The last of the human freedoms- to choose one's attitude in any given set of circumstances, to choose one's way. - Victor Frankl
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 1, No. 139, Part II, 15 October 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'S RADIO TWIST BACK ON AIR

* CROATIAN, BOSNIAN TALKS DEADLOCKED

* ALBANIAN AUTHORITIES PURGE DEMOCRATS

End Note : LITHUANIA'S ECONOMY SLIGHTLY LAGS BEHIND BALTIC
NEIGHBORS

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EAST-CENTRAL EUROPE

SLOVAKIA'S RADIO TWIST BACK ON AIR. Independent Radio Twist
resumed broadcasting on 15 October following protests by the
opposition and the payment of what the Slovak Telecommunication
agency said the station owed, Slovak media reported. Radio Twist co-
owner Andy Hryc joined opposition parties in saying that the
shutdown was politically motivated (see "RFE/RL Newsline," 14
October). Hryc promised, however, that the action will have no
impact on the radio's independent stance, which has been criticized
by Premier Vladimir Meciar.

BELARUSIAN PRESIDENT CUTS FORD'S TAX EXEMPTIONS. Alyaksandr
Lukashenka on 14 October issued a decree limiting the tax
exemptions for Ford Motor Company investments there to five years,
Belarusian Radio reported. Earlier, Lukashenka has issued a decree,
approved by the parliament, granting those exemptions without any
cut-off date. In other news, Lukashenka's government has found
itself in another dispute with Moscow. Minsk wants to impose highly
restrictive "security fees" on the transit of cars from the West to
Russia, but Russia opposes that measure, ITAR-TASS reported on 14
October. The new regulations are likely to be discussed when
Lukashenka meets with Russian President Boris Yeltsin in Moscow on
22 October at a summit that will also include Kazakhstan's Nursultan
Nazarbayev and Kyrgyzstan's Askar Akayev.

UKRAINE HOPES TO SELL METAL FROM CHORNOBYL DEAD ZONE.
According to Kyiv's Studio One Plus One television on 14 October,
Kyiv hopes to attract private capital to pay for the retrieval and sale
of thousands of tons of metal now lying in the contaminated zone
around the Chornobyl nuclear power plant. The television station did
not indicate how the metal would be cleaned or where the funds for
the project might come from.

ESTONIAN PARLIAMENT APPROVES CONTROVERSIAL LAW ON
CUSTOMS TARIFFS. The parliament on 14 October approved by 61 to
21 votes the law on customs tariffs, ETA and BNS reported. In a
compromise between the opposition and the governing coalition, the
law allows the government to levy customs duties on specified goods
for six months. Initiated by the coalition rural parties, the bill has
long been a source of controversy. Advocates maintain the legislation
will protect local producers and is necessary (even if the tariffs
themselves are not) for Estonia's membership in the EU and World
Trade Organization. Opponents say the bill will cause the price of
foodstuffs to rise and will harm Estonia's image abroad. Estonia
imports roughly half of its foodstuffs, of which two-thirds come from
the EU. Since Tallinn has free trade agreements with Latvia,
Lithuania, and Ukraine, the tariffs will most likely impact on food
imports from the U.S., Russia, and Poland.

LITHUANIA CRITICIZES BELARUS OVER ILLEGAL IMMIGRANTS.
Lithuanian Deputy Minister of Internal Affairs Romas Kilikauskas has
sharply criticized Belarus for not preventing illegal immigrants from
Third World countries from crossing into Lithuania, an RFE/RL
correspondent reported on 14 October. Kilikauskas was speaking at
an international conference in Prague on measures to prevent illegal
migration to and within Europe. He noted that Belarusian President
Alyaksandr Lukashenka recently backed out of signing a cooperation
agreement with Lithuania and other countries to prevent illegal
migration across Belarus. Kilikauskas said the "vast majority" of
illegal immigrants enter Lithuania from Belarusian territory. Vilnius
demands the right to send them back to Belarus, he said.

SOLIDARITY NAMES CANDIDATE FOR PREMIER. Solidarity Electoral
Action (AWS) has named the 57-year-old academic Jerzy Buzek as its
candidate for prime minister, Western news agencies reported on 15
October. The previous day, the AWS and the Freedom Union
denounced as "illegal" a contract signed on 12 October by the
outgoing Polish government calling for the purchase of missiles from
Israel worth $600 million. The two parties said they will reverse the
deal after they assume power. The U.S. has strongly opposed that
deal.

CZECH, HUNGARIAN PRESIDENTS PLEDGE COOPERATION ON NATO.
Czech President Vaclav Havel and his Hungarian counterpart, Arpad
Goncz, declared in Prague on 14 October that there are "many good
reasons" for their countries and Poland to expand cooperation as they
move toward NATO membership, CTK reported.

NATO REFERENDUM POSTPONED IN HUNGARY. The parliament on 14
October rejected the government's proposal that the 16 November
referendum include only the question on NATO accession (see
"RFE/RL Newsline," 14 October 1997), Hungarian media reported. The
opposition is insisting that the plebiscite include both the question on
accession and two questions on land ownership by foreigners. Also
on 14 October, the government announced it will ask the
Constitutional Court to clarify whether the court's 13 October decision
excludes the possibility of conducting the referendum on NATO
accession alone. Meanwhile, US Ambassador to NATO Robert Hunter
said in Budapest that it is Hungary's internal affair to choose how to
demonstrate its commitment toward NATO membership.

SOUTHEASTERN EUROPE

CROATIAN, BOSNIAN TALKS DEADLOCKED. Croatian and Bosnian
negotiators failed on 14 October in Zagreb to reach an agreement on
Bosnia's use of Croatia's Adriatic port of Ploce. Croatia rejected a U.S.
proposal for Bosnia to have a long-term free-trade zone in the port,
which is Bosnia's natural outlet to the sea. The issue has bedeviled
relations between Zagreb and Sarajevo for several years. Croatian
authorities fear that Bosnia may seek to annex Ploce, which Croatian
politicians cannot accept. The Bosnian authorities, for their part, will
not cede transit rights to Croatia through Bosnia's coastal fishing
village of Neum, which bisects Dalmatia, without concessions by
Zagreb over Ploce.

MOSTAR CROATS REJECT ELECTION RESULTS. A spokesman for the
Croatian Democratic Community (HDZ) said in Mostar on 14 October
that his party does not accept the results of the September local
elections. The spokesman said it is "absurd" that the HDZ received a
majority of the total votes cast but won only a minority of the seats
on the city council. Officials from the Organization on Security and
Cooperation in Europe, which supervised the vote, have promised a
recount. But U.S. Ambassador to Bosnia Richard Kauzlarich said in
Mostar that he does not expect the recount to produce different
results from the first tally, an RFE/RL correspondent reported from
Mostar. Meanwhile in Split, "Feral Tribune" on 13 October published
what it called new evidence that Croatian President Franjo Tudjman
agreed with the Belgrade leadership in 1991 to partition Bosnia.

U.S. SPECIAL ENVOY SAYS BOSNIAN SERBS STILL HAVE MILITARY
EDGE. James Pardew told Worldnet Television in Washington on 14
October that the Bosnian Serb army (VRS) remains stronger than the
Bosnian Federation's military, despite Washington's "Equip and Train"
program to aid the latter. Pardew denied charges made in the former
Yugoslavia and in some Western media that the U.S. program has
tipped the balance in favor of the Muslims and Croats. He charged
that the VRS remains superior to its rivals because it is "just an
extension" of the Yugoslav military, on which it can call for assistance
at any time.

RUSSIA TO SUSPEND GAS DELIVERIES TO YUGOSLAVIA? Officials of
the Russian gas monopoly Gazprom said in Moscow on 14 October
that they may suspend deliveries to Yugoslavia if that country does
not pay at least part of its $250 million debt to Gazprom, Belgrade
media reported. Observers noted that the suspension of gas
deliveries would coincide with the onset of winter. Meanwhile,
Yugoslav Deputy Prime Minister Nikola Sainovic and Serbian Prime
Minister Mirko Marjanovic held talks in Moscow with Prime Minister
Viktor Chernomyrdin, but no details of the discussions have been
released to the press.

KOSOVO POLICE STATION ATTACKED. The Serbian Interior Ministry
on 14 October announced that "Albanian separatists mounted an
armed terrorist attack" with automatic rifles and grenades on a
police station near Pec, in Kosovo. Property was damaged but no one
injured. This is the third attack on that station this year and one of
many armed assaults since January on Serbian government buildings
in various localities across Kosovo. The Kosovo Liberation Army has
claimed responsibility for most of the incidents.

ETHNIC ALBANIANS SENTENCED IN MACEDONIA. A local court in
Tetovo on 14 October sentenced both Mayor Alajdin Demiri and City
Council President Vehbi Bexheti to two-and-a-half years in prison.
The court ruled they had violated a Constitutional Court order in July
by refusing to remove an Albanian flag from the city hall. The
Constitutional Court had earlier ruled that only the Macedonian flag
could be flown from public buildings under most circumstances. In
September, ethnic Albanian officials in Gostivar were sentenced on
similar charges (see "RFE/RL Newsline," 18 September 1997). Ethnic
Albanians make up about 20 percent of the total population of
Macedonia but form a compact majority in the western part of the
country.

SLOVENIAN PRESIDENT WELCOMES ELECTION TO UN SECURITY
COUNCIL. Milan Kucan said in Ljubljana on 15 October that his
country's election the previous day to a seat on the UN's most
important body is a form of international recognition for what he
called Slovenia's achievements in world affairs. Kucan added that his
country now has both an opportunity to present its views to the
world and a responsibility for international crisis spots. In the 14
October vote in New York, Slovenia beat out Macedonia for the non-
permanent seat held by a country from Eastern Europe.

ALBANIAN AUTHORITIES PURGE DEMOCRATS... The Democratic Party
on 13 October issued a declaration condemning the sacking of
university rectors and their alleged replacement by Socialist Party
loyalists, "Rilindja Demokratike" reported. The Democrats claim that
Prime Minister Fatos Nano himself fired the rectors in violation of
the principle of university autonomy. It is unclear how many of
Albania's seven rectors are affected by the apparent purge. At the
National Opera and Ballet, Director Agron Xoxe began a hunger strike
on 15 October to protest his dismissal, which, he says, is politically
motivated. At the State Control Commission, 41 commission members
were dismissed on 13 October. Meanwhile, "Rilindja Demokratike"
reported that the Prosecutor-General's Office has launched
proceedings against some 300 people involved in recent anti-
government protests.

...DROP CHARGES AGAINST FORMER COMMUNISTS. Prosecutor-General
Shkelqim Gani on 14 October dropped charges against communist-era
President Ramiz Alia, former Interior Ministers Hekuran Isai and
Simon Stefani, and former Prosecutor-General Qemal Lame. The
previous Democratic government had charged the four with genocide
and crimes against humanity in connection with the persecution and
killing of dissidents who tried to flee the country illegally. Gani said
he based his decision on a recent Supreme Court verdict pardoning
all other 32 senior ex-Communists whom the Democrats had
sentenced on the same charges. The Court ruled that the ex-
Communists cannot be sentenced on such charges because their
actions were not criminal under the law in force at the time.

ALBANIAN GOVERNMENT EXTENDS INVITATION TO FORMER LEADER.
Former President Sali Berisha on 14 October accepted an invitation
from Nano to participate in the international aid donors' conference
on Albania, scheduled to take place in Rome on 17 October. Observers
said Nano extended the invitation to help offset the bad impression
the government made in September when President Rexhep Meidani
refused to let Berisha on the plane carrying Meidani and Italian
leaders to the funeral of Mother Teresa in Calcutta.

ROMANIAN PRESIDENT ON TENSIONS IN COUNTRY. President Emil
Constantinescu, in an 14 October address on nationwide radio, urged
the country to overcome "misunderstandings, confusion, and
unnecessary tensions," RFE/RL's Bucharest bureau reported.
Constantinescu said Foreign Minister Adrian Severin would have to
resign if his allegations on foreign agents in political parties and the
media proved inaccurate. Constantinescu also referred to the ongoing
hunger strike of " 1989 revolutionaries," who are protesting the
government's intention to amend the law granting them various
privileges. Constantinescu, who met with the protesters on 13
October, said their situation is critical and must be tackled "with
maximum seriousness." He said society is indebted to the protesters
and must honor their past deeds as well as help them out of their
difficult economic situation.

ROMANIAN PREMIER MEETS PROTESTING 'REVOLUTIONARIES.'
Following Constantinescu's appeal, Prime Minister Victor Ciorbea met
with the protesters, Radio Bucharest reported. A spokesman for the
"revolutionaries" said Ciorbea had pledged to withdraw the
amendment to the law submitted earlier that day to the Chamber of
Deputies. Dan Iosif, a counselor to former President Ion Iliescu and a
leader of the protesters, said the protesters will end their strike only
if they receive assurances that a joint commission of representatives
of the "revolutionaries" and the government will examine the case of
each "revolutionary" to verify that he qualifies for the privileges.
Four protesters have so far been hospitalized during the nine-day
hunger strike.

TRADE UNIONISTS PROTEST IN BUCHAREST. Several thousand
members of the Alfa trade union confederation marched in Bucharest
on 14 October to protest declining living standards. Former President
Iliescu and other leaders of the Party of Social Democracy in Romania
joined the protest. Union leader Bogdan Hossu told Vlad Rosca, chief
of the government's office for relations with the unions, that the
government must take immediate measures for social protection. He
said the unionists are "fed up with theoretical discussions" and with
the incompetence of some ministers. Hossu handed Rosca a long list
of demands, RFE/RL's Bucharest bureau reported.

MOLDOVAN PREMIER IN MOSCOW. Ion Ciubuc met with his Russian
counterpart, Viktor Chernomyrdin, in Moscow on 14 October to
discuss the 22-23 October CIS summit in Chisinau and bilateral
economic relations, RFE/RL's Chisinau bureau reported, citing an
official government press release. Meanwhile, opposition leaders
accused President Petru Lucinschi of attempting to make Moldova
politically and economically subservient to Russia. Former President
Mircea Snegur said the holding of the CIS summit in Chisinau is proof
of Lucinschi's goal. Iurie Rosca, the leader of the Christian Democratic
Popular Front, said the Chisinau CIS summit and the CIS security
heads' recent meeting in the Moldovan capital show Lucinschi is
trying to bring about the country's " incorporation into a Russian-
dominated economic, political, military, and informational sphere."

MOLDOVAN DEFENSE MINISTER MEETS TRANSDNIESTER LEADER.
Valeriu Pasat on 14 October met in Tiraspol with Igor Smirnov, the
leader of the breakaway Transdniester region, ITAR-TASS reported.
The two leaders discussed confidence-building measures in the
security zone separating the two sides' troops. According to the news
agency, the talks concentrated on the agreement mediated by
Russian Deputy Prime Minister Valerii Serov during his September
visit to Moldova, whereby the security zone set up in 1992 would be
reduced in size. ITAR-TASS noted this would do away with the need
to bring Ukrainian peacekeepers to the security zone, despite the
accord with Kyiv on the presence of those troops.

BULGARIAN INTERIOR MINISTER ON ILLEGAL IMMIGRATION.
Bogomil Bonev told RFE/RL on 14 October that his country has
developed a strategy for combating illegal immigration. Bonev, who
is attending the international conference in Prague on illegal
immigration, said Bulgaria has already implemented the
recommendations of earlier meetings of European interior ministers
on the issue. He said Sofia has harmonized the country's legislation
with that of other states and introduced visa restrictions for
nationals of countries considered to be sources of illegal immigration.
Bonev expressed the hope that the Czech Republic will not take
"hasty measures" to introduce visa restrictions for Bulgarian citizens.
This was a reaction to Czech Interior Minister Jan Ruml's earlier
statement that his country is considering introducing restrictions for
citizens of some East European states.

END NOTE

LITHUANIA'S ECONOMY SLIGHTLY LAGS BEHIND BALTIC NEIGHBORS

by Michael Wyzan

The European Commission's decision to recommend that Estonia,
rather than Latvia or Lithuania, be among those countries invited to
begin EU accession negotiations has been criticized by Lithuanian
officials, who claim the decision was based on outdated data. While
Lithuania's economy is in some respects lagging behind those of the
other two Baltic States, Vilnius is beginning to close the gap,
especially with Latvia.
        At the end of 1996, Lithuania's economy was growing faster
than Latvia's, its inflation was almost identical to Latvia's (and below
Estonia's), and its unemployment rate lay between those of its two
Baltic neighbors. However, it remained poorer and more dependent
on trade with the CIS. And it also had a substantial budget deficit
(about 3 percent of gross domestic product), while Estonia had a tiny
surplus and Latvia only a small deficit.
        In 1996, Lithuania's GDP grew by 3.6 percent, compared with
4.3 percent in Estonia and 2.3 percent in Latvia. Consumer prices
rose by 13.1 percent from December 1995 through December 1996;
the equivalent figures were 15 percent in Estonia and 13.2 percent in
Latvia. Unemployment in Lithuania in December 1996 was 6.2
percent, compared with 4.1 percent in Estonia and 7.2 percent in
Latvia. In the same month, Lithuania had an average monthly wage
of $173, Estonia $260, and Latvia $242.
        In 1996, 40.5 percent of Lithuania's imports came from the EU
and 36.2 percent from the CIS; the equivalent figures for exports
were 33.4 percent and 45 percent. By contrast, only 17.5 percent of
Estonia's imports in 1996 originated in the CIS, while 25.2 percent of
its exports went there. Lithuania received only $41 in cumulative
foreign direct investment per capita from 1989 to 1996, compared
with $516 in Estonia and $310 in Latvia.
        There has been little change in the countries' performance so
far this year. During the first quarter of 1997, Lithuanian GDP was
2.4 percent above the level in the same period of1996--similar to
Latvia's growth rate, but well below Estonia's. Lithuanian inflation in
the 12 months to August 1997 was 8.7 percent, compared with10.8
percent in Estonia and 8.6 percent in Latvia.
        The most recent unemployment figures available are 5.4
percent in Lithuania and 7.3 percent in Latvia in August and 4.7
percent in Estonia in July. The average monthly gross wage in July
was $215 in Lithuania, $250 in Estonia, and $230 in Latvia.
        Lithuania shares with Estonia large and growing trade and
current account deficits. In the first quarter of 1997, Lithuania had a
$232 million current account deficit, compared with $134 million
during the same period in 1996. Through the first two quarters, the
trade deficit was $825 million, whereas it was $500 million during
the first half of 1996.
        One way to assess a country's economic development is to
examine the foreign reserves of the central bank: if those funds are
rising, inflows elsewhere in the balance of payments are more than
making up for unbalanced current transactions. At the end of August,
the Bank of Lithuania's reserves (including gold) were at a post-
independence high: $1.09 billion, or the equivalent of three months
of imports. Estonia has also experienced foreign-reserve growth this
year, despite an even faster increase in its current account deficit.
        The growing current account imbalance is one of the main
reasons why the Lithuanian government has decided to jettison its
currency board and fixed exchange rate. IMF Managing Director
Michel Camdessus, visiting Vilnius on 3 October for the Bank of
Lithuania's 75th anniversary celebration, described the board as a
"useful straight jacket" and called for tight monetary policy once a
more flexible regime is in place.
        If economic performance does not markedly distinguish
Lithuania from Estonia, what about progress on structural reform? In
assessing Lithuania's merits as a potential candidate for EU
membership, the European Commission stressed poor financial
discipline at enterprises, a backward agricultural sector, and a weak
banking system. It also cited the need for further progress on price
liberalization, large-scale privatization, enterprise restructuring, and
bankruptcy proceedings.
        The government, for its part, stresses that privatization of all
but the biggest enterprises is complete and that the financial system
weathered the banking crisis in mid-1995.
        As a report card on the areas in need of further improvement
in Lithuanian economic policy, the European Commission's
assessment is useful. Less convincing, however, is its argument that
Estonia is so far ahead of Lithuania (and Latvia) in those areas that
the EU should begin negotiations only with the former.

The author is a research scholar at the International Institute for
Applied Systems Analysis in Laxenburg, Austria.


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