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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 228, Part II, 25 November 1998


___________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 228, Part II, 25 November 1998

***
Note to Readers: Due to the Thanksgiving holiday, RFE/RL
Newsline will not appear on 26 or 27 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

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Headlines, Part II

* KOVAC TO STAND FOR SLOVAK PRESIDENCY

* MILOSEVIC SACKS ARMY CHIEF

* ROW CONTINUES OVER ALBANIAN REFERENDUM

End Note: ROMANIAN ECONOMY CONTINUES TO PERFORM POORLY
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EAST-CENTRAL EUROPE

BELARUSIAN OPPOSITION PROTESTS 1996 REFERENDUM. Some 2,000
opposition demonstrators rallied in Minsk on 24 November to
protest the November 1996 referendum that granted Belarusian
President Alyaksandr Lukashenka nearly unlimited powers, AP
and RFE/RL's Belarusian service reported. The results of the
24 November 1996 referendum, which are believed by the
opposition and international human rights groups to have been
falsified, allowed Lukashenka to disband the legitimate
parliament and replace it with a loyal legislature. The
demonstrators demanded that the authorities reduce police
forces and bureaucracy, increase pensions and wages, return
to the 1994 constitution, hold presidential elections next
year, and improve relations with the West. "Today the results
of [Lukashenka's] policy can be observed on the empty store
shelves. What is going on in the country proves that
Lukashenka can't rule the country," Mikalay Statkevich,
leader of the opposition Hramada Social Democratic Party,
told the rally. JM

LUKASHENKA SAYS PRICE HIKES FORCED BY PRODUCERS. Lukashenka
told workers at a Minsk plant on 24 November that the recent
price hikes in Belarus were forced by the "terrible pressure"
from producers who insisted on increasing sale prices in
order to cover production costs, Belarusian Television
reported. Lukashenka warned trade union leaders against
inciting people to take part in street protests and
destabilize the situation in the country. He threatened to
disclose financial abuses by "trade union functionaries,"
who, he claimed, "feed on trade union membership fees." JM

BELARUSIAN TELEVISION SLAMS 'PROVOCATIVE' LEAFLETS.
Belarusian Television on 24 November reported that someone
has surreptitiously placed "provocative" leaflets into the
mailboxes of "many of us." The leaflets appeal to Belarusians
to help crisis-stricken Russia, which "lacks even bread and
milk." They also "appeal to all pensioners to contribute a
half or one-third of their pensions to Russia's budget and to
all workers to give up a part of their wages. Students, too,
could decline to take their stipends for the time being." A
television commentator said the leaflets were prepared by a
"Jesuit brain, morbid enough to trade such foulness with
regard to the holy cause of fraternity and friendship." JM

BELARUS DENIES VISA TO EUROPEAN PARLIAMENT DEPUTY. The
Belarusian government has denied an entry visa to Elisabeth
Schroeder, a deputy of the European Parliament, RFE/RL's
Belarusian Service reported on 25 November. Schroeder, a
member of Germany's Green Party, intended to visit Minsk from
the 25-27 November to participate in a conference. She also
reportedly planned to meet with members of the opposition
Charter '97 and visit the offices of several independent
publications. A spokesman for Schroeder said she requested
the visa on 13 November but received no response from the
Belarusian Foreign Ministry. JM

UKRAINIAN LEFTISTS DEMAND KUCHMA'S RESIGNATION. Communists,
Socialists, and other leftists held rallies across Ukraine on
24 November to protest President Leonid Kuchma's policies and
demand his resignation, AP reported. Some 700 people turned
out in Kyiv and some 2,700 in Kharkiv. "Ukraine is prepared
for a peaceful revolution and is ready to oust this anti-
people president through elections," the agency quoted a
Socialist leader as saying. JM

ESTONIAN PARLIAMENT REJECT LANGUAGE REQUIREMENTS FOR
DEPUTIES. Lawmakers on 23 November rejected an amendment to
the law on parliamentary elections that would have required
members of parliament and local government representatives to
speak Estonian sufficiently well to take part in the work of
those bodies, ETA and BNS reported. The vote was 48 to six,
with members of the United Russian faction casting a "no"
vote and many Center Party and Coalition Party members
abstaining. At the end of 1997, the parliament had included
language requirements for deputies in the language law, which
provided for delegating authority to the government to
establish such requirements That law was vetoed, however, and
the Constitutional Court later ruled that such requirements
can be stipulated only in a constitutional law, such as the
election law (see also "RFE/RL Newsline," 24 November 1998).
JC

LATVIAN COALITION PARTY SAYS 'NO' TO SOCIAL DEMOCRATS... The
Fatherland and Freedom party, one of the three coalition
parties currently involved in forming a minority government,
has said it is opposed to the Social Democrats' involvement
in the new cabinet. Fatherland spokesman Janis Kuzulis told
Reuters on 24 November that "our board has basically decided
that the Social Democrats should not participate either
within or outside of the coalition." Prime Minister-designate
Vilis Kristopans of Latvia's Way had said earlier he would
offer cabinet posts to parties outside the coalition, and
the Social Democrats were considered the most likely
candidates. Under the coalition agreement, however,
Kristopans is bound to respect the Fatherland and Freedom
party's decision. The three-party coalition has 46 seats in
the 100-strong parliament. JC

...WHILE VOTE ON CABINET TO TAKE PLACE THIS WEEK. Also on 24
November, both the People's Party, which won last month's
parliamentary elections but has not been invited to join the
coalition, and the Social Democrats announced they will not
support Kristopans's cabinet. Kristopans told BNS the same
day that he will ask both parties for their support, and he
pledged he would make every effort to ensure that the vote in
the parliament on his cabinet takes place on 26 November.
Kristopans is to submit an incomplete list of his government
lineup to the parliament on 25 November. A candidate still
has to be nominated for the agricultural portfolio. JC

LITHUANIAN TRANSPORT MINISTER RESIGNS. Algis Zvaliauskas
resigned on 24 November over a business trip to Sweden during
which he was found to have mixed public and private
interests, BNS reported. The Ethics Commission concluded
that during his 23-25 October visit to the Scandinavian
country, Zvaliauskas had no official meetings scheduled for
the second day of his visit and went hunting. The commission
ruled that this day cannot be considered part of an official
business trip. Zvaliauskas reportedly paid for the trip after
the scandal broke in the local press. The Conservative-
dominated government is now faced with the threat of having
to resign since more than half of its members have been
replaced, according to BNS. JC

BALCEROWICZ SAYS TRADE UNIONS' ROLE 'EXCESSIVELY GREAT.'
Deputy Prime Minister Leszek Balcerowicz on 24 November
warned that the trade unions' influence on the cabinet is
too large and could harm reforms, Reuters reported. His
comment followed the resignation of Transport Minister
Eugeniusz Morawski over the reform of the Polish State
Railroad (PKP) (see "RFE/RL Newsline," 24 November 1998).
Morawski is a member of the Freedom Union, which is chaired
by Balcerowicz. "The resignation signals weakness of Poland's
political system--the excessively great role of trade unions,
which may be dangerous for the country's development," the
agency quoted Balcerowicz as saying. Under pressure from the
Solidarity trade union, the cabinet recently rejected a plan
to restructure the PKP and allow for competition within the
railroad transportation sector. JM

POLAND TO PROTECT CLASSIFIED INFORMATION IN LINE WITH NATO
STANDARDS. The Polish cabinet has approved a secret data
protection bill adjusting the country's system of protecting
state and official secrets to NATO standards, PAP and Reuters
reported on 24 November. The bill, which now goes to the
parliament, creates a Secret Information Protection Committee
to decide what information is classified and to oversee its
protection. It divides secret data into four categories: top
secret, secret, confidential, and for official use and
obliges state institutions to create zones, ranging from
rooms to boxes, in which classified information should be
stored. The president, the premier, parliamentary speakers,
cabinet ministers, the central bank head, and the ombudsman
would have unlimited access to such information. JM

CZECH, KYRGYZ PRESIDENTS SIGN DECLARATION. Vaclav Havel and
his Kyrgyz counterpart, Askar Akayev, signed a cooperation
agreement in Prague on 24 November, an RFE/RL correspondent
reported. The accord pledges cooperation in trade, fighting
organized crime, and in protecting the environment. Havel
said after the signing that Kyrgyzstan deserves respect for
its tolerance, democratic leadership, and the openness in its
political and economic affairs. Akayev said Prague's joining
NATO will strengthen security in the region. Akayev also met
with Czech Prime Minister Milos Zeman, who praised the
Central Asian country as an "island of stability." PB

KOVAC TO STAND FOR SLOVAK PRESIDENCY. Former Slovak President
Michal Kovac on 24 November said he will run for the
presidency in direct elections to be held next year, the
daily "Pravda" reported. Kovac, who has no party
affiliations, said that the president "should be independent
from partisan structures." Kovac was president from 1993
until 2 March 1998. The sharply divided parliament has failed
to elect his successor in numerous votes since then. The
coalition government of Mikulas Dzurinda has agreed to alter
the constitution to allow popular presidential elections.
Kosice Mayor Rudolf Schuster is considered the favorite for
the presidency. PB

PUBLIC APPROVAL OF SLOVAK GOVERNMENT GROWS. An opinion poll
in Slovakia shows that support for the government of Mikulas
Dzurinda is growing, Reuters reported. The survey revealed
that support for the combined coalition is 65 percent,
compared with the 58 percent of the vote it won in the
September elections. Former Premier Vladimir Meciar's
Movement for a Democratic Slovakia registered the largest
drop in support, down from 27 percent in the election to 16.6
percent now. In other news, Dzurinda told students at
Bratislava's School of Economics that they do not have to
fear the introduction of university tuition fees. Dzurinda
said the government will gradually raise the higher education
budget in order to bring it closer to EU levels. PB

HUNGARIAN CONSTITUTIONAL COURT ELECTS NEW CHAIR. The
Constitutional Court on 24 November elected Janos Nemeth as
its chairman and Andras Hollo as deputy chairman, Hungarian
media reported. Nemeth replaces Laszlo Solyom, whose term
expired. Between February 1990 and July 1997 he was chairman
of the National Election Committee. MSZ

SOUTHEASTERN EUROPE

MILOSEVIC SACKS ARMY CHIEF. Yugoslav President Slobodan
Milosevic on 24 November replaced General Momcilo Perisic
with General Dragoljub Ojdanic as army chief of staff, Tanjug
reported. Perisic has repeatedly refused to take sides in the
dispute between Milosevic and the Montenegrin leadership and
has stressed that the army must stay out of politics. He
recently said in a newspaper interview that senior
politicians, whom he did not name, are responsible for the
conflict in Kosova because they failed over many years to
find a political solution to the problem (see "RFE/RL
Newsline," 20 October 1998). Perisic and other army officers
have long been resentful of what they regard as Milosevic's
favoring the paramilitary police over the army. In October,
Milosevic sacked Jovica Stanisic, his intelligence chief.
Observers in Belgrade told "RFE/RL Newsline" that Milosevic
may feel he has already lost control of Kosova and is now
preparing for a showdown with the Montenegrin leadership. PM

UCK TO COMPROMISE ON HILL PLAN? Adem Demaci, who is the
political spokesman for the Kosova Liberation Army (UCK),
said in Prishtina on 24 November that U.S. envoy Chris Hill's
plan for an interim political settlement "is far from what we
really want, but we are not rejecting it." Demaci added that
"the UCK has no illusions...and it is preparing, if need be,
to rise again in defense of the Albanian people. I am not an
optimist. I'm afraid that the Serb regime will once more
force us into spilling blood," AP quoted him as saying. PM

KOSOVARS CHARGE THAT SERBIAN FORCES ARE RETURNING. The
Democratic League of Kosova, which is the leading ethnic
Albanian political party in the province, said in a statement
in Prishtina on 24 November that Serbian paramilitary police
have recently returned to several localities that witnessed
extensive fighting earlier this year. The statement added
that the police have resumed shelling and looting in some
places. Elsewhere, the Kosovar news agency KIC reported that
harsh winter weather has led to "difficult humanitarian
conditions" in the Skenderaj, Malisheva, and Klina regions.
Among the problems identified by KIC are shortages of power,
water, medicines, food, clothing, and fuel. Some 15,000
people remain "without a roof over their heads" in the
Malisheva area, which is the poorest in Kosova, and another
30,000 are homeless in the central Klina region. PM

SERBIAN JOURNALIST CALLS PRESS LAW 'PSYCHOLOGICAL TORTURE.'
Veran Matic, who heads independent Belgrade Radio B-92 and
the Independent Association of Serbian Journalists, wrote in
"Danas" on 25 November that the month-old draconian press law
aims at meeting the "immediate political goals of the
governing fascist-Stalinist coalition" headed by Milosevic.
Matic charged that the law seeks to foment a sense of
insecurity among journalists, so that they are never quite
sure of what is permitted and what is not. Matic likened this
to "psychological torture in concentration camps" and charged
that the authorities' goal is to force journalists into
silence. PM

MONTENEGRIN PRIME MINISTER BLASTS SERBIAN PRESS POLICY. Filip
Vujanovic told a news conference in Podgorica on 24 November
that the Serbian authorities' policies toward the media only
serve to promote a lack of democracy in that country,
RFE/RL's South Slavic Service reported. He added that
Montenegrin courts will not carry out or be affected by
rulings of Serbian courts. Vujanovic stressed that he does
not feel that Yugoslavia is heading for dissolution. He added
that Montenegro opposes giving Kosova republican status equal
to that of Serbia and Montenegro. PM

MUSLIMS TELL U.S. TO 'GET OFF THEIR BACKS.' Several prominent
Bosnian Muslim political leaders, including Alija
Izetbegovic, Haris Silajdzic, and Edhem Bicakcic, signed a
letter saying that U.S. envoy Richard Sklar's alleged
accusation that "all Bosnian politicians are corrupt" is a
"lie." They added that Sklar should "finally publicly name
those he accuses of corruption or get off our backs." The
leaders stressed that "we are not thieves." Ejup Ganic, who
is president of the mainly Muslim and Croatian federation,
wrote a similar letter to Sklar, AP reported. PM

CROATIAN MINISTER ADMITS PHONE TAPPING. Interior Minister
Ivan Penic said in Zagreb on 24 November that "there is no
systematic tapping of journalists' phones or the creation of
files" on them. He added, however, that the security services
conduct "random" phone taps on people they believe to be part
of the "security problem." Membership in any particular
profession, he stressed, does "not clear someone," and "the
intelligence service has a data base of persons who in any
way were a part of the security problem." He did not
elaborate. The weekly "Globus" recently charged that the
intelligence services keep extensive files on journalists,
including information about their private lives. The
opposition and moderates within the governing Croatian
Democratic Community (HDZ) have frequently said that the
HDZ's hard-liners use the intelligence services for political
purposes. PM

SLOVENIAN COALITION'S FUTURE IN DOUBT. Results from the 22
November local elections show that Prime Minister Janez
Drnovsek's Liberal Democrats are the most popular party, with
25 percent of the total votes, up from 17 percent in the 1994
local elections. But the share of the votes for Drnovsek's
main coalition partner, the Slovenian People's Party (SLS),
fell from nearly 13 percent to just over 10 percent.
Observers in Ljubljana said that the future of the coalition
is now in doubt, the "Frankfurter Allgemeine Zeitung"
reported on 25 November. Janez Jansa's rightist Social
Democrats won the second largest number of votes, with just
over 17 percent of the total, a gain of more than 3 percent
over 1994. The big losers were Lojze Peterle's Christian
Democrats, whose share of the total fell from 18 percent to
10 percent. PM

ROW CONTINUES OVER ALBANIAN REFERENDUM. A spokesman for the
Central Election Commission said in Tirana on 24 November
that in the 22 November referendum on the constitution,
results from 14 out of 37 regions "show a turnout of 56
percent and more than 90 percent voted for the constitution"
(see "RFE/RL Newsline," 24 November 1998). Results from the
far south are due in Tirana on 25 November, and tallies from
the snow-bound north will be delivered by helicopter.
Elsewhere in Tirana, Ridvan Bode, the secretary-general of
the opposition Democratic Party, told 2,000 protesters that
"the constitution is dead but [the authorities] are trying to
exhume it by manipulating" the electoral results, Reuters
reported. PM

ROMANIAN PRESIDENT SAYS OPPOSITION BEHAVIOR THWARTING
INTEGRATION. Emil Constantinescu has accused opposition
parties of ruining Romania's image in the eyes of Western
Europe, Reuters reported on 24 November. The president,
speaking on the eve of a visit by NATO Secretary-General
Javier Solana, said that the boycotting of the parliament by
leftist and nationalist parties (see "RFE/RL Newsline," 23
November 1998) and their rejection of his offer to discuss
problems are imperiling Romania's attempts to integrate into
Euro-Atlantic structures. Former President Ion Iliescu, the
head of the Party of Social Democracy in Romania, refused a
meeting with Constantinescu on 24 November, as did other
nationalist parties. The lack of a quorum in the parliament
has stalled the passage of reform legislation. PB

ROMANIAN, HUNGARIAN CULTURAL MINISTERS SIGN PACTS. Hungarian
National Cultural Heritage Minister Jozsef Hamori and his
Romanian counterpart, Ion Caramitru, signed two framework
agreements in Bucharest on 24 November, Hungarian media
reported. One accord promotes bilateral cultural cooperation,
the other concerns the joint protection of monuments. The two
ministers agreed to develop concrete proposals on expanding
cooperation between their ministries until 2001. Hamori also
met with several representatives of the coalition Hungarian
Democratic Federation of Romania. MSZ

EXTREME COLD IN ROMANIA LEADS TO DOZENS OF DEATHS. Sixty
people have died in Romania over the past few days owing to
sub-zero temperatures, AFP reported. Police reported that 24
people were found frozen to death on 23 November alone. PB

MOLDOVA RECEIVING ELECTRICITY FROM ROMANIA. Romanian Prime
Minister Radu Vasile said his country is supplying Moldova
with 15 percent of its energy needs, AP reported on 24
November. Vasile, who recently met with Moldovan Deputy
Premier Valeriu Dolganiuc to discuss Chisinau's electricity
needs (see "RFE/RL Newsline," 23 November 1998), said Romania
can supply up to 60 percent of those needs. Moldovan
authorities said Bucharest will decide if it wants to be paid
in cash or receive instead a stake in MoldTelecom, the
national telecommunications company. The Moldovan state
electricity company is owed some 1.8 billion lei ($300
million) by industrial and domestic consumers unable to pay
their bills. PB

MULTINATIONAL BALKAN FORCE TO BE LOCATED IN BULGARIA.
Military officials from Bulgaria, Romania, Greece, and Turkey
agreed on 24 November in Istanbul that the headquarters of a
multinational Balkan military force will be in the southern
Bulgarian city of Plovdiv, an RFE/RL correspondent in Sofia
reported. The officials said the headquarters will rotate to
a different country every four years. In other news,
Bulgarian Premier Ivan Kostov appointed parliament deputies
Zdravko Zafirov and Plamen Radonov as deputy defense
ministers. Both are members of Kostov's party, the Union of
Democratic Forces. They replace Simeon Petkovsky and Rumen
Kanchev, who were sacked 10 days ago. PB

END NOTE

ROMANIAN ECONOMY CONTINUES TO PERFORM POORLY

Michael Wyzan

	Alone among the transition economies in Central and
Eastern Europe, Romania's economy has by most measures
performed worse since a reformist government was elected to
replace the former Communists (in Romania's case, in November
1996). Although inflation is down and the exchange rate has
been relatively stable this year, gross domestic product
(GDP) will decline substantially for the second consecutive
year and privatization efforts have largely stalled.
	Finance Minister Daniel Daianu, who is credited with
having kept the budget deficit and foreign debt from getting
out of control, was dismissed on 23 September. Even before
his departure, rating agencies, concerned about the coalition
government's bickering and policy paralysis as well as about
possible contagion from the Russian financial crisis, had
begun to lower Romania's credit rating.
	The time pattern of the changes in Romania's GDP is
unique among transition countries. After experiencing
positive growth from 1993 to 1996, this output measure fell
by 6.6 percent in 1997, similar to the 6.9 percent GDP
decline suffered that year by Bulgaria, which was in the
throes of a severe economic crisis. GDP declined by a further
5.2 percent in the first half of 1998, compared with the same
period in 1997, and industrial production was down by 19.1
percent over the same period. Forecasts of the GDP decline
for 1998 as a whole range from 3 percent to 6 percent and
higher. Such a steep decline would generally be expected to
increase the budget deficit (because of a decline in revenues
from various taxes) but to reduce the trade deficit (because
of weakening imports).
	It became clear during this summer that the fiscal
imbalance of 3.6 percent of GDP, approved by the parliament
in May, was no longer realistic. However, in early
September, the parliament (on Daianu's recommendation)
approved a temporary 6 percent surcharge on most imports,
excise hikes on tobacco and alcohol, and a state sector wage
freeze in the fourth quarter. These measures are expected to
hold the deficit to 4 percent of GDP this year, although
promises by new Finance Minister Traian Remes to cut taxes in
1999 call into question the sustainability of this fiscal
strengthening.
	More surprising, external sector indicators have not
improved as the economy has declined, with the slower growth
of imports more than offset by a fall in exports. The latter
during the first six months were $4.1 billion, down by 1.3
percent from January-June 1997, while imports were $5.4
billion, up by 4.0 percent.
	The current account deficit has increased in tack with
the trade imbalance, the former reaching $1.1 billion in
January-June 1998, compared with $864 million in the first
half of 1997. These imbalances are not unusually large for
the region, and observers expect the current account deficit
to be an unremarkable 4-5 percent of GDP this year. Moreover,
the foreign reserves rose from $2 billion in July 1997 to
$2.6 billion in July 1998, mostly owing to an increase in
foreign direct investment late in 1997.
	Nonetheless, Romania remains relatively unattractive to
foreign investors, especially under the conditions on world
financial markets after the Russian crisis, which has raising
concern over how Bucharest will finance its external
imbalances. This unease is heightened by the bunching of
foreign debt service this year ($1.7 billion) and next ($2.2
billion).
	The leu, which finished 1997 at 8,023 to the dollar, has
weakened relatively little this year (by about 11 percent
through September). But following an recent increase in its
rate of depreciation, it is now at almost 10,000 to the
dollar. Nonetheless, this year's more stable currency
reflects the fall in retail price inflation to 52 percent in
the 12 months to August 1998, compared with 152 percent in
1997.
	Although inflation has slowed and the decline of the leu
has abated, wages have continued to grow. Both the monthly
wage expressed in dollars and the real wage (measured in leu)
have risen considerably. The gross dollar wage was $154 in
June, up from $108 in June 1997.
	Trends in Romanian unemployment are difficult to relate
to movements in wages. The jobless rate peaked in early 1994
at 11.3 percent and then declined to 6.1 in November 1996,
before rising to reach 9.6 percent in February of this year.
It then declined over the course of 1998, the most recent
figure being 8.8 percent in June.
	Romania's economy apparently has more in common with
Russia's (and those of other CIS states) than with those
elsewhere in Central and Eastern Europe. The failure to
implement structural reform has made it difficult to turn
reduced inflation and a more stable exchange rate into
sustainable economic growth. Both Romania and Russia have
learned that under such conditions, these improvements in
macroeconomic stability cannot be sustained either.

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

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