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RFE/RL NEWSLINE Vol. 2, No. 136 Part II, 17 July 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 136 Part II, 17 July 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 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part II * EUROPEAN PARLIAMENT SUPPORTS EU VISA BAN ON BELARUS * DEPUTY HEAD OF SOLIDARITY COALITION RESIGNS * NANO SAYS KOSOVA CRISIS THREATENS ALBANIA'S STABILITY End Note: POLAND'S UNREGULATED TRADE WITH NEIGHBORS DECLINES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx EAST-CENTRAL EUROPE EUROPEAN PARLIAMENT SUPPORTS EU VISA BAN ON BELARUS. In a resolution adopted on 16 July in Strasbourg, the European Parliament supported the EU Council's 13 July ban on visas for Belarusian senior officials. The resolution calls on President Alyaksandr Lukashenka "to immediately restore the full and unimpeded use of the EU ambassadors' residences in Minsk." It also appeals to the Belarusian government to take the "necessary steps in the process of economic and democratic reform" and to respect human rights. The European parliamentarians also backed the OSCE's efforts in Minsk to promote "the re-establishment of democratic structures" and appealed to the OSCE to provide for "free and fair presidential elections" in Belarus next year. JM LUKASHENKA THANKS RUSSIA FOR STANCE IN DIPLOMATIC HOUSING DISPUTE. Lukashenka has thanked Russian deputies and senators for not joining the dispute over diplomatic housing at Drazdy, near Minsk. "The West has launched a campaign of vicious attacks on Belarus," Interfax quoted Lukashenka as saying on 16 July. According to the Belarusian president, his opponents "are trying to break Russia's backbone in an attempt to make it put pressure on Belarus." The same day, the Russian State Duma unanimously adopted an appeal to the parliaments of OSCE member countries to revise their policy toward Belarus and engage in a constructive dialogue. The Duma thinks the West's reaction to the Drazdy conflict "is absolutely inadequate to the essence of the issue," while the conflict itself "has been blown up for purely political reasons," Interfax reported. JM KUCHMA COMMENTS ON FINANCIAL CRISIS... Ukrainian President Leonid Kuchma, visiting Donetsk Oblast on 16 July, said that Ukraine is facing a "severe financial crisis," Ukrainian Television reported. He noted that monthly budget revenues do not exceed 800-900 million hryvni ($400-$450 million), whereas Ukraine's monthly foreign debt obligations amount to 1.8 billion hryvni. Kuchma again appealed to the parliament to pass an amended version of this year's budget that would reduce the annual budget deficit to 2.3 percent of GDP. Such a budget would pave the way for a $2.5 billion loan from the IMF, which "will automatically resolve our problems," Ukrainian Television cited Kuchma as saying. JM ... DEPLORES SITUATION IN COAL MINING, METALLURGY. Kuchma also said that the situation of the coal mining industry will not improve as long as the mines do not receive cash payments for their output. He criticized the mines themselves for the barter trade, which, he said,. amounts to as much as 80 percent of business deals at some mines. He also criticized the industry for allotting only one-sixth of its budget subsidies for restructuring and spending the remainder on wages and social benefits. The president also noted a decline in the output of the metallurgical industry and criticized the industry's management for its lack of a "strategic line." JM LATVIA'S ULMANIS BELIEVES NO MORE OSCE DEMANDS ON CITIZENSHIP LAW. Returning from a visit to France, Latvian President Guntis Ulmanis said he believes the OSCE will not require that Latvia make any more changes to its citizenship law, BNS reported on 16 July. He said that during his visit, the opinion was voiced that it would be "unacceptable" to make any more such requirements. "There are no grounds to believe that the OSCE will exert such pressure," he commented. Both Ulmanis and Prime Minister Guntars Krasts have requested assurances from the OSCE that it will cease to require changes in the country's citizenship law. JC LITHUANIAN LAWMAKERS BACK ADAMKUS OVER LUSTRATION LAW. In a surprise move, the parliament on 16 July voted by 101 to one to approve a proposal by President Valdas Adamkus that the lustration law not be enacted until 1 January 1999, BNS reported. Parliamentary chairman Vytautas Landsbergis, who initiated the controversial law, described the president's recent veto of the legislation as "10 times dubious." But Landsbergis called for "granting the president an opportunity to be together" with the parliament over the issue. He added that he is determined not to "fight" with the head of state but to seek to agree on the law. Lawmakers also decided to postpone until the fall any debate on the president's proposal that the parliament turn to the Constitutional Court for a ruling on whether the bill is constitutional. JC NATO PEACEKEEPING EXERCISES LAUNCHED ALONG LITHUANIAN COAST. Some 5,000 troops from the Baltic States, Hungary, Poland, the U.S. and western Europe are taking part in training exercises along the Lithuanian coast. Code-named "Baltic Challenge 98," the maneuvers are being coordinated by NATO as part of its Partnership for Peace program. Among those taking part are more than 2,000 U.S. soldiers as well as troops from the Baltic Battalion, whose members are trained specifically for NATO peacekeeping duties. Russian, Belarusian, and Ukrainian observers also reportedly are present. JC DEPUTY HEAD OF SOLIDARITY COALITION RESIGNS. Adam Slomka has resigned as deputy leader of the ruling Solidarity Electoral Action (AWS), PAP reported on 16 July. Slomka is head of the Confederation for an Independent Poland, a junior partner of the AWS. Slomka's resignation follows an agreement on setting up 16 administrative provinces that the AWS and the leftist Democratic Left Alliance has concluded (see "RFE/RL Newsline," 16 July 1998) "This is suicide for [rightist forces]," he commented. In a letter to AWS Chairman Marian Krzaklewski, Slomka argued that the AWS has departed from the fundamental goals of Poland's center-right. Meanwhile, President Aleksander Kwasniewski has announced he will sign the bill providing for 16 provinces. JM POLAND, UKRAINE TO FIGHT SEX SLAVE INDUSTRY. Poland and Ukraine agreed on 16 July to cooperate in fighting prostitution and sex slave trafficking to the West, Reuters reported. "The Mafia has got engaged in [the trafficking of women].... We must take preventive measures together," a Ukrainian Interior Ministry representative commented on the agreement. According to the International Organization for Migration, more than 100,000 Ukrainian women are being forced to work as prostitutes in the West. JM ZEMAN SAYS HAVEL ACCEPTS CABINET LINEUP. Social Democratic leader Milos Zeman said on 16 July that President Vaclav Havel accepts his list of proposed cabinet members, CTK reported. Zeman, who made his comments after meeting with Havel, said the president will appoint him as premier on 17 July. Zeman said he could not say that "the president had no objections." He added that it is the president's duty to check on the "suitability" of the cabinet ministers. Havel has said he does not support the appointment of Jan Kavan as foreign minister and Vaclav Grulich as interior minister . The Supreme Court ruled the same day that the daily "Mlada fronta Dnes" must apologize to Kavan for writing that he is persona non grata in Britain, but not for saying that he is "a convicted liar." As a dissident in Britain, Kavan regularly met with a Czechoslovak Secret Service agent but says he was unaware of the agent's identity. PB SLOVAKIA BLAMES PRESS, 'DOUBLE STANDARDS' FOR EXCLUSION. The Slovak Foreign Ministry said on 16 July that the ignorance of the international media and Western "double standards" are the reasons why the country has been kept out of EU and NATO accession talks, Reuters reported. Deputy Foreign Minster Jozef Sestak said that Slovakia has been "undervalued" and "systematically hurt" by ignorant foreign media reports. Both the EU and NATO have named Bratislava's poor democratic record as the main reason for not inviting the country to expansion talks. PB MECIAR WANTS PLEBISCITE ON PRIVATIZATION. Slovak Prime Minister Vladimir Meciar said on 16 July that he plans to call a referendum on excluding energy utilities from privatization, AFP reported. Meciar said if he is unable to get parliamentary support for such a measure he will start a petition drive to call a referendum on the issue. Opposition deputies say the move is a ploy to deflect attention away from questionable privatization deals already concluded. PB HUNGARIAN PRIME MINISTER IN PARIS. After meeting with French President Jacques Chirac in Paris on 16 July , Hungarian Prime Minister Viktor Orban said that EU internal reforms are not expected to hinder EU enlargement. In talks with French Prime Minister Lionel Jospin, Orban said Hungary will "not offer areas and industries for colonization but will present economic opportunities" for EU countries. Trade between the two countries totaled nearly $1.7 billion last year, 23 percent more than in 1996, "Napi Gazdasag" reported. Orban also said that joining the EU by 2000 is "ambitious" but "realistic." This was Orban's his first trip abroad as premier. MSZ SOUTHEASTERN EUROPE NANO SAYS KOSOVA CRISIS THREATENS ALBANIA'S STABILITY. Prime Minister Fatos Nano told his national security advisers on 16 July that the international community has not been able to come to grips quickly with the crisis in Kosova and that its failure to act will place a great burden on his government, "at least for the medium-term." He added that the refugees in particular will place a strain on the state budget, Reuters reported. He said that whereas 13,000 refugees are officially registered, the real number of refugees could be as high as 20,000. Nano urged Kosovar leaders to set up a single representative institution and speak with only one voice to the outside world. He warned that their failure to do so would work to the advantage of Yugoslav President Slobodan Milosevic. The prime minister concluded that "all these factors increase the danger to Albania's stability and threaten the work we are doing to rebuild." PM SERBIAN POLICE BREAK UP KOSOVAR PARLIAMENT. Some 90 members of the Kosovar shadow-state legislature attended its first session in eight years in Prishtina on 16 July. Deputies took an oath of loyalty to the shadow state and elected a speaker. Police then arrived and told the legislators to hand over any documents and to disperse. The deputies left peacefully, and police took away several boxes of documents. Kosovar President Ibrahim Rugova called the session a success and told Reuters: "we have done it." One legislator added: "it is a very historic day, marking the start of a new free, democratic and independent state of Kosova." Some observers noted, however, that the meeting may prove to be too little, too late, since the government does not represent all political parties and has been steadily losing influence among Kosovars to the Kosova Liberation Army (UCK) in recent months. PM ANNAN WANTS MORE TROOPS FOR MACEDONIA. UN Secretary-General Kofi Annan said on 16 July in New York that the world organization should add 350 soldiers to the current 800 who make up the UN peace-keeping operation in Macedonia (UNPREDEP). He also called for extending UNPREDEP's mandate by another six months, which would be until February 1999. Annan said that the force is stretched too thin to be able to monitor effectively Macedonia's borders with Albania and Yugoslavia. UNPREDEP is the first mission in UN history that seeks to prevent a conflict from spreading rather than keeping the peace in a war-torn area. PM MONTENEGRO HAS NEW GOVERNMENT. Some 47 deputies in the 78- member legislature on 16 July approved the new cabinet of Filip Vujanovic, an ally of reformist President Milo Djukanovic. Supporters of pro-Milosevic Yugoslav Prime Minister Momir Bulatovic boycotted the session. Vujanovic promised to promote economic reforms and criticized Milosevic's efforts to curb Montenegro's autonomy. He said that "the destiny of Montenegro and its citizens can be decided only in Montenegro.... We cannot give up Montenegrin statehood, national identity, tradition, and culture." The government represents a coalition of anti-Milosevic parties and includes representatives of the ethnic Albanian minority. PM BOSNIAN PRIME MINISTER BLAMES FOREIGNERS FOR REFUGEE DELAY. Bosnian federal Prime Minister Edhem Bicakcic told RFE/RL's South Slavic Service in a telephone interview on 16 July that refugees are currently returning to many parts of the mainly Muslim and Croatian federation. He added, however, that the number of Croats and Serbs who have returned to Muslim-controlled Sarajevo remains too low. Bicakcic said that a major problem preventing refugees from going home is that the international community has not fulfilled its promises to construct houses and apartments. He singled out the office of the United Nations High Commissioner for Refugees and the European Commission for special criticism. Bicakcic charged that some unnamed foreigners "deliberately find excuses" for delaying promised aid. PM CROATIAN OPPOSITION TO UNITE? Vlado Gotovac, the leader of the Liberal Party, told Reuters on 16 July that chances are good that opposition parties will form a coalition and defeat President Franjo Tudjman. "We are trying to find a joint political platform with which we would present ourselves at the elections and a program that we would make sure we fully implement once the elections are over." Gotovac said that the laws governing elections and the media must be changed if Croatia is to become a truly democratic country. He added that there is no chance of reforming that legislation so long as the HDZ remains in power. Observers noted that the failure of the opposition to close ranks has been a major factor in the HDZ's maintaining its grip on power since 1990. Legislative elections are due by October 1999 and a presidential vote in 2002. PM BAD YEAR FOR CROATIAN TOURISM. A drop in the number of foreign tourists may have a significant effect on the government's projected figures for economic growth in 1998, "Vecernji list" reported on 16 July. Two main tourist areas- -Istria and Dalmatia -- report declines of 22 percent and 11 percent, respectively, in the number of visitors in the first days of July, compared with the same period in 1997. The crisis in Kosova and the World Cup in France may have prompted some potential visitors not to go to Croatia, but the main reason for the drop is that prices have risen without a corresponding increase in the quality of services. Expanding privatization is the key to reviving tourism, Reuters wrote. Government experts had projected a 15 percent growth in the number of tourists this year. Tourism and remittances from Croatian workers abroad are Croatia's two main traditional sources of hard-currency income. PM ALBANIAN GOVERNMENT ORDERS INVESTIGATION INTO INVESTMENT COMPANIES. The government on 16 July authorized pyramid- scheme investigator Farudin Arapi to audit the records of another eight investment firms. They include one of Albania's largest companies, namely 2K, which is owned by businessman Koco Kokedhima. Independent legislator Nikolle Lesi recently urged the government to investigate 2K, and he published a series of articles in his daily, "Koha Jone," in which he called 2K a pyramid scheme. Some observers charged that Lesi's motive was to get rid of a competitor. Kokedhima's daily, "Shekulli," lowered its sales price to one-fifth of that of "Koha Jone" in May and quickly tripled its circulation to 17,000. "Koha Jone's" circulation during the same period fell from more than 20,000 to 9,000 copies. Also on 16 July, 70 legislators endorsed Lesi's proposed draft law to ban publishers from selling newspapers below production costs. FS CONSTANTINESCU MEETS WITH CLINTON. Romanian President Emil Constantinescu met with his U.S. counterpart, Bill Clinton, in Washington on 16 July and praised the expanding ties between the two countries, an RFE/RL correspondent reported. Talks in the White House focused on bilateral relations, regional cooperation, security in southeastern Europe, and Bucharest's aspirations to join NATO. Clinton said that Romania's general progress has been "very impressive," but he did not elaborate. Constantinescu urged U.S. businesses to expand investments in Romania. He is due to meet with Defense Secretary William Cohen on 17 July. PB ROMANIA TO INVESTIGATE MISSING PRIVATIZATION REVENUES. Romanian Prime Minister Radu Vasile requested on 16 July that Privatization Minister Sorin Dimitriu investigate revenue shortfalls from the sale of state assets, Reuters reported. Vasile asked for the investigation after an official report showed that $160 million in revenues are missing from privatization sales. PB MOLDOVAN DEPUTIES APPROVE NEW BUDGET. The Moldovan parliament on 16 July passed a more austere 1998 budget but rejected a new tax on bread and milk, Reuters reported. Communist deputies left the chamber before the vote to protest the revised budget, which they called "anti-social." The previous budget, passed before parliamentary elections in March, was based on unrealized projections. Valeriu Muravschi, chairman of the parliament's budget commission, said Moldova needs to accelerate reforms and increase tax collection in order to deal with a "very complicated" economic situation. PB TRANSDNIESTER AUTHORITIES TO CLOSE ROMANIAN-LANGUAGE SCHOOL. The Tiraspol City Council said on 15 July that the only secondary school in the city to offer instruction in Romanian will lose its license to operate in November, Infotag reported. Ion Iovchev, the director of the school, said that the school is alleged to have broken Transdniester laws on education and "languages spoken in Transdniester." PB BULGARIAN ARMY ANNOUNCES PERSONNEL CUTS. Colonel General Mikho Mikhov, the head of the Bulgarian army's General Staff, announced on 16 July that more than 1,000 officers will be cut from the armed forces, Bulgarian Radio reported. Mikhov said that by 2000 the army will be reduced to 85,000 men, of whom 20,000 will be officers. Mikhov said the planned cuts are being made to conform to NATO standards. In other news, the Interior Ministry said that seven policemen were arrested on 16 July for accepting bribes from international drug traffickers, AP reported. Interior Minister Bogomil Bonev said the policemen will be fired and prosecuted. PB MALFUNCTION AT BULGARIAN NUCLEAR PLANT. Operators said that a technical "malfunction" at the Kozloduy nuclear power plant caused radiation levels at the facility to double, AP reported on 16 July. The failure occurred at one of the plant's four older reactors. The Bulgarian government has spent tens of millions of dollars to upgrade the plant in the past several years and rejects calls by the EU to turn off the reactors. PB END NOTE POLAND'S UNREGULATED TRADE WITH NEIGHBORS DECLINES by Jan de Weydenthal Unregulated cross-border trade, once the mainstay of commercial relations between many Central and East European countries, is declining. That development was perhaps inevitable, given changes in the economies of the region. But it also reflects conscious moves by various governments to introduce stable rules into commercial activities, to tax profits, and to control the flow of currencies between countries. The result has been a shift toward wholesale, large- scale operations between big companies. This, however, adversely affects the interests of many small businesses and numerous individuals throughout the region. The apogee of the unleashed cross-border commerce was in the years 1994-1996, following revolutionary upheavals in Eastern Europe and the subsequent dissolution of the Soviet Union. The activity focused on Poland, the crossing point between the Germans, the Russians, the Lithuanians, the Belarusians, the Ukrainians, the Slovaks, and the Czechs. It led to the establishment of large, mostly private trading centers--the bazaars--on all Polish borders as well as in the country's center. To illustrate the economic magnitude of this activity, it is sufficient to note that by 1997, the turnover of the 15 largest bazaars reached an officially confirmed figure equivalent to some $2.2 billion, with unofficial estimates putting that figure 25 percent higher. More than half of the turnover came from the export of Polish-made products. In this way, the bazaar commerce, partly untaxed and unregulated, was a major source of Poland's export earnings. More than 120,000 people were employed last year by the 15 largest bazaars, while hundreds of thousands profited from businesses linked with the commercial activity itself (suppliers, hotels, restaurants, travel companies, and so forth). According to a recent study by the Polish Institute of Market Research (IBGR), the scope and volume of trade at almost all bazaars have been declining during the last two years. And the institute says this decline is not only likely to continue but will almost certainly accelerate. This assessment is shared by the traders themselves. The IBGR says that the decline has been prompted by economic changes in Poland and the neighboring countries. The Polish currency, the zloty, has been gradually gaining strength in relation to both the U. S. dollar and the German mark. This strength has also been a factor in the rapidly declining value of the Russian and Belarusian rubles as well as the Ukrainian hryvna. As a result, Polish products have become more and more expensive for the country's eastern neighbors. At the same time, there has been growing demand for better and more sophisticated products, which can hardly be supplied by small firms catering to traditional bazaar clientele. The IBGR says that policy decisions by several governments constitute another factor affecting trade. Belarus has introduced a steep duty on imported furniture, for example, while Russia has imposed higher duties on imports of almost all foreign-made products. Poland, meanwhile, enacted a law last year making it more difficult for Easterners to enter the country. Recent figures on cross-border travel confirm the trend: a 37 percent decline on both the Polish-Russian (Kaliningrad) and the Polish-Belarusian borders. The Lithuanian and Ukrainian crossings have been less affected, but the trend is downward there as well. The decline in the bazaar commerce has been particularly painful for small businesses and individual traders. They have constituted a large majority of suppliers (the IBGR estimates that about 65 percent of products sold at the bazaars came from small or medium-sized firms). Public protests have been staged in Poland, Belarus, and the Russian exclave of Kaliningrad this year. But to no avail. The downward trend continues. By contrast, large scale, tax-paying, and strictly regulated supermarkets and department stores are likely to profit from that trend. Networks of such supermarkets have recently appeared in the eastern parts of Germany, in Poland, and in border regions of the Czech Republic. There is every reason to assume that more will appear. The author is an RFE/RL senior correspondent. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. 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