RFE/RL NEWSLINE Vol 2, No. 88 Part II, 11 May 1998

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RFE/RL NEWSLINE Vol 2, No. 88 Part II, 11 May 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

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Headlines, Part II

* HUNGARIAN RULING PARTY LEADS AFTER FIRST ROUND OF
ELECTIONS

* HOLBROOKE SAYS KOSOVA 'EXTRAORDINARILY DANGEROUS'

* MORE SANCTIONS IMPOSED ON SERBIA

End Note: ALTERNATIVES TO SANCTIONS
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EAST-CENTRAL EUROPE

UKRAINE STILL CLAIMS PART OF EX-USSR PROPERTY IN RUSSIA.
Ukrainian Foreign Minister Borys Tarasyuk told journalists
on 7 May that Ukraine's claim to part of the former
Ukrainian SSR's property abroad "has not been taken off the
agenda" in negotiations with Russia, Interfax reported. The
parliament has postponed ratifying the 1994 agreement on
sharing the former USSR's assets and liabilities between
Ukraine and Russia. Tarasyuk also expressed amazement over
Belarusian President Alyaksandr Lukashenka's remarks on
Ukraine's debt to Belarus. Lukashenka had said earlier last
week that Belarus will not ratify a border treaty with
Ukraine until Kyiv pays $215 million in debts. JM

EBRD TO SUPPORT UKRAINIAN BUSINESS. Ukrainian National Bank
Chairman Viktor Yushchenko and European Bank for
Reconstruction and Development President Charles Frank,
meeting in Kyiv on 8 May, signed an agreement on a credit
line worth 80 million ecus to support small and medium-sized
business in Ukraine, the Ukrainian News agency reported. AFP
quoted an EBRD official as saying on 10 May that the EBRD
will give its final answer to financing the construction of
two nuclear reactors in Ukraine "in a few months." Ukraine
is seeking international funds for nuclear plants in Rivne
and Khmelnytskyy to compensate for the planned closure of
the Chornobyl plant. JM

UKRAINIAN PREMIER APPEALS TO IMF FOR MILDER STANCE. Valeriy
Pustovoytenko has complained about the tough stance of the
IMF, which is demanding economic austerity measures in
exchange for more loans, ITAR-TASS reported on 10 May. The
fund wants Ukraine to abolish its system of social benefits
and increase the price of electricity, gas, and municipal
services. According to Pustovoytenko, this would trigger a
"social explosion" in Ukraine. Meanwhile, at a meeting with
EBRD President Charles Frank the same day, Pustovoytenko
pledged that his government will continue economic reforms.
JM

BEREZOVSKII SAYS HIS VIEW OF CIS GOALS COINCIDES WITH
LUKASHENKA'S. Following his meeting with Belarusian
President Lukashenka in Minsk on 8 May, CIS Executive
Secretary Boris Berezovskii said their views of the CIS's
strategic goals coincide, ITAR-TASS reported. Summing up his
recent meetings with the presidents of Ukraine, Moldova (see
below), and Belarus, Berezovskii said he had noted "concern
about the fact that there are few specific actions." He
added that those countries also share the "unconditional
will and desire to develop relations within the
commonwealth." JM

EXILED OPPOSITIONIST PROPOSES HIMSELF FOR "PRISONER
EXCHANGE." Syarhey Navumchyk, a Belarusian Popular Front
activist who received political asylum in the U.S. in 1996,
has sent a letter to Belarusian President Lukashenka
proposing he serve a prison term for two young
oppositionists, RFE/RL Belarusian Service reported.
Navumchyk said he feels moral responsibility for 18-year-old
Alyaksey Shydlouski and 23-years-old Pavel Sevyarynets, who,
he said, "have been brought up on the renewed ideas of
national revival" advocated by the Belarusian opposition. JM

BALTIC ASSEMBLY CONDEMNS RUSSIAN INTERFERENCE IN LATVIAN
AFFAIRS. The Baltic Parliamentary Assembly on 9 May adopted
a resolution condemning what it called Russian interference
in Latvia's internal affairs, BNS reported. The assembly
expressed disapproval of Russian economic pressure on Latvia
as well as Russian attempts to "incite hatred among the
Baltic States." And it also said that Russian officials'
recent accusations against Latvia have become "especially
menacing, though ungrounded." At the same time, the
resolution affirmed the desire to develop good neighborly
relations with all democratic countries, including Russia.
JC

THREE DETAINED OVER DOBELE BOMBING. Three youths aged 18
have been detained in connection with the 4 May bombing of a
Soviet-era monument to World War II victims in the Latvian
city of Dobele, BNS reported on 8 May. Criminal police chief
Aloizs Blonskis told journalists that the detainees had
harbored no political motives but had wanted to see how the
local police would respond. Another person is wanted on
suspicion of involvement in the blast. Meanwhile in Lestene,
the remains of 10 members of the Latvian Waffen-SS Legion
were reburied without military honors in what is to become a
memorial cemetery. Some 1,000 people were present, including
former commander of the armed forces Juris Dalbins and
several parliamentary deputies. No government officials
attended the reburial. JC

STANDARD & POOR'S RECONFIRMS CREDIT RATING FOR LATVIA. The
international rating agency Standard & Poor's has
reconfirmed its BBB foreign-currency and A- local-currency
long-term rating for Latvia, BNS reported. The agency noted
Latvia's success in reforming the economy and attaining a 6
percent growth. At the same time, it pointed to several
negative factors, including the threat to tight fiscal
policy posed by the upcoming elections, the delay in
privatizing large-scale enterprises, and the threat to the
trade balance owing to tensions in relations with Russia. JC

EBRD PREDICTS SLOWER GROWTH IN BALTICS THIS YEAR... The EBRD
has predicted 5.5 percent economic growth in Estonia in
1998, compared with 10 percent last year, BNS reported.
Latvia is expected to sustain the 6 percent growth it
achieved last year, while the growth of the Lithuanian
economy is predicted to slow to 5.5 percent, down from 5.7
percent in 1997. The EBRD report was released ahead of the
bank's annual meeting. JC

...AND PRAISES POLISH REFORMS. The EBRD also praised Poland
for its well-advanced reforms and gave the Polish economy
second place in Central Europe, after Hungary. The bank
praised in particular Poland's transformation of its legal
system but pointed to the slow pace of restructuring the
financial sector. JM

CZECH POLICE OFFICIALS RESIGN OVER COMMUNIST-ERA ACTIVITIES.
Prague police chief Miroslav Bornik resigned on 7 May amid
media allegations that he had participated in the
questioning of anti-Communist demonstrators in January 1989.
One witness said Bornik had forced him to sign a fabricated
protocol that was later used in one of Vaclav Havel's
trials. Bornik said he does not remember what happened nine
years ago. Interior Minister Cyril Svoboda said he has
accepted Bornik's resignation and transferred him to an
anti-drug unit. In a separate development, also on 7 May,
Intelligence Agency chief Karel Vulterin accepted the
resignation of his deputy, Lubos Dolezal, after it was
revealed that he had served in the Communist-era secret
services, Czech Television reported. MS

CZECH EXTREMIST LEADER BEATEN BY ROMA. Miroslav Sladek,
leader of the far right Republican Party, was beaten by a
group of Roma on 9 May, CTK reported. The incident occurred
in Novy Bor while Sladek was addressing a public meeting. A
local Roma representative said his speech had incited racial
hatred. Police intervened and broke up the fist-fight by
firing a shot in the air. In a separate incident, five
skinheads were detained on 8 May after physically attacking
two Indian men in the Prague subway. The attack followed a
demonstration against the growing number of neo-Nazi
incidents. And the next day in the same subway, an Algerian
was stabbed in the kidneys and had to be hospitalized. MS

MECIAR REJECTS RESPONSIBILITY FOR PRIVATIZATION MISTAKES.
Slovak Prime Minister Vladimir Meciar on 7 May rejected
responsibility for the legal errors in privatization
contracts. He said most of the errors occurred when he was
in opposition, CTK reported. Meciar's government decided to
abandon coupon privatization, which had been used in
Czechoslovakia, and opted for direct sell-offs of property
assets. MS

HUNGARIAN RULING PARTY LEADS AFTER FIRST ROUND OF ELECTIONS.
The Socialist Party won 32.2 percent of the vote in the
first round of the parliamentary elections on 10 May
(compared with 33 percent in 1994). But Its coalition
partner, the Free Democratic Party, suffered substantial
losses, gaining only 7.8 percent (19.7 percent four years
ago). With 28.2 percent of the vote (7 percent in 1994),
FIDESZ emerged as the main contender among opposition
parties. Owing to election agreements with other opposition
parties on supporting best-placed candidates, FIDESZ may
emerge as the winner after the second round of the
elections, to be held in two weeks. The Smallholders Party
increased its support from 8.8 percent to 13.7 percent. For
the first time, the far-right Justice and Life Party passed
the electoral threshold, winning 5.5 percent of the vote.
Turnout was 56 percent, compared with 69 percent in 1994. MS

SOUTHEASTERN EUROPE

HOLBROOKE SAYS KOSOVA 'EXTRAORDINARILY DANGEROUS.' Former
chief U.S. envoy to the former Yugoslavia Richard Holbrooke
said in Tirana on 10 May that Yugoslav President Slobodan
Milosevic, Kosovar shadow-state President Ibrahim Rugova,
and Albanian Prime Minister Fatos Nano all agree that the
situation in Kosova is dangerous. The diplomat added,
however, that the three do not agree on what to do next.
Holbrooke and Robert Gelbard, who succeeded him at the State
Department, obtained no concessions from Milosevic during
talks in Belgrade on 9 May. The following day, the two
diplomats visited Prishtina to "listen and learn" in talks
with the Kosovar leadership. Holbrooke said: "I have no
idea" how to solve the Kosovar problem. The envoy added that
Milosevic made it clear that "he does not want an
international negotiator." On 11 May, Holbrooke again met
with Milosevic in Belgrade. PM

MORE SANCTIONS IMPOSED ON SERBIA. At a meeting of foreign
ministers of the G-8 countries in London on 9 May, the U.S.,
U.K., Germany, France, Italy, and Canada agreed to ban
future foreign investments in Serbia. They also confirmed an
earlier decision by the Contact Group to freeze Serbian and
Yugoslav assets abroad. The Western foreign ministers issued
a communique saying they "are deeply concerned by the
increasing violence and growing polarization in Kosova and
in particular the excessive use of force by the Serbian
forces." They called on both sides to begin unconditional
talks under international mediation. Russian envoys neither
agreed to nor blocked the sanctions package. Japanese
diplomats said they "will study" possible courses of action.
PM

MONTENEGRO UNAFFECTED BY SANCTIONS? In Podgorica,
Montenegrin President Milo Djukanovic said that the
sanctions will not affect his mountainous republic, RFE/RL's
South Slavic Service reported on 9 May. In Belgrade, a
government spokesman argued that the sanctions "will only
hurt the Serbian people." In Tirana, the Foreign Ministry
issued a statement calling for tougher measures than the
sanctions. "Belgrade should be forced to stop the policy of
war and bloodshed and sit at the negotiating table with
ethnic Albanians in the presence of an international
factor." The statement added that Kosova otherwise could
become "a second Bosnia." The ministry also charged that the
Serbian authorities are trying to create "a sanitary cordon"
between Kosova and Albania (see "End Note" below). PM

HYDROELECTRIC PLANT CLOSED IN KOSOVA. Radisav Vlahovic, the
director of the Koznjar hydroelectric plant near Decan, told
Beta on 10 May that he ordered the enterprise closed because
"Albanian terrorists are everywhere in the area and the
workers are afraid for their safety," "Nasa Borba" reported.
Two days earlier, police closed the Prishtina-Peja road
because of heavy fighting in the area. Serbian and Albanian
sources in Prishtina each claimed in recent days that their
respective sides suffered several deaths in various places
in Kosova. PM

GRANIC APOLOGIZES FOR PERSECUTION OF JEWS. Croatian Foreign
Minister Mate Granic apologized in Jerusalem on 11 May for
the persecution that led to the deaths of thousands of
Croatian Jews in the Holocaust. "Relying on its freedom-
loving and anti-fascist roots, the modern democratic Croatia
in the strongest possible terms condemns fascism, racial
hatred, xenophobia, and anti-Semitism. I express and testify
to the deepest regret and condemnation of the persecution,
suffering ,and the tragedy of the Jews on Croatian territory
under the Ustasha regime." At the Yad Vashem Memorial,
Granic said: "On behalf of the government of Croatia and
with deepest respect for the victims of the Holocaust, I
express eternal condemnation of the crime of genocide of 6
million Jews." Many observers in Israel, Croatia, and
elsewhere have accused Croatian President Franjo Tudjman of
playing down the Holocaust and of anti-Semitism in his
historical writings. PM

POPE TO RETURN TO CROATIA. Spokesmen for the Roman Catholic
Church said in Zagreb on 8 May that Pope John Paul II will
visit Croatia from 2-4 October to honor Cardinal Alojzije
Stepinac on what would have been his 100th birthday. The
Pope will proclaim Stepinac "blessed," which is the first
step on the road to sainthood. Many Croats believe that
Stepinac, whom the Communists imprisoned, was a martyr for
his faith and country. Many Communists and Serbs regard him
as an Axis-sympathizer. In Zagreb on 10 May, Archbishop
Josip Bozanic warned that attempts to turn Roman Catholicism
into a political ideology are doomed. And in Ljubljana,
unnamed persons have opened a law suit against former
Communist-era leader Mitja Ribicic for his role in the
"genocide of the ethnic German minority" immediately after
World War II, RFE/RL's South Slavic Service reported on 8
May. PM

ALBANIAN DEMOCRATS DEMONSTRATE IN VLORA. Democratic Party
leaders arrived in Vlora on 9 May to take part in the first
Democratic rally there since the unrest began in the town
last February. Party deputy chairman Genc Pollo and
legislator Azem Hajdari addressed the 2,500 demonstrators.
Party leader Sali Berisha did not attend the rally owing to
concerns for his safety. A group of women threw stones at
the delegation's heavily guarded cars, but no other
incidents were reported. Daan Everts, who is the
Organization for Security and Cooperation in Europe's
ambassador to Albania, accompanied the visitors, "Gazeta
Shqiptare" reported. FS

ALBANIAN PREMIER CALLS FOR INVESTMENTS. During a visit to
Thessaloniki on 8-9 May, Fatos Nano called on Greek
businesses to increase investments in Albania, saying the
period of instability is over. He told members of the Union
of Northern Greek Industries that "I can guarantee that
situations similar to last year's...will never arise again."
Some 200 Greek companies have invested some $100 million in
Albania. The following day, Greek Interior Minister Georgios
Romeos pledged to provide assistance, including patrol cars
and bullet-proof vests, to Albanian border guards to help
them prevent illegal immigrants from entering Greece. FS

MORE FALLOUT FROM ROMANIAN 'CIGARETTE AFFAIR.' Another three
persons, two of them officers and the third a woman, have
been detained in connection with the "cigarette affair,"
RFE/RL's Bucharest bureau reported on 10 May. This brings
the total number of detainees in connection with the affair
to 14. Two days earlier, the Supreme National Defense
Council, chaired by President Emil Constantinescu, said that
people "working in state institutions were directly
involved" in smuggling "over the last six years." It said
new legislation dealing with the status of foreigners in the
country must be "urgently passed." Some detainees are Arabs
resident in Romania. In a clear hint to the Greater Romania
Party, the council also said the parliament must "analyze
the existence" of "parallel [illegal] information
structures." MS

PRESIDENTIAL COUNSELOR SUES OPPOSITION LEADER. Dorin Marian
on 8 May launched legal proceedings against Senator Radu
Timofte for libel. Timofte, who represents the opposition
Party of Social Democracy in Romania, has accused Marian of
involvement in the cigarette-smuggling scandal. MS

BULGARIAN AIR COMPANY REJECTS ROMANIAN ACCUSATIONS. Rumen
Draganov, the director-general of Air Sofia, on 8 May
rejected Romanian accusations that one of his company's
planes was involved in the cigarette affair. In an interview
with Romanian Radio, Draganov said the allegations by
Romanian Transportation Minister Traian Basescu that his
company has not forwarded to Bucharest documentation on the
plane's cargo are inaccurate. He added that the Romanian
side "should have had copies" of the documents it is now
requesting from Air Sofia. According to Basescu, Air Sofia
has been "consistently involved in smuggling." He has said
that Romania will deny the company the right to overfly its
territory in the future. MS

ROMANIAN DIPLOMATS DISMISSED OVER GERMAN 'CHILDREN THEFT
RING.' President Constantinescu on 10 May asked Prime
Minister Radu Vasile to investigate the activities of all
Romanian consular services abroad. His request follows the
Foreign Ministry's 7 May decision to dismiss the Romanian
consul in Bonn and his deputy and to launch legal
proceedings against them. The ministry also announced it
will replace the entire staff of the consulate. Last month,
German prosecutors accused the staff of the Romanian embassy
in Bonn of providing false identification papers to
criminals who illegally brought children into the country
and forced them to pickpocket. MS

BEREZOVSKII, LUCINSCHI HAVE SAME VIEWS ON CIS'S FUTURE. CIS
Executive Secretary Boris Berezovskii told journalists in
Chisinau on 7 May that in order to succeed in the future,
the CIS must rid itself of the "Big Brother mentality" still
prevailing among some of its members, RFE/RL's Chisinau
bureau reported. President Petru Lucinschi said after his
talks with Berezovskii that they share views on the future
of the commonwealth. Lucinschi said Berezovskii's
appointment is a sign of the changes ahead since the Russian
businessman is better equipped to deal with a "changing
situation" in which the private sector increasingly takes
over from the state sector. The two men also discussed the
conflict with the Transdniestrian separatists. MS

BULGARIAN PARLIAMENT APPROVES AGRICULTURAL REFORM POLICIES.
The parliament on 9 May approved a law abolishing subsidies
to agriculture, an RFE/RL correspondent in Sofia reported.
Agricultural Commission chairman Vladislav Kostov said the
only way to implement "free-market principles" is to "break
the pattern of artificial price increases." In other news,
the EU and the European Bank for Reconstruction and
Development have set up a $40 million investment fund to
assist medium-sized Bulgarian businesses. MS

END NOTE

ALTERNATIVES TO SANCTIONS

by Patrick Moore

	Meeting in London on 9 May, the foreign ministers of
the U.S., U.K., France, Germany, Italy, and Canada agreed to
freeze Yugoslav and Serbian assets abroad and to ban further
foreign investment in Serbia. The ministers' goal is to
press Yugoslav President Slobodan Milosevic to withdraw his
paramilitary special police forces from Kosova and launch a
dialogue with representatives of the ethnic Albanian
majority there about the province's future. Recent
experience involving Belgrade and sanctions, however,
suggests that the ministers' latest move may prove
counterproductive.
	The UN placed all of rump Yugoslavia under tough
economic sanctions on 30 May 1992 because of Belgrade's
involvement in the wars in Croatia and Bosnia. The sanctions
remained in force until the Dayton agreement was signed at
the end of 1995. According to Richard Holbrooke, the U.S.
diplomat who was the architect of the Dayton peace, the
effects of the sanctions were one of the main reasons why
Milosevic finally chose to seek peace.
	There are three reasons, however, to suggest that the
sanctions may have made it difficult to promote the cause of
peace. First, the embargo was not selectively targeted at
those in power but was rather a set of blanket measures that
affected all Yugoslav citizens. The sanctions helped lower a
standard of living--especially for the poor and the elderly-
-that was already bad enough thanks to Milosevic's neo-
communist economic policies. They similarly hurt the
struggling economies of neighboring Romania, Bulgaria, and
Albania, whose governments estimate their losses from the
sanctions in the billions of dollars.
	Second, the sanctions had only a slow effect on the
Milosevic regime, which, in any event, did not decide to go
to Dayton until after the Krajina and Bosnian Serb armies
had been routed on the battlefield. In the meantime, the
regime had more than three-and-a-half years to tell its
citizens that the source of their growing poverty was the
foreigners' sanctions. In doing so, Milosevic's media
skillfully boosted his popularity by playing on a
traditional Serbian belief that the Serbs are often the
victims of foreign-led conspiracies.
	Third, the sanctions gave rise to sanctions-busting on
a massive scale both in rump Yugoslavia and in some
neighboring countries. This phenomenon led to the growth of
mafia-like structures, many of whose members enjoyed
excellent political connections, particularly in Belgrade.
The growth of the mafias--whose profits often came from the
pockets of ordinary citizens--also undermined all efforts
aimed at promoting democratization and the rule of law.
	In view of those experiences from 1992 to 1995, some
Serbian opposition leaders and journalists as well as a
number of prominent Kosovars have suggested that the
international community should try to find alternatives to
blanket economic sanctions. Speaking in Vienna on 6 May,
reformist Montenegrin President Milo Djukanovic warned that
such sanctions will hit ordinary people as well as the
regime and will make it easy for Milosevic to clamp down on
the reformers and blame foreigners for his country's growing
poverty.
	One alternative to economic sanctions might be to
maintain and intensify the existing international political
pressure on Milosevic by continuing to bar his government
from membership in international organizations such as the
Organization for Security and Cooperation in Europe. The
fact that Belgrade frequently complains about the ban
suggests that the measure is having some effect. The ban
need not mean, however, that all Yugoslav passport holders
will be barred from international meetings and events.
Serbian opposition spokesmen stress that, on the contrary,
the international community should clearly differentiate
between the regime and other Serbs, who will play a key role
in establishing an eventual post-Milosevic order in the
Balkans. Opposition spokesmen therefore urge the
international community to make special efforts to involve
non-regime Yugoslav citizens in European and international
forums.
	Another alternative to an economic embargo is to find
ways of increasing military pressure on Milosevic, which
Kosovar leaders and the Albanian government have repeatedly
urged NATO to do. They argue that Serbia ceased its
aggression during the Croatian and Bosnian wars only when it
came up against the clear willingness of NATO to use
superior force. The leaders in Prishtina and Tirana add that
a strong NATO presence along Serbia's frontiers with Kosova
and perhaps with Macedonia would consequently be much more
effective than economic sanctions in sending the message to
Milosevic that the international community will not tolerate
armed repression in Kosova.
	Serbian opposition spokesmen, such as Radio B-92 chief
editor Veran Matic, have frequently urged the international
community to develop a serious and comprehensive program to
support democratization and a civil society in Serbia. Matic
further asks foreign diplomats to be firm in their
opposition to the regime and to avoid flattering Milosevic
by treating him as a peacemaker or offering him positive
incentives.
	Matic also stresses that new economic sanctions could
prove a boon to the mafias and undermine the efforts of many
people since 1995 aimed at establishing democratization and
the rule of law in Montenegro, Albania, and the Republika
Srpska. Biljana Plavsic, the president of the Republika
Srpska, said recently that the key to resolving the Kosova
crisis is the democratization of Serbia.

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