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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 3, No. 141, Part II, 22 July 1999


________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 141, Part II, 22 July 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 OPPOSITION DEMONSTRATES ON 'FIRST DAY'
AFTER LUKASHENKA

* OJDANIC SAYS ARMY MAY INTERVENE AGAINST PROTESTS

* SERBIAN RESERVISTS SET DEADLINE FOR PAYMENTS

End Note: EFFECTS OF RUSSIAN CRISIS CATCH UP WITH
LITHUANIA
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EAST-CENTRAL EUROPE

BELARUSIAN OPPOSITION DEMONSTRATES ON 'FIRST DAY' AFTER
LUKASHENKA. More than 3,000 people took part in the
opposition "folk festival" near the presidential office
in Minsk on 21 July to mark the end of President
Alyaksandr Lukashenka's legitimate term in office. The
demonstrators carried placards urging Lukashenka to step
down and pronouncing 21 July "the first day without
Lukashenka in power." Police troops, which were present
in large numbers, did not intervene but arrested 53
people after the protest ended. The same day, the
opposition Supreme Soviet convened to declare
Lukashenka's tenure over. Viktar Hanchar, who was
elected Supreme Soviet first deputy chairman, said
Supreme Soviet chairman Syamyon Sharetski is now "de
facto the head of state." Earlier the same day, artist
Ales Pushkin dumped a wheelbarrow of manure with
Lukashenka's portrait in front of the presidential
office, saying his action is intended to thank the
president "for five years of fruitful work." JM

U.S. TO MAINTAIN TIES WITH LUKASHENKA ON 'DE FACTO
BASIS.' State Department spokesman James Rubin said on
21 July that the U.S. government will continue to deal
with Lukashenka even though he lost his legitimacy after
20 July. "The fact that we'll continue to deal with him
on a de facto basis, in our view, does not legitimize
him," Rubin said. He added that unless the Lukashenka
regime shows respect for human rights and democracy, the
U.S.'s "policy of selective engagement will remain very
much in effect." JM

UKRAINE CUTS IMPORT DUTIES TO FIGHT FUEL SHORTAGE.
President Leonid Kuchma reprimanded his government on 21
July for the acute gasoline shortage in the country (see
"RFE/RL Newsline," 21 July 1999). The cabinet responded
by ordering the lifting of a 2 percent duty on oil
imports land and freeing domestic producers from a 0.01
euro duty on each kilogram of oil products until 1
January 2000. Deputy Economy Minister Viktor Kalnyk said
the government also ordered tax authorities to give
local oil refineries more time to pay value-added tax
and excise duties. The government, meanwhile, plans to
import 500,000 tons of diesel fuel from Azerbaijan to
help farmers with the harvest campaign. As a result of
the gasoline crisis, the exchange rate for the hryvnya
sank to 4.2 to $1 in trading between banks on 21 July,
having remained stable for several months at around 3.9
to $1. JM

ESTONIA, LITHUANIA JOINS EU POSITION ON LUKASHENKA. Both
Estonia and Lithuania joined the EU in its stance on the
end of Belarusian President Lukashenka's term in office
(see "RFE/RL Newsline," 21 July 1999). The Lithuanian
Foreign Ministry said in a press release that Vilnius
"joins the efforts of the international community to
develop a dialogue with Belarus on consolidating respect
for human rights in that country, the freedom of press
and the principles of free elections," BNS reported. The
Estonian Foreign Ministry said that it joined the
"common position" on Lukashenka. MH

LITHUANIAN OIL TERMINAL OPERATION DISRUPTED. Protestors
from Latvia on 21 July disrupted the first operations of
the Butinge Oil Terminal, a key part of Lithuania's oil
industry. Four environmental protestors chained
themselves to a buoy near the terminal until they were
removed by the Lithuanian coast guard and were later
deported. Oil began pumping at the terminal in mid-
afternoon, the first 70,000 tons of which is to be
purchased by British Petroleum. Latvian Environmental
Minister Vents Balodis said it was appropriate for
Lithuanian officials to arrest the protestors, but he
noted that as a person with "Green sympathies," he
"understood" the action of the protestors, BNS reported.
The official opening of the Butinge Terminal is
scheduled for 22 July. MH

POLISH GOVERNMENT DELEGATION UNABLE TO SPEAK FOREIGN
LANGUAGES? Prime Minister Jerzy Buzek on 21 July
demanded that a Polish government delegation led by
Deputy Interior Minister Bogdan Borusewicz explain its
behavior at a UN conference on human rights in Geneva on
19 July. Polish Television reported on 21 July that in
answering questions posed by the UN Human Rights
Committee, virtually none of the 14 Polish delegates was
able to communicate in any of the UN official languages.
"This is the first such humiliation in the history of
the UN," a Polish Television correspondent reported from
Geneva. JM

CZECHS NOT AFRAID OF COMMUNIST POPULARITY GROWTH. A poll
released by STEM on 21 July shows that 55 percent of
Czechs are not afraid of the recent growth in the
popularity of the Communist Party of Bohemia (KSCM) and
Moravia (see "RFE/RL Newsline," 19 July 1999), CTK
reported. Forty-five percent said they are afraid of the
findings' implications. Seventy-seven percent of Freedom
Union supporters expressed that opinion. as did 56
percent of Civic Democratic Party backers and 28 percent
of Social Democratic Party supporters. MS

SLOVAK POLL SHOWS GOVERNMENT SUPPORT DECLINING. A
public opinion poll conducted by Focus shows that
support for Slovakia's four-party coalition
government, which recently announced economic
austerity measures, is declining, Reuters and CTK
reported. The government now has 52.8 percent backing,
compared with 57.6 percent in June. The combined
support of the opposition parties now exceeds 41
percent, compared with 37.9 percent one month earlier.
The opposition Movement for a Democratic Slovakia is
leading the field, with 28.7 percent backing, followed
by the Slovak Democratic Coalition (19.6 percent) and
the Democratic Left Party (14.5 percent). The Slovak
National Party, the other opposition party, is backed
by 12.4 percent, the Hungarian Coalition Party by 11
percent, and the Party of Civic Understanding by 7.7
percent. MS

HUNGARIAN PARTY IN SLOVAKIA TO 'RECONSIDER'
PARTICIPATION IN GOVERNMENT. The Hungarian Coalition
Party (SMK) is to "reconsider" its continued
participation in the government coalition given that
"its political expectations have not been fulfilled,"
according to a statement by the SMK leadership to CTK
on 21 July. The SMK has opposed the government-
sponsored bill on the use of national minority
languages in contacts with the authorities, saying its
provisions are too restrictive. MS

HUNGARY REBUFFED ON VOJVODINA AT BRATISLAVA
CONFERENCE. Slovak Foreign Minister Eduard Kukan, one
of the two UN special envoys on the Balkan crisis,
told a 21 July international conference in Bratislava
devoted to the future of Yugoslavia that it is now
necessary to solve the complicated problems in
Yugoslavia, Kosova, and the Balkans rather than "make
up new ones," such as autonomy for Vojvodina's
Hungarian ethnic minority, CTK reported. Jiri
Dienstbier, UN envoy for human rights in Yugoslavia,
said it is "very dangerous" for the Hungarian
government "to play with fire abroad," and Dusan
Mihajlovic, chairman of the Serbian New Democracy
Party, said the issue of autonomy for the Vojvodina
Hungarians is "a Yugoslav problem that could find a
solution in granting a very high degree of regional
autonomy [to Vojvodina]." Joszef Kasza, head of the
Federation of Vojvodina Hungarians, told the forum
that autonomy is "a promising model for solving
minority problems." MS

SOUTHEASTERN EUROPE

OJDANIC SAYS ARMY MAY INTERVENE AGAINST PROTESTS...
General Dragoljub Ojdanic, who is chief of the General
Staff and a staunch supporter of Yugoslav President
Slobodan Milosevic, told a meeting of the government in
Belgrade on 21 July that the military will "support the
state" and its "elected leadership" in peacetime as well
as in war, RFE/RL's South Slavic Service reported. PM

...AS PERISIC SLAMS HIM. General Momcilo Perisic, who
was Ojdanic's predecessor as chief of staff, told the
Belgrade-based weekly "NIN" that the government
seriously mismanaged the crisis in Kosova. He charged
that the army leadership is now openly politicized on
the side of Milosevic and Mira Markovic, who is the
president's wife. Perisic added that all democratic
forces in Serbia must unite if they want to get rid of
Milosevic, RFE/RL's South Slavic Service reported on 22
July. Milosevic fired Perisic and replaced him with
Ojdanic in November 1998 following public criticism by
Perisic of Milosevic's policies in Kosova (see "RFE/RL
Newsline," 25 November 1998). PM

SERBIAN RESERVISTS SET DEADLINE FOR PAYMENTS. Several
hundred reservists blocked a road outside Kragujevac to
demand that the army give them their back pay within 48
hours. They also demanded that the authorities pay the
reservists' water and electricity bills and provide
benefits for the families of dead or disabled soldiers
in the Kosova conflict, Reuters reported. A spokesman
for the reservists said they will march on Belgrade if
the authorities do not meet the deadline. Earlier the
same day, Defense Minister Pavle Bulatovic said the army
will pay back wages totaling $90 million in six monthly
installments. Serbian economists noted that the average
monthly salary there is about $40 and that a rapid
influx of freshly printed money into the economy could
trigger rampant inflation, AP reported. PM

MILOSEVIC GOVERNMENT CALLS OPPONENTS 'TRAITORS.' Serbian
Prime Minister Mirko Marjanovic said in Novi Pazar on 21
July that unnamed opponents of Milosevic "were visiting
our enemies and requesting them to keep bombing while we
were defending our country," RFE/RL's South Slavic
Service reported. He was referring to Democratic Party
leader Zoran Djindjic, whom a court has summoned to a
hearing on 28 July over charges that he failed to
respond to a military call-up notice during the Kosova
conflict. The Democratic Party said in a statement that
the authorities are "trying to settle accounts with
democratic forces...[and prevent] inevitable changes."
In Novi Pazar, the opposition Sandzak Coalition said in
a statement that Marjanovic's visit was an example of
"bad taste and cheap political propaganda." PM

ADDITIONAL JAIL SENTENCE FOR NOVKOVIC? Protests
continued in Leskovac on 21 July for the 17th straight
day to demand the release from jail of television
broadcaster Ivan Novkovic, who had appealed on the air
for anti-Milosevic protests (see "RFE/RL Newsline," 8
July 1999). The broadcaster is serving a 30-day
sentence. On 22 July, a local judge ruled that Novkovic
faces a criminal charge of "misusing an official
position" in connection with the same televised appeal.
If found guilty, Novkovic could face up to five years in
prison, RFE/RL's South Slavic Service reported. PM

BELGRADE FINES RADIO PANCEVO. The authorities sent a
$35,000 bill to the independent Radio Pancevo "for use
of state-owned frequencies," AP reported on 21 July. A
spokeswoman for the station said the government "does
not consider us patriotic" and is trying to bankrupt the
station to force it off the air. She stressed that Radio
Pancevo does not have the money to pay the bill. PM

STUDENTS DEMONSTRATE IN NIS. Several hundred secondary
school and university students demonstrated in southern
Serbia's principal city on 21 July to demand that
Milosevic resign. A spokesman told Reuters that "Serbia,
headed [sic.] by its students, must change because this
is not life, this is a twilight zone." Another student
added that protests will become much bigger in September
and October after the summer holidays. Observers noted
that the march in Nis was the first large student anti-
Milosevic protest in several years. During the Kosova
crisis, students often wore anti-NATO badges and turned
out for public rock concerts organized by the
authorities. Elsewhere, representatives of the
Independent Farmers' Union called for protests and a
general strike on 2 August, AP reported from Belgrade.
PM

KFOR FREES SERBIAN POLICE. International peacekeepers
have returned to the Serbian authorities four Serbian
police whom KFOR troops recently arrested in northern
Kosova, RFE/RL's South Slavic Service reported on 21
July (see "RFE/RL Newsline," 21 July 1999). The four
said they did nothing wrong and mistakenly entered
Kosova because they "misread their map." PM

UNHCR OUTLINES KOSOVA RECONSTRUCTION COSTS... A
spokesman for the UNHCR said in Prishtina on 21 July
that approximately 25 percent of the buildings in the
province's 29 largest cities and towns were "heavily
damaged" during the recent crisis. He estimated that
reconstruction costs for the rest of 1999 at $333
million. PM

...AS DOES WORLD BANK. World Bank President James
Wolfensohn said in Prishtina on 21 July that "water,
power, fire services, and, most important, police [must
be restored]. The fabric of civil [sic.] government
needs to be put together, because it does not exist
today. [We also need] a basis for re-establishing
commerce, including banking and the provision of micro-
credit to get [the economy] moving forward," Reuters
reported. Wolfensohn stressed that "it's important to
rebuild confidence, establish a normal way of life." He
noted that law and order are a prerequisite for
attracting foreign investment. Wolfensohn estimated
reconstruction costs "for the next two months" at
approximately $50 million. PM

PRODI WARNS AGAINST 'BUREAUCRACY.' Incoming European
Commission President Romano Prodi said in Strasbourg on
21 July that the EU "will be the first to contribute [to
the Kosova reconstruction effort], but there is a danger
that the impact of its support will get buried in a
complex web of competing structures. We desperately need
to simplify things." He warned that money must be
directed primarily to projects in Kosova and not to
salaries of EU officials. Critics of the EU effort have
charged that officials dealing with the program should
be working in Kosova and not in Thessaloniki or
Brussels, where EU aid coordinator Bodo Hombach
reportedly plans to have a large office. PM

BOSNIANS BLAST EU OVER SUMMIT PLANNING. Edhem Bicakcic,
who is prime minister of the mainly Muslim and Croatian
Bosnian federation and the head of Bosnia's organizing
committee for the 30 July Balkan reconstruction summit
in Sarajevo, said on 21 July that the EU "has put the
summit into question...by its lack of understanding of
the need for timely preparation" of the meeting. The EU
approved a budget of $1.6 million for the summit only on
19 July. The Bosnian authorities expected an
unspecified, larger sum at an earlier date. PM

BOSNIAN PARLIAMENT FAILS TO ADOPT TV LAW. The
legislature of the mainly Muslim and Croatian federation
ended a session on 21 July without passing proposed
legislation to regulate television in the federation.
The international community's Carlos Westendorp had
given the parliament a deadline of midnight that day to
pass the law. He is likely to enact the legislation by
decree on 22 July, RFE/RL's South Slavic Service
reported from Sarajevo. PM

ARE THERE SPIES IN THE HAGUE? The Dutch intelligence
service said in its annual report on 21 July that
members of unnamed "Balkan secret services" have sought
to infiltrate the Hague-based war crimes tribunal,
RFE/RL's South Slavic Service reported. The agents
allegedly sought to influence the court's work and to
obtain information about the identity of witnesses who
have testified in confidence to the tribunal. The report
did not elaborate. PM

WORLD BANK TO HELP MACEDONIA. Wolfensohn said in Skopje
on 20 July that the World Bank "will do all we can along
with the G-7 and other European countries to ensure that
the financing, which is needed to reach the level of the
assessed damage [resulting from the Kosova conflict],
can be put together in the coming months" He did not
specify a figure. During his visit, he signed agreements
for several projects totaling more than $50 million,
Reuters reported. Wolfensohn stressed that Macedonia
must reform its legal, banking, justice, and financial
systems. Only by instituting key reforms, he continued,
can Macedonia "be organized to face the future." PM

ROMANIAN SENATE CHAIRMAN JOINS CRITICS OF GENERALS'
SENTENCING. Petre Roman on 21 July said he fully
agrees with Defense Minister Victor Babiuc's criticism
of the sentence passed last week on Generals Victor
Stanculescu and Mihai Chitac. Roman, who heads the
Democratic Party, to which Babiuc also belongs, said
the sentence is "discrediting the army as a whole,"
adding that it is "strange" that shortly after a
former head of the Securitate, General Mihai Pacepa,
was rehabilitated, the judicial system sentences two
generals who participated in the 1989 revolution,
treating them "as if they were war criminals,"
RFE/RL's Bucharest bureau reported. MS

ROMANIAN NATIONALISTS CRITICIZE CONSTITUTIONAL COURT.
The Party of Romanian National Unity (PUNR) on 21 July
said a recent ruling by the Constitutional Court is
likely to have "baleful consequences" for the country.
The previous day, the court ruled that the amended
Education Law passed by the parliament last month does
not violate the constitution. It also ruled that when
the parliament is in recess, the cabinet is entitled
to ratify by government regulation the European
Charter on Minority and Regional Languages. Twenty-
five senators and 61 deputies from the PUNR and the
Party of Social Democracy in Romania had urged the
court to rule that both the law and the charter
contradict the provisions stipulating that Romania is
a "unitary and national state" and that the country's
only official language is Romanian. The group also
argued that only the parliament can ratify the
charter. MS

MOLDOVAN OFFICIALS DENY TURKISH INVOLVEMENT IN KURDISH
REBEL'S CAPTURE. The Moldovan Interior and Security
Ministries on 21 July denied any knowledge of the
capture in Moldova of a Kurdish rebel, the RFE/RL
Chisinau bureau reported. Turkish Premier Bulent Ecevit
had said earlier the same day that Cevat Sosyal was
arrested in a secret Turkish operation and brought to
Turkey. Xemgin Abdulah of the Kurdistan Association of
Moldova told journalists that Sosyal was arrested in
Chisinau on 13 July by the Security Ministry and later
extradited to Turkey. Reports from Turkey said Sosyal is
the second-ranking Kurdish rebel leader after Abdullah
Ocalan, who was recently condemned to death in Turkey.
The Kurdistan National Liberation Front, which is the
political wing of the Kurdistan Workers' Party (PKK),
said in a written statement that Sosyal was a rebel
activist, but not a senior PKK leader. MS

BULGARIAN PREMIER IN GREECE. Ivan Kostov told
journalists in Athens on 21 July that "Greece is
Bulgaria's most important partner among EU states" and
that his government is interested in further Greek
investments in Bulgaria. Greek Prime Minister Kostas
Simitis said Athens wants its EU partners to agree at
the Helsinki summit in December to start membership
negotiations with Bulgaria, and he expressed support for
Bulgaria's NATO accession bid. Simitis added that his
government remains committed to participating in the
construction of a highway linking Bulgaria to northern
Greece but that the project is being delayed by
"environmental considerations." Kostov said officials
from the two countries and from Russia will meet at the
end of this month to discuss a possible pipeline linking
Bulgaria's Black Sea port of Burgas with
Alexandroupolis, on the Aegean Sea. The project has been
delayed by disputes among the countries involved and
doubts about its efficiency. MS

END NOTE

EFFECTS OF RUSSIAN CRISIS CATCH UP WITH LITHUANIA

by Michael Wyzan

	In the first few months after the Russian economic
crisis erupted in August 1998, Lithuania seemed less
affected by that development than the other two Baltic
states. GDP rose by 5.1 percent in Lithuania in 1998,
compared with 4 percent in Estonia and 3.6 percent in
Latvia.
	The Lithuanian economy's apparent ability to
withstand the crisis better than those of the
neighboring countries was surprising in view of its
greater dependence on trade with Russia. By far
Lithuania's largest partner, Russia accounted for 22
percent of Lithuanian exports and 23 percent of its
imports in 1998. Russia's weight in Estonia's trade last
year was 13 percent for exports (third place) and 11
percent for imports (second), while for Latvia the
comparable figures were 12 percent for exports (third)
and 12 percent for imports (second).
	Despite the strong GDP growth for 1998 as a whole,
Lithuania's economy was performing weakly by the fourth
quarter. GDP growth was only 0.2 percent in that
quarter, compared with the same period in 1997. Much of
the blame for the slowdown in growth can be attributed
to the foreign sector: total exports were 22 percent
lower than during the final quarter of 1997.
	Most indicators point to a deterioration in
economic performance in early 1999. GDP fell by 5.7
percent during the first quarter, compared with the same
period in 1997. From January-May, sales of industrial
production were down by 8.5 percent, compared with one
year earlier.
	Nonetheless, the worst may well be over. During the
first two months of the year, industrial sales were down
by 12.2 percent. Moreover, the official unemployment
rate, after rising from 6.9 percent at the end of 1998
to a record 8.5 percent in March, has since subsided to
7.8 percent in May.
	A large decline in trade with Russia, similar to
that experienced by both Estonia and Latvia in 1998, has
finally hit Lithuania this year, especially with regard
to exports. From January through April, Russia purchased
only 7 percent of Lithuanian exports, putting it in
fourth place. However, with regard to Lithuanian
imports, Russia remained the most important partner,
accounting for 20 percent of the total.
	Thus, Lithuania remains more vulnerable to economic
developments in Russia than Estonia or Latvia. That
vulnerability is even greater than the figures suggest
because much of Lithuania's imports from Russia consists
of crude oil for the Mazeikiai refinery, whose supplies
have been cut off twice this year (in late January and
in late May, on both occasions for several days). Since
Mazeikiai accounts for about 10 percent of GDP, these
shutdowns have a significant impact on the economy.
	The weakness of the economy this year has had
predictable fiscal consequences. The government of
former Prime Minister Gediminas Vagnorius, who was
replaced on 19 May by Rolandas Paksas, had targeted a
balanced budget for 1999. However, that goal was
predicated on 5.5 percent GDP growth and 5 percent
inflation. Given the unrealistic targeted GDP growth,
the current government is considering expenditure cuts
of varying sizes, with the IMF supporting a reduction of
$104 million.
	There is, however, one silver lining for
Lithuania's economy this year--namely that the current
account deficit, which had reached an alarming 12.1
percent of GDP in 1998, fell to 9.6 percent of GDP
during the first quarter. In line with the slowing
economy, imports contracted by 20.2 percent from January
through April over the same period in 1998. Such a
decline kept the trade deficit from growing excessively
in the face of a 23.5 percent fall in exports over this
period.
	Large current account deficits have not yet
undermined Lithuania's commitment to maintaining the
fixed exchange rate under the currency board introduced
in April 1994, although there is debate about how and
when to switch from pegging to the dollar to fixing to
the euro. Moreover, foreign direct investment of $920
million in 1998, largely on the strength of the sale in
July to Swedish and Finnish interests of the
telecommunications monopoly for $510 million, was
sufficiently large that the foreign reserves grew by
$397 million, despite the big current account imbalance.
	Projections for Lithuania's GDP growth this year
vary, with the IMF projecting 2.5 percent and other
observers predicting a decline of 1-2 percent. Exports
to Russia are likely to remain far below their past
levels, so that reorienting foreign trade toward the EU
must be given a high priority if sustained economic
growth is to be achieved in the coming years.

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

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