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RFE/RL NEWSLINE Vol. 1, No. 180, Part II, 16 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 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part II * MINSK COURT FINDS OPPOSITION LEADER NOT GUILTY * SERBS SENTENCE 17 KOSOVARS * ALBANIA, CROATIA SAY NO BALKAN PEACE WITHOUT KOSOVO xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx EAST-CENTRAL EUROPE MINSK COURT FINDS OPPOSITION LEADER NOT GUILTY. A Minsk court on 15 December found Belarusian Popular Front deputy chairman Yuri Khadyka not guilty of violating a presidential decree on anti-government demonstrations, RFE/RL's Belarusian service reported. Khadyka was charged with leading protesters away from the officially approved route during a 23 November demonstration. The judge said there was insufficient evidence to find Khadyka guilty. This unexpected conclusion may embolden opposition groups to push their drive for the removal of President Alyaksandr Lukashenka from office. PG PENTAGON SAYS NO MORE HELP TO BELARUS FOR DISMANTLING BASES. U.S. Defense Department aide Edward Warner told a Minsk press conference on 14 December that "Belarus will henceforth be required to dismantle nuclear missile bases on its territory using its own funds. It can no longer rely on U.S. financial assistance in this matter," RFE/RL's Belarusian service reported the next day. Warner said the U.S. was forced to take this decision because Belarusian authorities have barred U.S. specialists from inspecting the bases in question, despite having pledged to allow such inspections. PG KUCHMA SAYS NATO MUST RESPECT UKRAINIAN, RUSSIAN INTERESTS. Speaking at a 15 December press conference following his meeting with visiting Greek President Konstantinos Stephanopoulos, President Leonid Kuchma said "it is necessary to take into account the interests of all sides, including Ukraine and Russia as NATO expands," ITAR-TASS reported. Kuchma said the alliance must act in ways that do "not divide Europe into two camps." PG UKRAINIAN TRADE RISES WITH GREECE, FALLS WITH CHINA. Ukraine's trade with Greece is likely to rise from its current $110 million a year if Greece follows through on its pledge to purchase ships built in Ukrainian yards, Kyiv media reported on 15 December. But trade between Ukraine and China fell 20 percent over the past year, amounting to only $365 million in the first 10 months of 1997, ITAR-TASS reported on 15 December. Moreover, Ukraine's trade deficit with China now exceeds $200 million annually. PG EU WELCOMES YELTSIN'S PLEDGE TO CUT TROOPS IN RUSSIA'S NORTHWEST... The EU on 15 December welcomed Russian President Boris Yeltsin's recent pledge to unilaterally cut troops in the northwest of Russia by more than 40 percent, BNS reported. In a statement, the union said it "strongly encourages" Estonia, Latvia, and Lithuania to improve regional cooperation with Russia. Yeltsin made the pledge earlier this month during an official visit to Sweden (see "RFE/RL Newsline, 3 December 1997). JC ...AND TALLINN'S OFFER ON ALIENS' CHILDREN. Also on 15 December, the EU welcomed the Estonian government's decision to discuss an amendment to the citizenship law whereby all children born in Estonia would be granted citizenship if their parents had lived in the country for at least five years (see "RFE/RL Newsline," 9 December 1997), according to ITAR-TASS. The union said the decision was a constructive step toward the integration of non-Estonian citizens. The same day, ETA reported that a special government committee has drafted a policy document aimed at making youths feel at home in Estonia. Ethnic Affairs Minister Andra Veidemann, who heads the committee, said the draft is to be presented to the government on 23 December. JC LITHUANIAN PREMIER WANTS BUDGET WITHOUT DEFICIT. Gediminas Vagnorius told journalists on 15 December that he will propose a constitutional law stipulating that the state budget must be balanced, BNS reported. Vagnorius did not rule out the possibility that the 1999 budget would be without a deficit. This year's budget deficit is estimated to total 1.9 percent of GDP and next year's 1.6 percent. JC WARSAW PLANS MAJOR REFORM OF LOCAL GOVERNMENT. Interior Minister Janusz Tomaszewski told a 15 December press conference that the Polish government plans to restructure local government, PAP reported. The plans, to be considered by the central authorities in January 1998, call for the number of provinces to be reduced from 49 to 15 or fewer and for the creation of a new administrative unit, the "powiat," which would be run by locally elected officials and an administrative district between the levels of municipal and provincial governments. Such decentralization had been blocked by the previous left-of-center government. PG POLISH PROSECUTORS QUESTION TOP EDITOR. Polish prosecutors called in for questioning the editor and two other senior employees of the weekly "Wprost" on 15 December, PAP reported. But all three were released by the end of the day. The authorities said they are investigating possible financial mismanagement, while the editors issued a statement arguing that the prosecutors' actions were designed to intimidate a journal that has been outspoken in its criticism of Polish officials. PG POLAND SEEKS LIFTING OF U.S. BAN ON MEAT PRODUCTS. The Agricultural Ministry on 15 December said that "for reasons of prestige," it will seek to have the U.S. lift its ban on the importation of some Polish meat products, PAP reported. The U.S. recently imposed a ban on such products from Poland and 20 other European countries until it can be established whether there is any risk of the products carrying mad cow disease. PG HAVEL TO ANNOUNCE NEW PRIME MINISTER. President Vaclav Havel has said he will appoint the country's new prime minister on 16 December. He hinted that the next premier could be either a "man or a woman" but will not be "a party head or directly proposed by a political party." The same day, outgoing Premier Vaclav Klaus told Czech state radio that the talks on forming the new government had been going on" about us [but] without us." He said nobody had talked to him after the recent congress of his Civic Democratic Party (ODS), which re- elected him leader on 14 December, and that he doubted the talks on the new cabinet could be completed "in the next 48 hours." MS CZECH COMMUNISTS HAVE OWN PRESIDENTIAL CANDIDATE. Vojtech Filip, the chairman of the Communist Party (KSCM) faction in the Chamber of Deputies, told reporters on 15 December that Havel will not be the only candidate for president on 20 January, CTK reported. Filip said Havel's 9 December speech to both houses of the parliament showed he is not "sufficiently critical of himself." The KSCM will nominate astrophysicist Stanislav Fischer as its presidential candidate, Filip said. The extreme-right Republican Party is also expected to announce soon its candidate for president. MS SLOVAK PRESIDENT BLAMES EU DECISION ON GOVERNMENT. Michal Kovac on 15 December said the EU decision not to include Slovakia among the countries with which talks will begin next year is proof of its mistrust of the ruling coalition, AFP reported. He said the decision marked a victory for those Slovak leaders who are struggling for respect of human rights and further democratization. MS AGREEMENT ON GABCIKOVO-NAGYMAROS TO BE REACHED BY MARCH... Slovak Prime Minister Vladimir Meciar and his Hungarian counterpart, Gyula Horn, have decided to reach an agreement over the Gabcikovo- Nagymaros dam dispute by 25 March 1998, the deadline set by the International Court of Justice in The Hague. Meciar and Horn met with Austrian Chancellor Viktor Klima in Vienna on 15 December, following what observers say was the Slovak side's refusal to meet in Budapest. MS ...AS SLOVAKIA GIVES PARTIAL ANSWER TO HUNGARIAN DAM PROPOSALS. Slovak officials on 15 December rejected Hungary's proposal to raise the bed of the Danube but said they will study two other proposals by Budapest. Peter Baco, head of the Slovak government delegation, said Hungary's proposals to raise the water level or build two smaller power plants need to be examined by the Slovak side. He said unless Nagymaros or a similar plant is completed, Slovakia will insist that Hungary pay compensation for the shortage of electric power. The next plenary session of the two delegations is to take place in early January. MSZ SOUTHEASTERN EUROPE SERBS SENTENCE 17 KOSOVARS. A Serbian court in Pristina on 16 December sentenced 17 ethnic Albanians to prison terms ranging from four to 20 years. Two other Kosovars were acquitted. The 19 were accused of membership in the clandestine Kosovo Liberation Army. It was the third large trial this year of ethnic Albanians on what the Albanians claim are baseless political charges. PM ALBANIA, CROATIA SAY NO BALKAN PEACE WITHOUT KOSOVO. Albanian Foreign Minister Paskal Milo said in Zagreb on 15 December that he and his host, Mate Granic, agreed that "the situation in Kosovo is currently very difficult, [explosive] and dangerous. We concluded that there will not be peace in southeast Europe" until the Kosovo issue is resolved. Milo added that "without democratization, the situation in Serbia cannot be peaceful and there cannot be cooperation and peace" in the Balkans. Meanwhile, prominent Kosovo politician Azem Vllasi told the Belgrade daily "Danas" that the outbreak of a "war in Kosovo is only a matter of time." PM WHY IS DINI IN BELGRADE? Italian Foreign Minister Lamberto Dini said in Belgrade on 15 December that the reason for his previously unannounced trip to the Yugoslav capital is to promote ties between Yugoslavia and the EU. He added that he also wants "to clarify" some matters regarding Belgrade's policies in Bosnia. An RFE/RL correspondent reported from the Serbian capital, however, that Italian sources said Dini's main goal is to persuade Yugoslav President Slobodan Milosevic to implement a 1996 agreement on Albanian-language education in Kosovo. An Italian NGO sponsored the pact, which remains a dead letter. PM BOSNIAN SERBS BLOCK CITIZENSHIP AGREEMENT. Serbian legislators in the joint Bosnian parliament refused in Sarajevo on 15 December to accept the proposed law on Bosnian citizenship because the text includes no reference to the recent agreement between Pale and Belgrade on dual citizenship. Representatives of the Croatian-Muslim federation and the international community say that the Pale-Belgrade agreement is invalid (see "RFE/RL Newsline," 15 December 1997). Earlier on 15 December, the parliament passed a law regulating Bosnian passports for all three ethnic groups despite Serbian efforts aimed at delaying the vote. The international community at its conference in Bonn on 9-10 December gave the lawmakers an ultimatum to pass both the citizenship and the passport laws by 15 December. PM CLINTON TO VISIT BOSNIA. U.S. President Bill Clinton said in Washington on 15 December that he will visit Sarajevo and U.S. SFOR troops in Tuzla on 22 December. He is expected to meet top Bosnian leaders, including presidency member Alija Izetbegovic. Clinton last visited Bosnia in January 1996. PM FRANCE DENIES ARBOUR CHARGES... Following a meeting in Paris on 15 December between Foreign Minister Hubert Vedrine and Louise Arbour, the chief prosecutor of the Hague-based war crimes tribunal, a Foreign Ministry spokeswoman said the French government is "deeply shocked by [Arbour's] scandalous allegations that [Bosnian] Serb war criminals could feel safe in the French sector of Bosnia" (see "RFE/RL Newsline," 15 December 1997). The spokeswoman added that Vedrine told Arbour that "France is cooperating with the [court] in its own way." In Strasbourg, General Jean-Philippe Douin, France's armed forces commander-in-chief, said that French troops in Bosnia are "impartial." PM ...AS DOES NATO. In Brussels, a NATO spokesman said on 15 December that France follows the same rules of conduct as any other NATO state that participates in SFOR. The spokesman added that the situation has worsened for war criminals in Bosnia over the past year. He noted that all indicted Muslims and 14 indicted Croats have gone to The Hague and that the hard-line Serbs have lost their parliamentary majority. PM RELATIONS COOL BETWEEN SLOVENIA, CROATIA. Slovenian Prime Minister Janez Drnovsek said on 15 December that his government is disappointed at recent amendments to the Croatian Constitution, which mention several ethnic minorities by name but not a Slovenian one (see "RFE/RL Newsline," 15 December 1997). Slovenian authorities called off a meeting slated for 15 December to deal with transportation questions, an RFE/RL correspondent reported from Ljubljana. Spokesmen for the Transportation Ministry said Slovenia is in no hurry to complete a highway from Maribor to the Croatian border, which Zagreb badly wants. According to official Croatian statistics, some 54,000 ethnic Slovenes live in Croatia. The new amendments do not mention Muslims or Albanians by name, either. PM SERB KILLED IN SLAVONIAN SHOOT-OUT. Eastern Slavonia's multi-ethnic police shot and killed a Serb in Beli Manastir on 15 December as he was trying to break into a police station. Earlier that day, the region's police administration came under Croatian control. PM BOMB BLASTS ENVER HOXHA'S HOUSE. A bomb heavily damaged the Gjirokaster home of late Albanian communist dictator Enver Hoxha and surrounding buildings on 15 December, "Dita Informacion" reported. Sabrie Hoxha, his distant relative, was injured in the blast. The house is used as a museum for Hoxha's World War II partisan movement. Nearby are offices of the OSCE and Mother Teresa's Sisters of Charity. It was the third explosion in the city within three days. Nobody has claimed responsibility for the attacks. FS ROMANIAN PRESIDENT AT NATO HEADQUARTERS. Emil Constantinescu on 15 December met with NATO Supreme Allied Commander Gen. Wesley Clark at the alliances headquarters in Brussels, an RFE/RL correspondent in Brussels reported. In other news, the private television channel Pro TV reported the same day that the Timisoara Prosecutor-General's office has completed its investigation into the role of Generals Victor Stanculescu and Mihai Chitac in the suppression of the December 1989 uprising in that town. The office will indict both Stanculescu and Chitac, who held the defense and interior portfolios, respectively, from 1990-1991. MS INTERNATIONAL FINANCIAL ASSISTANCE FOR MOLDOVA TO CONTINUE. International financial organizations offering assistance to Moldova decided on 15 December to continue backing Moldova's economic reform and efforts to accelerate economic growth and reduce inflation, RFE/RL's Chisinau bureau reported, citing a World Bank statement. The organizations agreed that in 1998- 1999, Moldova will receive credits totaling $600 million. Prime Minister Ion Ciubuc, who attended the meeting in Paris, said most of the funds will come from the World Bank and the IMF. He added that the loans are conditional on budget restructuring and the passage of legislation on various social issues, including a law raising the retirement age. MS. U.S. OFFICIAL SAYS RELATIONS WITH MOLDOVA IMPROVING. Stephen Sestanovich, special adviser to U.S. Secretary of State Madeleine Albright on matters related to the Newly Independent States, told reporters in Chisinau on 15 December that Moldovan-U.S. relations have been improving of late, particularly since the conclusion of the agreement on the sale of the 21 MiG-29C aircraft to the US. Sestanovich noted that Moldova has recently made a "fundamental choice--that of belonging to the European Union," RFE/RL's Chisinau bureau reported. He emphasized that the U.S. "recognizes Moldova's territorial integrity." MS GEORGIAN PRESIDENT IN BULGARIA. Speaking at a joint press conference marking the end of Eduard Shevarnadze's two-day visit to Bulgaria, President Petar Stoyanov said Sofia "fully backs Georgia's desire to restore its territorial integrity." Shevardnadze said Georgia is willing to provide transshipment of oil from Azerbaijan to Bulgaria as an alternative to Russian supplies. The two presidents reached an agreement on training Georgian border guards in Bulgaria and establishing a regular ferry link between their Black Sea ports. Similar agreements were concluded with Romania during Shevarnadze's visit there on 10-11 December. MS REGIONAL AFFAIRS OECD PREDICTS ECONOMIC GROWTH. The Organization for Economic Cooperation and Development released a report on 15 December saying that Russia's economy is likely to expand by 0.5 percent in 1997, 3 percent in 1998, and 5 percent in 1999. The OECD expects GDP in Poland and Hungary to grow by 4-5 percent in the next two years. But it says the Czech economy is unlikely to expand by more than 2 percent in the same period. Slovakia is a cause for concern because of what the OECD calls a "twin deficit" problem--a current account deficit of 10 percent of GDP and a deepening fiscal gap. The OECD says Romania's GDP is likely to grow by 1 percent in 1998, after a 4 percent fall in 1997. Bulgaria is also expected to see a 2 percent growth in its GDP, following a 6 percent decline this year. MS MOLDOVA'S ECONOMY STILL STRUGGLING DESPITE SOLID REFORMS by Michael Wyzan Since the breakup of the Soviet Union, Moldova has more consistently pursued sound macroeconomic policies and political democratization than most CIS states. Freedom House in 1997 gave it the third-highest ranking in the CIS (behind Russia and Kyrgyzstan and tied with Armenia) on economic reforms. Those reforms have resulted in low inflation and a stable currency. Nonetheless, the economy has declined longer and further than many others in the CIS. Moldova remains dependent on an agricultural sector vulnerable to weather patterns and to hindrances to its foreign trade arising from the dispute with the breakaway Transdniester region. Relations between the country and international financial institutions have worsened lately, as the parliament has balked at passing legislation to accelerate structural reform. Moldova was displaying favorable economic indicators by 1994. Retail prices rose by 105 percent from the end of 1993 to the end of the following year; within the CIS, only Kyrgyzstan had lower inflation. In 1995, Moldovan retail prices increased by 24 percent, the lowest inflation of all 15 former Soviet republics. Another early indicator of sound policy-making was the stability of the leu against the dollar. The currency unit fell from 4.06 to the U.S. dollar in April 1994 to only 4.27 at the end of that year and to 4.53 at the end of 1995. That stability posed a potential threat to exports, since inflation was faster than the leu's decline against Western currencies. Still, such stability under a floating exchange rate regime indicated confidence in fiscal and monetary policy and expectations of low inflation. Fiscal deficits have been modest by CIS standards, with the consolidated budget showing deficits of 5.9 percent of gross domestic product (GDP) in both 1994 and 1995. Despite those achievements, the economy has been slow to turn around. GDP fell by 8 percent in 1996, making for a cumulative decline of 64 percent from 1991 to 1996, one of the largest falls in the CIS. Aggregate production appears sensitive to weather-driven agricultural performance, with years of large GDP declines--1994 and 1996--characterized by meager grain, vegetable, and fruit harvests. However, TACIS experts argue that the apparent GDP fall in 1996 may be only temporary--the result of a surge in imports and the failure to record a significant volume of exports, especially to the CIS. Such exports typically transit the Transdniester region, and Chisinau cannot record them at Moldova's border with Ukraine. GDP is reportedly declining again this year, while industrial output was down 12 percent from January to June compared with the same period last year. Other economic indicators have been stagnating or even deteriorating. Disinflation is slow: the 15 percent inflation rate in 1996 was bettered by all three Transcaucasian states, which started reforming later. In November, the National Bank of Moldova raised its 1997 inflation estimate to 13 percent. The budget deficit, which reached 10 percent of GDP in 1996, is about 7 percent of GDP, compared with an IMF-agreed target of 4.5 percent. The trade regime has been fairly liberal since the end of 1993, and the parliament further liberalized it in late June. A Generalized System of Preferences scheme--which provides a duty-free regime for "non-sensitive" goods--is in force with the EU. Moldova is the only CIS state whose textile exports to the EU are not subject to quotas. Even so, Moldova's external relations are troubled. Moldova owes Gazprom $500 million, of which $332 million is owed by the Tiraspol authorities. Gazprom warned early this month of a cut-off in supplies unless that debt is settled. Ukraine applies country-of-destination rules to its tariffs and excise duties, as sanctioned by the World Trade Organization. Consistent with such rules, and out of concern that goods supposedly transiting Ukraine's territory may illegally be sold there, Kyiv imposes tax deposits on transit exports. This has caused problems for Moldovan exporters; at mid-year, trade with the CIS was down on 1996 levels. Furthermore, the EU treats Moldova's all-important exports of wine and fresh fruit and vegetables as "sensitive" sectors subject to tariffs. In earlier years, the IMF supported Moldova's reform efforts, providing $71 million in 1994, $65 million in 1995, and $41 million in 1996. However, the IMF postponed from June until July the release of a $21 million tranche under a three-year $195 million loan agreed to in May 1996; the fund cited unfulfilled conditions, especially on privatization. And in November, it delayed until early 1998 the next tranche release out of concern over the parliament's suspension of energy-price hikes and the growing budget deficit. Despite those setbacks, Moldova remains one of the most reform-minded CIS states. Accordingly, its failure so far to resume economic growth is worrisome. The author is an economist living in Austria. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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