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RFE/RL NEWSLINE Vol. 2, No. 216, Part II, 9 November 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 216, Part II, 9 November 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 * IMF POSTPONES DECISION ON NEXT LOAN TRANCHE TO UKRAINE * U.S. SAYS HAGUE TRIBUNAL MUST HAVE ACCESS TO KOSOVA * SERBIAN MEDIA CLAMPDOWN CONTINUES End Note: RUSSIAN CRISIS FUELS LATVIAN ECONOMIC WORRIES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx EAST-CENTRAL EUROPE IMF POSTPONES DECISION ON NEXT LOAN TRANCHE TO UKRAINE. An IMF mission that arrived in Kyiv last week to examine Ukraine's implementation of the $2.2 billion loan program has reached "negative" conclusions, Ukrainian News reported on 9 November. While citing Ukraine's successes in stabilizing the national currency and restructuring foreign debts, the IMF said major setbacks are decreasing budget revenues, too strict controls on state prices, the lack of administrative reform, and the slow pace of reform in the energy and agricultural sectors. The IMF also warned the government against a money emission, saying it might lead to higher inflation and aggravate the situation on the financial market. The IMF mission left Ukraine without signing any accord on the provision of the next loan tranche. An unnamed IMF representative told the agency that the decision on the tranche "depends on further negotiations" and may be made in late November. JM UKRAINE ASKS FOR UN, EU HELP TO FLOOD VICTIMS. Foreign Minister Borys Tarasyuk has sent letters to the UN and EU asking for humanitarian help to victims of the floods in Ukraine's Transcarpathian region, dpa reported on 8 November. Heavy rains have caused five mountain rivers to inundate some 120 settlements in Zakarpatska Oblast, forcing some 25,000 people to leave their homes. The Ukrainian government has provided $600,000 for rescue efforts, while neighboring Hungary donated $250,000 to help the flooded area. JM UKRAINIAN COMMUNISTS MARK OCTOBER REVOLUTION ANNIVERSARY... Some 4,000 people led by Communist leaders marched through Kyiv on 7 November to celebrate the 81st anniversary of the Bolshevik revolution in Russia, AP reported. Communist Party Secretary Petro Symonenko told the crowd that "those in power in Ukraine are waging war against their own people and living on the money that was stolen from us." The Kiev demonstrators called for Ukraine's reunion with Russia and Belarus as the first step toward creating "a new union of brotherly independent Soviet republics." Rallies were also held in other Ukrainian cities, drawing 5,000 people in Kharkiv and 2,000 in Sevastopol. JM ...AS DO THEIR BELARUSIAN COUNTERPARTS. Some 4,000 people took part in a 7 November demonstration in Minsk to mark the anniversary of the 1917 Bolshevik revolution, Belarusian Television reported. Viktar Chykin, secretary of the Communist Party of Belarus, told the crowd that Belarus has maintained "the achievements of the October Revolution" to a greater degree than any other former Soviet republic, Belapan reported. According to Chykin, this explains why Belarusian Communists support Lukashenka's policies "so actively." Elsewhere in Belarus, some 5,000 people took part in a 20- minute rally in Homel and 1,000 in a meeting in Hrodna. JM LUKASHENKA CALLS ON WEST TO ABANDON 'DOUBLE STANDARDS.' Belarusian President Alyaksandr Lukashenka said at a 6 November meeting with Robert Antretter, vice president of the Parliamentary Assembly of the Council of Europe, that the West should abandon its policy of double standards with regard to Belarus, Belarusian Television reported. Lukashenka added that Belarus meets all standards applied to nations represented in the assembly. "The level of democracy, the protection of our people's rights is not one bit lower than in the countries that have recently joined this respected and very influential organization," Lukashenka told Antretter. Belarus was excluded from the assembly after the 1996 referendum, which virtually abolished the division of powers and the independence of the judiciary in Belarus. Antretter said he visited Belarus "to determine whether any grounds have appeared for the start of a dialogue" between the EU and Belarus, Reuters reported. JM ESTONIAN RIGHT-WING PARTIES DISCUSS ELECTION ALLIANCE. The leaders of three small right-wing parties--the Moderates, the People's Party, and the Fatherland Union--met on 8 November to discuss cooperation during the election campaign, ETA reported. Agreement was reached on a program for a possible election alliance, which focuses on education and family policies. The previous day, Prime Minister and Coalition Party leader Mart Siimann and Center Party head Edgar Savisaar failed to reach an agreement on the abolition of election alliances. The Centrists have sought to do away with such alliances, while the Coalition Party opposes such a move. The parliament is due to discuss a bill that would ban election blocs on 17 November. JC IMF URGES TALLINN TO ADOPT RULES ON STABILIZATION FUND. IMF representative to Estonia Dimitris Demekas told BNS on 6 November that Tallinn should adopt as soon as possible regulations for using the country's economic stabilization fund. He added that it is to be expected that suggestions will be made about the fund's use as long as no rules are in place. "I think the first priority would be to establish the rules what the funds should be used for and then we can start discussing whether it should be used for agriculture, for building roads, or for bailing out Maapank or whatever," he said. The IMF advised establishing the 1.3 billion kroon (some $100 million)) stabilization fund one year ago to avoid the overheating of the economy and to accumulate resources in the event of a macroeconomic downturn. JC POLISH COALITION THREATENED BY DISPUTE OVER TAX LAW. The ruling coalition of the Solidarity Electoral Action (AWS) and the Freedom Union (UW) appears to be in crisis after the AWS voted against the UW on 6 November to push through tax breaks in the 1999 income tax law, Polish media reported. Under the AWS tax plan, families with three children will receive tax exemptions in 1999, those with two children in 2000, and those with one child in 2001. Finance Minister Leszek Balcerowicz commented that the AWS voted "against their own government, their own prime minister, and their own budget." The UW asked for a recess and demanded that the AWS reject the passed law and quickly introduce a new one without exemptions for families. A UW spokesman said the stability of the coalition "depends on the AWS," adding that the UW does not intend to defend the coalition "at any price." JM HAVEL CRITICIZES SENATE'S RECORD... One week ahead of the elections for the Senate, President Vaclav Havel has criticized the chamber's performance for failing to gain enough prestige and authority during its two-year existence, AP reported on 8 November. In an interview on Czech Television, Havel said he had hoped the upper chamber would not be "merely a body passing laws" but one "thinking about them in broad terms." Owing to its failure to perform such a role, the Senate is viewed by many people as "the lower, number two chamber, which is redundant and costs money," he said. MS ...VISITS BRATISLAVA. The previous day, Havel was in Bratislava to meet with new Slovak Prime Minister Mikulas Dzurinda and members of his cabinet. Havel proposed that the Visegrad group be revived at a meeting of its premiers and presidents in Bratislava, "where this regional cooperation began". He added that such a meeting will become possible "when Slovakia has a president." Dzurinda welcomed "the idea of a restoration of the Visegrad Four," according to CTK. With regard to the still unsolved problem of the division of former federal property between the two countries, Havel said he considers this a matter for the two governments to solve, noting that he recommends that the Czech cabinet be "as generous as possible." Accompanied by former Slovak President Michal Kovac, Havel also visited the grave of Prague Spring leader Alexander Dubcek. MS SLOVAK PREMIER MEETS AUSTRIAN CHANCELLOR. Dzurinda met with Austrian chancellor Viktor Klima on 6 November in Vienna to discuss, among other things, the disputed Mochovce nuclear plant. Dzurinda expressed confidence that an understanding can be reached, while Klima said he believes that under the new government, there will be "a new era of openness" in Slovakia. In an interview with Reuters on 6 November, Dzurinda said his government intends to move quickly to meet two concerns expressed during talks he had at EU headquarters in Brussels one day earlier, namely that a law on national minority languages be drawn up and that an investigation into the 1995 abduction of former President Kovac's son be launched. MS HUNGARY REJECTS EXTENSION OF EU ADMISSION DATE. Hungarian Foreign Minister Janos Martonyi told reporters in Stockholm that there is no reason to amend his country's "ambitious, but not unrealistic expectations" that it will be granted EU membership in 2002. Martonyi said "competent officials of the European Commission do not speak about major delays in membership," adding that Hungary will firmly argue its own goals regarding enlargement. The foreign minister was responding to a statement by German Parliamentary Assembly member Otto Graf Lambsdorff that Hungary's admission may be delayed until 2005. MSZ SOUTHEASTERN EUROPE U.S. SAYS HAGUE TRIBUNAL MUST HAVE ACCESS TO KOSOVA. David Scheffer, who is Washington's chief envoy dealing with war crimes, said in Belgrade on 7 November that "it is the unanimous view of all the Security Council members that the [Hague-based war crimes] tribunal investigators should have full authority to do their job" in Kosova. He added that the question of access to Kosova for the investigators "is not a debatable issue." He spoke at a conference on war crimes sponsored by non-government organizations in the Serbian capital on 7-8 November. The previous week, Yugoslav authorities denied visas to top officials of the Hague court to go to Kosova (see "RFE/RL Newsline," 5 November 1998). On 7 November, the Yugoslav Justice Ministry issued a statement stressing that Kosova is Yugoslavia's internal affair and outside the court's jurisdiction. PM SERBIAN MEDIA CLAMPDOWN CONTINUES. A Belgrade court ended hearings against the independent daily "Dnevni Telegraf" on 8 November, RFE/RL's South Slavic Service reported. Bratislava Morina, who heads the Serbian government's refugee program and who belongs to the hard-line United Yugoslav Left, brought the case against the newspaper, which the Belgrade authorities recently shut down and which is now published in Montenegro. Morina sued the paper for publishing an advertisement by the opposition student movement "Resistance." In related news, Resistance issued a press release on 6 November in which it reported that police arrested four students in Belgrade two days earlier for writing anti-government graffiti. The statement added that the students went on trial "immediately" and received 10 days each in prison. Resistance called for their release. PM MONTENEGRO ISSUES DECREE ON MEDIA FREEDOM. The Montenegrin government issued a decree on 6 November guaranteeing full freedom to local and foreign media. The document pledges that foreign news agencies and journalists will be able to work unhindered and that local radio stations may rebroadcast foreign programs if they do not exceed 30 percent of the local station's programming. The Montenegrin government strongly opposes many policies of Yugoslav President Slobodan Milosevic, which it regards as anti-democratic and against Montenegro's fundamental political and economic interests. Several publications recently banned in Serbia are now based in Montenegro. Critics of the Montenegrin government charge, however, that the Montenegrin media are not free to criticize President Milo Djukanovic or to write about corruption. PM INCIDENTS CONTINUE IN KOSOVA. Two Serbian policemen went missing in southwestern Kosova on 6 November. Their police colleagues have since been conducting a search for them. Also on 6 November, some five Kosovar guerrillas died in a shoot- out with police in southwestern Kosova. It is unclear if the incidents were linked, AP reported. In Prishtina on 7 November, representatives of Kosovar Serbs insisted that any future autonomy for Kosova include autonomy for Serbs from local ethnic Albanian rule. The Serbian representatives said that there can be no political settlement in Kosova without the Serbs' approval and that Milosevic does not have the right to sign agreements in their name. Also in the Kosovar capital, some 11 British monitors "with military backgrounds" arrived on 6 November, Reuters noted. PM HILL MEETS WITH UCK FIGHTERS. U.S. Ambassador to Macedonia Chris Hill, who is also Washington's chief envoy in the Kosova crisis, held what Reuters described as "secretive talks...[in a] cloak-and-dagger atmosphere" with representatives of the Kosova Liberation Army (UCK) in Dragobilj on 6 November. UCK spokesman Jakup Krasniqi said afterward that the talks were "fruitful" but gave no details. Hill "avoided" journalists and left immediately after the meeting, Reuters added. PM MACEDONIAN COALITION TALKS TO BEGIN. A spokesman for the Democratic Party of the Albanians (PDSH) said in Skopje on 6 November that party leader Arben Xhaferi will begin discussions this week with Ljubco Georgievski, who is most likely to be the next prime minister, on the PDSH's joining the new government (see "End Note," "RFE/RL Newsline," 6 November 1998). The PDSH spokesman said that his party noted that Georgievski and his ally Vasil Tupurkovski "created a positive climate in the [recent] election campaign and did not instigate inter-ethnic hatred." The spokesman stressed that the PDSH believes that improving interethnic relations is the "key to economic development." Georgievski and Tupurkovski campaigned on a platform of ending corruption and promoting economic growth. PM WESTENDORP REJECTS BOSNIAN HOUSING MEASURE. The international community's Carlos Westendorp ordered "suspended" a recent regulation issued by the government of the mainly Muslim and Croatian Bosnian federation to govern property rights, RFE/RL's South Slavic Service reported on 6 November. Westendorp said that the measure would impede the right of refugees to return to their former homes, which is a fundamental right guaranteed in the Dayton agreement. In Zagreb, Croatian officials said on 7 November that Bosnian federal President Ejup Ganic, a Muslim, canceled a meeting of top Bosnian and Croatian officials originally slated for 9 November in Zagreb. The new date for signing an agreement on bilateral relations is 19 November. Federal Vice President Vladimir Soljic, an ethnic Croat, said that he doubts that the signing will take place even on that later date. PM MIXED RESULTS ON SERBIAN-CROATIAN RELATIONS. On 6 November in New York, the UN Security Council issued a statement calling on Croatian officials to provide better security for Serbs in eastern Slavonia. The next day in Belgrade, the transportation section of the Yugoslav Chamber of Commerce asked the Transportation Ministry to approve setting up 65 new bus routes to Croatia. Twenty-one Yugoslav firms expressed an interest in participating. The Belgrade authorities rejected a similar request by the Montenegrin Chamber of Commerce to connect Montenegro with Croatia by bus via the still-closed border crossing of Debeli Brijeg, RFE/RL's South Slavic Service reported. PM DID BIN LADEN TRY TO SEND FIGHTERS TO KOSOVA? Claude Cheik Ben Abdel Kader, who is a French citizen of Algerian origin and on trial for murder in Albania, told a Tirana court on 7 November that he came to Albania as "a man" of suspected Islamist terrorist Osama Bin Laden." Albanian police arrested Kader in August for allegedly killing his Albanian translator (see "RFE/RL Newsline" 19 October 1998). Kader said that he had wanted to "organize a group of 300 people to...fight in Kosova against the Serbs," adding that he considers this year's Serbian offensive "a war against Islam." Kader claimed that his translator was also a member of the Islamist group and died in an unspecified accident, AP reported. Bin Laden, who reportedly visited Albania in April 1994, is the key suspect in the bombing of the U.S. embassies in Tanzania and Kenya in August. FS GERMAN-ALBANIAN FOUNDATION BECOMES BANK. The Albanian-based Foundation for Enterprise Financing and Development (FEFAD) celebrated its transformation into a full-fledged bank on 6 November, the "Albanian Daily News" reported. The German Bank for Reconstruction and Development founded FEFAD in 1996. Since then, it has given some 750 credits worth a total of $ 5.5 million to small and medium-sized enterprises. The transformation will allow the FEFAD-Bank to receive deposits, offer bank accounts to customers, and make transfers. FS BUCHAREST MAYORAL RACE NARROWLY DECIDED. Acting Mayor Viorel Lis, running on the Democratic Convention of Romania ticket, has narrowly defeated Sorin Oprescu, the candidate of the Party of Social Democracy in Romania, in the runoff elections to the Bucharest mayoralty, Mediafax reported on 8 November. With nearly all votes counted, Lis received 50.5 percent of the vote, compared with 49.5 percent for Oprescu. Turnout was 37.8 percent. In other news, the IMF delegation that visited Romania last week said it will return for further talks in January and that the possibility of resuming loans to Romania will be examined in March, after the 1999 budget has been approved by the government. MS ROMANIA'S COUNTRY RISK RATING DOWNGRADED AGAIN. For the second time in three months, Moody's Investment Service has downgraded Romania's country risk classification, citing political instability and doubts about the country's capability to meet its $2.26 billion foreign debt servicing in 1999. Standard & Poor's downgraded Romania's risk rating last month, Mediafax reported on 8 November. The previous day, the government announced that Greece's OTE has won the bid to purchase a 35 percent stake in RomTelcom. OTE paid $675 million and will invest another $400 million over the next three years if operations grow. MS MOLDOVAN OPPOSITION MOVES NO CONFIDENCE MOTION. The Party of Moldovan Communists on 6 November moved a no confidence motion in the cabinet, citing the government's responsibility for the ongoing economic crisis, BASA-press reported. The motion must be debated within three days. Communist leader Vladimir Voronin has said his party is ready to participate in setting up a new cabinet on condition that it be allowed to appoint the prime minister. Also on 6 November, the parliament passed a new law on local administration that provides for the appointment of prefects as government representatives at the local level. The autonomous Gagauz- Yeri region will also have a prefect. MS RUSSIAN ARMS EXPORTER SUES BULGARIAN COMPANY. The state-run Russian arms exporting company Rosvooruzhenie has sued the Armimex company, and a Sofia court has ordered the seizure of state-owned Armimex's bank accounts, ITAR-TASS reported on 7 November, citing Bulgaria's "Standard." Rosvooruzhenie says Armimex has defaulted on a $3 million debt for exports to a machine tool plant, adding that the debt dates back three years. The Bulgarian Defense Ministry's engineering directorate guaranteed the debt. Armimex is the successor of that directorate. MS END NOTE RUSSIAN CRISIS FUELS LATVIAN ECONOMIC WORRIES by Katya Cengel Russia's continuing economic crisis is causing problems for those countries with which it has significant trade links. That is certainly true of neighboring Latvia. Russia is Latvia's second-largest market, and many Latvian companies are now feeling the strain. Official statistics show that before the crisis, some 15 percent of Latvia's exports went to Russia and almost 12 percent of its imports came from that country. It is widely expected that newer numbers will show a drop in trade, the effect of which is already being seen in unemployment figures. In August, Latvia's unemployment rate was officially listed as 7.4 percent, but according to the State Employment Service, it had climbed to 7.6 percent one month later. Much of the increase is being linked to the situation in Russia, as higher-than-average unemployment is being registered in those districts where exports to Russia are highest. This applies, in particular, to areas dealing with food and fish products. At a press conference last month, Latvian Welfare Minister Vladimirs Makarovs said he expects another 10,000 people to lose their jobs owing to the closure of Latvian companies as a result of the Russian crisis. He said that he expects official unemployment to reach 8.6 percent in the coming months and that "even highly qualified and well paid workers are in danger." Among the companies most severely affected are 70 that have scaled down their business or manufacturing operations. Of these, 14 have halted work altogether and 46 have partly closed. Some 2,000 employees have been laid off and another 5,000 sent on unpaid leave. Auto Elektroaparatu Rupnicas [Riga Auto Electric Apparatus Plant] is an example of a company that has been forced to reorganize. With 70 percent of its business involving shipments to Russia, the company recently reduced its 1,200 employees to 700. Arnis Ermanis Shemins, president of the company, said his firm was unable to make severance payments to its former employees, adding that further lay-offs are expected. The company has suspended exports to Russia and sales have declined by half. Some companies are encountering difficulties making other payments as well. Maiga Dzervite, deputy director- general of the State Revenue Service, says 50 companies have requested extensions for making tax payments. Of those, 15 are linked to the fishing industry, nine to the transport sector, and eight to the food and beverages industry. Latest available figures put the export of food products at 8.7 percent down on last year's level, while the export of machinery and electrical equipment has declined by 6.8 percent. Dzervite warns that worse is to come for the economy as a whole: "Revenue is decreasing, the economy is distorted, and the gross national product is going down." She added that Latvia "will survive but it will not be such a nice picture as we originally drew for 1998." Dzervite describes the effects of the Russian crisis as occurring in three stages. The first affects companies selling directly to Russia. The second hits those supplying goods to companies that export to Russia. And the third involves firms from all sectors of the economy supplying goods to Latvian consumers, since higher unemployment means smaller demand for goods and services. Some companies are resorting to barter to continue trade with Russia. OlainFarm pharmaceuticals, which formerly sold 60 percent of its products to Russia, has just signed a contract to exchange medicine for Russian coal. Currently, about 30 percent of their production is going to Russia in barter trade. The company's advertising director, Egils Grikis, credits the Russian government with the barter idea, which will allow OlainFarm to retain all its employees. The arrangement has lowered the need to find new markets, which, in itself, is a difficult process. Agris Skuja, director of the industry department for the Latvian Economics Ministry, acknowledged that Latvian products are generally "not of a sufficiently high quality for the European market," adding that "it is expensive to meet European standards." He added that the situation is "very bad" and can be improved only through a long, expensive program. Worker training needs to be enhanced, the government must provide a better legislative framework for business, companies must better explore other markets and develop marketing strategies, and Latvia must gain increased political and economic support from the EU, he argues. Some officials hope Latvia's entrance into the World Trade Organization will help provide a way forward. Latvia was accepted as a WTO member last month, and ratification by the Latvian parliament is expected within the next few weeks. The author is a Riga-based contributor to RFE/RL. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. All rights reserved. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx HOW TO SUBSCRIBE Send an email to email@example.com with the word subscribe as the subject of the message. 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