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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 180, Part II, 17 September 1998


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RFE/RL NEWSLINE Vol 2, No. 180, Part II, 17 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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SLOVAK SERVICE NEWS ONLINE
Thousands are protesting staff firings at an independent TV
station as elections approach. News texts in Slovak and all
broadcasts are now available online.
http://www.rferl.org/bd/sl/slovak/index-sl.html

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Headlines, Part II

* KYIV CITY AUTHORITIES TO REIN IN PRICES ON STAPLE FOODS

* ALBANIAN PARLIAMENT TO CONSIDER LIFTING BERISHA'S IMMUNITY

* THOUSANDS MORE KOSOVARS FLEE SERBIAN ATTACKS

End Note: MACEDONIAN ECONOMIC RECOVERY IMPERILED BY
INTERNATIONAL CRISES
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EAST-CENTRAL EUROPE

UKRAINE TO USE WORLD BANK LOAN FOR PRIVATIZATION, BANKING
REFORM. Roman Shpek, head of the Ukrainian National Agency
for Development and European Integration, has said Ukraine
will spend its World Bank loan on boosting privatization and
restructuring the banking sector (see "RFE/RL Newsline," 16
September 1998), dpa reported. Shpek called the World Bank
loan "an extremely important decision that came at an
extremely important time." He added that the loan underscored
the World Bank's confidence in Ukrainian reforms. JM

KYIV CITY AUTHORITIES TO REIN IN PRICES ON STAPLE FOODS. The
Kyiv city administration has introduced limits on the prices
on a number of staple foods produced by domestic firms,
Reuters reported on 16 September. The decision prohibits
increasing the retail price of bread by more than 15 percent
above its wholesale price. Retail prices for oats, pasta,
butter, and milk are not allowed to increase by more than 25
percent over their wholesale prices. The move intends to
soften the impact on consumers of the de facto devaluation of
the hryvnya earlier this month. JM

BELARUSIAN PARENTS PROTEST INCREASING NUMBER OF RUSSIAN
SCHOOLS. Some 200 parents and public activists rallied in
Minsk on 16 September to protest the increasing use of
Russian as the main language of instruction at Belarusian
schools, RFE/RL's Belarusian Service reported on 16
September. The demonstrators pointed out that the number of
Belarusian schools has fallen significantly under the
presidency of Alyaksandr Lukashenka. In 1993, 58 percent of
the first-graders in Minsk began their education in
Belarusian, while in 1998 that figure had plummeted to 7
percent. The corresponding figures for Belarus as a whole are
76 and 28 percent. The protesters believe that the main
reasons for the declining Belarusian-language education are
the state policy of promoting education in Russian and the
lack of Belarusian-language universities in Belarus. JM

TALLINN STOCK EXCHANGE PLUNGES FOR SECOND DAY. The Tallinn
stock exchange plunged for the second consecutive day on 16
September, resulting in a two-day combined loss of 17.8
percent of its value. Analysts attributed the fall to
uncertainty over several major banking mergers and
acquisitions taking place in Estonia, combined with the
effects of the Russian economic crisis, according to dpa. A
local dealer told ETA that the trend can be reversed only by
renewed interest among foreign investors. JC

RURAL PARTIES THREATEN TO FORM ELECTORAL BLOC WITH CENTER
PARTY. Estonia's rural parties, which form the ruling
coalition with the Coalition Party, are threatening to set up
an electoral bloc with the Center Party unless the Coalition
Party agrees to consider farmers' interests, ETA reported on
16 September. According to a member of the Center Party's
parliamentary caucus, the Centrists are opposed to the idea
but may review their position if a right-wing electoral bloc
is formed for the March 1999 general elections (see "RFE/RL
Newsline," 16 September 1998).  Leaders of the Coalition
Party and the  rural  parties have been negotiating for
several months about reviving their electoral bloc but have
not yet reached an agreement. JC

RUSSIAN BALTIC FLEET READY TO ACCEPT LITHUANIAN AID? Citing a
Kaliningrad newspaper on 16 September, BNS reported that the
Russian Baltic Fleet is ready to accept humanitarian aid from
Lithuania. The head of the fleet's food service is quoted as
saying that Lithuanian suppliers have sent food worth $1
million to the fleet but that the fleet has been unable to
pay for those supplies because it is no longer receiving
funds from Moscow. He said that the fleet will now accept
humanitarian aid in order to settle its debt to Lithuanian
suppliers. JC

POLISH DAILY SLAMS 'CLUMSY' OFFER OF AID TO RUSSIA. The 16
September issue of "Rzeczpospolita" criticized the government
for making a "clumsy" offer of food aid to Russia (see
"RFE/RL Newsline," 14 September 1998). The offer, which the
government published beforehand in the media, was to be
officially made by Polish Interior Minister Janusz
Tomaszewski during his 14-15 September visit to Moscow.
Russian Interior Minister Sergei Stepashin said after talks
with Tomaszewski on 15 September that Russia does not need
humanitarian aid from Poland. Tomaszewski hinted that the
proposal of aid was not even discussed during his visit.
"Rzeczpospolita" commented that if the proposal had been made
with greater discretion and through official channels, it
could have been viewed differently in Moscow. JM

CZECH PRESIDENT WELCOMED AT WHITE HOUSE.   Welcoming his
Czech counterpart to  the White house on 16 September,
President Bill Clinton said that Vaclav Havel is a "voice of
dazzling eloquence" for freedom and that the world "owes a
great deal...to the inspiration provided by a single
man...who for years spoke when it mattered, often at enormous
personal costs." The two presidents discussed regional
security issues, the Czech Republic's impending membership in
NATO, the fight against terrorism, the Kosova crisis, and the
situation in Russia, dpa reported. Havel told journalists at
a joint press conference after the talks with Clinton that
the economic and political situation in Russia in
"complicated" and will probably still be so "in 50 and in 100
years." Despite the ongoing crisis in the country, he said he
does not see "anything dangerous" in it and believes it is
"better to have an ill Russia than a healthy Soviet Union."
MS

PROTESTS CONTINUE OVER DISMISSALS AT SLOVAK PRIVATE TV...
Former President Michal Kovac, addressing a rally in
Bratislava protesting the dismissal of staff at the private
Markiza television station (see "RFE/RL Newsline," 16
September 1998), praised the courage of the station's
director-general, Pavol Rusko, and his colleagues, saying
they showed the world that the country's citizens will not
"give in to anti-democratic, mafia-like tactics," RFE/RL's
Bratislava bureau reported. The demonstrations began on 15
September and spread to other cities as well. Speakers for
the opposition said the dismissals are aimed at stemming
criticism of the HZDS just 10 days before the parliamentary
elections. Premier Vladimir Meciar told a rally of his
supporters on 15 September in Trnava that "the government is
not involved in what is happening at Markiza." MS

...AS HUMAN RIGHTS GROUP ACCUSES STATE TV OF CAMPAIGN ABUSES.
The Vienna-based International Helsinki Federation (IHF) said
on 16 September that Slovak Television's pro-government bias
in covering the elections has been "egregious." The human
rights group cited the findings of the Memo 98 independent
monitoring organization (see "RFE/RL Newsline," 11 September
1998). The IHF said this kind of campaign coverage violates
the European Convention on Human Rights and Slovakia's
commitments to the UN and the OSCE. It also criticized
Slovakia's failure to grant accreditation to some domestic
and international observers who applied for it. MS

SOUTHEASTERN EUROPE

ALBANIAN PARLIAMENT TO CONSIDER LIFTING BERISHA'S IMMUNITY.
The Albanian parliament announced on 16 September that it
will discuss the issue of lifting former President Sali
Berisha's immunity as a deputy, Reuters reported. Prime
Minister Fatos Nano has accused Berisha of leading an attempt
to overthrow the government and says he should be arrested.
Spartak Braho, the head of the parliamentary commission
investigating the case, said that Berisha will have the
opportunity to appear before the full assembly and respond to
the charges against him. Berisha called attempts to take
legal action against opposition leaders "an act of madness."
He said he does not want to "preserve any immunity" for
himself "in this state without laws." Berisha repeated claims
that Nano is responsible for the murder of Democratic Party
deputy Azem Hajdari (see "RFE/RL Newsline," 14 September
1998). PB

NANO INSISTS ALBANIANS SUPPORT HIS GOVERNMENT. Albanian
Premier Fatos Nano said on 16 September that the majority of
Albanians consider his government to be "legitimate," AFP
reported. Nano made his comments in response to calls from
opposition leader Berisha for him to resign (see "RFE/RL
Newsline," 16 September 1998). PB

OPPOSITION DEFIES GOVERNMENT, HOLDS RALLY. A march by several
thousand supporters of the opposition, led by Berisha, in
Tirana on 16 September passed without incident, AFP reported.
After police prevented the demonstrators from moving to the
central Skanderbeg Square,  a rally was held in front of the
opposition Democratic Party headquarters. As many as seven
people have died and 76 have been wounded in violence on the
streets of Tirana since 13 September. Berisha described the
Nano government as a "dictatorship" and called for a national
day of protest to be held on 18 September. PB

THOUSANDS MORE KOSOVARS FLEE SERBIAN ATTACKS. Several
thousands of ethnic Albanians have left their homes northeast
of Prishtina after the shelling of several villages by
Serbian forces, AP reported on 16 September. Officials of the
UN refugee agency said they saw houses burning in some of the
villages. Renewed attacks in the central region of Drenica
were also reported. There were no independent reports on
casualties in either area. Northeast Kosova is considered to
be one of the last refuges of the Kosova Liberation Army
(UCK). PB

HILL, TALBOTT AT NATO MEETING ON KOSOVA. U.S. Ambassador to
Macedonia Christopher Hill flew from Prishtina to Brussels on
16 September to brief NATO ambassadors on the situation in
the Serbian province, Reuters reported. U.S. Deputy Secretary
of State Strobe Talbott also attended the meeting. Hill,
Washington's top envoy for Kosova, told officials that the
continued military action by Serbian forces is complicating
his efforts to forge a political accord aimed at ending the
violence and allowing Kosova some form of interim autonomy.
The UCK condemned Hill's attempts to secure the interim
accord, saying it considers such an agreement "national
treason." In London, British Foreign Secretary Robin Cook
ordered an immediate ban on Yugoslav airline flights to
Britain, citing the "sharply deteriorating humanitarian
situation" in Kosova. The U.K. had previously said it could
not join an EU ban on such flights. PB

HARD-LINE SERBIAN PARTIES DEMAND RELEASE OF PRELIMINARY
RESULTS. The Bosnian Serb Radical Party and the Serbian
Radical Party released a joint statement on 16 September
calling on the OSCE to issue the preliminary results of the
Bosnian general elections, Beta reported. "The results are
known but [the] OSCE is silent," said the statement. The
previous day, the OSCE canceled the planned release of
preliminary results. OSCE spokeswoman Nicole Szulc said "the
people have spoken in this country. Bosnia and the OSCE will
respect what they said--regardless of what they said." She
said final results will be issued in four to seven days.
Several observers are predicting victories for hard-line
candidates contesting many of the key posts. PB

HUMAN RIGHTS GROUP CONDEMNS MONTENEGRO. The U.S.-based Human
Rights Watch has criticized the Montenegrin government for
not allowing ethnic Albanian refugees to remain in
Montenegro, an RFE/RL correspondent in Washington reported on
16 September. The organization said the closing of
Montenegrin borders to the refugees in effect trapped them.
She also condemned the expulsion of some 3,200 ethnic
Albanians to Albania. In Sarajevo, the UNHCR said that about
3,000 refugees from Kosova have been registered and are being
cared for in Bosnia-Herzegovina. A spokesman said that as
many as 15,000 Kosovar Albanians have fled to Bosnia but that
not all have registered with the authorities. PB

OSCE OFFICIAL PRAISES, ENCOURAGES CROATIA. Tim Guldimann, the
head of the OSCE mission in Croatia, said on 16 September
that Zagreb had gained "positive momentum" both in its
political development and in its cooperation with the
international community, AP reported. Guldimann welcomed the
steady return of Serbs to Croatia though he said the flow
could be increased. He also said there is a severe need on
the part of the government to reform state-controlled
television and to rectify the parts of electoral legislation
that favor the ruling party. Also in Zagreb, Croatian
President Franjo Tudjman awarded former British Prime
Minister Margaret Thatcher  the Grand Order of King Dmitar
Zvonimir for her contributions in helping secure the
"establishment of a free and independent...Croatian state."
PB

ROMANIAN FOREIGN MINISTER ON MINORITY IN UKRAINE. Andrei
Plesu on 16 September appealed to journalists to display more
"seriousness and responsibility" when reporting on the
situation of the Romanian minority in Ukraine, RFE/RL's
Bucharest bureau reported. Referring to the campaign in the
media on alleged infringements of that minority's rights,
Plesu said reports are often "exaggerated, based on
insufficient evidence, and even groundless." He said that the
Romanian minority in Ukraine is "unfortunately divided into
numerous rival factions" and that it was one of those groups
that proposed changing the official designation of its
language from "Romanian" to "Moldovan." The Ukrainian
authorities, he noted, have not acted on that proposal. In
other news, Valeriu Tabara, leader of the nationalist Party
of Romanian National Unity, said on 16 September that
Hungarian Premier Viktor Orban must be declared "persona non
grata" in Romania for  allegedly backing demands for Szekler
autonomy in Transylvania. MS

ROMANIAN FINANCE MINISTER STILL OPPOSED TO HELICOPTER DEAL.
Daniel Daianu on 16 September said that his opposition to the
deal with Bell Helicopters Textron is "unchanged." Daianu
said the company's readiness to accept part of the payment in
Romanian currency "does not reduce the deal's costs,"
RFE/RL's Bucharest bureau reported. In other news, Romania on
16 September joined the EU boycott on flights to and from
Yugoslavia. MS

MOLDOVAN PARLIAMENT BUREAU REJECTS NO-CONFIDENCE MOTION. The
Permanent Bureau of the Moldovan parliament on 16 September
voted against placing the no-confidence motion submitted by
the Party of Moldovan Communists (PCM) on the legislature's
agenda, the independent Flux agency reported. PCM deputy
Viktor Zlachevsky said the  decision was "arbitrary," as the
initiative had met all the  constitutional provisions on
initiating a no-confidence motion (see "RFE/RL Newsline," 15
September 1998). MS

MOLDOVAN PRESIDENT IN BULGARIA. Petru Lucinschi met with
Bulgarian Prime Minister Ivan Kostov, Sofia Mayor Stefan
Sofiyanski, and parliamentary  chairman Yordan Sokolov in
Sofia on 16 September,  the independent Moldovan Infotag
agency reported. The previous day, Lucinschi and President
Petar Stoyanov signed agreements on avoiding double taxation
as well as on cooperation in transportation, fighting
organized crime, terrorism prevention. MS

FIRST TRANSPORT OF KOZLODUY NUCLEAR WASTE LEAVES BULGARIA.
The first train carrying nuclear waste from the Kozloduy
plant left Bulgaria on 16 September, Infotag reported. The
cargo will be transferred to a special vessel on the River
Danube and will transit Moldovan and Ukrainian territory  en
route to Russia. The four countries had agreed to the transit
in agreements signed several months ago. The Moldovan
parliament approved the transit after an acrimonious debate
last month. In other news, the Bulgarian parliament on 16
September approved an article in a draft law that would ban
tobacco advertising from radio and television and through
sponsorship of televised sports events. The ban is part of a
law restricting the advertising of addictive substances,
including alcohol, which the parliament expects to finalize
later this year, AP reported.

END NOTE

MACEDONIAN ECONOMIC RECOVERY IMPERILED BY INTERNATIONAL
CRISES

Michael Wyzan

	This year has finally seen an invigorated Macedonian
economy, with industrial production up by 9.3 percent during
January-July relative to the same period in 1997, and gross
domestic product (GDP) projected to rise by 5 percent this
year. Such rapid growth follows an unusually prolonged
stagnation. GDP declined from independence in 1991 through
1995, before rising by only 0.8 percent in 1996 and 1.5
percent in 1997. At the end of last year, GDP was less than
73 percent of the 1990 level.
	Inflation is virtually nonexistent, with retail prices
rising by a mere 0.85 percent in the year to August 1998, far
below the 4.6 percent achieved in 1997 and the 3 percent
projected for 1998 (both figures for December-to-December).
The money supply, broadly defined, grew by 21 percent in the
year to March 1998, after falling by 1.4 percent in the
preceding 12 months. The combination of faster money growth
and slower inflation is a good sign, showing that Macedonians
are increasingly willing to hold onto denars.
	The government budget remains nearly balanced. The
government attributes this year's strong revenue performance
to the improved economy, a reduction in tax rates (which has
decreased the incentive for tax evasion), and improved tax
administration.
	The economic upturn is one of the reasons for a widening
of the trade deficit from $147 million in the first half of
1997 to $260 million in January-June 1998: imports rose from
$723 million to $890 million over this period, while exports
increased only from $576 million to $630 million.
	This trend is worth watching, since it may suggest a
growing current account deficit, which was $277 million, a
relatively high 7.3 percent of GDP, in 1997. However, the IMF
argues that the current account imbalance is overstated
because of under-reporting of remittances from abroad.
	One sector of the economy that, at least as of the end
of 1997, shows no signs of improvement is the labor market.
Unemployment rose from 175,526 in November 1993 to 257,666 in
December 1997. A  labor force survey in April 1997  found a
staggering 36 percent unemployment rate.
	This year, the government has yet to publish
unemployment data, although the MILS news agency has reported
a figure of 268,900 for March. Considerable publicity has
been given to a 1997 law on employment creation, which went
into effect on 1 January. That law, among other things,
exempts employers from paying social insurance contributions
for new workers hired.
	The IMF's executive board approved in mid-June release
of the second annual loan (worth $24 million) under a three-
year, $73.2 million facility agreed to in November 1996. The
fund noted the progress made on macroeconomic stabilization
but stressed the need to promote share trading and encourage
ownership of enterprises by outsiders, tighten prudential
regulation of banks, introduce a value-added tax, remove
barriers to trade and foreign investment, and increase social
assistance payments and better target them at the needy.
	Business circles are less happy with the situation than
the IMF, concerned about the high level of enterprise
illiquidity, which they blame on the high interest rates
charged by banks. The average rate charged on bank credits in
1997 was 21.4 percent, while inflation was in the low single
digits. The national bank has kept rates high in order to
defend the denar's fixing to the German mark and encourage
capital inflows.
	The debate in Macedonia about whether another
devaluation of the denar is necessary (the national currency
was devalued by 14 percent against the German mark in July
1997) will be reinvigorated by the first half's foreign trade
figures and by the reverberations of the crises in Russia and
East Asia. Further, the Chamber of Commerce is asking for
antidumping measures to protect the economy from cheap
imports from countries whose exchange rates have plummeted.
	Macedonia's newfound economic dynamism is fragile for
reasons beyond macroeconomics and international finance.
General elections are scheduled for 18 October, with polls
putting the nationalist Internal Macedonian Revolutionary
Organization-Democratic Party for Macedonian National Unity
(VMRO-DPMNE) and its coalition partners well ahead of the
Social-Democratic Union of Macedonia (SDSM). The formerly
communist SDSM has ruled Macedonia in coalition with other
parties, including one representing ethnic Albanians, since
independence.
	The SDSM's economic policy is highly regarded--at least
by the IMF--and has been implemented by a stable group of
technocrats, some of whom are ethnic Albanian, including
Finance Minister Taki Fiti. A government led by the VMRO-
DPMNE would mean wholesale personnel changes, bringing in
inexperienced officials and probably ending the practice of
awarding ministries to ethnic Albanians. With the turmoil in
Kosova continuing, and the Kosova Liberation Army putting
down deeper roots in Macedonia, this is the most alarming
prospect of all.

The author is a research scholar at the International
Institute for Applied Systems Analysis in Laxenburg, Austria.

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