RFE/RL NEWSLINE Vol. 1, No. 179, Part II, 15 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

* EU LEADERS AGREE ON ENLARGEMENT

* KLAUS RE-ELECTED PARTY CHAIRMAN

* ROW OVER YUGOSLAV CITIZENSHIP FOR BOSNIAN
SERBS

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EAST-CENTRAL EUROPE

EU LEADERS AGREE ON ENLARGEMENT. The leaders of the
EU agreed in Luxembourg on 13 December that entry
negotiations with the Czech Republic, Estonia, Hungary, Poland,
Slovenia, and Cyprus will begin in spring 1998. They also
agreed that Bulgaria, Latvia, Lithuania, Romania, and Slovakia,
though not invited to start formal negotiations, will be included
in the overall enlargement process. The union has promised
that they can move to the "fast track" for prospective new
members if they make sufficient progress in economic and
political reform. MS

RESPONSES FROM THOSE LEFT OUT OF FAST TRACK...
Slovak Prime Minister Vladimir Meciar told journalists that
Bratislava was "pleased" with the EU decision but wanted to be
included in the "fast track" category, saying his country has
made "more progress" than some of those included in that
category. Bulgarian President Petar Stoyanov said his country
is encouraged but should aim not simply to join the EU but to
create a stable democracy. Romanian Foreign Minister Adrian
Severin argued that the decision provided a "fantastic
opportunity for European unification." Latvian Prime Minister
Guntars  Krasts noted it was the "best formula" for the start of
the enlargement process that "Latvia had hoped for."
Meanwhile, Lithuanian Premier Gediminas Vagnorius's
spokesman said that while the decision did "not quite satisfy"
Vilnius, the premier nonetheless believes that Lithuanian
efforts toward EU membership have paid off because
"Lithuania will begin the process of accession to the
organization next year." MS/JC

...AND FROM SOME OF THOSE INCLUDED. Polish Premier
Jerzy Buzek stressed Poland will be cooperating with those
countries negotiating EU membership at a slower pace. Czech
President Vaclav Havel said Europe has a unique opportunity
to organize itself on the basis of "equal justice" and change the
previous practice of the powerful states dictating to the less
influential ones. Hungarian Premier Gyula Horn argued there is
a "qualitative difference" in the way the two groups were
handled and predicted that Hungary may join the EU between
2000 and 2002. MS

ESTONIA WELCOMES DECISION ON BALTIC NEIGHBORS.
In an official statement released on 13 December, Tallinn said
it attaches particular importance to the inclusion of  Latvia and
Lithuania in the overall EU enlargement process, RFE/RL's
Estonian service reported.  It also stressed the importance of
further strengthening and developing relations with those two
countries, which it described as its closest neighbors. JC

SLOVENIA, ESTONIA HOPE TO SIMULTANEOUSLY JOIN
EU, EMU. Prime Minister Janez Drnovsek said at the
Luxembourg summit on 13 December that Slovenia already
meets the fiscal criteria for joining the European Monetary
Union and that 70 percent of its trade is with the EU. Similarly,
Estonian Foreign Minister Toomas Hendrik Ilves commented
that Tallinn will be ready for the EMU by the time it joins the
union, ETA reported. According to Ilves, Estonia already meets
"nearly all criteria" for joining the EMU, except the one on
inflation. The government currently estimates annual inflation
in 1997 at 11.8 percent. PM/JC

UKRAINIAN GOVERNMENT PROPOSES TIGHTER
AUSTERITY BUDGET. Faced with the prospect that Kyiv will
be unable to finance any deficit by borrowing abroad, Finance
Minister Igor Mityukov said on 12 December that the
government will propose a new budget with a deficit of only
3.5 percent of GDP rather than 4.3 percent as envisaged in the
draft budget approved by the parliament in the first reading,
ITAR-TASS reported.   Given Socialist opposition to the first
draft, this second even tighter proposal is likely to exacerbate
tensions between the parliament and the government. PG

UKRAINE, RUSSIA TO DROP VAT IN 1998. Following a
meeting 12 December in Moscow, Russian First Deputy Prime
Minister Anatolii Chubais and his Ukrainian counterpart, Serhiy
Tyhypko, announced that the two countries will sign an
agreement on 28 February 1998 ending the practice of levying
value-added tax on goods exported to the other country, ITAR-
TASS reported.  But the two leaders failed to reach agreement
on sugar quotas, according to the Russian news agency.
Meanwhile, Ukrainian Prime Minister Valeriy Pustovoitenko
said in Donetsk that Kyiv has approved a Donets development
plan for the years 1998-2000. But both the estimated high
costs of the plan and the absence of key Ukrainian officials
raise doubts that the project will be implemented.  PG

CRITICISM OF BELARUSIAN PRESS CRACKDOWN
CONTINUES. Some 1,000 people demonstrated in Minsk on 14
December against President Alyaksandr Lukashenka's decision
to close the main opposition newspaper, "Svaboda," RFE/RL's
Belarusian Service reported.  The same day, Stephen
Sestanovich, special adviser to U.S. Secretary of State Madeleine
Albright on the Newly Independent States, said after meetings
in Minsk with Belarusian officials that countries failing to
respect freedom of the press cannot expect to be treated in the
same way as those that show respect.  Two days earlier, the
press and information ministers of the Council of Europe
denounced the closure of "Svaboda." The Russian delegation,
however, refused to back the resolution, ITAR-TASS reported.
PG

RUSSIAN OFFICIAL SAYS KALININGRAD IS NOT
"FOURTH BALTIC REPUBLIC." Russian Foreign Ministry
official Artur Kuznetsov has expressed surprise at Lithuanian
parliamentary deputy speaker Romualdas Ozolas's recent
statement that Kaliningrad Oblast is the "fourth Baltic republic."
Kuznetsov told ITAR-TASS on 13 December that the statement
was "unexpected, unprovoked, and illogical" and, moreover,
"surprising" since relations between  Kaliningrad and Lithuania,
like those between that country and Russia as a whole, have
"never been better." Ozolas made the statement during an
unofficial trip to Kaliningrad to participate in celebrations
marking the 450th anniversary of the first book to be
published in Lithuanian. JC

SOLIDARITY-BACKED GROUP SEEKS TO BUY POLISH
SHIPYARD.  A group of Polish banks and foundations,
including one linked to the Solidarity movement, is seeking to
buy the Gdansk shipyards, PAP reported on 12 December. The
movement began in those shipyards, which  the former
government declared bankrupt in August 1996. Some Gdansk
officials are reportedly concerned that the group will be unable
to find the money to take over the yards and will scare off
foreign investors in the meantime. PG

POLAND MAY PRODUCE RUSSIAN FIGHTER.  Russian
defense industry officials told ITAR-TASS on 12 December that
Poland may produce the SU-39 subsonic attack fighter under a
licensing agreement.  The deal reportedly is worth some $2
billion. PG

KLAUS RE-ELECTED PARTY CHAIRMAN. An extraordinary
congress of the Civic Democratic Party (ODS) at Podebrady on
13-14 December re-elected outgoing Prime Minister Vaclav
Klaus as ODS chairman, CTK reported. Klaus, who defeated Jan
Ruml by 227 votes to 72, said the ODS executive will decide
whether the party will seek to join a new government. He did
not say, however, when that decision will be made. On arriving
in Podebrady, Ruml said that a separate wing may emerge
after the congress but that he would not like to see the ODS
split. In other news, the Chamber of Deputies on 12 December
approved the 1998 budget by a vote of 101 to 99. MS

HAVEL TO APPOINT NEW GOVERNMENT. At a 12
December conference with Christian Democratic Party leader
Josef Lux, President Vaclav Havel said he will appoint a new
government this week, CTK reported. Havel said Lux's
proposals for the new cabinet are "realistic" and that the new
government will have fewer ministers and an approximately
equal number of non-party and party-affiliated members. He
also said more women will be represented in the cabinet than
in any Czech government since the collapse of communism. Lux
said the government will have to "prepare the privatization
projects" of three partly state-owned banks and to consider
"modifying the constitution" to allow the parliament to call for
its own dissolution if a stable coalition cannot be formed, AFP
reported. MS

SLOVAK PRESIDENT PARDONS SON. Michal Kovac on 12
December ordered that the prosecution of all people involved
in the "Technopol case," including his son, be halted. The
president explained that in the five years since investigations
began, the authorities have failed to gather evidence that
would make it possible to bring the case to trial, CTK reported.
In an interview with Bratislava's Radio Twist, Michal Kovac Jr.
commented that he had no choice but to accept the presidential
pardon. MS

HUNGARIAN PARTIES PREPARE FOR 1998 ELECTIONS.
The National Board of the Hungarian Democratic Forum (MDF)
on 13 December approved an election cooperation agreement
with the Young Democrats (FIDESZ), The same day, FIDESZ
named its candidates for ministerial posts in case of an
electoral victory. Ivan Szabo, the chairman of the Hungarian
Democratic People's Party (MDNP), told the media on 13
December that his party hopes to have a "stable and strong"
parliamentary faction of 20-25 members following the spring
1998 elections. MSZ

SOUTHEASTERN EUROPE

ROW OVER YUGOSLAV CITIZENSHIP FOR BOSNIAN
SERBS. Yugoslav Foreign Minister Milan Milutinovic and
Momcilo Krajisnik, the Serbian member of the Bosnian joint
presidency, signed an agreement on dual citizenship in
Belgrade on 13 December. The pact allows Bosnian citizens to
hold Yugoslav citizenship as well. In Sarajevo, however, an
adviser to Alija Izetbegovic, the Muslim member of the joint
presidency, told an RFE/RL correspondent that no agreement
on dual citizenship can be legally binding until Sarajevo and
Belgrade establish diplomatic relations.  Hanns-Heinrich
Schumacher, a deputy to High Representative Carlos
Westendorp, said on 14 December that the Milutinovic-
Krajisnik document is invalid because Krajisnik has no
authority to sign international agreements on behalf of Bosnia.
Krajisnik said in Pale the previous day that the Serbs in the
joint Bosnian parliament will not agree to the proposed law on
Bosnian citizenship unless the measure takes into account his
agreement with Milutinovic. PM

HAGUE'S ARBOUR SLAMS FRENCH. Louise Arbour, the chief
prosecutor at the Hague-based International Criminal Tribunal
for the Former Yugoslavia, told "Le Monde" of 13 December
that France is deliberately hampering the court's work. She also
charged that most indicted war criminals live openly in areas
of Bosnia under French SFOR control. Arbour objected to Paris's
recently announced policy of not allowing French officers and
soldiers to testify in person before the court but to
communicate with that body only in writing. The French
Foreign Ministry, for its part, denied that Paris is obstructing
the court's work and pointed out that France has long been
active in peacekeeping in the former Yugoslavia. PM

BOSNIAN CROATS PROTEST TO TUDJMAN. Preporod, the
leading Bosnian Croat cultural society, sent a letter from
Sarajevo to Croatian President Franjo Tudjman on 12 December
to protest what it called the growing number of arrests and
deportations from Croatia of Bosnian Muslim miners. The letter
said that many of the Muslims have lived in Croatia for 20
years but have not yet been able to clarify their legal status, an
RFE/RL correspondent reported from Zagreb. The Croatian
Interior Ministry replied in a statement that it will examine
each of the Muslims' cases individually and rule on them
according to the law. PM

CROATIAN CONSTITUTIONAL CHANGES ANGER
SLOVENIA. The lower house of parliament on 12 December
passed a package of constitutional amendments that Tudjman
proposed in November (see "RFE/RL Newsline," 11 December
1997). But the final version of the law names some 10 ethnic
minorities, which Tudjman's proposal did not. Slovenes,
however, are not included among those named. In Ljubljana,
Deputy Prime Minister Marjan Podobnik on 13 December called
the exclusion of the Slovenian minority unexpected and
disturbing, an RFE/RL correspondent reported. Podobnik said
Zagreb's move will prompt Ljubljana to reconsider its support
for Croatian membership in European bodies. On 12 December,
Slovenian Prime Minister Janez Drnovsek led a delegation to
Zagreb to sign a free trade agreement. It is Croatia's first such
pact with a member of the Central European Free Trade
Association and its first step toward membership in that body.
PM

SLOVENIA NOT TO BAR EX-COMMUNISTS. The parliament
voted by 57 to 22 on 12 December to defeat an opposition-
backed measure to bar former Communists from public office.
The measure was aimed at President Milan Kucan and at
Premier Drnovsek. PM

NEW REGIME IN FORCE ON CROATIAN-SERBIAN
FRONTIER. As of 14 December, residents of eastern Slavonia
require a Croatian passport with a Yugoslav visa or a special
border pass to enter Serbia. Previously, the mainly Serbian
population could cross the frontier with only an identity card.
The Croatian police have recently issued some 4,000 special
border passes. PM

PRISTINA STUDENTS DEMAND POLITICAL UNITY.
Representatives of some 900 students at the underground
Albanian-language University of Pristina have presented a
petition to the leaders of the eight main Kosovar political
parties, an RFE/RL correspondent reported from Pristina on 12
December. The students demanded that the parties sink their
differences and unite as a first step toward promoting the
broad unity of all Kosovars. PM

ALBANIAN GOVERNMENT TO CUT 15,000 STATE JOBS...
Prime Minister Fatos Nano said after a meeting with IMF
representatives in Tirana on 13 December that his government
wants to raise public sector wages by 20 percent but also cut
15,000  jobs in that sector next year The government also
hopes to help create 73,000 new jobs in the private sector. Of
the 267,000 people currently employed by the government,
some150,000 work in the government administration. Albania
has 162,000 registered unemployed, while another 155,000
families receive welfare payments. The average monthly salary
in the state sector is $55, according to "Gazeta Shqiptare." FS

...BUT EXPECTS ECONOMIC STABILIZATION. Also on 13
December, spokesman Ben Blushi said that the government
expects to reduce inflation from 40 percent in 1997 to 20
percent the following year. It also hopes to increase GDP
growth from 7.5 percent to about 10 percent. By consolidating
and streamlining the collection of taxes and customs duties, the
government expects to reduce the budget deficit to $170
million, down  from $333 million in 1997.  Blushi added that
customs revenues have increased from $10 million last year to
$28 million for the period September-10 December 1997 alone,
partly owing to higher tariffs. FS

BERISHA ACCUSED OF SMUGGLING. Former Finance
Minister Genc Ruli told "Koha Jone" of 13 December that former
President Sali Berisha ran smuggling operations from 1992 to
1997. Ruli added that the secret service (SHIK) was at the
center of smuggling activities across Albania. Ruli claims that
Berisha appointed SHIK officers as heads of the customs and
tax police, adding that he "institutionalized smuggling in [the
hands] of SHIK and a gang linked to it." In 1995, Berisha
accused Ruli of involvement in smuggling, but the parliament
refused to lift his immunity so that he could be prosecuted. The
following year, Berisha purged Ruli and party leader Eduard
Selami from the Democratic Party. FS

HUNGARIAN ALLIANCE TO REMAIN IN ROMANIAN
GOVERNMENT. The Council of Representatives of the
Hungarian Democratic Federation of Romania (UDMR) on 14
December decided against leaving the cabinet, an RFE/RL
correspondent in Cluj reported. UDMR chairman Bela Marko
said the decision is conditional on the implementation of
agreements reached by the Hungarian formation and the other
coalition partners. The UDMR has also said that the continuation
of its participation in the governing coalition is conditional on a
"firm decision" by its members to "put an end to the nationalist
anti-Hungarian campaign that has been on going as of late." The
UDMR "cannot be a member of a coalition that tolerates
exacerbating nationalism and shrinking the rights of national
minorities." Finally, the UDMR has demanded that George
Pruteanu, the chairman of the Senate's Education Commission,
be replaced. MS

ROMANIAN PRESIDENT ON RELATIONS WITH RUSSIA.
Emil Constantinescu says Romania "acknowledges Russia's great
power status and respects Russia's interests." In an interview
with "Pravda" cited by Mediafax on 14 December,
Constantinescu said that Russia's interests "do not contravene"
those of Romania and that the reason for Bucharest's quest to
join Euro-Atlantic structures is "not a threat coming from
Russia.". He said developing good bilateral relations with
Moscow continues to be a "fundamental component" of
Romanian foreign policy. MS

ROMANIAN CIVIC MOVEMENT SUES FORMER
PRESIDENT. The Civic Alliance movement on 12 December
announced it is suing former President Ion Iliescu, RFE/RL's
Bucharest bureau reported. Alliance chairwoman Ana
Blandiana said the movement will ask the parliament to lift
Iliescu's immunity. The decision follows Iliescu's testimony at
the trial of miners' leader Miron Cozma. Iliescu had said that, in
September 1991, the alliance asked the miners to return to the
center of Bucharest from the railway station, where they had
gathered in order to leave the capital (see also "RFE/RL
Newsline," 12 December 1997). Meanwhile, Iliescu on 12
December said his Party of Social Democracy in Romania may
initiate the process of "presidential suspension" if President
Constantinescu continues to "infringe on the principle of the
separation of powers." MS

TIRASPOL SAYS ROMANIA WANTS ANNEXATION OF
MOLDOVA.  Separatist Foreign Minister Valerii Litskay says
the "danger" of a Romanian annexation of Moldova is still not
over. In an interview with Tiraspol television on 12 December,
Litskay said it is "alarming" that Romania, which he claimed
"will join NATO in the next five years," has not yet signed a
basic treaty with Moldova but has signed such treaties with
Hungary and Ukraine, BASA-press reported. Tiraspol Supreme
Soviet chairman Grigorii Marakutsa told journalists in Tiraspol
the next day that the separatists oppose the State Duma's
ratification of the Moldovan-Russian treaty because the
document makes no mention of its "political and economic
prerogatives." He said a new treaty must be worked out and
that Transdniester will demand Moldova accept full integration
into CIS political and military structures, join the Russia-
Belarus union,. and renounce "unification" with Georgia,
Ukraine, and Azerbaijan. MS

MOLDOVAN PRESIDENT ON EU ASSOCIATE
MEMBERSHIP. Petru Lucinschi has sent letters to EU leaders
requesting their  support for starting negotiations on Moldovan
associate membership, RFE/RL's Chisinau bureau reported on
12 December. Lucinschi wrote that Moldova hopes to
eventually become a full member of the union but realizes that
this is a "complicated and lengthy process." He noted that the
application for associate membership is proof that Moldova has
"firmly stepped on the path of full integration into Europe." MS

BULGARIAN PARLIAMENT APPROVES NEXT YEAR'S
BUDGET. Lawmakers on 12 December approved the 1998
budget by a vote of 120 to 52 with four abstentions, RFE/RL's
Sofia bureau reported. The budget envisages a deficit of  610
billion leva ($343 million) or 2.7 percent of GDP. Annual
inflation is projected at 16.4 percent. MS

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