RFE/RL NEWSLINE Vol. 2, No. 139 Part II, 22 July 1998

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RFE/RL NEWSLINE Vol. 2, No. 139  Part II, 22 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
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Headlines, Part II

* POLISH, GERMAN LAWMAKERS PLAY DOWN RESETTLEMENT ROW

* UN RENEWS MANDATE FOR MACEDONIAN PEACEKEEPERS

* FIGHTING CONTINUES IN RAHOVEC

End Note: EU PUNISHES BELARUSIAN LEADERSHIP

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EAST-CENTRAL EUROPE

UKRAINIAN GOVERNMENT APPROVES 1999 ECONOMIC TARGETS... The
government on 21 July approved economic targets for 1999,
Interfax reported. GDP growth next year is expected to be 2
percent and the budget deficit 1.5 percent of GDP. Inflation
is predicted to remain below 8 percent, while the hryvnya
will be  allowed to fall no more than by 18 percent against
the dollar by the end of 1999. The number of registered
unemployed people is expected to total 1.7 million, while the
monthly average wage is forecast at 189 hryvni ($90), 9.2
percent up on this year's figure. JM

...WHILE PREMIER URGES BUDGET DISCIPLINE IN 1998. Ukrainian
Prime Minister Valeriy Pustovoytenko told his cabinet on 21
July that observing budget discipline is the most important
condition for maintaining economic stability in the country,
Ukrainian Television reported. Pustovoytenko denied rumors
that the government will write off the tax debts accumulated
this year by enterprises. He added that since the beginning
of this year, the budget has failed to receive 5.9 billion
hryvni ($2.9 billion) because of tax arrears or evasion. He
threatened to apply administrative sanctions and bring
criminal charges against those who fail to pay their taxes.
JM

LUKASHENKA PRAISED ON FOURTH ANNIVERSARY AS PRESIDENT.
Belarusian Television on 21 July said that during his four
years as president, Alyaksandr Lukashenka has been able to
fulfill "a lot of what was expected of him by Belarusian
society." Lukashenka was praised for taking "considerable
steps" toward restoring the "flourishing Belarusian economy
of the late 1980s and early 1990s." According to a recent
poll,  Lukashenka's foreign policy is supported by 72.4
percent of the population, Belarusian Television reported.
And the television station claimed that the  West began
exerting political pressure on Belarus after the Belarusian
leadership announced its policy of rapprochement with Russia,
citing the diplomatic conflict over the Drazdy compound as a
recent example of such pressure. JM

LUKASHENKA WANTS TO STABILIZE BELARUSIAN RUBLE. At a meeting
with National Bank Chairman Pyotr Prakapovich on 20 July,
Lukashenka demanded that the National Bank step up efforts to
"stabilize the Belarusian ruble exchange rate and accelerate
the transition to a single exchange rate," Belapan reported.
Lukashenka ordered the bank and the government "to take
additional measures" to increase by 5-8 percent this year the
foreign currency revenues of enterprises  He also instructed
Prakapovich to repay all debts to Gazprom before "the
beginning of the heating season." JM

SIIMANN REJECTED INTERIOR MINISTER'S RESIGNATION. Estonian
Prime Minister Mart Siimann turned down an offer by Interior
Minister Olari Taal to resign over the scandal surrounding a
loan granted last year to Hoiupank by Japan's Daiwa Bank, ETA
and BNS reported on 21 July. Siimann said that it is "unfair"
of the press to blame Taal for remaining in his post, adding
that he is a "very good interior minister" and that there is
"no one better" to reorganize that ministry. Taal, who was
chairman of the board of Hoiupank at the time the loan was
granted, submitted his resignation in May in a bid to avoid
accusations against him that would be harmful to the
government, according to the news agencies. More recently, he
said he sees no reason why he should step down (see "RFE/RL
Newsline," 15 July 1998). JC

EU URGES LITHUANIA TO BE PATIENT. European Commissioner for
External Affairs Hans van den Broek has said Lithuania is
making good economic progress but must remain "somewhat
patient" about joining the EU, Reuters reported. Van den
Broek made the remarks after talks in Vilnius on 21 July
with Lithuanian President Valdas Adamkus and other top
officials. He praised Lithuania for speeding up privatization
and for economic growth estimated to exceed  5 percent this
year. But he added that Lithuania still needs to make
progress "in the modernization of enterprises and in
achieving a clear, transparent, and predictable economic
environment," according to AP. JC

POLISH, GERMAN LAWMAKERS PLAY DOWN RESETTLEMENT ROW.
Bundestag speaker Rita Suessmuth visited the Polish
parliament on 21 July in an attempt to play down Polish-
German discord over the expulsion of Germans from Poland
after World War II. In May, the Bundestag issued a resolution
calling upon Poland to acknowledge the right of German exiles
to settle in areas they inhabited before the war. The Polish
parliament responded with a statement criticizing the
resolution (see "RFE/RL Newsline," 7 July 1998). Suessmuth
explained to Sejm speaker Maciej Plazynski that the Bundestag
resolution does not demand that  Poles living in the former
German territories of Silesia and Eastern Prussia be deprived
of their property. According to PAP, Plazynski said after his
meeting with Suessmuth that "the matters are clear now." JM

POLAND NOT TO SEEK EU TRANSITION PERIODS IN SEVEN AREAS. Jan
Kulakowski, Poland's chief negotiator for EU entry, said in
Brussels on 21 July that Poland will not seek transition
periods in seven negotiation areas, PAP reported. Those
transition periods are designed to allow non-member countries
to adapt to EU standards. According to Kulakowski, this means
Poland must pledge that by 2002 it will allow 100 percent
shares of foreign capital in audiovisual media or
telecommunications companies. The other five negotiation
areas are scientific research, education,  small and medium-
sized enterprises, industrial policy, and foreign policy. JM

HAVEL TO UNDERGO SURGERY. President Vaclav Havel will undergo
surgery on 26 July to remove a tube inserted  into his colon
in April, when he underwent surgery in Austria for acute
peritonitis, AP reported citing CTK. Havel is scheduled to
appoint the new government on 22 July, before entering the
hospital. Doctors expect him to remain in the hospital for
two weeks and to convalescence for another six weeks. MS

FLOODS VICTIMS IN SLOVAKIA. At least 23 people, five of them
children, were killed in flooding in northeastern Slovakia
during the night of 20-21 July, TASR and AP reported. About
60 people are missing.  Some 3,000 people had to be
evacuated.  In other news, AP reported on 21 July that
Interior Minister Gustav Krajci survived a no confidence vote
in the parliament initiated by the opposition, which fears he
may abuse his powers in the elections scheduled for
September. To succeed, the no-confidence vote had to enlist
the support of 76 out of the 150 deputies. Out of the 78
deputies who voted, only 48 cast their ballot against Krajci,
13 supported him, and two abstained. MS

ORBAN CONCERNED ABOUT PROSPECTS FOR EU EXPANSION. Prime
Minister Viktor Orban, in an interview with the daily "Napi
Magyarorszag" on 21 July, said he is concerned about
differences of opinions among EU members on the
organization's expansion. Orban said some EU countries, such
as France, insist that new members be admitted  only after
internal reforms have been carried out, while others  take
the opposite view. These differences, he said leave Central
European candidates for membership fearing that accession may
be delayed by years. Orban also said he attaches "outstanding
importance" to relations with Romania and will pay an
unofficial visit there on 25 July. According to protocol,  it
is the Romanian premier's turn to visit Hungary. MS

SOUTHEASTERN EUROPE

UN RENEWS MANDATE FOR MACEDONIAN PEACEKEEPERS. The Security
Council voted unanimously in New York on 21 July to extend
the mandate of UNPREDEP until 28 February 1999. The leading
UN body also agreed  to add about 350 soldiers to the current
nearly 750-strong mainly U.S. and Scandinavian contingent.
Norway will supply most of the additional troops. The vote
came hours after three bombs exploded in three different
locations in Macedonia (see "RFE/RL Newsline," 21 July 1998).
On 16 July, UN Secretary-General Kofi Annan said in New York
that UNPREDEP 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 keep the peace
in a war-torn area.  PM

MACEDONIA TIGHTENS BORDER SECURITY. Defense Minister Lazar
Kitanovski said in Debar on 21 July that the government is
closely monitoring events in Kosova and that "because of
possible movements of groups from Albania into Macedonia, we
will additionally reinforce" troops along the Albanian
border. Debar is near one of the main border crossings
between the two countries. In Skopje, Kitanovski's spokesman
told Reuters that "there have been 30 armed incidents along
the border with Albania in the past three months, in which
Albanians tried to enter Macedonian territory to smuggle
weapons" bound for Kosova. "So far there have been no
casualties on the Macedonian side but two Albanians were
killed and over 10 wounded in these incidents," he added.
Ethnic tensions run high in Macedonia between the Macedonian
majority and the ethnic Albanian minority. PM

FIGHTING CONTINUES IN RAHOVEC. Serbian forces clashed with
the Kosova Liberation Army (UCK) in  Rahovec on 21 July for
the fourth straight day. The town was "in flames and smoke"
and the fighting left a total of 36 ethnic Albanians dead,
the Kosovar KIC news agency. In a statement, shadow-state
President Ibrahim Rugova's Democratic League of Kosova (LDK)
criticized "violence and massacres by Serbian forces in
Rahovec" and urged the international community to react
"forcefully."  The LDK called on foreign governments to bring
the Belgrade authorities before the Hague-based war crimes
tribunal because of what Serbian forces have done in Kosova.
Rugova discussed the situation in the province with
Christopher Hill, who is U.S. ambassador to Macedonia and who
met the previous day in Belgrade with Yugoslav President
Slobodan Milosevic. PM

SERBIAN PRIEST COMFORTS KOSOVARS, SERBS. A humanitarian aid
worker from Kosova told Reuters on 21 July in Prishtina that
fighting in western Kosova near the Albanian border has left
great material destruction. He added that in many places
quantities of human and animal remains lie unburied. The aid
worker said that his work is difficult because "the Serbs
hate us, and the Albanians are very disappointed in us." He
noted that "there is a Serbian Orthodox priest there, a
remarkable man called Sava, who is doing all he can to help
the Albanians against the odds." Father Sava is a deputy of
Bishop Artemije. Both men are committed to the welfare of
ordinary Serbs and to reconciliation between Serbs and
Albanians. The two men blame Yugoslav President Slobodan
Milosevic for the current conflict. PM

UNHCR COMPLAINS ABOUT ALBANIAN ORGANIZED CRIME. A
representative of the UN High Commissioner for Refugees told
journalists in Tirana on 20 July that local gunmen in
northern Albania continue to hamper aid efforts. He said that
thefts of cars and aid supplies by "organized local criminal
groups are a major problem" and that  criminals are trying to
make money from the crisis situation. He noted that they
"steal aid shipments and even pressure us to employ them."
The spokesman pointed out that there is a constant risk of
UNHCR personnel being caught in crossfire in random shooting.
Another aid worker stressed that "people are armed and police
are reluctant to intervene and restore law." Northeastern
Albania has traditionally been considered lawless. Tirana has
been unable to fully restore law and order there since the
country succumbed to anarchy in early 1997. FS

OSCE OPENS NEW FIELD OFFICE IN NORTHERN ALBANIA. The OSCE
opened a field office in Koplik on 21 July, its fifth such
office in the north. The bureau is part of an effort to
expand monitoring of the border region. Meanwhile in Tirana,
Socialist Party legislator Spartak Braho told "Koha Jone"
that he will go to Kosova later this week to join the UCK.
Braho said he wants to help the guerrillas with logistics,
but he did not rule out eventually taking part in military
operations. Braho also called on legislators, "intellectuals,
and [former] soldiers to make their contribution to Kosova."
He criticized Albanian politicians for what he called their
"idleness" with regard to the conflict. FS

ALBANIA DEPORTS REPUTED TERRORIST. The authorities on 21 July
deported suspected Egyptian terrorist Muhamed Hasan Mahmud to
the U.S. Mahmud had worked as director of the Islamic Revival
charity organization in Tirana until his arrest on 17 July.
The FBI helped Albanian police identify Mahmud, whom the U.S.
suspects of being behind the 1990 murder of Egyptian
parliament speaker Rifaat el Mahgoub in Cairo as well as
attacks on an aircraft and a supermarket in the U.S. Albanian
authorities expelled two other suspected Egyptian terrorists
to the U.S.  last month. FS

BOSNIAN POLITICIANS DECLARE ASSETS. Candidates in the
September general elections have filed declarations of their
assets with the election commission. That move is in keeping
with a ruling by the OSCE, which is supervising the vote,
"Oslobodjenje" reported on 20 and 21 July. The wealthiest
politician is Fikret Abdic, the controversial kingpin of the
Bihac pocket, who declared property worth $250,000. Kresimir
Zubak, who is the Croatian member of the joint presidency,
and his Serbian counterpart, Momcilo Krajisnik, both own what
the paper called "an impressive amount of real estate." Alija
Izetbegovic, their Muslim opposite number, declared savings
of $50,000. Republika Srpska President Biljana Plavsic
reported her salary of $200 per month plus two garages in
Sarajevo, although the newspaper states that she also owns an
apartment in the Muslim-controlled capital. Observers say
that many politicians on all sides amassed great wealth
during the 1992-1995 war. PM

ROMANIAN FINANCE MINISTER THREATENS TO RESIGN. Daniel Daianu
on 21 July told journalists in Bucharest that he will resign
if his proposal to raise taxes in August is rejected or if
the government upholds the controversial deal to purchase 96
helicopters. Under the proposed deal, Bell Helicopters
Textron is to purchase a majority stake in the Gimbav
aircraft company, which would produce the helicopters. The
deal involves a $1.45 billion loan, which Daianu says would
increase budget expenditures by more than $ 150 million
annually. He also said the envisaged property tax cannot be
applied before 1999 for logistical reasons.  MS

MOLDOVAN-TRANSDNIESTER SUMMIT FAILS TO BRIDGE MAIN
DIFFERENCES. President Petru Lucinschi and Transdniestrian
leader Igor Smirnov, meeting in Chisinau on 21 July, failed
to reach an agreement on the "common state" envisaged in  the
memorandum signed in May 1997 in Moscow, RFE/RL's Chisinau
bureau reported. The two leaders did, however, reach an
understanding on the continuation of energy deliveries from
the Cuciurgan (Dnestrovsk) power plant in the Transdniester.
Lucinschi acknowledged that Moldova owes Tiraspol $21
million, but he said the debt cannot be settled for the time
being. The two leaders also agreed that the bridge over the
Dniester at Dubasari, which has been reconstructed following
its destruction in 1992, will be reopened on 3 August. The
Transdniester authorities previously opposed the
recommissioning of the bridge, citing security reasons. MS

ROMANIAN DEPUTY FOREIGN MINISTER IN MOLDOVA. Razvan
Ungureanu, on a two-day visit to Chisinau, told journalists
on 21 July that the pending Romanian-Moldovan basic treaty
has been "finalized in great part" and that only the preamble
to the treaty and its concluding articles remain to be
negotiated. Ungureanu conducted talks with Deputy Foreign
Minister Ceslav Ciobanu, the independent Flux agency
reported. Before departing from Bucharest, Ungureanu said he
would raise during the talks the problem of the Bessarabian
Metropolitan Church, which Chisinau refuses to recognize. MS

SPANISH PREMIER IN BULGARIA. Jose Maria Aznar and his host,
Ivan Kostov, on 21 July told journalists in Sofia at the end
of the Spanish premier's two-day visit that the two countries
have signed accords on cooperation in tourism and on
combating organized crime, BTA reported. They also reached an
agreement to work for the settling of Bulgaria's $30 million
debt to Spain by giving Spanish companies stakes in Bulgarian
enterprises. Aznar praised Bulgaria's economic and social
reforms but said the country still has a long way to go
before being able to join the EU, adding that this goal  must
be achieved by consensus in Bulgarian society. At a meeting
with President Petar Stoyanov, Aznar said Spain will continue
to support Bulgarian efforts to join the EU and NATO. MS

BULGARIAN OPPOSITION TO BACK IMF DEAL. Rumen Ovcharov, a
leading member of the opposition Socialist Party, told
Reuters on 21 July that his party will support a three-year
loan now being negotiated with the IMF on condition that the
deal secures "stable economic growth, employment, and
development." Ovcharov spoke after meeting with the chief IMF
representative in Bulgaria, Anne McGuirk. The government
supported  that meeting in a bid to soften resistance to
painful restructuring and expected lay-offs under the program
coordinated with the IMF. MS

EU PUNISHES BELARUSIAN LEADERSHIP

by Jan Maksymiuk

	The EU Council on 13 July formally approved a decision
to ban EU visas for  Belarusian government officials.
President Alyaksandr Lukashenka topped a list of 130
Belarusian cabinet ministers, deputy ministers, presidential
administration officials, and state committee heads, all of
whom are now prohibited from traveling to the EU's 15 member
states.
	The decision was communicated to the Belarusian Foreign
Ministry  by charges d'affaires of five EU states--France,
Germany, Greece, Italy, and the U.K.--on 10 July, the fourth
anniversary of Lukashenka's presidency. A Russian newspaper
reported that Foreign Minister Ivan Antanovich was shocked to
receive such a note and tried to dismiss it on the pretext
that it was poorly prepared--the names of some officials were
misspelled or their official positions incorrectly
identified. Four days later, the US State Department followed
suit, imposing similar restrictions on Belarusian senior
officials wanting to travel to the U.S., except those
visiting the UN headquarters. Ten non-EU states in Europe
have also joined the visa ban.
	Minsk obviously did not expect such a turn of events in
the ongoing diplomatic scandal over the eviction of Western
ambassadors from the Drazdy residential compound, near Minsk.
In fact, Deputy Foreign Minister Uladzimir Herasimovich,
appointed by Lukashenka to negotiate a solution to the
conflict with Western diplomats, announced on 9 July that
Belarus had reached some kind of arrangement with Germany and
France on moving their ambassadors to other accommodation. He
also said Minsk had backed off from its ultimatum ordering
Western diplomats to remove their belongings from Drazdy.
	But the West seemed finally to realize that whatever the
Belarusian Foreign Ministry says need not correspond to what
Lukashenka does or intends to do. The EU visa ban was the
first serious setback suffered by Lukashenka in his six-week
battle to empty the diplomatic compound and to have it for
himself alone. The recalling of Western ambassadors for
consultations was not enough to shake Belarus's authoritarian
leader. "Let them know that they may return to Belarus only
following our permission," Lukashenka commented on the
withdrawal of Western diplomats. But the visa restrictions
have hit hard, for three reasons.
	First, by imposing the ban on Lukashenka and his
administration officials, the EU and the U.S. have
unmistakably demonstrated who is really responsible for the
infamous "sewer war."  Belarus has been generally portrayed
by international media as a country trying to find its way
"back to the USSR." Lukashenka's views of various economic
and political issues are presented as reflecting "the
people's will" or, at least, enjoying immense popular
support.
	The Drazdy conflict, however, shows this is not
necessarily the case. Protesting declining living standards
in Minsk on 15 July, some 5,000 workers adopted a resolution
saying that Lukashenka's policy "threatens the country with
political and economic isolation." The West appears to have
realized that it would be counterproductive to punish the
Belarusian people for the actions taken by its government.
	Second, the visa ban may help the fragmented and weak
Belarusian opposition to consolidate itself, assuming that it
is willing and able to do so. Lukashenka is vulnerable: that
is the main lesson that the opposition can learn from the
current diplomatic standoff. And  his regime will become more
vulnerable as Russia--Minsk's closest ally among the former
Soviet republics--continues to press for the repayment of
outstanding debts for gas and oil.
	Russia under Sergei Kirienko's government is becoming
more and more reluctant to provide its "sisterly republic"
with energy resources free of charge or in exchange for
Belarusian antiquated tractors and television sets. With no
international financial aid in sight, Lukashenka will find it
very hard to cope with mounting problems in the virtually
unreformed Soviet economy he controls. He will be forced to
make political concessions if his is not a suicidal case. And
it will be up to the Belarusian opposition to decide whether
and how to take advantage of that vulnerability.
	Third, by imposing visa restrictions and not severing
diplomatic relations with Belarus, the West has prudently
left room for diplomatic maneuvering. It has also confirmed
that it still sees Belarus as a sovereign country and wants
it to retain that status. With NATO's eastern border flanking
Belarus in six months or so, it is doubtless preferable to
have a stretch of non-Russian territory  between NATO and
Russian tanks. No European government, including the Kremlin,
wants to recreate the barbed-wire dividing line that
characterized Cold-War Europe.

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