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RFE/RL NEWSLINE Vol. 1, No. 176, Part II, 10 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 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part II * HAVEL CRITICIZES KLAUS WITHOUT NAMING HIM * SERBS LEAVE BOSNIA CONFERENCE * ETHNIC HUNGARIANS SUSPEND PARTICIPATION IN ROMANIAN GOVERNMENT * End Note: UKRAINE IS OUT OF CAPITAL MARKETS: WAS IT PUSHED? xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx EAST-CENTRAL EUROPE UKRAINIAN PARLIAMENT PREPARES FOR NO CONFIDENCE VOTE. The Verkhovna Rada voted on 9 December to prepare a resolution of no confidence in the government, Ukrainian media reported. 242 of the 450 deputies voted for the resolution that was proposed by the Socialist and Agrarian factions. If the parliament passes a resolution of no confidence, the government must resign, but the president has the final say on whether it has to leave office. PG UKRAINE'S FINANCE MINISTER CONFIDENT ABOUT FUTURE. Finance minister Igor Mityukov told Itar-Tass on 9 December that the National Bank of Ukraine has sufficient reserves to cope with financial challenges in the immediate future. He said that Kyiv's most important task is to adopt an austerity budget that reduces both state expenditures and state borrowing. In the same interview, Mityukov said that Ukraine hoped Russia would participate in Ukraine's privatization effort and thus inject new funds into the country. PG ESTONIA MAY REGISTER ILLEGAL RESIDENTS. The Estonian cabinet on 9 December approved a measure which, if the parliament agrees, would allow currently illegal residents to obtain residence permits after registering with the authorities, BNS reported. Under the terms of the draft bill, the illegal resident must have arrived in Estonia before July 11, 1990, and then must register with the authorities. Tallinn estimates that there are some 50,000 such people at the present time. PG LATVIAN PM BOWS TO FACTIONS, DROPS CHALLENGE TO GOVERNMENT. Prime Minister Guntars Krasts said on 9 December that he would bow to the current coalition partners and drop his plans to try to reform the current government, BNS reported. Instead, he indicated that he would seek to improve discipline among the current ministers. But this may not be the end of the matter. Krasts said that "it is the first time when I'm left alone, and I hope it is the last such occasion. Should similar situations occur again, I won't see any possibility of continuing in the post." PG LATVIAN GOVERNMENT APPROVES DRAFT BORDER ACCORD WITH RUSSIA. The Latvian cabinet has approved the draft border agreement with Russia, foreign minister Valdis Birkavs told BNS on 9 December. He said that Riga would inform Russia about this decision and seek agreement on a venue for signing the document. PG HAVEL CRITICIZES KLAUS WITHOUT NAMING HIM . . . In a televised "state of the nation" speech before both houses of parliament on 10 December, President Vaclav Havel harshly criticized outgoing premier Vaclav Klaus, though he refrained from naming him. Havel said it was pointless to name names, but "some deserve blame more than others." He said that "fascinated by our macro-economic data, we ... disregarded the rules of the game, the rule of law, the moral order behind that system of rules." He said there was a "cloak of liberalism without adjectives" that concealed what in fact was a "Marxist- like conception of base and superstructure." Havel said that "morality, decency and solidarity" had been left to "the superstructure" and were "slightly derided as a mere 'seasoning'--until we found there was nothing left to season," CTK reported. MS . . . AND KLAUS REJECTS CRITICISM. Reacting to Havel's speech, which was greeted by a standing ovation by almost all those present, Klaus told journalists the president showed a "deep failure to understand the functioning of a market economy and a free society eight years after the fall of communism." He said Havel wanted to take the country back to "a third way" between capitalism and communism. He also said Havel's speech had been "confrontational" and accused him of "inflaming the situation rather than calming it down." He added that he considered the speech "a challenge, and I am ready to continue to search for a constructive solution to our situation," Reuters and AFP reported. MS CZECH, SLOVAK FOREIGN MINISTERS POSTPONE MEETING. A meeting between Czech Foreign Minister Jaroslav Sedivy and his Slovak counterpart Zdenka Kramplova has been postponed indefinitely, a spokesman for the Czech Foreign Ministry said on 10 December. The meeting was scheduled to take place on 12 December in the western Slovak spa resort of Trencianske Teplice. No reason was offered for the postponement but CTK, citing "reliable sources," said it was likely the meeting had been cancelled because of the derogatory remarks made by Prime Minister Vladimir Meciar about Havel (See "RFE/RL Newsline," 8 December 1997). Bratislava's reply to a protest note from Prague was regarded by the Czech officials as unsatisfactory. CTK also reported that outgoing Justice Minister Vlasta Parkanova postponed her trip to Slovakia, where she was due to meet her Slovak counterpart Josef Liscak. A Justice Ministry spokesman said the cancellation was due to the resignation of the Czech government. MS ... WHILE SLOVAKIA POSTPONES HUNGARIAN VISIT. Slovakia has postponed a one-day visit by Hungarian Minister of Defense Gyorgy Keleti, scheduled for 10 December, Hungarian media reported on the same day. A Defense Ministry official in Bratislava said the visit would be rescheduled for early next year. No explanation for the postponement was offered but the daily "Nepszabadsag," citing anonymous sources, says Slovak Defense Minister Jan Sitek would like to host Keleti as lavishly as he was hosted in Budapest during his visit there earlier this year. This would have been impossible with only half a day programmed for the event. Keleti and Sitek were to sign two treaties, one on confidence building and the other on the joint use of air space. MS HUNGARIAN PARLIAMENT APPROVES 1998 BUDGET. The parliament approved the 1998 budget on 9 December. The vote was 209 in favor, 65 against, and two abstentions. The budget provides for a deficit of 419 billion forints ($2.1 billion), which is 4.4 percent of the GDP, Hungarian media reported. Economic growth is expected to be 3-4 percent. In separate news, the parliament elected Arpad Kovacs, chairman of the board of the State Privatization and Holding Company, as president of the State Audit Office for a period of 12 years. MSZ SOUTHEASTERN EUROPE SERBS LEAVE BOSNIA CONFERENCE. Yugoslav delegate Dragomir Vucicevic walked out of the international Bonn conference on Bosnia on 10 December to protest plans to include references to Kosovo in the session's final documents. Republika Srpska President Biljana Plavsic and Bosnian Serb hard-line leader Momcilo Krajisnik also left the conference. The previous day, Vucicevic demanded that Kosovo and Sandzak be excluded from the conference's agenda because they are "internal questions" of his country. Vucicevic added that Belgrade might "distance itself" from the conference and its final documents if Belgrade's wishes are not respected. The Kosovo Albanians and Sandzak Muslims, for their parts, feel that the only way to change Yugoslav President Slobodan Milosevic's repressive policies toward his ethnic minorities is for the international community to put pressure on him. PM OUTSIDE FORCE THE KEY IN BOSNIA. Most participants at the Bonn meeting agreed on 9 December that the presence of foreign peacekeepers and the application of political and economic pressure have been decisive in restoring peace and stability to the region (see "RFE/RL Newsline," 9 December 1997). Speakers also said, however, that progress in implementing the Dayton agreement has been very slow. A U.S. diplomat pointed out that much of the problem stems from the fact that the people who began and fought the war are still in power. Also in Bonn, the Muslim, Serbian, and Croatian members of the joint presidency agreed under international pressure on a common citizenship, passport, and council of ministers. Parliament must still approve the measure. PM ALBANIA'S MILO WARNS OF "SECOND BOSNIA." Albanian Foreign Minister Paskal Milo said during a visit to Moscow on 9 December that the situation in Kosovo has become "rather explosive," Interfax reported. He said the province might turn into "another Bosnia in the Balkans unless the key rights of the Kosovo population are fulfilled." His host, Russian Foreign Minister Yevgenii Primakov, said that Russia opposes Kosovar separatism and believes that "Kosovo is Yugoslav territory." He nonetheless urged the Belgrade authorities to take "a number of steps in order to democratize the situation there [in Kosovo] and give local residents the opportunity to defend their interests." PM SERBIA'S SESELJ EXPECTS TO WIN PRESIDENCY. The Serbian Radical Party's Vojislav Seselj said in Belgrade on 9 December that he expects to win the 21 December presidential runoff, BETA news agency reported. Seselj argued that Milan Milutinovic, his Socialist opponent, peaked in the first round. Seselj said that votes cast for other candidates in the first round will go to him in the second (see "End Note," "RFE/RL Newsline," 9 December 1997). Vuk Draskovic, who came in third in the first round, has, however, urged his supporters to boycott the runoff. PM MONTENEGRO'S DJUKANOVIC WANTS COOPERATION WITH HAGUE. Montenegrin President-elect Milo Djukanovic said in Podgorica on 9 December that U.S. President Bill Clinton's decision to keep sanctions on federal Yugoslavia for another year proves that Milosevic's policies are responsible for the country's continuing isolation (see "RFE/RL Newsline," 9 December 1997). Djukanovic added that Yugoslav leaders must recognize that cooperation with international institutions, especially with the Hague-based war crimes tribunal, is a matter of top state interest. He added that Montenegro will do all it can to move federal policy in that direction, an RFE/RL correspondent reported from Podgorica. PM PHONE LINES UP BETWEEN YUGOSLAVIA, BOSNIA. Serbian authorities restored direct-dial telephone links between federal Yugoslavia and the mainly Muslim and Croat Bosnian federation on 9 December. Spokesmen for Yugoslav Posts and Telecommunications said in Belgrade that the telephone system of the Republika Srpska will continue to be an integral part of the Yugoslav one. PM NATO WON'T LET WAR CRIMINAL TURN SELF IN. Dutch NATO peacekeepers in central Bosnia refused in July to let Miroslav Bralo surrender because he was not on their list of indicted war criminals, the "Washington Post" reported on 9 December. Once the Hague-based tribunal subsequently asked NATO to arrest Bralo at home, the peacekeepers refused. Bralo is a self-confessed war criminal who committed atrocities against Muslims in 1993. A senior U.S. official called the affair "a minor blip on the screen." A spokesman for the war crimes tribunal, however, said that the Bralo case is part of a pattern in which, "when push comes to shove [regarding catching war criminals], NATO runs into a corner and cries." PM CROATIAN OPPOSITION WANTS VAT CUT. Social Democratic deputies introduced a bill in parliament on 9 December to exclude food, medicines, children's clothes, books, and educational materials from the new VAT, an RFE/RL correspondent reported from Zagreb (see "RFE/RL Newsline," 2 December 1997). The bill also called for cutting the VAT on taxable goods from 22 to 15 percent. PM TOP ALBANIAN COURT FILES CHARGES AGAINST PARLIAMENT SPEAKER. Five judges of the constitutional court, who were appointed during the former government of President Sali Berisha, filed criminal charges against Social Democratic parliamentary speaker Skender Gjinushi on 9 December. They charge Gjinushi with slander, claiming that he said in parliament on 7 December that "the constitutional court of [Chief Justice] Rustem Gjata has broken the rules and serves foreign interests." On the same day, Gjinushi charged that the judges misquoted him. He claimed that he only said that government policies in the first half of the year under Berisha "served [to promote] the destruction and destabilization of Albania. And a part of the Constitutional Court took decisions in line with that policy and hence has served the same goal," "Koha Jone" reported. FS ALBANIA INVESTIGATES RAMPANT SMUGGLING. The state prosecutor's office on 9 December set up a special team to investigate dealings in contraband. Prosecutor General Arben Rakipi said that the specialists will reopen investigations into every case of smuggling that police could not earlier solve for lack of evidence, "Koha Jone" reported. Rakipi expressed hopes that the new group will also be able to crack down on corruption among police and customs officials (see "RFE/RL Newsline" 9 December 1997). FS ETHNIC HUNGARIANS SUSPEND PARTICIPATION IN ROMANIAN GOVERNMENT... The Hungarian Democratic Federation of Romania (UDMR) on 10 December announced it has suspended its participation in Victor Ciorbea's coalition cabinet, RFE/RL's Bucharest bureau reported. The decision followed the vote in the Senate on the government regulation that amended the 1995 Education Law. Representatives of the National Peasant Party Christian Democratic (PNTCD) voted in favor of opposition amendments, limiting the teaching of Romanian language with special manuals for national minorities to grades I-IV, instead of all school grades, as provided in the regulations. PNTCD senators also supported an amendment that forbids separate universities of the national minorities. They also supported forbidding separate minority sections in existing universities, which the 1995 law permitted. The UDMR said this was in breach of a protocol of 3 December, signed before the reshuffle of the cabinet. MS ... AND INTER-ETHNIC TENSION RISES IN TRANSYLVANIA. Police are guarding an orphanage in the Transylvanian town of Odorheiul Secuiesc run by Greek- Catholic nuns and the local government council is threatening to resign, the media in Romania reported on 9-10 December. The police were deployed at the orders of government secretary general Remus Opris, after he visited the town on 10 December. The local council is suspecting that the orphanage will serve as a means to bring about the "Romanization" of the town, which is inhabited by Hungarian Szeklers (see "RFE/RL Endnote, 15 August 1997). Earlier on 10 December, the local mayor refused to allow a truck that brought furniture to the orphanage to unload. The locks that were placed at the mayor's order on the building were dismantled. The UDMR protested the measure, saying matters should be left to the decision of a court of justice. MS MONARCHY AGAIN TROUBLING ROMANIAN POLITICS. Premier Victor Ciorbea has summoned Minister of Culture Ion Caramitru, Information Minister Sorin Botez and Agriculture Minister Dinu Gavrilescu, demanding that they clarify a declaration they signed in support of the return of a constitutional monarchy, Romanian media reported. Earlier on 9 December, a press release of President Emil Constantinescu's office said the ministers, like any other Romanian citizens, had a right to express their views, but once they have taken an oath on the Constitution, they must respect its provisions. The presidential press release said the three ministers must "opt between the freedom of expressing their opinion and their ministerial obligations under the constitution." MS WORLD BANK APPROVES LOAN TO ROMANIA. The World Bank on 10 December approved a $25.5 million loan to support Romania's privatization program, Romanian television reported. Citing a World Bank release, Reuters said "the money will be used to consolidate economically inefficient farms and to facilitate the operation of the land market necessary for a market-based economy." In other news, several hundred journalists on 10 December marched in Cluj to protest legislation making libel a criminal offense punishable by large fines and imprisonment. The protest came after a local newspaper was fined for allegedly slandering the town's nationalist mayor, Gheorghe Funar. MS POLISH PRESIDENT IN MOLDOVA. Aleksander Kwasniewski on 10 December began a two-day visit to Moldova, the RFE/RL Chisinau bureau reported. He met his Moldovan counterpart Petru Lucinschi, the chairman of the parliament Dumitru Motpan and leaders of the parliamentary factions. Lucinschi said Poland was for Moldova a "model for the transition to a market economy." He said Poland's road to market reforms started a long time ago. "We are only half-way on this road and need the Polish experience." Kwasniewski assured the Moldovans of Warsaw's support for finding a peaceful solution to the Transdniester conflict. He also said Poland was interested in further developing its commercial ties with Moldova and was ready to share its experience with Chisinau. Trade between the two countries has grown by 50 percent in 1997 in comparison with 1996. The two sides are to sign accords on cooperation in transportation and cultural affairs. MS MOLDOVAN SUPREME COURT RULES AGAINST BESSARABIAN METROPOLITAN CHURCH. The Moldovan Supreme Court on 10 December turned down the appeal of the Bessarabian Metropolitan Church against the government's refusal to register it. The Chisinau Court of Appeal ruled in August that the government should register the church, which is subordinated to the Bucharest patriarchate, saying it could co-exist with the Moldovan Orthodox Church, which is subordinated to the Moscow patriarchate. The Supreme Court ruled that the Bessarabian church had not appealed against the government's refusal to register it within the time specified by the letter of the law. Parliament deputy Vlad Cubreacov, who represented the Bessarabian Church in court, said the grounds for the rejection were unjustified and emphasized that the appeal would not have been heard by the Court of Appeals if the church had really failed to respect the legal provisions. Cubreacov said the Bessarabian Church would now appeal to the European Court for Human Rights. MS TRANSDNIESTER SEPARATISTS DENY ENTRY TO INSPECTION TEAM. Transdniestrian border guards on 10 December blocked a team of military observers from the U.S., France and Germany from entering the territory, BASA-press and ITAR-TASS reported. The team was to carry out an inspection of the Russian contingent stationed in Bendery- Tighina, in line with the CFE treaty. The team was accompanied by Moldovan Defense Ministry officers. The guards said the entry of the Moldovans was not "coordinated in advance." The international team refused to proceed without the officers and returned to Chisinau. In other news, committees of the State Duma on 10 December began debating the Russian-Moldovan basic treaty, initialed in 1990. A delegation of the Transdniester Supreme Soviet is attending the debates, but the State Duma has not invited a Moldovan parliamentary delegation to attend. MS UKRAINE IS OUT OF CAPITAL MARKETS: WAS IT PUSHED? by Robert Lyle Ukraine has decided to stay out of world capital markets until sometime in the next year, but the question in global financial circles is whether Kyiv was pushed back by the International Monetary Fund or stepped back on its own volition as a prudent business decision. The question is being asked by international investors who are reassessing the countries where they have money in the wake of the Asian financial crisis. This is one of the normal ripple effects of any financial crisis and the investors who are re-examining their investments say it could make a difference if Kyiv is still dependent on the IMF to keep out of trouble or is beginning to make some of these choices on its own. The Financial Times newspaper last week said it was the IMF which brought a halt to Ukraine's plans to issue several hundred million dollars in Eurobonds, but denominated in Ukrainian hryvnya. To protect foreign investors from devaluation of the hryvnya, the bonds were being designed with a special feature that protected the purchaser, but left Ukraine open to a large risk of very high costs. The IMF refused to comment in any way on the story, but a spokeswoman for the Ukrainian embassy in Washington said it wasn't the IMF at all, it was the Kyiv government which had stopped. She said Finance Minister Ihor Mityukov last week announced the postponement of all Ukrainian operations in international financial markets, including both Eurobonds and Samarai (Asian) bonds, because costs were just too high. One byproduct of the Asian financial crisis has been a sharp rise in the interest rates developing and emerging market countries must pay to borrow money globally. Russia has suffered a particularly large outflow of money as foreign investors began withdrawing from government bonds and notes. Moscow was forced to raise its rates significantly in the past week to prevent the situation from getting worse even as it began talking with major global commercial banks about loans totaling around 2,000 million dollars to help the country get through the current difficulties. Ukraine had been much slower getting into global bond and note markets, but had intended to begin issuing bonds first on Asian, and then on European and North American markets. Sources in global securities markets say the Ukrainian government may also have acted to keep its sovereign credit ratings secret. Kyiv got its ratings from the three private firms which make the ratings world-wide -- IBCA, Standard & Poors, and Moodys -- early last week, but declined to reveal them. Since most countries are anxious to have their ratings known, the suspicion is the ratings are much lower than was expected and lower than that of neighboring countries. The sovereign credit ratings are necessary before any country can sell bonds or government notes on capital markets in other countries. While the IMF would not comment, market sources said the advice sounded like something the fund would say in Ukraine's situation. When it agreed to release two monthly tranches totaling about 103 million dollars from Ukraine's stand-by loan, the fund said it was releasing the drawing because of Kyiv's "renewed commitment to speed up structural reforms, particularly in the areas of privatization and deregulation." The fund also praised Ukrainian authorities for moving quickly to increase interest rates and reserve requirements to contain pressures on the foreign exchange market during the Asian crisis. But they said it was important the country preserve the gains that had been achieved, and that would mean, importantly, keeping borrowing costs within bounds. The experts point out that while the feature the financial firm Merrill Lynch was designing into the bonds would expose Kyiv to the possibility of unexpected high costs, it would have been a feature necessary to attract foreign investors in current market conditions. Whether Kyiv jumped or was pushed will not be as important after the markets see how Ukraine does handle itself when it decides to go back into the world capital markets. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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