RFE/RL NEWSLINE Vol. 2, No. 105 Part II, 3 June 1998

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RFE/RL NEWSLINE Vol. 2, No. 105 Part II, 3 June 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
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xxxxxxxxxxxxxxxxxxx SPECIAL REPORT xxxxxxxxxxxxxxxxxxxxxx
RUSSIAN MEDIA EMPIRES III
A new prime minister has taken office, Boris Berezovsky's
now a CIS official, and the state plans to form a new media
holding company. See our updated media report.
http://www.rferl.org/nca/special/rumedia3/index.html
(English)
http://www.rferl.org/bd/ru/russian/content/reports/rumedia3/
index.html
(Russian)

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Headlines, Part II

* UKRAINIAN GOVERNMENT TO PAY CURRENT WAGES TO MINERS

* SHELLING DIES DOWN, EXODUS CONTINUES

* ALBANIA EXPECTS THOUSANDS OF REFUGEES

End Note: UNCERTAINTY PERSISTS ABOUT UKRAINE'S ECONOMIC
PROSPECTS
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EAST-CENTRAL EUROPE

UKRAINIAN GOVERNMENT TO PAY CURRENT WAGES TO MINERS. Deputy
Prime Minister Anatoliy Holubchenko told the Supreme Council
on 2 June that the government will pay current wages to
miners, Ukrainian Television reported. According to a
protocol signed by the government and some miners trade
unions, the government will allot 400 million hryvni ($200
million) from the budget and take out a 400 million hryvni
loan from the National Bank to pay wages for May through the
end of the year. Holubchenko added that the government is
currently unable to pay Ukraine's total wage arrears, which
amount to 6 billion hryvni. Also on 2 June, the Supreme
Council passed a resolution instructing the Cabinet of
Ministers and the National Bank to report by 9 June on the
country's financial situation. JM

UKRAINIAN LEFT-WING DEPUTIES WANT TO UNSEAT CABINET. Left-
wing parliamentary deputies have collected 191 signatures
supporting a motion of no confidence in Valeriy
Pustovoytenko's government, Reuters reported on 2 June.
Under parliamentary rules, a third of the 450-seat
parliament must agree to table a motion, while a simple
majority is enough to pass it. The final decision on whether
the vote will take place will be made on 10 June. Reuters
suggest the motion is a political maneuver by left-wing
deputies trying to bring pressure on parliamentary parties
that support President Leonid Kuchma. Those parties have
blocked three attempts to elect a leftist speaker. JM

BELARUSIAN LAWYER STRIPPED OF LICENSE. The Justice Ministry
on 2 June took away the license of Hary Pahanyayla, a
prominent lawyer known for defending critics and opponents
of the Belarusian government, Belapan reported. The ministry
said the lawyer forfeited his right to practice law in
Belarus when he quit the Minsk City Collegium of Lawyers and
joined a Russian bar association. Pahanyayla said the
ministry's ruling contradicts international law and
Belarus's obligations under the union treaty with Russia. He
said he will appeal the decision in court. Most recently,
Pahanyayla defended Pavel Sevyarynets, the 21-year-old
leader of the Belarusian Youth Front, who was arrested in
April for taking part in the 2 April rally protesting the
Russia-Belarus union. JM

YOUNG BELARUSIAN OPPOSITIONIST TO STAY IN JAIL FOR ANOTHER
MONTH. Meanwhile, the prosecution has ordered that
Sevyarynets remain in jail for another month, Belapan
reported on 2 June. According to witnesses interrogated in
connection with Sevyarynets's case, the prosecution has been
unable to substantiate the charges of "malicious
hooliganism" and is now seeking another indictment. One
investigator reportedly admitted to a witness that some
articles in "Maladzyovy vesnik," which Sevyarynets edits,
may be regarded as "stirring up interethnic dissension." The
prosecution has denied a request by Sevyarynets's parents to
defend their son, despite the provision of the penal code
allowing the defendant to choose his defense. JM

EESTI TELEKOM SHARES TO BE FLOATED IN NEW YORK, LONDON. An
international group advising the government on the sale of
shares in Eesti Telekom, the state-owned telecommunications
company, has said it will float 49 percent of the shares in
the U.S. and U.K. in the second half of this year, ETA
reported on 2 June. Only 10 percent of the shares will be
floated on the Tallinn stock exchange. The flotation will be
the largest international share issue from the Baltic
States. Also on 2 June, the government approved a bill
increasing excise duties on tobacco, alcohol, and luxury
goods. Finance Minister Mart Opmann said the move is aimed
at reducing the current accounts deficit and improving
macro-economic figures. The government plans to introduce
the higher rates on 1 December. Meanwhile, share prices on
the Tallinn stock exchange plunged 12 percent on 1 June,
having lost one-third of their value last month. Corrections
over the past 48 hours have helped the exchange regain some
ground. JC

LATVIAN PARLIAMENT TO VOTE ON SINGLE DOCUMENT AMENDING
CITIZENSHIP LAW. The parliament's Legal Affairs Committee on
2 June announced that all three proposals submitted to the
parliament on amending the citizenship law will be
considered as one draft document, BNS and "Diena" reported.
It explained that move by pointing to the urgency of the
issue. Lawmakers will vote on the removal of the so-called
naturalization windows, which would make it easier for non-
citizens to gain citizenship and would grant citizenship to
all children born to non-citizens since 21 August 1991
should their parents request it. The coalition parliamentary
parties, however, have thrown their support behind
alternative amendments that would grant citizenship to those
children only after they reach the age of 16 and are able to
prove sufficient knowledge of the Latvian language. Calls
for the Latvian parliament to amend the citizenship law in
line with OSCE recommendations have intensified recently
ahead of the 4 June vote on the issue. JC

ADAMKUS URGES UNDERSTANDING FOR KREMLIN'S ANXIETY OVER NATO
EXPANSION. Lithuanian President Valdas Adamkus said in
Stockholm on 2 June that aspiring NATO members must
understand Moscow's anxiety over the alliance's possible
eastward expansion to include former Soviet states. That
statement came one day after Russian Foreign Minister
Yevgenii Primakov repeated that NATO membership for former
Soviet states such as Lithuania is "unacceptable." Adamkus
said Primakov's comment came as "no surprise" and that he
expected the attitude in Russia toward NATO would change as
the Kremlin learns the alliance has "no designs on Russia."
JC

POLISH GOVERNMENT TO APPOINT 'CASHIER' FOR EU FINANCIAL AID.
The Polish government on 2 June announced it will appoint a
special plenipotentiary to manage EU aid funds to Poland,
"Rzeczpospolita" reported. The decision follows the recent
slash of 34 million ecus in EU aid because of the
"irrelevant" projects Poland proposed in its bid for such
assistance (see "RFE/RL Newsline," 26 and 27 May 1998).
However, the Committee for European Integration will retain
its function of determining targets for EU funds. In this
way, Poland complies with EU requests to separate those two
functions. Meanwhile, a Dutch radio journalist has caused a
stir among cabinet members by announcing last week that one
Polish minister called the European Commission to
congratulate it on cutting aid to Poland. "This slap in the
face should sober up Warsaw," the minister allegedly
commented. JM

CZECH ROMA PROTEST PLAN TO WALL THEM IN. A delegation of
Czech Roma on 2 June handed over to the mayor of Usti nad
Labem a protest against a plan to isolate a tenement block
of Romani families behind a wall. A spokesman for the
Association of Roma in the Czech Republic said the plan is
an "insult" to all the Roma in the country. He added that if
the plan is implemented, other towns will follow suit and
"then you will have ghettos, followed by ovens, and that
will be the end of the Roma." Mayor Ladislav Hruska said the
wall is "not racially motivated" but just intended to
"separate the decent people from those who are not," Reuters
reported. MS

IAEA OFFERS TO FACILITATE SLOVAK-AUSTRIAN TALKS ON MOCHOVCE.
A spokesman for the International Atomic Energy Commission
(IAEA) on 2 June said the commission is willing to
"facilitate talks" between Slovakia and Austria over the
controversial Mochovce nuclear plant, AFP reported. The
spokesman said the agency can offer "technical advice and a
venue for the talks" but added that the IAEA is not prepared
to "chair the meeting or mediate between the sides." Also on
2 June, the Slovak Nuclear Supervision Bureau said it has
told the EU that the Mochovce plant "is ready to start
operating" and is "safe from the technical and safety point
of view." The bureau said the operation will actually begin
"only after a detailed review of individual procedures have
been completed." MS

HORN TO RESIGN AS HUNGARIAN SOCIALIST PARTY LEADER. Outgoing
Prime Minister Gyula Horn on 2 June announced his intention
to resign as Socialist Party chairman, executive deputy
chairwoman Magda Kovacs Kosa told Hungarian media after a
meeting of the party's steering board. She said that Horn
has headed the party for "an eight-year period of historic
significance" and that his decision requires no explanation.
A party congress to elect a new chairman will be convened in
late August or early September. Outgoing Foreign Minister
Laszlo Kovacs is likely to be Horn's successor. He was
quoted as saying he would not turn down such an offer. In
other news, President Arpad Goncz on 2 June told Viktor
Orban, chairman of the Federation of Young Democrats-
Hungarian Civic Party, that he will ask him to form the new
government at the inaugural session of the new parliament.
MSZ

SOUTHEASTERN EUROPE

SHELLING DIES DOWN, EXODUS TO ALBANIA CONTINUES. The
concentrated shelling by Serbian forces of several villages
in western Kosova is reported to be winding down, according
to AFP and Reuters on 2 June. The Serbian Interior Ministry
said police have "eliminated a large terrorist group of
Albanian separatists" near the village of Crnobreg, Tanjug
reported. It added that one policeman was killed in a clash
with ethnic Albanians on a road between Decani and
Djakovica. Kris Janowski, a spokesman for the UN High
Commissioner for Refugees, said that thousands of people
have been displaced or left homeless within Kosova and that
Serbian forces are denying UN aid workers access to the
area. An Austrian military attache in Tirana, Wilhelm Figl,
told Austrian Radio on 2 June that he observed from the
Albanian border how Serbian forces systematically destroyed
villages. No independent casualty figures from the area are
available. PB

ALBANIA EXPECTS THOUSANDS OF REFUGEES. Refugees
continue to pour into the northern Albanian Tropoja
district. According to an Interior Ministry spokesman, more
than 3,000 refugees have arrived in that district but up to
another 20,000 are expected, "Koha Jone" reported. The same
day, Prime Minister Fatos Nano told the government that Albania
is considering breaking diplomatic ties with Yugoslavia and
asking the international community to further increase its
pressure on Belgrade. FS

RUGOVA ASKS UN FOR NO-FLY ZONE OVER KOSOVA. UN Security
Council President Antonia Monteiro said in New York on 2
June that Kosovar shadow-state President Ibrahim Rugova has
requested that a "no-fly zone" be established over Kosova,
AFP reported. Rugova explained his request by pointing to
the heavy use of Serbian helicopters in the ongoing violence
in ethnic Albanian towns in the northwestern part of Kosova.
Rugova also repeated an appeal that a UN human rights office
be established in Prishtina. Belgrade has so far refused to
allow such an office to open there. On 1 June, Rugova met
with UN Secretary-General Kofi Annan. PB

MONTENEGRIN PRESIDENT LOOKS FOR REACTION FROM MILOSEVIC.
Milo Djukanovic called on Yugoslav President Slobodan
Milosevic to respond positively to the victory of
Djukanovic's coalition in the Montenegrin parliamentary
elections, dpa reported on 2 June. Djukanovic told
Belgrade's Radio Index that Milosevic must recognize the
"new Montenegrin political reality." He said Yugoslavia
could "crumble from within" if Milosevic continues to
subjugate Montenegro to Serbia. Predrag Bulatovic, the
deputy chairman of Montenegro's Socialist People's Party,
which supports Milosevic, said that Djukanovic and his
supporters will be given" 100 days to prove it can fulfill
promises." Yugoslav Premier Momir Bulatovic, a Djukanovic
rival, was summoned to Belgrade the same day for talks with
Milosevic. PB

CROATIAN, BOSNIAN SERB PREMIERS DISCUSS REFUGEES. Croatian
Prime Minister Zlatko Matesa and Bosnian Serb Premier
Milorad Dodik, meeting in Zagreb on 2 June, agreed that
refugees have the right to choose to return to their pre-war
homes or to sell or even exchange their property and settle
elsewhere, SRNA reported. The meeting aimed to help resolve
the situations of tens of thousands of ethnic Serbian
refugees who fled Croatia in 1995. Some 50,000 relocated to
the Republika Srpska. Many Bosnian Croats driven from the
Republika Srpska now live in vacated Serbian homes in
Croatia. The same day in the strategically located town of
Brcko, Dodik met with Ejup Ganic, the Croatian member of the
Bosnian presidency, and Robert Farrand, the international
community's supervisor of Brcko. The meeting, which Farrand
described as "historic," also centered on the return of
refugees. PB

GERMAN DEFENSE MINISTER TO SUPPORT REFUGEE RETURN. Volker
Ruehe said in Sarajevo on 2 June that Bonn will encourage
more investment in Bosnia-Herzegovina to aid the return of
refugees from Germany, Reuters reported. Ruehe made his
comments after talks with Edehem Bicakcic, a Bosnian deputy
prime minister. Some 150,000 Bosnian refugees still live in
Germany. In other news, Milojica Kos, a Bosnian Serb accused
of committing crimes against humanity at the Omarska prison
camp in northwestern Bosnia, pleaded innocent at The Hague
to all 11 charges against him. PB

ALBANIAN PRESIDENT DECREES DISMISSAL OF 15 GENERALS. Rexhep
Meidani has issued a decree dismissing 15 army and police
generals in accordance with a proposal by his adviser and
former Defense Minister Sabit Brokaj and current Defense
Minister Luan Hajdaraga. Brokaj accused the generals of
having ordered troops to use violence to put down the March
1997 anti-government rebellion. The troops refused to obey
the orders, which were issued at a time when anarchy reigned
in the country. Among those dismissed are former Police
Chief Agim Shehu and former General Chiefs of Staff Adem
Copani and Sheme Kosova. FS

MACEDONIAN FOREIGN MINISTER IN ROMANIA. Blagoj Handziski and
his Romanian counterpart, Andrei Plesu, said in Bucharest on
2 June that they support a "U.S. [military] presence in
southeastern Europe under NATO auspices" in order to prevent
"the possible extension of the crisis in Kosova." They added
that they also support "an extended [form of] autonomy" for
Kosova "within the Yugoslav Federation," RFE/RL's Bucharest
bureau reported. Plesu later announced that the two
countries are to conclude a basic treaty and a free trade
agreement in the near future. A military accord will also be
signed following Defense Minister Victor Babiuc's visit to
Macedonia in June. Prime Minister Radu Vasile praised
Macedonia's policy toward the Vlach minority, which is
closely related to the Romanians. MS

ROMANIAN PROSECUTOR-GENERAL APPOINTED CHIEF JUSTICE. Sorin
Moisescu on 2 June was appointed by presidential decree
chief of the Supreme Court of Justice , Mediafax reported.
Also on 2 June, the Chamber of Deputies approved a law on
combating money laundering. The law, which has yet to be
debated in the Senate, stipulates the setting up of a
National Office for Combating Money Laundering that would be
subordinate to the government and would have control over
banks, insurance companies, and casinos. Banks would have to
inform the office of any deposit exceeding 10,000 ecu
($11,600). Concealing information from the office would
constitute a criminal offense punishable by between three
and 12 years in prison. MS

MOLDOVAN PREMIER ON ECONOMIC SITUATION. In a televised
address on 2 June, Ion Ciubuc said that the five months that
preceded the March elections damaged the country's economy
beyond "the blackest expectations." Ciubuc, who also headed
the previous government, said that during that period, the
executive had "worked just formally" and "ties with the IMF
and the World Bank were practically disrupted, while foreign
investments ceased." He also said the government
unjustifiably forgave "huge debts" of many state enterprises
and made "populist reductions of tariffs for energy
consumption," BASA-press reported. Under these
circumstances, he said, public spending must now be
"radically cut." MS

BULGARIAN ROM SETS HIMSELF ON FIRE. A Bulgarian Rom on 2
June set himself on fire after a two-week protest fast over
discrimination and unpaid social benefits, RFE/RL's Sofia
bureau reported. The man, one of the 17 Roma who are staging
a hunger strike in Lom, suffered only slight injuries, as
police put out the fire. Minister of Public Administration
Mario Tagarinski later arrived in Lom for talks with the
protesters, who threatened to set themselves ablaze one
after the other every hour. Meanwhile, AFP reported on 2
June that exiled Princess Marie-Louise, sister of former
King Simon II, has arrived for a 17-day visit of her
homeland at the invitation of President Petar Stoyanov. She
is scheduled to tour the country and visit orphanages,
monasteries, and hospitals. MS

END NOTE

UNCERTAINTY PERSISTS ABOUT UKRAINE'S ECONOMIC PROSPECTS

by Viktor Luhovyk

	The Ukrainian government last week announced its
intention to cut the planned budget deficit for 1998, saying
the move marks the beginning of a new wave of reforms. But
the announcement stopped short of providing details, leading
to doubt whether the measures will ever be fully
implemented.
	The 29 May announcement said that the deficit will be
cut to 2.3 percent, down from the 3.3 percent level approved
by the parliament in December. Officials said more reforms
will follow immediately, as the cash-strapped government
tries to qualify for a three-year $2.5 billion loan from the
IMF.
	The decision to cut the deficit was prompted by the
rapidly worsening financial situation. The IMF and the World
Bank suspended their aid programs in April, after the budget
deficit in the first three months of this year doubled the
planned target of 3 percent.
	Most affected has been the market for Treasury bills
(T-bills), issued by the Finance Ministry to finance the
budget deficit. The ministry's payments for maturing T-bills
have exceeded the funds raised from issuing the new debt
this year, reflecting foreign investors' reluctance to
purchase the T-bills. Last year, foreign investors had held
half of Ukraine's T-bill market but were purchasing only 10-
25 percent of the securities in recent months.
	Unable to restore foreign investors' interest in the
T-bill market, the government borrowed more than $1 billion
internationally in February and March at a high 16 percent
interest rate to cover budget losses and pay off some wage
arrears in the run-up to 29 March parliamentary elections.
The exodus of foreign investors from the T-bill market
forced the National Bank to spend up to $1 billion to
prevent the hryvna from falling.
	But many observers say the government must start now
raising more than $2.5 billion to pay off mature T-bills and
foreign debt in the next three months. This could lead to a
drop in the value of the hryvna after 20 June, when first
debt payments have to be made. The Finance Ministry can now
sell only T-bills whose maturity period does not go beyond
1998, and analysts say that the government may again try to
borrow at a high interest rate to cover its outstanding
obligations amid growing concerns that the country may
eventually go bankrupt.
 	"The government behaves like the passengers of the
'Titanic,'" said Volodymyr Dubrovsky of the Harvard
Institute for International Development, alluding to the
government's persistent policy of acquiring new loans to pay
off old debt.
	Meanwhile, serious structural reforms are still only
being talked about. "We started talking about liberalization
of foreign trade, bankruptcy regulations, and new taxation
policies five years ago," said Vitaly Migashko of ING Bank
Ukraine. "Can anyone say today that at least some of these
measures were introduced adequately?"
	At the beginning of the year, the government announced
plans to lay off thousands of government employees by the
end of the year to reduce budget expenditures and implement
a number of deregulation measures. However, many of these
measures are still to be put into effect months after they
were first discussed.
	"What dominates the current cabinet is concern with
its own interests," said former Economy Minister Viktor
Suslov. Having won election to the parliament, Suslov
resigned from the cabinet last month, after criticizing the
anti-reform stance of its many departments.
	The situation may be further exacerbated by tense
relations between the government and the legislature. "The
newly elected parliament is not likely to be more friendly
toward the government than the previous one," says liberal
lawmaker Serhy Teryokhin, who was among the proponents of a
radical tax reform discussed by the previous legislature.
"And with the government being politically and
professionally weak, there are no reasons to believe in
financial stability."
	The government measures aimed to avert the financial
crisis have to be approved by the parliament. But the
legislature so far seems unwilling to do anything of the
kind.

The author is a Kyiv-based RFE/RL correspondent.

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