RFE/RL NEWSLINE Vol. 2, No. 170 Part II, 3 September 1998

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RFE/RL NEWSLINE Vol. 2, No. 170 Part II, 3 September 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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SPECIAL REPORT: HOW RUSSIA IS RULED--1998
As the string of crises continue in Russia, the question
remains: Who is in charge? This in-depth report analyzes
the country's power structure.
http://www.rferl.org/nca/special/ruwhorules/index.html

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Headlines, Part II

* CHIRAC OFFERS SUPPORT TO UKRAINIAN REFORMS

* KOSOVA AGREEMENT IN THE OFFING?

* ALBANIAN GUNMEN FORCE POLICE TO WITHDRAW
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EAST-CENTRAL EUROPE

CHIRAC OFFERS SUPPORT TO UKRAINIAN REFORMS. French
President Jacques Chirac arrived in Kyiv on 2 September
to offer support to Ukraine's efforts to reform its
economy and boost ties with the EU, Reuters reported.
"We understand and support with all our force your
desire to tie yourself to Europe, which is your family,"
Chirac said at a dinner given by Ukrainian President
Leonid Kuchma. Several agreements on the use of nuclear
energy and bilateral cooperation are to be signed during
the two-day visit. French business leaders accompanying
Chirac are expected to encourage Ukraine to expand trade
with France. French investments account for only $50
million of the $2 billion foreign investment in Ukraine
since its independence in 1991. JM

UKRAINIAN CENTRAL BANK TO RESUME SELLING DOLLARS.
Ukrainian National Bank Chairman Viktor Yushchenko on 2
September said that the bank will soon resume selling
dollars on Ukraine's Interbank Currency Exchange to meet
demand on the street, Reuters reported. "The central
bank declares that it will not limit exchange
operations," he said. The National Bank exchange rate of
the hryvnya was 2.25 to $1 on 2 September, while in
interbank trade it was quoted at 3.1 to $1. The
unofficial exchange rate is even higher, at 3.7 hryvni
to $1. Yushchenko's pledge is seen as a move to avoid a
hryvnya plunge as Ukraine waits for the IMF to decide on
granting the country a $2.2 billion loan. Meanwhile, an
IMF mission is in Kyiv to assess the financial situation
there before making its final decision on 4 September.
JM

LUKASHENKA SAYS BELARUS'S ECONOMIC DEVELOPMENT
'OPTIMAL'... Belarusian President Alyaksandr Lukashenka
has approved a report on the country's economic
performance this year drawn up by Economy Minister
Uladzimir Shymau, Belarusian Television reported on 1
September. Lukashenka said current economic development
can be considered "optimal" for Belarus. At the same
time, he instructed Shymau to take measures to avoid
price hikes and the smuggling of food out of the
country. According to official data, Belarus's GDP grew
by 12 percent from January to July, industrial output by
12.5 percent, consumer goods output by 21 percent, and
foreign trade by 13.9 percent, compared with the same
period last year. JM

...SETS PRIORITIES FOR HOUSING CONSTRUCTION. Lukashenka
has set priorities for housing construction in Belarus,
Interfax reported on 2 September. He said the state
should build more houses in villages and towns in which
the housing problem is particularly acute. He also
demanded that an average of five apartments be built on
every collective farm each year. "Housing is the
locomotive which is getting the whole economy of the
country going," he stressed. Lukashenka blasted the
construction industry for poor performance and warned
that the government will "deliberately produce
unemployment" in the industry to force competition
unless the Construction Ministry takes steps to improve
the situation in the sector. JM

BELARUS JOINS NON-ALIGNED MOVEMENT. A conference of the
Movement of Non-Aligned Countries in Durban, South
Africa, on 2 September accepted Belarus as its 114th
member, ITAR-TASS reported. Until now, Belarus had
observer status in the organization. JM

ESTONIAN LEFTIST PARTY FACES BANKRUPTCY. The Estonian
Social Democratic Labor Party (ESDTP) may be declared
bankrupt unless it pays the state some 8 million kroons
($533,000), ETA reported. That debt was accumulated as a
result of a dispute between the ESDTP and the government
over a building occupied by the party that was declared
state property, along with all other assets of the
former Communist Party. The ESDTP continued to occupy
the building and to pocket the income from leased office
space. At a preliminary court session on 2 September, it
was recommended that the party be declared insolvent.
Tiit Toomsalu, the chairman of the ESDTP, says the case
is politically motivated and aimed at the liquidation of
the country's only left-wing party. JC

ESTONIAN DAIRY EXPORTERS HIT BY RUSSIAN CRISIS.
Estonia's largest dairy concern, United Dairies, is to
lay off 300 workers for at least two months and to
reduce the price of milk beginning this month, ETA
reported on 2 September. That move comes in the wake of
the financial crisis in Russia, to which United Dairies
exports some 80 percent of its products. Meanwhile, the
Parnu dairy plant, a subsidiary of United Dairies, is to
be temporarily closed. Some 90 percent of its output is
exported to Russia. JC

LITHUANIAN GOVERNMENT TO AID EXPORTERS IN FACE OF
RUSSIAN CRISIS. Meeting with Prime Minister Gediminas
Vagnorius to discuss the impact of the Russian financial
crisis on Lithuania's commercial sector, Finance
Minister Algirdas Semeta said the government has
sufficient financial and monetary reserves to offer
assistance to Lithuanian exporters, BNS reported on 2
September, citing the government press service. He added
that the government foresees increasing state budgetary
and Privatization Fund reserves in the country's banks
to allow those institutions to grant loans to exporters
affected by the ongoing crisis. In addition, the
Agriculture Loan Guarantee Fund and the Food Product
Market Regulatory Agency will extend additional credits
to dairies and meat processors, both of which are
particularly badly hit by the crisis (see "RFE/RL
Newsline," 2 September 1998). JC

SOLIDARITY LEADER CRITICIZES PROPOSED TAX REFORM.
Solidarity Electoral Action (AWS) leader Marian
Krzaklewski told Polish Radio on 2 September that the
AWS will not accept Finance Minister Leszek
Balcerowicz's plan to introduce new taxes in 1999 (see
"RFE/RL Newsline," 1 September 1998). Balcerowicz is a
member of the Freedom Union (UW), the AWS's partner in
the ruling coalition. Krzaklewski said that the
coalition agreement between the AWS and the UW envisages
"family-friendly" changes in the tax system and that
Balcerowicz's proposals do not provide for such changes.
The AWS leader added that any changes must not only make
the poor pay less but also increase concessions to
families with a large number of children. PAP reported
on 2 September that Poland's major trade unions,
Solidarity and the leftist National Trade Union
Alliance, have both spoken out against Balcerowicz's
plan. JM

POLISH NATIONALISTS PROTEST GERMAN TROOPS PRESENCE. Some
50 people picketed the Defense Ministry in Warsaw on 1
September to protest the stationing of German troops in
Szczecin, PAP reported. A Polish-Danish-German unit is
to be created in that town once Poland joins NATO. The
agency reports that the picket was organized by members
of the nationalist organization All-Poland Youth and
listeners of the Roman Catholic Radio Maryja station.
"We once invited Germans to Poland, but only got rid of
them in 1945," PAP quoted one organizer as saying, in
what seemed to be an allusion to the invitation for
Teutonic Knights to settle in Poland in the 13th
century. JM

FORMER CZECHOSLOVAK PREMIER TO BE CHARGED OVER
CHORNOBYL? Lubomir Strougal may face charges over having
withheld information on the danger posed by the
Chornobyl nuclear catastrophe in 1986, AP reported.
Strougal, now 74, is suspected of having intentionally
provided false or incomplete information on radiation
levels measured on former Czechoslovak territory shortly
after the explosion in Chornobyl. The Office for
Investigation and Documentation of Communist Crimes,
which has the power to prosecute, is investigating the
case. A spokesman for the office said investigators hope
to decide within a month whether to press charges.
Strougal has denied the accusations. MS

ZEMAN 'CONCERNED' ABOUT RUSSIAN CRISIS. Prime Minister
Milos Zeman on 2 September said the Czech Republic is
"following with concern" the situation in Russia, CTK
reported. He said the crisis has caused foreign
investors to leave Russia and triggered mistrust in many
other emerging Eastern and Central European markets.
Zeman said some of these investors could switch to the
Czech Republic but that in order for this to happen, "it
is necessary to create the appropriate atmosphere of
economic security and certainty." Zeman also said the
Czech Republic insists on the repayment of Russia's
outstanding $ 3 billion debt and that this could be
achieved through the purchase of stakes in Russian
companies. "The prices of shares are now dropping and
this is the right moment to buy them," he concluded. MS

SLOVAKIA TURNS TO THE HAGUE AGAIN IN DAM DISPUTE WITH
HUNGARY. Slovakia is again appealing to the
International Court of Justice in The Hague to rule on
the ongoing dispute with Hungary over the Danube
hydroelectric power plant. Slovak Foreign Minister
Zdenka Kramplova notified her Hungarian counterpart,
Janos Martonyi, of this decision in a 2 September
letter. Hungarian Foreign Ministry spokesman Gabor
Horvath told journalists that his country is "ready to
accept the involvement of an impartial third party."
Gyorgy Szenasi, Hungary's representative at the trial,
said it is "surprising" that Bratislava's move comes
shortly before the Slovak general elections. Since no
agreement was reached on implementing the court's
earlier ruling, both parties are entitled to appeal to
the court again, he concluded. MSZ

SOUTHEASTERN EUROPE

KOSOVA AGREEMENT IN THE OFFING? U.S. Ambassador to
Macedonia Christopher Hill, who is also Washington's
chief envoy regarding the Kosova question, said in
Prishtina on 2 September that "the two sides in general
agreed what we can reach." He said that Yugoslav
President Slobodan Milosevic, with whom he met the
previous day in Belgrade, and Kosovar shadow-state
President Ibrahim Rugova, with whom he met in Prishtina
on 2 September, agreed in principle that Kosova should
receive "a certain degree of self-administration" for a
provisional period of between three and five years.
After that period, the parties concerned would "review"
the political status of Kosova. PM

SOME NEGATIVE REACTIONS TO AUTONOMY PROPOSAL... Numerous
commentaries in regional and international media on 2
September pointed out that Hill has yet to get the two
sides to agree on details and that the "devil has been
in the details" in previous attempts to negotiate an end
to the conflicts in the former Yugoslavia since 1991.
Some commentaries noted that Hill gave no indication as
to when his proposal might take effect, or whether the
Kosova Liberation Army (UCK) will agree to it. The UCK's
long-standing position is that independence is the only
possible solution. German Foreign Minister Klaus Kinkel
said that he is skeptical about whether the proposal can
lead to concrete results. PM

...AND SOME POSITIVE ONES. Spokesmen for Rugova said the
accord could lead to "stabilizing the overall situation
in Kosova and assure the functioning of all [state]
institutions." U.S. diplomats in Prishtina also stressed
that the main goal of the agreement would be to "create
a framework for democratic institutions and the
functioning of the rule of law," AFP reported. Albanian
Foreign Minister Pascal Milo said that Hill's project
"promises the start of a dialogue which might lead to
further positive developments.... [The agreement] might
not be the best Albanians are asking for, but it is a
basis to start negotiations and they can reach promising
results." PM

FIGHTING CONTINUES ACROSS WESTERN KOSOVA. Serbian and
Kosovar sources reported clashes on 3 September in the
Prizren area and near the Prishtina-Peja highway and the
Gjakova-Klina road. The Kosova Information Center, which
is close to Rugova, noted heavy Serbian attacks in the
vicinity of Malisheva, Klina, Gjakova and Rahovec. No
independent confirmation of either side's accounts of
casualties or kidnapping victims is available. In other
news, the Austrian Interior Ministry said in a statement
the previous day that some 2,800 Kosovars have asked for
political asylum in Austria since the beginning of
August. The report added that only about 10 percent of
the applicants have been able to prove they were victims
of repression by the Serbian authorities. Those
applicants are thus the only ones to receive asylum. PM

RUEHE WARNS MOSCOW ON KOSOVA. German Defense Minister
Volker Ruehe on 2 September said that Russia must play
what he called a more constructive role in resolving the
Kosova problem. Ruehe suggested that Moscow is not
applying sufficient pressure on Belgrade to seek a
negotiated solution and that Russia is preventing the UN
Security Council from taking effective action to end the
crisis in Kosova, RFE/RL's South Slavic Service
reported. Ruehe and Kinkel both told the Bundestag that
Milosevic must understand that NATO is ready and able to
take military action in Kosova if the Atlantic alliance
decides to do so, the "Sueddeutsche Zeitung" added. In
Brussels, NATO ambassadors agreed to offer
transportation and communications assistance to
international relief organizations to provide aid to
Kosovar refugees. In Bonn, the German government
announced that it has made $4.5 million available for
refugee relief work, primarily in Montenegro. PM

GARROD APPEALS TO CROATS. Sir Martin Garrod, who is the
international community's chief representative in
Mostar, appealed on 2 September to the Croatian
Democratic Community (HDZ) to support the return of
Croats to nearby areas under Muslim control. He called
on HDZ leaders to distance themselves from recent
remarks by Ivan Prskalo, who is the Croatian co-mayor of
Mostar. Prskalo said that Croats should not return to
their former homes in Grabovica and Dreznica until
Muslim troops leave those areas. Meanwhile in Zagreb, a
spokesman for the OSCE said that the Croatian
government's commission for refugee return has not done
enough to expedite the return of Serbs, especially in
the Knin, Obrovac, and Vukovar regions. PM

ALBANIAN GUNMEN FORCE POLICE TO WITHDRAW... Police on 2
September withdrew from the southern village of Lazarat
after eight officers were injured while trying to
recapture the village from armed gunmen (see "RFE/RL
Newsline" 2 September 1998). Hundreds of special police
had made two attempts to capture a group of armed
villagers who halted traffic along a main north-south
road the previous day, but they gave up those attempts
after coming under heavy gunfire. Gjirokastra's police
chief Edmond Stepa said all units have withdrawn to
Gjirokastra, adding that "police forces will stay here
until the situation calms down." He gave no further
explanation for the withdrawal. In Tirana, Interior
Minister Perikli Teta blamed the disturbances on
"elements of anarchy and terror, who will be punished by
all means," Reuters reported. He called on "the people
of Lazarat to distance themselves from the bandits....
The Albanian police [will] not back down in face of
crime," Teta said. FS

...WHILE GUNMEN'S MOTIVE REMAINS UNCLEAR. Observers
noted that it is not clear whether the main motive for
the gang's actions is political or criminal. OSCE
representative Tim Isles said in Tirana that he has "no
indication that it was political," adding that "I
believe it was a gang doing hold-ups on the road,
something which has happened before, and then things
escalated." "Rilindja Demokratike," however, published a
Democratic Party statement on 2 September accusing the
Socialist-led government of conducting "communist
persecution" against "the marvelous [sic] inhabitants of
Lazarat." It added that "the clique of [Prime Minister
Fatos] Nano with its anti-Lazarat behavior shows its
true face of crime, political hatred, and unscrupulous
hostility toward its political opponents." FS

BOMB DAMAGES SOCIALIST PARTY OFFICES. An explosion
during the night of 2 to 3 September badly damaged the
headquarters of the Socialist Party in the northern town
of Lezha, dpa reported. Four days earlier, a bomb went
off near Socialist offices in Shkodra (see "RFE/RL
Newsline," 1 September 1998). Meanwhile in Tirana,
Pandeli Majko, who heads the Socialist faction in
parliament, said that "the developments in Kosova make
it necessary [for all parties] in Albania to cooperate
and [conduct a] dialogue." He accused Democratic Party
leader Sali Berisha of trying deliberately to "increase
tensions" between the governing coalition and the
opposition. He charged that some of Berisha's recent
statements calling for a confrontation with the
government have "nothing to do with [the normal conduct
of] a democratic opposition and are in contradiction to
our national interests," ATSH reported (see "RFE/RL
Newsline," 1 September 1998). FS

IMF CALLS FOR 'TOUGH MEASURES' IN ROMANIA. The IMF chief
negotiator for Romania, Poul Thompsen, met with Finance
Minister Daniel Daianu on 2 September to discuss
envisaged cuts in the budget, RFE/RL's Bucharest bureau
reported. Thompsen said after the meeting that "very
tough measures" are necessary in order to halt the
"unprecedented" budget deficit and that Romania must
also raise taxes. Daianu said that under current
circumstances, a deficit totaling 3.6 percent of GDP
cannot be achieved. Unless very strict additional
measures are immediately introduced, Romania risks
jeopardizing even its "small achievements" to date, such
as low inflation, he commented. MS

ROMANIAN PARLIAMENTARY COMMISSION REJECTS ETHNIC
HUNGARIAN DEMANDS... The Chamber of Deputies' Education
Commission on 2 September rejected the amendment to the
education law, proposed by Victor Ciorbea's cabinet,
that would have set up a Hungarian-language state
university. Last December, the Senate's Education
Commission rejected that amendment but endorsed setting
up separate departments that would provide instruction
in Romanian and Hungarian. The chamber's commission
decided to allow only "sections and groups within
multicultural universities," where teaching in ethnic
minority languages is permitted. It also decided that
instruction in just one of those languages can be
offered only by private universities. Deputy Aureliu
Emil Sandulescu of the ruling coalition's National
Peasant Party Christian Democratic (PNTCD), who proposed
the resolution, said the move comes to "emphasize that
Romania is a unitary state, not a federal one." He added
that a Hungarian-language state university would signify
"a first step toward federalism." MS

...WHILE ETHNIC HUNGARIAN PARTY WARNS OF CONSEQUENCES.
Csaba Takacs, executive chairman of the Hungarian
Democratic Federation of Romania (UDMR), responded by
saying that the UDMR will now have to "reconsider its
participation in the ruling coalition" at the 5
September meeting of its Council of Representatives. The
UDMR's coalition partners had promised that the Senate's
decision would be amended by the Chamber of Deputies in
accordance with the coalition agreement. Also on 2
September, George Pruteanu, who led the opposition to
the amendment in the Senate and who has since been
expelled from the PNTCD, was replaced as chairman of the
Senate's Education Commission by PNTCD Senator Florin
Bogdan. Meanwhile, the government commission set up to
discuss ways of establishing a Hungarian state
university convened for the first time on 2 September.
MS

BULGARIAN PRESIDENT WARNS PARLIAMENT AGAINST COMPLACENCY.
Petar Stoyanov on 2 September urged the parliament to press
ahead with reforms and warned against complacency because of
the financial stability achieved over the past 18 months,
Reuters reported. In a speech to the legislature at the
opening of its fall session, Stoyanov said he is "concerned"
and does not want to "see our accomplishments wasted. They
were achieved with a lot of suffering by the Bulgarian
society." Stoyanov added that the state administration is
still "full of bureaucrats who have a strong interest in
slowing privatization and impeding the liberalization of the
economy, since they had managed to turn their positions into
a source of personal wealth." In his address to the
legislature, Prime Minister Ivan Kostov pledged that the
"toughest part" of the structural reform will be completed by
mid-1999. MS

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