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RFE/RL NEWSLINE Vol 2, No. 15, Part II, 23 January 1998
________________________________________________________ RFE/RL NEWSLINE Vol 2, No. 15, Part II, 23 January 1998 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 * UKRAINIAN PRESIDENT PROTESTS PRIVATIZATION BAN * ALBANIAN KILLED IN KOSOVO SHOOT-OUT * ALBANIAN DEPUTIES FACE INVESTIGATION OVER SHKODER VISIT End Note VARIED ECONOMIC FORTUNES IN VISEGRAD AND BALKANS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx REGIONAL AFFAIRS YELTSIN "PLEASED" WITH CIS CUSTOMS UNION SUMMIT. Meeting in Moscow on 22 January, the presidents of Russia, Belarus, Kazakhstan, and Kyrgyzstan focused on "eight global political problems." Their prime ministers, meanwhile, discussed and signed documents on joint customs tariffs, coordination of their tax systems, forming a transport union, and unified transit tariffs. But the four presidents failed to reach agreement on a draft proposal by Kazakh President Nursultan Nazarbaev, who was chairing the meeting, to create a "common economic space" modeled on the EU. That draft, published by "Nezavisimaya gazeta" on 23 January, will be amended and resubmitted for discussion at the next Customs Union summit on 3 April. Nazarbayev told journalists that Yeltsin "resolutely supports" further integration among the four Customs Union members. Yeltsin,. meanwhile, said he was "pleased" by the "serious negotiations" at the summit, adding that "we must strive to make the CIS as a whole work in this way." LF RUSSIAN, BELARUSIAN PRESIDENTS PRAISE UNION. Yeltsin and Alyaksandr Lukashenka have hailed the results of a 22 January session of the Supreme Council of the Russian- Belarusian Union, Interfax and ITAR-TASS reported. Yeltsin commented that cooperation between the two countries is "serious, it is for a long time, and it is not to be played with." The council passed a union budget of 5 trillion old rubles ($830 million), and coordinated a common foreign policy for 1998 and 1999. Lukashenka, who is also chairman of the council, said he and Yeltsin are satisfied with the results of the Union for the first time since it was founded. Russian State Duma Speaker Gennadii Seleznev said the budget is for financing joint programs "in priority spheres of cooperation." He added that the introduction of a common currency is not "too distant." PB GOVERNMENT LEADERS IN RIGA FOR BALTIC COUNCIL SUMMIT. Eleven heads of government from the Baltic and Nordic countries have arrived in Riga for a summit of the Council of Baltic Sea States, which aims to promote regional cooperation. On the agenda for the 23 January talks are the development of economic and trade relations, fighting crime, and EU expansion eastward. EU Commission President Jacques Santer is attending the talks. German Chancellor Helmut Kohl is making his first visit to the Baltics since those countries gained independence and is scheduled to hold separate meetings with the Estonian, Latvian, and Lithuanian premiers. Russia's Viktor Chernomyrdin is the first premier of that country to visit Latvia since 1991. He is to meet with Latvian President Guntis Ulmanis. Latvian Foreign Minister Valdis Birkavs told BNS that Riga hopes the meeting will bring about agreement on signing the bilateral border accord. JC POLISH PRIME MINISTER MEETS WITH CHERNOMYRDIN. Jerzy Buzek met with Russian Premier Chernomyrdin in Riga on 22 January, Interfax reported. It was the first meeting between the two men. Main topics discussed were the possibility of building a gas pipeline across Poland, new border regulations imposed by Poland that have angered Russians, and the formation of a working group to help provide security for the Brest to Warsaw railroad. PB MOSCOW SAYS RUSSIA NOT RESPONSIBLE FOR WW2 EVENTS. Russian Foreign Ministry spokesman Valerii Nesterushkin told RIA-Novosti on 22 January that "it would be naive to hope that Russia could take all responsibility for the acts committed by the pre-war Soviet Union." Nesterushkin was answering a question about Baltic reactions to an alleged letter from the Russian Foreign Ministry to the State Duma denying that the USSR forcefully annexed the Baltic States in 1940 (see "RFE/RL Newsline," 20 and 22 January). Nesterushkin commented that instead of digging up "pre-World War Two events," more attention should be paid to future Russian-Baltic relations and to concrete steps in increasing trust and understanding in the Baltic Sea region. JC PARLIAMENTARY ASSEMBLY OF ORTHODOX STATES IN CHISINAU. Anti-Western and anti-NATO statements were made at a meeting of the Parliamentary Assembly of Orthodox Church States that took place in Chisinau on 21 January. Russian philosopher Valerii Alekseev said that NATO is a "serious danger to mankind" and its eastward expansion will bring about a division of Europe. Moldovan parliamentary deputy Vlad Cubreacov told an RFE/RL Chisinau correspondent that the meeting marked "the first serious attempt by Russia since the dismemberment of the Soviet Union to re-establish and expand its influence zone, taking advantage of the Orthodox community of faith." The meeting was attended by representatives of Orthodox Churches from Russia, Ukraine, Belarus, Armenia, Bulgaria, and Georgia. MS EAST-CENTRAL EUROPE UKRAINIAN PRESIDENT PROTESTS PRIVATIZATION BAN. Leonid Kuchma on 22 January appealed to the Constitutional Court over a ruling on a parliamentary resolution that in effect bans privatization, Interfax-Ukraine reported. The resolution, passed by the parliament last year following the release of a report on the activities of the State Property Fund, bars the fund from selling property until its chairman is approved by the parliament, as stipulated by the constitution. The parliament has twice rejected appointing Vladimir Lanovoi, the acting chairman of the fund. PB BELARUSIAN PRESIDENT DISCLOSES DEATH PENALTY NUMBERS. Lukashenka said in Moscow on 22 January that some 30 people were executed in Belarus in 1997, RFE/RL reported. He added that since he came to power in 1994, he has pardoned just one person facing the death penalty. The Council of Europe bars executions and has threatened to expel Ukraine from the organization if it does not abolish legislation providing for capital punishment. PB ESTONIA'S RURAL UNION TO COOPERATE WITH CENTRISTS. The junior coalition Rural Union and the opposition Center Party have concluded a cooperation agreement whereby they will seek to promote agriculture and protect Estonia's domestic market, ETA and BNS reported on 22 January. The agreement states that each party will support the other during voting in the parliament, according to a Center Party deputy. The Center Party has 10 seats in the 101-seat parliament and the Rural Union seven. The Centrists also have a cooperation agreement with the ruling Coalition Party, but observers say that the accord exists on paper only. JC SOLANA SAYS POLAND DOES NOT HAVE TO "OVERSPEND." NATO Secretary-General Javier Solana told the Polish parliament on 22 January that the alliance will guarantee Poland's security but that Warsaw will need to make a substantial military contribution as well, RFE/RL reported. He added that NATO and the Polish military are aware of the deficiencies within the Polish armed forces (see "RFE/RL Newsline," 20 January 1998) but that there is time for improvement before Poland's planned accession to the alliance in 1999. Solana added that Warsaw will not have to "overspend" in order to upgrade its armed forces to NATO standards. PB HAVEL ON CHANCES OF NEW GOVERNMENT. After a meeting on 22 January with the chairmen of the main parliamentary parties, President Vaclav Havel said the likelihood that Josef Tosovsky's cabinet will receive the legislature's vote of confidence on 27 January seemed "greater now," but he added "I cannot be sure about it." Havel said his relative optimism derived from the government's draft policy statement, which, he said, was "basically not at variance with the Social Democrats' program," CTK and Reuters reported. Social Democratic Party (CSSD) chairman Milos Zeman repeated earlier statements that he will recommend to the party to vote confidence in the cabinet if its program does not contradict that of the CSSD. MS POLL SHOWS RACIST ATTITUDES AMONG CZECHS. Almost one-third of the Czechs are opposed to co-existence with the Romani minority and 14 percent believe the Roma should be expelled from the country, according to a poll conducted by the Focus agency and released on 22 January. CTK reported that the poll also shows that two-thirds of the respondents are satisfied with the way the Roma community is presented in the media. The same day, a petition entitled "Several Words" was handed to the Council for National Minorities and the Council for Radio and Television. The document demands that the electronic media devote more attention to creating a democratic society that protects the ethnicity of minorities. It also protests the way Roma are depicted in those media. Senate Chairman Petr Pithart is among the signatories. MS HUNGARY, SLOVAKIA FAIL TO AGREE ON MINORITIES. Hungarian Foreign Minister Laszlo Kovacs and his Slovak counterpart, Zdenka Kramplova, meeting in Budapest on 22 January, failed to agree on who should represent Slovakia's ethnic Hungarians on a joint committee monitoring the implementation of minority rights in the two countries. Hungary refused to accept Slovakia's nominee, Istvan Gyorgy, who heads an organization loyal to Slovak Prime Minister Vladimir Meciar. Kovacs said the nominee should enjoy the confidence of all three Hungarian parliamentary parties in Slovakia. Kramplova disagreed, saying those parties cannot be considered the real representatives of the Hungarian minority in Slovakia. She pointed out that Hungary's failure to guarantee parliamentary representation for its ethnic minorities is an "open case of discrimination." MSZ HUNGARY RECEIVES FIRST FRENCH MISSILES. France's Matra Defense company has delivered the first 60 Mistral air defense missiles and 15 Atlas launchers that Hungary ordered last year, Hungarian media reported on 22 January. The delivery is a result of a $100 million tender launched by the Hungarian Defense Ministry last year. "Mistral missiles belong to the most up-to-date missiles and are fully compatible with NATO's air defense system," Hungarian Defense Minister Gyorgy Keleti told reporters. Hungary intends to integrate the missiles into its defense system in April 1999, he added. The French company is expected to deliver another 150 missiles by the end of this year. MSZ SOUTHEASTERN EUROPE ALBANIAN KILLED IN KOSOVO SHOOT-OUT. Serbian police killed one man and wounded two women in Donji Prekaz on 22 January. Radio Pristina said the police were pursuing "terrorists" when the incident occurred. Spokesmen for a Kosovo human rights organization said the police cut off telephones and electricity to the village and then fired on it. The village is in the Srbica area, where the Kosovo Liberation Army (UCK) controls some communities. In Belgrade, Milomir Minic, a leader of the governing Socialist Party of Serbia, stressed the authorities "will not tolerate terrorism." He added that ethnic minorities in Serbia enjoy more rights than do minorities in many other European countries. A spokesman for the opposition Citizens' League of Serbia said the Organization for Security and Cooperation in Europe should urgently arrange a dialogue between Serbs and Albanians, an RFE/RL correspondent reported from Belgrade. PM FATWA ISSUED AGAINST MACEDONIAN MUFTI. Some ethnic Albanian Muslim religious leaders in Macedonia recently issued an edict calling for the death of Jakub Selimovski, the head of a rival Islamic organization. The imams charged Selimovski with misuse of funds. State-run media condemned the imams' decision as an attempt to put themselves above the law. Selimovski was the last head of the main Yugoslav-wide Islamic organization before it broke up in 1992. An ethnic Macedonian and a moderate who advocates religious and ethnic tolerance, he has frequently been at odds with Islamic fundamentalists and ethnic Albanian nationalists. PM SOLANA PREDICTS MORE ARRESTS IN BOSNIA. A State Department spokesman said in Washington on 22 January that the arrest and extradition to The Hague of indicted war criminal Goran Jelisic was another step toward a lasting peace in Bosnia (see "RFE/RL Newsline," 22 January 1998). The spokesman added that Jelisic's arrest should serve as a warning to other war criminals. In Warsaw, NATO Secretary-General Javier Solana predicted that there will be further such arrests. PM EU GIVES $110 MILLION FOR REFUGEES. EU officials have approved a $110 million aid package to facilitate the return of Bosnian refugees, an RFE/RL correspondent reported from Brussels on 22 January. EU spokesmen said they hope that the money will enable "several tens of thousands" of people to go home. In Ankara, Turkish and Bosnian officials signed a $3.8 million agreement to improve agriculture and transportation in Bosnia. And in Bonn, Foreign Minister Klaus Kinkel said in a 23 January statement that the international community should show its support for the moderate Bosnian Serb government of Prime Minister Milorad Dodik by speeding up economic aid to the Republika Srpska. PM MILOSEVIC WELCOMES DODIK. Yugoslav President Slobodan Milosevic said in Belgrade on 22 January after meeting with Dodik and other Bosnian Serb officials that "Yugoslavia will support all efforts aimed at realizing the main objectives of the Republika Srpska, especially to reinforce its unity and overcome divisions which have led to a crisis." Milosevic last met with the top Bosnian Serb leadership on 16 January, one day before Dodik's election. In related news, outgoing Bosnian Serb Prime Minister Gojko Klickovic said he will hand over power peacefully to Dodik, even though he does not consider Dodik's election legal (see "RFE/RL Newsline," 22 January 1998), the Belgrade daily "Danas" reported. PM STILL NO GOVERNMENT IN SERBIA. Vojislav Seselj, the leader of the Serbian Radical Party (SRS), said in Belgrade on 22 January that his party will not form a coalition Serbian government with Milosevic's supporters, nor will the SRS tolerate a minority cabinet, "Danas" reported. Vuk Draskovic of the Serbian Renewal Movement (SPO) has demanded the Serbian premiership and several key ministries in both the Serbian and Yugoslav governments for the SPO as a condition for his participation in a Serbian coalition, AFP wrote. Milosevic's backers lost their absolute majority in parliamentary elections in September 1997. Serbian law does not set a deadline by which a government must be formed, "Nasa Borba" noted. PM BLIZZARDS WRECK HAVOC IN CROATIA. Storms and gale- force winds crippled transportation and disrupted the electric power system across much of Croatia on 21 and 22 January. Bus services between Zagreb and the coast and ferry services between the islands were canceled. PM ALBANIAN DEPUTIES FACE INVESTIGATION OVER SHKODER VISIT. A spokesman for the Prosecutor-General's Office has said that the office will question legislators who were recently in Shkoder about their role in the disturbances there. He added that the office may ask the parliament to lift the immunity of some of those deputies. Parliamentary Vice Parliament Jozefina Topalli, who belongs to the opposition Democratic Party, tried to mediate between rebel policemen who occupied the local prefecture from 19-21 January and special police forces from Tirana. Meanwhile, local police have reestablished control over the city. Local police have arrested two of the dozen or so rebel policemen and charged them with staging a rebellion, "Koha Jone" reported. In related news, the Council of Ministers has appointed Ali Lacej from the Democratic Alliance Party as prefect in the northern town. FS TURKISH ARMY TO REBUILD ALBANIAN PORT. The Turkish army will reconstruct the southern naval base of Pasha Liman, "Gazeta Shqiptare" reported on 22 January. Investments totaling some $5 million will also be used to upgrade the naval academy in Vlora. Both the port and the school were largely destroyed during unrest in March 1997. Pasha Liman is Albania's oldest developed harbor, dating back to the Roman Empire. It became a military port during the Ottoman Empire and served the Soviet Union as its only base on the Adriatic before Albania's break with the Soviet bloc in the early 1960s. FS ROMANIAN COALITION CRISIS CONTINUES. Romanian media reported on 22 January that Premier Victor Ciorbea has offered the Democratic Party the first deputy premiership in charge of reforms and Minster of Reform Ilie Serbanescu has resigned in protest. According to those reports, Ciorbea has not accepted Serbanescu's resignation. Mircea Ionescu-Quintus, the leader of the National Liberal Party (PNL), said he does not believe the offer to the Democrats will solve the crisis. On 22 January, the PNL Standing Bureau again delegated Ionescu- Quintus to mediate between the Democrats and the National Peasant Party Christian Democratic, both of which say they want the coalition to continue. The next day, however, the PNL Standing Bureau announced it will withdraw its ministers from the government on 28 January if negotiations on Ciorbea's replacement have not begun by then. MS ROMANIAN INCOME TAX TO BE REDUCED. The government on 22 January approved a draft regulation that will reduce the income tax imposed on wages from a maximum of 60 percent to 45 percent, RFE/RL's Bucharest bureau reported. Incomes below 250,000 lei (some $30) a month will not be taxed. Also on 22 January, the Senate approved a banking law providing for the National Bank's increased control over the country's banks. The law differs in part from legislation approved earlier by the Chamber of Deputies. In line with parliamentary regulations, a mediation commission will now have to seek to reconcile those differences. MS MOLDOVAN CUSTOM AUTHORITIES ENGAGE IN 'LANGUAGE WAR.' The Moldovan custom authorities are prohibiting the transit of trucks from CIS states unless the documents presented at the border are filled out in the Romanian language, which is Moldova's "state language." Radio Bucharest said on 22 January that similar measures have been instituted by Russia, Ukraine, and Belarus. In other news, the authorities in the Transdniester breakaway republic have reduced electricity to Moldova by 10 percent, RFE/RL's Chisinau bureau reported. Chisinau owes Tiraspol $15 million for energy supplied by the Dnestrovsk power station, which accounts for some 40 percent of Moldova's electricity consumption. The Tiraspol authorities rejected a Moldovan offer to pay 30 million lei (some $6.5 million) and insist on the full settlement of the debt. MS BULGARIAN PRESIDENT MARKS INAUGURATION ANNIVERSARY. President Petar Stoyanov, marking first anniversary of his inauguration on 22 January, told Bulgarians they must continue to support market reforms. Stoyanov said on national radio that reform "is not a single act after which we can stop and rest." He said Bulgarians must make a permanent effort if they want to participate in global markets and take a share of prosperity, Reuters reported. Meanwhile in Bonn, German Foreign Minister Klaus Kinkel told visiting Bulgarian Prime Minister Ivan Kostov that Germany wants Sofia to join the EU and NATO as soon as possible. But Kinkel rejected calls to lift visa requirements for Bulgarians who want to visit Germany, dpa reported. MS BULGARIAN OPPOSITION MOVES NO CONFIDENCE MOTION. The Socialist Party on 22 January moved a no- confidence motion against Ivan Kostov's cabinet, blaming it for the rising costs of health care, Reuters reported. The motion is the first no-confidence move against the nine-month-old government, but is certain to be defeated owing to the Union of Democratic Forces' absolute majority in the legislature. MS END NOTE VARIED ECONOMIC FORTUNES IN VISEGRAD AND THE BALKANS by Michael Wyzan Last year saw a large divergence in economic performance among the transition countries. That continued a long-established trend whereby the Visegrad countries and Baltic States are the leading performers and other countries struggle to carry out the most basic economic reforms and resume economic growth. The big story in the Visegrad countries was the economic plight of the Czech Republic. The country experienced a currency crisis in the spring and a natural catastrophe-- flooding--in the summer. Gross domestic product GDP grew by only 1.2 percent, down from 4.1 percent in 1996. The budget deficit increased, while foreign investment inflows fell by 35 percent. A long period of political uncertainty and weak government culminated in the December resignation of Vaclav Klaus, prime minister since 1992, over a campaign-finance scandal. Both his and the economy's fortunes were tied to the premier's economic approach. In the early years of his tenure, his commitment to trade and price liberalization as well as to austere macroeconomic policy stood the country in good stead. Later, following his failure to comprehend such subtler issues as government regulation of the economy and the transparency of capital markets, Klaus became a liability. Slovakia's economy performed respectably in 1997, even though GDP growth was down and inflation up slightly. However, serious problems are looming, including a ballooning current-account deficit largely caused by the strength of the Slovak crown, which is now worth more than its Czech counterpart. The budget deficit was about 5.7 percent of GDP and is expected to rise further this year. And the foreign-debt burden reached worrisome proportions. As in the Czech Republic, the quality of political leadership is the main problem. Slovakia's incomplete democratization has alienated the EU to such an extent that it is only Visegrad land not invited to accession talks. Its insider- dominated privatization methods have scared away foreign investors. Moreover, matters are unlikely to improve this year, given the disincentives to sound economic policy that are likely to prevail until September's general elections. The other three Visegrad countries registered sound performances. Hungary is reaping the benefits of the austerity measures introduced in 1995 and political stability under the Socialists. Virtually all its economic indicators are favorable and improving, although inflation remains stubbornly high. The economy is largely in private hands, and foreign investment inflows remain enormous. Virtually the same could be said about Poland, although the budget situation is worrisome. Many major enterprises remain in state hands, and differences between the governing coalition partners may hinder progress. Slovenia continues to turn in respectable, if unspectacular, economic results but needs to speed up privatization (especially of banks) and rein in budget expenditure and wage growth. The year 1997 was even more troubled than usual in the Balkans. In Albania, the entire social order imploded in the wake of the failure of pyramid schemes, and GDP declined by about 15 percent. In Bulgaria, the socialist government's failure to deal with festering structural problems and to reach agreement with the IMF led to a severe currency collapse in the winter that damaged the economy (GDP fell by 7.4 percent). Both countries have new leaderships; and particularly in Bulgaria, where a currency board was introduced on 1 July, there are grounds for optimism. Romania's situation is similar to Bulgaria's: a government elected in November 1996 has embarked on radical reforms with IMF support. Unlike in Bulgaria, however, the regime is a weak coalition of feuding parties and the IMF has become increasingly standoffish as the government has had trouble meeting its commitments on structural reforms. Its economic indicators in 1997 were unimpressive: GDP declined by about 5 percent and inflation remained more than 100 percent. The other former Yugoslav republics followed strikingly diverse patterns. Macedonia has enjoyed political stability under the same prime minister since 1992, but relations between Macedonians and Albanians have deteriorated while ties with Greece (its only never-communist neighbor) are disappointingly slow to improve. Still, GDP growth picked up slightly in 1997 and inflation remained among the lowest in the region. Croatia is in a unique position, with progress on reform and the standard of living putting it among the leading transition countries in many respects. Foreign-policy problems, however, keep it in the EU's waiting room without even an association agreement. Its economy is growing rapidly, and it has extremely low inflation. But the current account deficit is large and restructuring of industrial enterprises and banks is slow. Federal Yugoslavia, meanwhile, has rapid growth and moderate inflation, but will not emerge from the deep economic hole dug by its leadership until it overcomes its international isolation. The author is an economist living in Austria. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. 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