic in Cacak, Kraljevo, and Nis, an RFE/RL
correspondent reported from Belgrade on 17 September. Some 2,500
candidates will compete for 250 parliamentary seats, but most of the
Serbian opposition and all ethnic Albanian parties are boycotting the
vote. Leading presidential candidates are Milosevic aide Zoran Lilic,
ultra-nationalist Vojislav Seselj, and opposition figure Vuk Draskovic.

MACEDONIAN MAYOR JAILED FOR SPREADING ETHNIC HATRED. A
court in Skopje sentenced Rufi Osmani, the ethnic Albanian mayor of
Gostivar, to 13 years and 8 months in jail for "fanning national, racial,
and ethnic intolerance, inciting rebellion, and disregarding [the
decisions of] the Constitutional Court." The Skopje court also
sentenced Gostivar City Council President Refik Dauti to three years
in jail. Osmani had allowed Albanian and Turkish flags to fly from
the town hall in July after the court ruled that only the Macedonian
flag could be flown from public buildings under most circumstances.
Violent protests ensued when the Macedonian authorities ordered
the flags taken down. Ethnic Albanians make up 23 percent of
Macedonia's population.

ALBANIA SAYS SERBIA MUST TALK TO KOSOVARS. Foreign Minister
Pascal Milo said in Tirana on 17 September that Serbian officials
must speak directly to representatives of the Kosovar Albanians and
not expect the Albanian government to act as an intermediary. Milo
was responding to speculation in the media that his upcoming talks
in New York with Yugoslav Foreign Minister Milan Milutinovic will
center on Kosovo. Meanwhile, the parliament passed an amendment
to the press law in order to guarantee the opposition access to the
state-run media (see "RFE/RL Newsline," 9 September 1997).

ALBANIAN ELECTRIC POWER COMPANY FACES HUGE LOSSES. The
state owned-electric power company faces a deficit of $ 43 million
due to unpaid bills, "Dita Informacion" reported on 17 September.
Robert Lalo, the company's investment director, told "Dita
Informacion" that government funds for modernizing the outdated
grid have been withheld for the last three months, which could
endanger the winter power supply to the north. The World Bank is
currently preparing a $50 million loan to upgrade five hydroelectric
power plants. Lalo, however, indicated that Albania may soon have
to import electricity.

ROMANIA TO CHANGE INVESTMENT LAW. The government on 17
September decided to submit a new draft law on foreign investment
that would put foreign and local investors on an equal footing,
RFE/RL's Bucharest bureau reported. Since June, foreign investment
has been regulated by a government ordinance that amended the
1991 law on foreign investment. Local investors and several parties
in the ruling coalition protested what they considered to be
discriminatory provisions in the amended law. The new law will be
drafted by 20 October, coalition leaders said. Until then, the
government ordinance remains in force.

ROMANIA CALLS FOR COOPERATION AGAINST ORGANIZED CRIME.
Addressing a three-day conference in Bucharest on crime in the
Balkans and the Black Sea region, Calin Mateescu, head of the
Romanian police unit for combating organized crime and corruption,
urged East European countries to set up a regional body to combat
the growth in organized crime. Mateescu said drugs and arms
smuggling, money laundering, prostitution, and terrorism are
spreading rapidly through the region. He also complained of the lack
of a legal framework and a shortage of specialists and equipment to
prevent crime, Reuters reported on 17 September.

MOLDOVAN PREMIER MAKES CASE FOR FOREIGN INVESTMENT.
Speaking at an international investors' forum in Chisinau on 17
September, Ion Ciubuc said that Moldova has passed legislation to
facilitate foreign investment. He also pointed to the country's low
rate of inflation and stable national currency, legislation on the
protection of private property, and Moldova's location at the
crossroads between Eastern Europe and the CIS. Ciubuc noted that in
1996, the private sector accounted for 50 percent of GDP and that 60
percent of the country's industry has already been privatized,
Infotag reported.

MOLDOVAN OPPOSITION DIVIDED. Valeriu Matei, the leader of the
Party of Democratic Forces (PFD), has denied that his party intends to
set up an alliance with the pro-presidential For a Democratic and
Prosperous Moldova (PMDP). Matei told journalists in Chisinau on 17
September that, despite the understanding reached between the PFD
and the Democratic Convention of Romania (CDM) to refrain from
mutual attacks, CDM leaders continue to accuse the PFD of
obstructing the formation of a right-wing alliance and of serving the
interests of the Left. Matei said those "absurd accusations" rule out
the possibility of an agreement with the CDM. He said the PFD will
continue negotiations with the Liberal Party and the National Peasant
Party on running joint lists in the 1998 parliamentary elections,
RFE/RL's Chisinau bureau reported.

IMF EXPERT SAYS BULGARIA'S REFORMS "ON TRACK." Anne McGuirk,
the IMF mission chief in Sofia, says economic reforms "appear to be
on track" for Bulgaria. In an interview with "Bloomberg Financial
News," McGuirk said she did not anticipate problems when an IMF
review team arrives in Bulgaria in October to recommend whether
Sofia should receive the next installment of a $647 million loan
aimed at helping the transition to a market economy. McGuirk said
Bulgaria's budget is now in better condition than had been expected
several months ago. She recommended that proposed tax privileges
for foreign investors be included in new tax legislation rather than a
new foreign investment law. A proposed foreign investment law
under consideration by the parliament calls for foreigners who invest
more than $5 million to receive a 50 percent tax exemption for 10
years.

BULGARIAN BANK RECEIVES CYPRIOT OFFSHORE LICENSE. The
National Bank of Cyprus on 17 September announced it has granted
the First Investment Bank of Bulgaria an offshore banking license,
dpa reported. The Arab Bank PLC of Jordan has also received a
license permitting it to participate in the $2 billion offshore Cypriot
market. In other news, five Bulgarian local branch bankers and four
currency dealers who worked for brokerage houses went on trial in
Plodviv on charges of embezzling and illegally channeling abroad the
equivalent of $6.3 million in state funds and depositors' savings. A
prosecutor said that in 1994-1995, the defendants transferred
money of unknown origin to 11 firms in Austria, Hong Kong, and
Dubai, an RFE/RL corespondent in Sofia reported.


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