RFE/RL NEWSLINE Vol 3, No. 33, Part II, 17 February 1999

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RFE/RL NEWSLINE Vol 3, No. 33, Part II, 17 February 1999

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

* BELARUSIAN NEWSPAPERS WARNED NOT TO PUBLISH OPPOSITION
ELECTION MATERIALS

* MILOSEVIC RULES OUT NATO TROOPS IN KOSOVA

* ROMANIAN MINERS' LEADER ARRESTED AFTER RENEWED CLASHES

End Note: EBRD PLANS TO FUND CONTROVERSIAL REACTORS IN
UKRAINE
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EAST-CENTRAL EUROPE

UKRAINE'S HARD CURRENCY RESERVES SHRINKING. The
Ukrainian National Bank said on 16 February that its
hard currency reserves decreased to $685.5 million at
the beginning of 1999, down from $906 million one month
earlier, AP reported. The bank had said earlier that its
reserves stood at $1.05 billion, but it has now revised
that figure downward using a new international
calculation method that excludes all precious metals
except gold. Ukraine's reserves stood at $2.34 billion
at the beginning of 1998, but the National Bank
systematically sold U.S. dollars in the wake of the
Russian financial crisis to support the hryvnya. JM

BELARUSIAN NEWSPAPERS WARNED NOT TO PUBLISH OPPOSITION
ELECTION MATERIALS. The State Committee for the Press
has warned six Belarusian independent newspapers not to
publish materials about the opposition presidential
elections scheduled for 16 May, RFE/RL's Belarusian
Service reported on 16 February. The committee noted
that the newspapers have published "documents of
nonexistent state organizations" and appealed to their
readers to take part in a "conspiracy" to seize power. A
committee official told RFE/RL that the authorities may
suspend publication of or even ban the newspapers if
they continue to publish materials supplied by the
opposition Central Electoral Commission. In a statement
issued on 16 February, leaders of Belarusian NGOs say
the warnings have no legal foundation and aim at
muzzling the independent press in Belarus. JM

BELARUS STARTS POPULATION CENSUS... Some 33,000 census-
takers have begun a population census that will continue
until 23 February, Belarusian media reported on 16
February. The census questionnaire includes 17 questions
about, among other things, the age, sex, ethnicity,
occupation, financial situation, and housing conditions
of the interviewed. According to Belarusian Television,
the final results of the census will be made public by
the end of this year. The last census in Belarus was
taken in 1989. JM

...WHILE OPPOSITION ISSUES CENSUS RECOMMENDATIONS. The
Belarusian Popular Front (BNF) believes that the
authorities' major objectives in conducting the census
are to play down the importance of the Belarusian
language in Belarus and to validate integration with
Russia, Belapan reported on 16 February. The BNF
recommends that people ask for Belarusian-language
census questionnaires and warns against any pressure or
"hints" from census-takers while providing answers. The
BNF also advises that citizens refuse to answer
questions about personal income because the "census in
not a tax inspection." JM

IMF MISSION LEAVES BELARUS WITHOUT COMMENT. An IMF
mission has left Belarus without making "public
assessments of its negotiation process with Belarus's
authorities," RFE/RL Belarusian Service reported on 16
February. The mission was in the Belarusian capital from
2-13 February. It was the fourth time IMF experts have
traveled to Minsk to discuss a $100 million credit to
Belarus. Meanwhile, the Belarusian National Bank issued
a statement saying that Belarus has reached mutual
understanding with the IMF over a "wide range of issues
concerning mainly credit and financial policies." The
statement added that another IMF mission is expected to
visit Belarus in mid-March. JM

ESTONIAN CABINET APPROVES TWO MORE FREE ECONOMIC ZONES.
The government on 16 February approved the setting up of
free economic zones at Valga and Varu, in southeastern
Estonia, ETA reported. Unemployment figures for Valga
and Varu are among the highest in the country, and the
two regions also have the oldest population, with an
average age of 38. Estonia already has two economic
zones, at the Tallinn-Muuga port and in Sillamae, in the
northeastern part of the country (see "RFE/RL Newsline,"
13 January 1999). JC

GERMANY WANTS LATVIA TO RECEIVE EU TALKS INVITATION THIS
YEAR. Speaking at a press conference in Riga on 16
February, German State Minister at the Foreign Ministry
Guenter Verheugen said Bonn wants Latvia to be invited
to begin EU entry talks later this year, during the
presidency of Finland, "Diena" reported. Verheugen
stressed that the EU's eastward expansion is one of
Germany's "strategic goals." He also expressed
confidence that the EU's internal problems will be
resolved soon, adding that this process must not have a
negative influence on expansion. Germany holds the EU
rotating presidency in the first half of this year.
Verheugen also commented that Germany supports Latvia's
goal of joining NATO and backs the "open-doors" policy
of the alliance. Earlier this month, German Chancellor
Gerhard Schroeder said he doubts a decision on new
members will be taken at NATO's April summit (see
"RFE/RL Newsline," 9 February 1999). JC

ONE IN SIX LITHUANIANS REPORTED ON VERGE OF POVERTY. A
Vilnius seminar entitled "Poverty and Social Policy"
revealed that one in six Lithuanians are living on the
verge of poverty, while every fourth Lithuanian
considers himself "impoverished," ELTA reported on 16
February. Last month, President Valdas Adamkus
established a committee to oversee implementation of the
Copenhagen declaration aimed at combating poverty, which
Lithuania signed in 1995. An official from the Social
Protection and Labor Ministry, however, told "Lietuvos
Rytas" that living standards are better than statistics
suggest, adding that "Lithuanians strive to prove that
they live far worse than they do in reality." JC

POLAND WELCOMES GERMAN FUND TO COMPENSATE NAZI SLAVE
LABORERS. Wieslaw Walendziak, chief of the prime
minister's office, has welcomed a plan by 12 leading
German industrial companies to set up a fund to
compensate those forced to perform slave labor in Nazi
Germany during World War II, Reuters reported on 16
February. "Central Europe has so far received only about
1 percent of war reparations. Now it seems that our
rights have been taken into account," Walendziak told a
news conference. Walendziak said German Chancellor
Gerhard Schroeder has confirmed that the fund--
reportedly totaling 3 billion German marks ($1.7
billion)--will not differentiate between victims in
terms of their ethnicity, citizenship, or place of
residence. According to Polish media, some 300,000
former slave laborers currently live in Poland. A total
of 2 million Poles were deported to work in Nazi
Germany. JM

HAVEL TO SIGN NATO ACCESSION DOCUMENTS THIS MONTH.
President Vaclav Havel has "tentatively" set 26 February
as the date for signing the ratification of Czech
membership in NATO, the presidential office announced on
16 February. The ceremony marking the accession of the
Czech Republic, Hungary, and Poland to NATO is scheduled
to take place on 12 March in Independence, Missouri, and
will be hosted by Czech-born U.S. Secretary of State
Madeleine Albright. MS

FORMER SLOVAK INTERIOR MINISTER TO LOSE PARLIAMENTARY
IMMUNITY? The parliamentary Constitutional and Legal
Committee on 16 February recommended that lawmakers
strip former Interior Minister Gustav Krajci of his
parliamentary immunity for having hindered the
referendum on NATO accession and direct presidential
elections in May 1997. The Prosecutor-General's Office
is investing Krajci also on suspicion of fraud. The
opposition Movement for a Democratic Slovakia (HZDS), to
which Krajci belongs, boycotted the committee meeting,
calling it a "farce." HZDS spokeswoman Olga Keltosova
said her party will also boycott a committee meeting
dealing with lifting the parliamentary immunity of
former Counter-Intelligence Service chief Ivan Lexa. MS

SOUTHEASTERN EUROPE

MILOSEVIC RULES OUT NATO TROOPS IN KOSOVA. Yugoslav
President Slobodan Milosevic told U.S. envoy Christopher
Hill in Belgrade on 16 February that he opposes the
stationing of NATO peacekeepers in Kosova (see "RFE/RL
Newsline," 16 February 1999). The state-run news agency
Tanjug said in a statement that "people from the left
and right of the political spectrum" agree with
Milosevic's position, adding that "our negative stand on
the presence of foreign troops is not only the attitude
of the leadership but also of all citizens of our
country." The statement noted that the Belgrade
authorities have "demonstrated through their behavior
their firm commitment to a peaceful solution [in the
province]." Tanjug concluded that the international
community must choose between "a multi-ethnic, multi-
cultural, and multi-religious approach" (which is how
Belgrade describes its position) and the "nationalist
approach of the separatist movement," by which it means
the Kosova Liberation Army (UCK). PM

ALBRIGHT WARNS MILOSEVIC. Secretary of State Madeleine
Albright told Milosevic in a telephone conversation
before Hill's arrival on 16 February that Milosevic must
agree to NATO deployment or face air strikes. She
described any Serbian ban on the stationing of
peacekeepers as a "deal breaker," adding that the
Kosovar delegation is ready to sign an agreement. In
Washington, Defense Department spokesman Ken Bacon said
that some 400 aircraft, including 260 from the U.S., are
ready to strike at targets in Serbia on 48 hours'
notice. PM

UCK WARY OF DISARMAMENT. UCK commanders in the Llap
region told William Walker, who heads the OSCE
monitoring mission in Kosova, that they are not willing
to commit themselves to give up their weapons, even if
the Rambouillet agreement requires them to do so. UCK
spokesman Albin Kurti said on 16 February that "the UCK
is an army with a developed military structure. The UCK
is going to exist. The UCK is going to liberate Kosova.
Other possibilities are out of the question." Kurti
stressed NATO should concentrate on "demolishing the
Serbian military complex," AP reported. Elsewhere, an
unnamed British military expert told Reuters that the
UCK is "very disciplined and very obedient." He added
the top command will be able to order local units to
disarm if it truly wants to. Problems would lie only
with some rogue units that wear UCK uniforms but are not
part of its command structure, he noted. PM

SLOVENIAN MINISTER LOSES VOTE OF CONFIDENCE. Liberal
Democratic Interior Minister Mirko Bandelj lost a vote
of confidence in the parliament on 16 February. The vote
was 49 to 41. Critics accused him of trying to take away
unspecified powers from several parliamentary
committees. PM

POPE TO VISIT SLOVENIA. Pope John Paul II will visit
Slovenia in September to beatify Bishop Anton Martin
Slomsek (1800-1862), the "Frankfurter Allgemeine
Zeitung" reported on 16 February. The pontiff last
visited the Alpine republic in 1996, which was also his
first trip there. Relations between Ljubljana and the
Vatican are overshadowed by a dispute over the return of
Church property confiscated by the Communists, which is
the main issue preventing the conclusion of a Church-
state agreement. Many Slovenes suspect that the Church's
ultimate goal is to regain the predominant role in
politics that it enjoyed in pre-communist times. PM

DID ALBANIAN-ITALIAN COMPANY BUILD BOATS FOR SMUGGLERS?
The Italian owner of the Rogolo boat-building company in
Shkozet, near Durres, has denied press reports that his
company produces high-powered speedboats for smugglers.
Graziano Padini told "Gazeta Shqiptare" of 16 February
that his company has been producing a wide range of
vessels, including yachts and fishing boats, for six
years. He did not rule out, however, that some of the
boats produced by Rogolo end up in the hands of
smugglers. Unnamed officials from the Durres tax
collection office and the Chamber of Commerce told the
daily that the company is legally registered, pays its
taxes, and has "always respected the law." FS

ALBANIAN POLICE ARREST MORE ISLAMISTS. Interior Minister
Petro Koci told Reuters on 16 February that police have
arrested two suspected Islamic terrorists. Koci said "we
suspect they set up a network of extremists [in Albania]
a long time ago," but he declined further comment. "Koha
Jone" reported that police found "bombs, grenades, and
Kalashnikov [assault rifles]...during a raid" on the
suspects' homes. It added that the two are suspected of
having spied on the U.S. embassy in Tirana and may be
accomplices of Maksim Ciciku, an Albanian who is charged
with spying on U.S. Ambassador to Albania Marisa Lino
and is suspected of having links with Saudi dissident
Osama bin Laden. Ciciku is in detention awaiting trial,
following his arrest last month (see "RFE/RL Newsline,"
11 January 1999). FS

ROMANIAN MINERS' LEADER ARRESTED AFTER RENEWED
CLASHES... Miron Cozma, the leader of the Jiu Valley
miners, was arrested in the town of Caracal, some 150
kilometers southwest of Bucharest, on 17 February,
Romanian Radio reported. Two of his deputies were also
detained, as were some 300 of his supporters. Two days
earlier, Cozma was sentenced to 18 years in prison for
his role in the September 1991 riots (see "RFE/RL
Newsline," 16 February 1999). He may now face an
additional sentence of 15 years in prison, having been
declared a fugitive on 16 February. His arrest follows
clashes between police forces and the miners early on 17
February in the village of Stoenesti, not far from
Caracal. Police used force to disperse the miners. One
miner died as a result of injuries sustained during the
police action and scores of people have been
hospitalized, including 35 police officers. Several
thousand miners had been on their way to Bucharest. MS

...AS HIS LAWYER DEMANDS PRESIDENTIAL PARDON. The
attorney representing Cozma on 16 February said he will
appeal to President Emil Constantinescu to grant his
client a presidential pardon. He said he will also ask
for the postponement of Cozma's sentence because the
presence of the miners' leader is necessary to ensure
implementation of the agreements reached last month by
Cozma and Premier Radu Vasile, RFE/RL's Bucharest bureau
reported. MS

ROMANIAN PARLIAMENT APPROVES 1999 BUDGET. The parliament
on 16 February approved the 1999 austerity budget, which
provides for a deficit of 2 percent of GDP, RFE/RL's
Bucharest bureau reported. The vote was 200 to seven
with six abstentions. The votes against were cast by the
opposition Romanian Alternative Party, while all other
opposition parties boycotted the vote to protest the
legislature's rejection of their proposed amendments.
The same day, Finance Minister Decebal Train Remes met
with the new chief IMF negotiator for Romania, Emmanuel
Zervoudakis, to discuss the pending memorandum with the
IMF on a new stand-by agreement. If the fund does not
agree to such an arrangement, Romania risks defaulting
on its foreign debt. MS

MOLDOVAN COALITION TALKS STILL STALLED. Iurie Rosca,
leader of the Christian Democratic Popular Front (FPCD),
said after another round of multi-party negotiations
with Premier-designate Serafim Urecheanu on 16 February
that "under no circumstances" will his party vote for a
cabinet headed by Urecheanu, RFE/RL's Chisinau bureau
reported. Without the support of the FPCD, a member of
the outgoing coalition, the cabinet will be short of a
majority in the legislature. Rosca said Urecheanu is not
fit to be premier. Party of Democratic Forces leader
Valeriu Matei said after the talks that President Petru
Lucinschi, after consulting with the parliamentary
majority, must propose another candidate for the
premiership. MS

MOLDOVAN PRESIDENT 'CONCERNED' ABOUT COALITION
NEGOTIATIONS. Presidential spokesman Anatol Golea on 15
February said President Lucinschi is "concerned" that
the negotiations on the new cabinet are progressing
"with much difficulty" and are focused on the cabinet's
lineup rather than its program, RFE/RL's Chisinau bureau
reported. Golea denied that Urecheanu was "the
president's man," noting that Lucinschi had been
promoting only Moldova's interests when he proposed
Urecheanu's candidacy. Golea also said the president
hopes the parliament will "seriously discuss"
Lucinschi's legislative initiative to increase the
government's prerogatives. MS

BULGARIA READY TO SUPPORT NATO GROUND TROOPS IN KOSOVA.
Deputy Defense Minister Velizar Shalamanov told
participants at an international seminar in Sofia on 16
February that Bulgaria is ready to place its military
infrastructure at NATO's disposal to support any ground
operation in Kosova, if the organization decides to
launch such action, AP reported. In October 1998, the
parliament voted to allow NATO planes to use Bulgarian
airspace if the alliance launches air strikes against
neighboring Yugoslavia. MS

END NOTE

EBRD PLANS TO FUND CONTROVERSIAL REACTORS IN UKRAINE

By Tony Wesolowsky

	The European Bank for Reconstruction and
Development is moving ahead with controversial plans to
fund completion of two nuclear reactors in Ukraine.
	The bank has given provisional approval to a loan
worth up to $190 million to complete construction of the
Khmelnitsky 2 and Rivne 4 nuclear reactors in southern
Ukraine. William Franks, the EBRD official overseeing
the loan project, told RFE/RL that the bank's Board of
Directors will likely reach a decision on the loan by
the end of April.
	In 1995, Ukraine said it would close Chornobyl only
if the two reactors at Khmelnitsky and Rivne, known as
K2/R4, were completed to replace the lost capacity at
Chornobyl, which in 1986 became the site of the worst-
ever civilian nuclear accident. The two reactors are
about 80 percent finished, according to Ukraine's
Energoatom. Additional funding from the EU's Nuclear
Energy Agency to cover up to 50 percent of the project's
cost hinges on approval of the EBRD loan.
	A study commissioned and later rejected by the EBRD
questioned whether Ukraine needs to add to its already
operating 11 nuclear power plants. Environmentalists and
others, including the Austrian government, have asked
the same question. They note that Ukraine's economic
collapse since the 1991 breakup of the Soviet Union has
meant a sharp drop in energy demand. Critics of the
project contend that demand will not exceed earlier peak
levels until 2010.
	For loan approval, the EBRD requires that a project
meet four conditions: be financially viable, meet
environmental requirements and be subject to public
debate, satisfy Western nuclear safety principles, and
be part of a least-cost option. But some experts
question whether the project satisfies these conditions.
	Steve Thomas, a professor at Sussex University in
England, took part in a 1996 study commissioned by the
EBRD to determine whether financing K2/R4 met the bank's
"least-cost" criteria. "It became very clear that the
case for completing the reactors was much weaker than
had been suspected," he told RFE/RL. "One very strong
element was that there didn't seem any reason to replace
Chornobyl. Electricity demand had fallen so steeply
after the fall of the Soviet Union that Ukraine had
twice the generating capacity to meet peak demand. A big
problem that Ukraine electricity had was that it had no
money, basically because most consumers in Ukraine do
not pay their bills in cash."
	Having rejected the findings of the Sussex
University group, the EBRD hired the U.S. firm Stone and
Webster to collect what Franks called "better data." He
told RFE/RL that "if you used the assumptions in the
Sussex report in the model Stone and Webster developed
you came to the same conclusions that the Sussex report
did. If you used the better data, you came to a
different set of conclusions."
	But Thomas says that the so-called better data are
suspect. He explains that "the problem with the Stone
and Webster report was that the assumptions going into
the model were all determined either by the EBRD or by
the Ukrainian company Energoatom, which wants to build
the nuclear power plants. So the report was far from
independent."
	As regards whether it makes banking sense to loan
to a business that receives an estimated 90 percent of
its payments through barter, Franks says "the loans to
K2/R4 will be conditioned on very concrete programs on
the part of the Ukrainians to improve the performance of
the power sector, and in fact, there are several
initiatives, the most recently initiated by the bank, to
address that issue."
	Ukraine may face other problems with spiraling
costs. In the Czech Republic, for example, Westinghouse
has run into huge cost overruns and delays retrofitting
the nuclear power reactors at Temelin. Both Temelin and
K2/R4 are equipped with the same Soviet-type VVER-1000
reactors. But as International Atomic Energy Agency
spokesman David Kyd explains, the Czech Republic, unlike
Ukraine, is spending hefty sums to completely refit
Temelin in what is a unique graft of Western technology
onto the body of an Soviet-type reactor.
	"In the case of the Ukrainian reactors, they are
not looking to do something that ambitious at all," Kyd
comments. "What they are looking to do is to stick with
the Russian designers, largely with Ukrainian and
Russian companies, to complete the standard VVER-1000
megawatt design, as basically put together from the
start. They are not looking to revamp the entire reactor
along Western lines and still such an effort will cost
more than a billion dollars."
	Kyd said such reactors would never be licensed in
the West. Germany concluded that the upgrade costs were
so exorbitant that it scrapped plans to retrofit two
VVER 1000 reactors at Stendal, eastern Germany after the
German nuclear safety agency estimated the project would
cost between $2.3 billion and $2.9 billion.
	So why would Ukraine pursue a project that Germany
found too costly, especially given the legacy of
Chornobyl? Thomas explains that in 1995 Ukraine proposed
building a gas-power plant to replace Chornobyl, but the
West reportedly rejected that plan, fearing Kyiv would
become dependent on Russian gas. He also notes that
Western powers with a strong nuclear industry,
especially Germany, France, and the U.S., have all
backed the project to complete K2/R4. Ukraine, moreover,
also has a strong nuclear lobby--one that retains strong
ties with its Russian counterpart.

The author is an RFE/RL editor based in Prague.
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