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RFE/RL NEWSLINE Vol. 1, No. 124, Part II, 24 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 ECONOMIC NEWS from this week's annual meeting of the IMF and World Bank is online at RFE/RL's Web site: http://www.rferl.org/nca/special/imfmeeting/index.html xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part II *LUKASHENKA SAYS NO RUSSIA-BELARUS MERGER IN PROSPECT *SERBIAN OPPOSITION MOVES TO RECALL DJINDIC OVER ELECTION BOYCOTT *BOSNIAN SERBS CLASH WITH SFOR End Note NEW POLISH GOVERNMENT TO FACE URGENT ECONOMIC TASKS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx EAST-CENTRAL EUROPE LUKASHENKA SAYS NO RUSSIA-BELARUS MERGER IN PROSPECT... Belarusian President Alyaksandr Lukashenka told an assembly at Almaty State University 23 September that "speculation on the full merger of Belarus and Russia was dreamed up by politicos who have nothing better to do," Interfax-Kazakhstan reported. Lukashenka stressed his country will never give up its sovereignty. The union the two countries have agreed to, Lukashenka continued, reflects "the aspirations" of both peoples but not does represent either a "return to empire" or the subversion of the CIS. He added that any slowdown in the rapprochement between the two countries is not the fault of Belarus. ...REMAINS UNREPENTANT ON JOURNALIST'S ARREST. Speaking to journalists in Almaty on 23 September, Lukashenka stressed his position that the Belarusian courts will have to decide the fate of Russian Public Television reporter Pavel Sheremet, who has been under arrest since mid-July on charges of having violated the Belarusian-Lithuanian border. Lukashenka repeated his charge that Sheremet had engaged in a "political act" but added he might "amnesty" the arrested journalist after the courts reached a verdict. UKRAINIANS SAID TO BACK DEATH PENALTY. Ukrainian parliamentary chairman Oleksandr Moroz told Interfax on 23 September that "Ukrainian society is not ready for the legislative repeal of the death penalty." When Ukraine joined the Council of Europe in 1995, Kyiv committed itself to abolishing the death penalty, but the parliament has been unwilling to pass the necessary legislation. As a result, President Leonid Kuchma is likely to be subjected to close questioning on the issue when he attends the Council of Europe summit in Strasbourg on 10-11 October. UKRAINE WANTS TO HOST 1999 BALTIC-BLACK SEA SUMMIT. Ukrainian President Kuchma told the UN General Assembly on 23 September that his country wants to promote good relations with all its neighbors, ITAR-TASS reported. To that end, Kuchma said, Kyiv now seeks to hold a summit of countries in the Baltic-Black Sea region in 1999. That meeting would be a follow-up to the summit earlier this month in Vilnius. As he had promised before leaving Kyiv, the Ukrainian president called for East European representation on the UN Security Council (see "RFE/RL Newsline," 23 September 1997). UKRAINE TO HELP IRAN SET UP AIRCRAFT INDUSTRY. An unnamed Ukrainian aircraft industry official told ITAR-TASS on 23 September that the Ukrainian Antonov Aviation Research Complex has won a bid to build 100 An-140 planes over the next eight years. The Ukrainian firm will transfer technologies to Iran to enable that country to manufacture planes on its own in the future. Initially, The planes, which can be used for both civilian and military purposes, will be built in Iran with parts produced in Ukraine. In addition, Tehran has purchased 10 An-74T-200 military transport aircraft for its ground forces. UKRAINE WANTS TO SUPPLY TURKISH ARMY. The Ukrainian arms trading company Ukrspetseksport is displaying firearms and its latest T-80UD tank at the international arms exhibition in Ankara, Interfax reported. Ukraine is one of several participants in a tender to provide military equipment for the Turkish army. Turkish Defense Minister Ismet Sezgin told Reuters on 22 September that his country allocates $2.5 billion annually to the modernization of its armed forces. "ESTONIA" CREW TO BE CRITICIZED IN FINAL REPORT. According to the Swedish newspaper "Svenska Dagbladet" on 23 September, the final report of the three nation-commission investigating the 1994 sinking of the "Estonia" passenger ferry will strongly criticize the Estonian crew for not responding quickly enough when the vessel began to sink. The newspaper report came one day after a Swedish expert resigned from the investigation, claiming that commission members had been too protective of the crew (see "RFE/RL Newsline," 23 September 1997). The commission's report has been delayed repeatedly and is expected to be released in November. TALLINN REJECTS U.S. BID FOR POWER PLANTS. The Estonian government has rejected the current version of a business plan drawn up by NRG Energy whereby the U.S. power utility would buy a 49 percent stake in Estonia's two largest power stations. The rejected plan was criticized for giving the U.S. company "monopolistic rights" to generate power in Estonia and for including a steep increase in electricity prices. Counselor to the Ministry of Economics Arvi Hamburg said more negotiations will soon take place with NRG, which is likely to offer a new plan within two months. He added that in the event NRG rejects the government's conditions, a public tender will be held, "Sonumileht" reported. NRG has pledged $67 million for its stake in the power stations and $1.1 billion in investments until the year 2005. This would be the largest single investment in Estonia. BALTICS URGE EU TO START TALKS WITH ALL THREE. Speaking to the annual meeting of the IMF and the World Bank on behalf of the Baltic States, Lithuanian Finance Minister Algirdas Semeta called on the EU to begin accession negotiations with all three countries, instead of just Estonia, RFE/RL's correspondent in Hong Kong reported on 24 September. Semeta said the Baltics welcomed the fact that Estonia has been invited to begin negotiations but added that Latvia and Lithuania have made "strong progress" this year and are now ready to start the process. He also said the Baltics have asked the World Bank to step up technical assistance in preparing them for EU membership. AUSTERITY BUDGET FOR POLAND? Leszek Balcerowicz-- the leader of the Freedom Union party, which is a probable partner in a new coalition government with Solidarity Electoral Action--told journalists in Warsaw on 23 September that Poland must reduce its budget deficit next year or face a serious financial crisis. The strong, third-place showing of Balcerowicz's party has been greeted by financial analysts worldwide (see also "End Note" below). CZECH REPUBLIC OPENS NATO MEMBERSHIP TALKS. The Czech Republic opened membership talks with NATO in Brussels on 23 September. Deputy Foreign Minister Karel Kovanda is leading the Czech delegation in the talks, which are to focus on the political, legal, and practical aspects of the Czech Republic's membership in the Atlantic alliance. Hungary and Poland have already opened similar talks with NATO. Meanwhile in Prague, the Czech trade union federation (CMKOS) has voted down demands by leaders of the miners' and railway workers' unions to stage a general strike. Instead, CMKOS will organize a mass rally in Prague on 8 November to protest the government's economic and social policies. SLOVAK FOREIGN MINISTRY REJECTS HORN'S COMMENTS. The Slovak Foreign Ministry on 23 September issued a statement "unequivocally" rejecting comments that Hungarian Prime Minister Gyula Horn made to the parliament in Budapest the previous day, Bratislava's Radio Twist reported. The ministry criticized Horn's remarks that the Slovak government's minorities policy does not comply with European standards and international obligations undertaken by Bratislava. It called on Hungary to "ensure a higher standard of minority rights to...at least come closer to the level of minority rights in Slovakia, instead of making unjustified, one-sided, and unfounded criticism." SLOVAKIA NEGOTIATES ARMS COOPERATION WITH TURKEY. Slovak Defense Minister Jan Sitek held talks in Ankara on 23 September with his Turkish counterpart, Izmet Sezgin, on possible cooperation in producing the T-72 tank and the "Suzana" self-propelled cannon, "Sme" reported. Both weapons are on view at an international weapons trade fair in Ankara. Sitek's spokesman said the two ministers are due to sign a cooperation agreement on weapons production when they meet in Bratislava in October. Meanwhile, Slovak Prime Minister Vladimir Meciar traveled unexpectedly to Croatia, allegedly for economic talks. "Pravda" reported on 24 September, however, that Meciar is holidaying in Dubrovnik. HUNGARIAN, ROMANIAN JUSTICE MINISTRIES SIGN ACCORD. Minister of Justice Pal Vastagh and his Romanian counterpart, Valeriu Stoica, met in Budapest on 23 September and signed an agreement on cooperation between their ministries, Hungarian media reported. Under the accord, the two ministries will regularly exchange information and will pay special attention to their experience in bringing nationality laws into line with EU legislation. Vastagh said that despite some negative trends, it cannot be denied that Hungarian-Romanian relations are on the whole positive, Radio Bucharest reported. SOUTHEASTERN EUROPE SERBIAN OPPOSITION MOVES TO RECALL DJINDIC OVER ELECTION BOYCOTT. The opposition Serbian Renewal Movement (SPO) has launched procedures to recall Belgrade Mayor Zoran Djindjic. The SPO accuses Djindjic, who is head of the Democratic Party, of having advocated boycotting the 21 September parliamentary and presidential elections. Djindjic told BETA he will not resist the call to resign if a sufficient number of city council members demand his ouster. But he said the SPO's call for his replacement is an attack on the entire opposition Zajedno movement. The boycott was intended to invalidate the poll by reducing turnout to less than 50 percent. The Serbian Electoral Commission has said 62 percent of the electorate turned out. The Democratic Party, however, claims turnout was 49.12 percent. Final election results are due on 25 September. BOSNIAN SERBS CLASH WITH SFOR. The NATO-led Stabilization Force clashed with several hundred Bosnian Serbs on roads leading to Doboj on 23 September. The protesters, opposed to increased SFOR patrols and check points, threw Molotov cocktails and stones at SFOR members. No injuries were reported. Also on 23 September, police loyal to Bosnian Serb President Biljana Plavsic took control of the city of Prijedor, and SFOR erected checkpoints around Prnjavor, where pro-Plavsic forces took control two days earlier. RFE/RL's South Slavic service reports Doboj is now the westernmost town in the Republika Srpska controlled by the hard-line leadership in Pale. PALE TV SAYS SFOR, UNHCR CONNIVING WITH RETURNING REFUGEES. Pale TV on 23 September reported that Muslim refugees are returning to settle in the Doboj suburb of Makljenovac, contrary to what it called a "signed agreement." The television station also accused SFOR and UNHCR of conniving with the Muslims to repair some 150 houses during daylight hours. The Muslims spend the night across the inter-entity boundary line in Tesanj in the Muslim- Croatian Federation. CROATIA APPROVES TRANSIT OF TANKS FOR BOSNIA. The Croatian government on 23 September granted approval for a Ukrainian cargo ship to dock at Ploce and unload ten T-55 tanks, a gift from Egypt to the Bosnian Federation Army, RFE/RL's South Slavic service reported. Zagreb had blocked the shipment since early August arguing that documentation was lacking. Meanwhile, Croatian Prime Minister Zlatko Matesa said in Zagreb on 23 September during a visit by Turkish President Suleyman Demirel that Croatia and Turkey intend to open talks shortly on forming a free trade zone. ALBANIAN PROSECUTOR REDUCES CHARGES AGAINST GENOCIDE SUSPECTS. The Prosecutor-General's office has changed charges of genocide and crimes against humanity against six former senior communist officials to "abuse of office." The prosecutor-general dropped all charges against three other former officials, ATA reported on 23 September. The previous day, the Supreme Court opened a trial of all nine officials. The court is due to make a ruling on 29 September. FIRE RAVAGES COASTAL FOREST. A forest fire that broke out on 22 September and burned itself out the following day destroyed thousands of pine trees in the woods overlooking the southern seaside resort of Saranda. ATA quotes forestry police as saying the blaze was set deliberately by citizens who want to construct buildings illegally in the area. The town's only fire engine was destroyed during the unrest earlier this year. ROMANIAN COALITION UNDER THREAT. Bela Marko, the chairman of the Hungarian Democratic Federation of Romania (UDMR), said on 23 September said the UDMR's continued participation in the ruling coalition is doubtful, RFE/RL's Bucharest bureau reported. He made the statement after the Senate's Commission on Education had for the third time changed the text of the law education (which has to be submitted to the parliament) and had reinstated the provision stipulating that history and geography are to be taught in the Romanian language. The ruling coalition leaders met later but were unable to reach a compromise. Marko said it is unacceptable for coalition representatives to break earlier agreements. The coalition leadership also decided that the issue of the education law is to be reexamined in consultations between the UDMR and the National Peasant Party Christian Democratic. ROMANIAN FOREIGN MINISTER ASKED TO SUBSTANTIATE SPY ALLEGATIONS. At a meeting of the Supreme Council of National Defense on 23 September, President Emil Constantinescu demanded that Adrian Severin substantiate his allegations that some heads of political parties and leading journalists are foreign agents (see "RFE/RL's Newsline," 23 September 1997), RFE/RL's Bucharest bureau reported. Severin said he has submitted and will continue to submit the evidence to the appropriate authorities, adding that his source of information was not the Romanian Intelligence Service (RIS). The RIS has denied receiving any such information. Premier Victor Ciorbea said Severin was "personally responsible" for the allegations, which, he said, do not represent the views of the government. Ciorbea said the matter will be discussed by the government when Severin returns from New York, where he is attending the session of the UN General Assembly. Democratic Party leader Petre Roman said that Severin's allegations do not reflect the position of the party and must be clarified by Severin himself. Severin is deputy leader of the Democrats. RUSSIAN DEPUTY PREMIER SAYS CHISINAU-TIRASPOL COMPROMISE REACHED. Valerii Serov and Transdniester leader Igor Smirnov met with President Petru Lucinschi in Chisinau on 23 September. Serov said later that he succeeded in bringing about a compromise between the two sides, RFE/RL's Chisinau bureau reported. Lucinschi told journalists that a protocol was signed providing for weekly meetings at which negotiations will continue. The meetings will be held at "presidential" level (meaning Lucinschi and Smirnov) as well as at government and expert levels. An agreement was also reached on drafting an economic treaty between Chisinau and Tiraspol. However, the fate of the assets of the Russian army stationed in the Transdniester remains unclear. Smirnov said this is a "Russian- Transdniestrian problem" and that he will oppose the "unilateral withdrawal of the arsenal." RUSSIA, MOLDOVA CONCLUDE AGREEMENTS. Serov and his Moldovan counterpart, Valeriu Bulgari, signed an agreement providing for deliveries of Moldovan agricultural goods in exchange for Russian gas supplies. They also agreed to cooperate in military modernization and conversion technologies. BULGARIANS SHOW LITTLE INTEREST IN JOINING PROFESSIONAL ARMY. Chief of Staff General Miho Mihov told journalists in Sofia on 23 September that Bulgaria's effort to transform its army of conscripts into a professional one is encountering difficulties because of the low pay offered. A well-publicized campaign to hire 120 trainees in the use of high-technology military equipment has produced only five applications. The deadline has now been extended to 22 October. A military spokesman said applicants are offered a three-year contract and monthly wages ranging from 128,000 leva ($72) in the ground forces to 194,000 leva ($110) in the navy, Reuters reported. END NOTE NEW POLISH GOVERNMENT TO FACE URGENT ECONOMIC TASKS by Breffni O'Rourke and Chris Klimiuk Finance experts say the new Polish government--whatever its eventual composition--will have some major problems to tackle quickly if it is to maintain the country's prosperity. The right-of-center Solidarity Electoral Action (AWS), which emerged with the strongest hand from the 21 September parliamentary elections, is expected to open contacts almost immediately with its most probable partners, the centrist Freedom Union and the rightist Movement for Renovation of Poland. The negotiations are likely to be difficult, as the parties have differing programs. In addition, some AWS leaders favor an even broader coalition that would include parties of a very different complexion. According to financial specialists, there are two major priorities facing the new ruling coalition. The first and overriding task is to bring the rapidly-increasing current account deficit under control before it threatens the value of the zloty. The second is to make progress in the socially-explosive task of privatizing the inefficient state-owned heavy industries. Bernd Klett, the Poland specialist at Deutsche Bank Research, told RFE/RL on 23 September that the current account last year registered a deficit of only about 1 percent of GDP, some $1.4 billion. In 1997, the deficit is set to reach almost 5.5 percent of GDP, or $7 billion. If present trends continue, it may reach a full 7 percent of GDP in 1998. Klett says this problem must be tackled quickly if the Polish economy is not to be exposed to major dangers. Pavel Demczuk, senior analyst with Wood & Co investment advisers in Warsaw, agrees with Klett's analysis, saying the government has until about the end of this year to act. Both stress that the strong consumer demand among Poles must be dampened. The Central Bank has already taken measures to achieve that goal, raising its interest rates several times in recent weeks and offering the public the opportunity to deposit money in accounts at an interest rate higher than that offered by commercial banks. That has had the effect of removing liquid money that might otherwise fuel consumer demand. But experts say that is not enough. They believe the incoming government must also run a tight fiscal policy aimed at cutting demand for imported consumer goods, which has a negative impact on the trade balance. Another priority of the new government must be to continue privatization, which has stalled in recent years as the authorities have shied away from the difficult task of tackling problem- industries such as coal mining. The Freedom Union, which seems set to be an indispensable partner in any coalition, has a radical plan aimed at fully privatizing the economy by the year 2000. The head of the union is Leszek Balcerowicz, author of the postcommunist "shock therapy," which in no uncertain terms started the country along the road to free enterprise In an interview with RFE/RL on September 23, Jerzy Osiatynski, the Freedom Union's senior economic adviser, said his party wants to see an end to public ownership of coal mining, ship building, and the steel industry. Given Poland's illustrious tradition of political activism among workers in those industries, a rigorous policy of privatization could result in a flash point for social unrest. Such a development would clearly not be in the interests of the new government. Klett notes that the AWS has a more moderate policy on privatization. He believes that the Freedom Union will have to tone down its ambitious plans. Any move to restructure the heavy industries will have to be handled carefully and social security measures put in place for those who lose their jobs. According to Klett, there are two routes to a market economy: through creating the right conditions for individuals to start their own business ventures and through privatization of existing state- owned enterprises. He says that all Polish post-communist governments have created a good climate for private enterprise and investment. And he notes that there has been progress toward privatization, although the process is far from complete. Klett also notes that the coal mining industry will apparently have a future even after it has been restructured. He recalls that visiting EU experts expressed the opinion earlier this year that the Polish coal industry would be a viable business proposition after modernization. Breffni O'Rourke is a senior RFE/RL correspondent. Chris Klimiuk is RFE/RL's Warsaw correspondent. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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