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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 1, No. 170, Part II, 2 December 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

* CZECH POLICE PROBE KLAUS'S ALLEGED SECRET BANK ACCOUNTS

* CROATIAN SOCIAL DEMOCRATS SCORE LOCAL ELECTION VICTORY

* SOLANA WANTS "MORE MOBILE" PEACEKEEPERS

* End Note: THE FALL OF VACLAV KLAUS
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EAST-CENTRAL EUROPE

CZECH POLICE PROBE KLAUS'S ALLEGED SECRET BANK ACCOUNTS... The Czech police on
1 December announced that an investigation is under way into media allegations
that outgoing Prime Minister Vaclav Klaus's Civic Democratic Party (ODS) has
secret bank accounts in Switzerland, CTK reported. According to the
allegations, Czech and foreign companies paid money into the accounts in
exchange for preferential treatment in privatization deals. Klaus continues to
insist he knows nothing about such accounts. Meanwhile, on 1 December, the
crown suffered its biggest one-day loss in almost two years (see also "End
Note"). MS

...WHILE KLAUS SAYS HE'LL SEEK RE-ELECTION AS ODS LEADER. Also on 1 December,
Klaus confirmed in a radio broadcast that he will seek another mandate as ODS
leader at the party's extraordinary 13-14 December congress, saying he is
responding to the "enormous support" voiced by party members. He also
criticized Finance Minister Ivan Pilip, who had called for him to resign on 28
November. Klaus said that while he had considered Pilip to be his likely
successor, the finance minister's "impatience and arrogance" ruled out such a
development. Meanwhile, the doctors treating ailing President Vaclav Havel
have said he should limit his work schedule, despite the political crisis in
the country, CTK reported on 1 December. At the same time, they say there has
been "no major change" in the president's health from the time he left
hospital on 18 November. MS

UKRAINE CONTINUES TO DOWNSIZE MILITARY.  Defense Minister Oleksandr Kuzmuk
told a Kyiv news conference on 1 December that he will continue with
downsizing the Ukrainian armed forces, cutting another 36,000 jobs by 2005. He
said his ability to downsize has been limited by inadequate government support
for the army and noted that he has asked the parliament to double its
allocations to the military in 1998.  In other comments, Kuzmuk acknowledged
he has released from duty three Ukrainian officers accused of smuggling while
in Bosnia. But he repeated Kyiv's insistence that the seven Ukrainian soldiers
arrested in Mostar had not violated any law. He suggested those soldiers had
been victims of a provocation of some kind. PG

CRIMEAN TATARS FACE OBSTACLES TO UKRAINIAN CITIZENSHIP.  Refat Chubarov, the
deputy speaker of the Crimean parliament, told Interfax on 29 November that
Kyiv still has not lifted the chief obstacle preventing many Crimean Tatars
from gaining Ukrainian citizenship. Since 1991, some 102,000 Crimean Tatars
have returned to their homeland from Central Asia, to where they were deported
by Stalin. But few of them have been able to prove that they have in fact
renounced citizenship in the countries there, as is required by Ukrainian
legislation. PG

BELARUSIAN PRESIDENT TO TAX MUSHROOM PICKERS? The latest victims of Alyaksandr
Lukashenka's efforts to extract more money from the population may be the
nation's mushroom pickers, RFE/RL's Belarusian service reported on 1 December.
Under orders from Lukashenka to find $200 million in additional taxes and
fees, Finance Minister Mikalaj Korbut suggested Minsk may impose new taxes on
private individuals who catch fish and game or gather mushrooms and berries.
PG

ESTONIAN GOVERNMENT OFFERS COMPROMISE TO OPPOSITION... In a bid to solve the
deadlock over next year's budget, the government on 1 December offered the
opposition a compromise whereby 109 million kroons ($7.3 million) would be
allocated to finance a wage hike for teachers, ETA and BNS reported. The
opposition recently pushed through a budget amendment that allocated 200
million kroons for such a hike, causing a budget imbalance. On 27 November,
some 16,000 teachers staged a warning strike to demand that they receive the
equivalent of the average wage. That strike was the largest in postcommunist
Estonia, according to the news agency. JC

...AND REWARD FOR ARREST OF ARMS ROBBERS. Also on 1 December, the government
offered a 100,000 kroon ($6,700) reward for information leading to the arrest
of three men who committed one of the country's largest arms robberies in
recent years, ETA reported. On the evening of 30 November, the three men
entered a weapons depot outside Tallinn, tied up the only guard at the site,
and absconded with some 70 Kalashnikov automatic rifles as well as a large
amount of ammunition. A massive manhunt is under way, while the government
crisis commission has formed a special working group to monitor developments.
JC

LITHUANIAN AUTHORITIES TO INVESTIGATE MAJOR SMUGGLING CASES. The
Prosecutor-General's Office and the Ministry of Internal Affairs are to set up
special investigative groups to examine this year's major smuggling cases,
BNS reported on 1 December. Officials implicated in such cases will be
investigated for negligence or abuse of office. Prime Minister Gediminas
Vagnorius proposed such a step at a meeting with  Finance Minister Algirdas
Semeta, Customs Department director Alvydas Budrys, and officials from the
Justice Ministry  and law enforcement agencies. JC

POLISH PRIMATE CRITICIZES RADICAL PRIEST.  In an open letter published by the
PAP news agency on 1 December, Jozef Cardinal Glemp asked the Redemptorist
Fathers to impose discipline on a controversial priest who has denounced
parliamentary supporters of abortion as "murderers" and refused to comply with
a summons by local prosecutors. The primate said that Father Tadeusz Rydzyk,
whose Radio Maryja often broadcasts nationalist rhetoric, was employing
"raucous measures" in the political arena. PG

EU BANS IMPORTS OF POLISH DAIRY PRODUCTS.  Following a warning that Poland's
dairy plants do not maintain adequate hygiene, the EU on 1 December banned the
import of dairy products from that country, PAP reported. The ban will have a
significant economic impact since Poland exported some $44 million  in dairy
products to EU countries over the past year.  But Warsaw did receive some good
economic news the same day.  The European Bank for Reconstruction and
Development has allocated $260 million for the  reform of Poland's banking and
industrial sectors, "Rzeczpospolita" reported. PG

SLOVAKIA WANTS GERMAN COMPENSATION FOR WAR VICTIMS. A Foreign Ministry
statement released in Bratislava on 1 December says Slovakia is "drawing
attention" to the fact that Germany has so far neither compensated Slovak
victims of the Holocaust nor paid compensation for "other forms of Nazi
persecution" in Slovakia. The statement was released on the eve of an
international conference in London that is  to examine ways of speeding up
compensation for Holocaust victims and is expected to focus on gold stolen
from Holocaust victims and countries invaded by the Nazis. The ministry said
it hoped the conference "will contribute to speeding up the compensation of
victims of Nazism who had so far been overlooked," Reuters reported. MS

HUNGARIAN OPPOSITION CRITICIZES "TWIN DAM" PROPOSAL. The opposition has
sharply criticized government commissioner Janos Nemcsok's proposal that
Hungary build two small hydropower plants on the Danube instead of completing
the original Gabcikovo-Nagymaros project. That proposal was submitted to a
Slovak delegation on 24 November in Bratislava. Hungarian opposition deputies
lambasted Prime Minister Gyula Horn for letting the Hungarian delegation make
such proposals without the explicit authorization of the legislature.  Horn,
for his part, said that the "twin dam" proposal would ensure that work already
completed on the project would  not be wasted. He added that The Hague
tribunal's ruling on the matter was neither a success nor a "fiasco" for
Hungary, since a compromise with Slovakia can still be reached. MSZ

SOUTHEASTERN EUROPE

CROATIAN SOCIAL DEMOCRATS SCORE LOCAL ELECTION VICTORY. A coalition led by the
Social Democrats has swept the 30 November elections in Primorsko-Goranska
County, which includes Rijeka. The coalition appears set to take 29 out of 41
seats in the county legislature, while supporters of President Franjo Tudjman
are likely to receive eight and the Istrian Democratic Assembly three, an
RFE/RL correspondent reported from Zagreb on 1 December. The Social Democrats
and their allies are also ahead in a number of municipal elections in the same
region. Social Democratic leader Ivica Racan said in Rijeka that his party
wants national parliamentary elections as soon as possible, "Novi List"
reported. PM

CROATIAN UNIFORMS FOR SLAVONIAN POLICE. Law enforcement officers in eastern
Slavonia began wearing Croatian police uniforms on 1 December, an RFE/RL
correspondent reported from Vukovar. The Croatian Interior Ministry is slated
to assume full control of security forces from the UN temporary administration
in the region by 15 December. A two-year process of reintegrating the last
Serb-held enclave of Croatia is slated to end in January. Meanwhile in
Karlovac County in central Croatia, some 4,050 Serbs have returned to their
homes from Serbia and eastern Slavonia since the end of the fighting in 1995,
"Vjesnik" reported on 2 December. PM

UNION LEADER BLASTS CROATIAN VAT.  Boris Kunst, president of the
250,000-strong Workers Trade Union, said in Zagreb on 1 December that the
value-added tax due to go into effect in January will raise food prices by
almost 5 percent and widen the already pronounced gap between rich and poor. A
group of independent trade unions concluded in a recent study that the average
family's food costs will rise by 11 percent. Most Croats struggle to make ends
meet on an average monthly income of $400. The economy is plagued by rampant
corruption and a housing shortage. PM

SOLANA WANTS "MORE MOBILE" PEACEKEEPERS. NATO Secretary-General Javier Solana
told the Paris daily "Le Monde" of 1 December that "after SFOR's [mandate runs
out in June 1998], the presence of more mobile, flexible troops will still be
necessary in Bosnia, but it is premature to speak in terms of numbers and
duty." News agencies reported from Brussels on 2 December that NATO's 16
defense ministers have reached a consensus on options for a future
peacekeeping mission in Bosnia. Details are not yet available, however. PM

NEW GOVERNMENT FOR MOSTAR COUNTY. The Mostar County assembly on 1 December
elected Zeljko Obradovic of the Croatian Democratic Community county governor.
Fatima Leho, who represents the Muslim-led Coalition for a United Bosnia and
Herzegovina, is his deputy, an RFE/RL correspondent reported from Mostar. The
allocation of offices in county and municipal governmental institutions in
Mostar is carefully balanced between Croats and Muslims. PM

MAJOR EUROPEAN LOAN FOR BOSNIA. Representatives of the European Bank for
Reconstruction and Development announced in Sarajevo on 1 December that the
EBRD has approved a $18 million loan to help rebuild Bosnia's power grid, much
of which was destroyed in the war. Work is slated to be carried out both in
the mainly Croatian and Muslim federation and in the Republika Srpska. Bosnia
was a major producer of electric power in the former Yugoslavia. PM

ALBANIA'S MILO SAYS KOSOVO AN INTERNATIONAL ISSUE. Albanian Foreign Minister
Paskal Milo told the Pristina daily "Koha Ditore" of 1 December that "Kosovo
has become an international problem whether Belgrade likes it or not." He
added that Serbia could best demonstrate good will by implementing "a
peaceful, political solution" to the Kosovo question. Serbia maintains that
Kosovo is a purely domestic affair (see "RFE/RL Newsline," 1 December 1997).
The Albanian opposition and many Kosovars suspect that the Albanian government
has agreed to accept the Serbian point of view in order to promote good
relations between Tirana and Belgrade (see "RFE/RL Newsline," 26 November
1997). Meanwhile in Brussels on 1 December, Kosovar shadow-state President
Ibrahim Rugova called  for an international protectorate for Kosovo. Rugova
added that the province must be completely demilitarized, "Nasa Borba" wrote.
PM

ALBANIANS RESIST DEPORTATION FROM ITALY. More than 100 Albanian refugees in
Brindisi launched a hunger strike on 1 December to protest Italian plans to
repatriate them over the next few weeks. Some 5,000 Albanians remain in camps
in the Puglia region, which the Italian authorities say they will close as
soon as possible. Up to 17,000 Albanians fled to Italy during the anarchy that
gripped their country in the spring. Some have since returned home, and many
more live illegally throughout Italy. PM

UN WARNS ALBANIA ON AIDS. The UN sponsored a seminar in Tirana on 1 December
to mark World AIDS Day and warn of the threat that AIDS poses to Europe's
poorest country. Participants blamed the government and conservative social
attitudes for widespread ignorance about AIDS and how it is spread.
Prostitution, migration, and drugs are the main risk factors in Albania,
participants added. The UN and the Albanian government are jointly sponsoring
an AIDS-awareness program. The first case of AIDS was reported in 1993, and
six people have died as a result of the immune deficiency syndrome.  Some 32
people are registered as HIV-positive. PM

ROMANIAN PRESIDENT URGES SELF-TRUST. In a speech delivered in Alba Iulia on
Romanian National Day (1 December),  Emil Constantinescu said the country is
now democratic and hence "everything depends on ourselves." He said that if
mistakes are made, "we must stop blaming them on the international situation,
on geopolitics, or on the alleged [misunderstanding of others] due to a lack
of communication." He said  the battle against poverty depends on the success
of the economic reforms and "now that we are again at a crossroads, we must
trust in ourselves." For the first time since the overthrow of communism,  a
military parade was staged in Alba Iulia to mark National Day. MS

MOLDOVAN CONSTITUTIONAL COURT  RULES AGAINST BUDGET PROVISIONS. The
Constitutional Court on 1 December ruled that two provisions of  the budget
approved by the parliament on 25 November are illegal. One provision states
that the government is to issue regulations establishing when judges are
entitled to receive bank loans. According to the other provision, 50 percent
of the fines imposed by courts will be used for court maintenance costs. The
court ruled that both provisions contravened the law on the status of judges,
which stipulates the state grant justices receive free housing for six months
or interest-free loans for accommodation purposes, BASA-press reported. MS

MOLDOVAN PRESIDENT ON POLITICAL SYSTEM. Petru Lucinschi on 1 December repeated
his belief that Moldova must opt for a full presidential system or  a full
parliamentary system. He said the present, semi-presidential system hinders
the promotion of reforms. He also noted that political struggles preceding the
1998 parliamentary elections "heat the atmosphere in our society and have a
negative impact on the development of the spirit of entrepreneurship at the
local level," BASA-press reported. MS

BULGARIA TO  TEAR DOWN RED ARMY MONUMENTS? Vice President Todor Kavaldzhiev on
1 December told a conference  that "monuments of the Soviet army in the center
of [the capital] must be replaced by monuments commemorating the victims of
communism, " an RFE/RL correspondent in Sofia reported. In other news, the
government on 1 December announced that the Bulgarian ambassador to Canada
will sign a new international convention banning landmines at a 3-4 December
conference in Ottawa.  Romania is sending Foreign Minister Adrian Severin to
sign the convention. MS

THE FALL OF VACLAV KLAUS

by Breffni O'Rourke

        Months of political unease in the Czech Republic have ended dramatically with
the resignation of Prime Minister Vaclav Klaus and his coalition government.
        Klaus stepped down early on 30 November amid allegations that his Civic
Democratic Party (ODS) improperly accepted more than $200,000 in donations
that may have had an influence over privatization decisions.
        The sudden fall of Klaus's long-troubled three-party coalition had an
immediate impact on the financial markets. On 1 December, the Czech crown
dropped sharply against the German mark, and analysts say they expect further
losses during the week. The currency was already weakened as it became clear
that strains inside the government were reaching breaking point. Similarly,
the Prague stock market suffered heavy losses at the start of trading on 1
December.
        The fall of Klaus, who is seen as the architect of his country's transition
to free enterprise, was precipitated from within the ODS. Two senior members,
Finance Minister Ivan Pilip and former Interior Minister Jan Ruml, chose a
moment when Klaus was absent from Prague to demand his resignation. Supporters
of Klaus accused Ruml and Pilip of plotting the premier's overthrow.
        President Vaclav Havel then called for Klaus to resign, saying the donation
scandal was the straw that broke the camel's back. The president also argued
that the Klaus government had exhausted its conceptual potential, alluding to
the political and economic lethargy into which the Czech Republic has sunk
following the crisis of confidence in the crown in  last May.
        Before then, the country was regarded as a model among the transition
economies, and  Klaus appeared to be successfully implementing broad economic
restructuring without causing the pain common in other transition economies.
But Klaus failed to realize the importance of creating a proper regulatory
framework to govern the restructuring process. Corruption and mismanagement
became widespread, large-scale privatization lost momentum, and foreign
investment dried up. Analysts say that since May, the Klaus government has
been living on borrowed time.
        The leftist opposition Social Democrats (CSSD), who are riding high in public
opinion polls, have called for new elections. But Havel has resisted that
call, noting that he is not bound to call such a vote until other
possibilities have been exhausted. Commenting that the country is already at a
virtual standstill, he added that elections would hold it frozen for another
six months.
        The ruling coalition partners--the ODS, the Civic Democratic Alliance, and
the Christian Democrats--have agreed with Havel that the present government
will remain in power temporarily until the ODS holds a special congress to
sort out its internal troubles. Scheduled to begin on 13 December, that
gathering will determine whether the coalition partners can continue their
cohabitation or will have to clear the way for early elections, which would
likely result in the CSSD forming a new government, possibly in coalition with
the Christian Democrats.
        Christian Democrat leader Josef Lux has already said that if the ODS congress
re-elects Klaus as party chairman, new elections will seem the only way out of
the crisis. Klaus has already signaled that he  may stand for re-election as
party chairman, although he stressed he will not be a member of the next
government.
        Klaus has also said that the main job of the temporary government  is to
avoid economic chaos. All the major parties--government and opposition--have
agreed that the current uncertainty must not be allowed to undermine Czech
efforts to enter the EU and NATO.
        The crisis has already had an impact on the privatization process, however.
The coalition says privatization will continue on track, but Finance Minister
Pilip has announced that several privatization decisions will be reviewed in
the light of the allegations of undue influence within the ODS on that
process.
        The CSSD, meanwhile, has called for a complete halt to privatization until a
new government takes over.  Analysts say that if the CSSD were to come to
power through new elections, no dramatic reversals of present policies should
be expected. But they worry that a leftist government would probably run a
bigger budget deficit and soften the fight against inflation. The CSSD, which
has accused the present center-right coalition of starving the state sector,
would also be less likely to push hard on privatization.
        Regardless of which government will be in power, it would be wrong to
consider the fall of Klaus as a cataclysm for the Czech Republic. As Havel
pointed out, the present government's resignation creates scope for Czechs to
think about a different government, one with renewed energy and dynamism.

The author is an RFE/RL senior correspondent.

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