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RFE/RL NEWSLINE Vol. 3, No. 168, Part II, 30 August 1999
___________________________________________________________ RFE/RL NEWSLINE Vol. 3, No. 168, Part II, 30 August 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 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part II * POLISH DEFENSE OFFICIAL RESIGNS OVER SUSPECTED TIES TO COMMUNIST SECRET SERVICES * NORWAY CALLS FOR MACEDONIA TO FREE PEACEKEEPER * HOLBROOKE: 'PROGRESS, PROBLEMS' IN KOSOVA End Note: BULGARIA'S ECONOMY ANAEMIC UNDER CURRENCY BOARD xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx EAST-CENTRAL EUROPE BELARUSIAN TRADE UNIONS ANNOUNCE NATIONWIDE PROTEST. The Federation of Trade Unions will hold a nationwide protest on 30 September over deteriorating living standards, Belarusian media reported on 27 August. Valyantsina Palevikova, secretary of the federation, told "Zvyazda" that the government has failed to comply with its pledge to increase real wages in 1999. According to Palevikova, those wages dropped 4 percent from January-June, instead of increasing by 34 percent, as the government had promised. Trade unionists said on 27 August that the federation also opposes the presidential decree on labor discipline, which introduces limited-duration contracts for all categories of Belarusian workers. JM BELARUSIAN OPPOSITION LEADER IN LITHUANIA GETS MORE SUPPORT. Former Supreme Soviet Chairman Stanislau Shushkevich, World Association of Belarusians Chairman Radzim Haretski, and Ivonka Survilla, chairwoman of the emigre Belarusian Democratic Republic, signed a document in Vilnius on 27 August repeating that Alyaksandr Lukashenka's term as Belarus's legitimate president is over. The document also pledges support for Supreme Soviet Chairman Syamyon Sharetski, who is now living in Lithuania and who de jure became Belarusian head of the state on 20 July. Meanwhile, Sharetski has unofficially met with German and U.S. diplomats in Vilnius, seeking to enlist their support in his effort to undermine Lukashenka's presidency in the international arena, dpa reported on 27 August. JM KUCHMA EMPOWERS FINANCE MINISTRY WITH SHAPING TAX POLICIES. Ukrainian President Leonid Kuchma has signed a decree putting the Finance Ministry in charge of taxation policies, a key requirement for the IMF to resume its $2.6 billion aid program to Ukraine, AP reported on 27 August. The decree deprives the State Tax Administration of policy-making duties and orders the Finance Ministry to set tax collection targets and propose new taxes. The State Tax Administration retains the right to monitor tax collection. JM UKRAINIAN INDEPENDENT TELEVISION CHANNEL SAYS IT FACES CLOSURE. Tax authorities in Kyiv on 26 August ordered that the bank account of the private STB television station be closed because of the station's failure to submit tax documents for examination, AP reported on 27 August. STB President Dmytro Prykordonnyy told journalists that his station cannot submit the required documents because they are being held by eight other state bodies. "I haven't dealt with television proper for the past two months. Instead, I've been working with the nine controlling agencies," Prykordonnyy commented. He added that the channel will have to close in September unless it is granted access to its money. STB has vowed to give equal air time to each of the leading candidates in the upcoming presidential ballot. JM UN COMMITTEE CRITICISES LATVIA'S TREATMENT OF ALIENS... The UN Committee on Racial Discrimination, while recognizing Latvia's efforts in achieving social stability and legislative reform, sharply criticized the country's treatment of its national minorities, LETA reported on 27 August. The report tagged Latvia for the country's sluggish naturalization process, which affects more than 25 percent of residents, and said Latvia should provide educational opportunities in minority languages. In addition, the committee urged Latvia to encourage its residents to rethink their understanding of "racial discrimination." MJZ ...LEAVES LATVIAN LAWMAKERS STEAMING ABOUT RUSSIAN INFLUENCE. LETA reported on 28 August that most Latvian lawmakers rejected the findings of the UN committee report. People's Party deputy Aleksandrs Kirsteins told LETA that "[the report] says nothing and means nothing... The reality is that more children are being educated in the Latvian language." Fatherland and Freedom deputy Juris Dobelis said the UN criticism is baseless, because "taking into account the reality of the situation in Latvia, it is impossible to implement all of the demands made by international organizations." Dobelis also criticized the country's "politicians who were unable to convince [others] in the international arena that another country is to a much greater extent responsible for the situation in Latvia," referring to Latvia's half-century of occupation by the Soviet Union. Latvia's Way deputy Edvins Inkens was surprised by the report's findings. "Until now, only Russia's UN representatives expressed such views," he commented. MJZ NEW CONFLICT OF INTEREST CHARGES FOR VENTSPILS MAYOR. "Diena" reported on 28 August that new documents have been submitted to the Latvian Prosecutor-General's office linking Ventspils Mayor Aivars Lembergs to Multinord AG, which has holdings in major companies operating in Ventspils. This third set of documents includes checks paying dividends from Multinord AG to Lembergs. Lembergs is being investigated for conflict of interest and failure to make proper financial disclosures, as required by law. AB FURTHER RUSSIAN REACTION TO COUP PLOTTERS' SENTENCING IN LITHUANIA. According to BNS on 27 August, the Russian Foreign Ministry believes that the verdict handed down to the 13 January 1991 coup plotters is political persecution. At the same time, the ministry acknowledged that the court's decision is "an internal affair of sovereign Lithuania." The Russian Foreign Ministry voiced special concern about the fate of 70-year-old Stanislav Mitskevich, who is a Russian citizen and received a four-year jail term, along with five other defendants. It is thought that Mitskevich may have fled the country because he failed to appear in court for the sentencing. AB POLISH DEFENSE OFFICIAL RESIGNS OVER SUSPECTED TIES TO COMMUNIST SECRET SERVICES. Deputy Defense Minister Robert Mroziewicz resigned on 27 August after Lustration Prosecutor Boguslaw Nizienski had queried the accuracy of his lustration statement denying any collaboration with the Communist-era secret services (see "RFE/RL's Newsline," 27 August 1999). Meanwhile, "Rzeczpospolita" reported on 28 August, citing "unofficial sources," that Nizienski also queried the lustration statement by Deputy Premier and Interior Minister Janusz Tomaszewski. Tomaszewski told "Rzeczpospolita" that he does not know anything about such a step, while Nizienski, speaking to "Gazeta Wyborcza"on 29 August, refused to confirm the "Rzeczpospolita" allegation. JM POLAND'S WALESA HOLDS CONFERENCE ON POVERTY... Former President Lech Walesa invited 37 top politicians and economists of all political stripes to discuss poverty in Poland at the Lech Walesa Institute on 27 August. Some well- known politicians--including parliamentary deputy speaker Marek Borowski of the Left Democratic Alliance and Finance Minister Leszek Balcerowicz of the liberal Freedom Union-- failed to appear, claiming the conference was part of Walesa's presidential election campaign. Walesa is the first politician who announced his intention to run in the 2000 elections (see "RFE/RL Newsline," 16 August 1999). JM ...WHILE JARUZELSKI PLEDGES TO ATTEND TRIAL FOR 1970 MASSACRE. A district court in Gdansk has summoned another former Polish president, General Wojciech Jaruzelski, to appear in court in connection with the massacre of 44 people by the police and the army during the 1970 riots in Gdansk, Gdynia, Szczecin, and Elblag. The court ruled that because of his poor health, Jaruzelski will stand trial in Warsaw, where he lives. "I shall stand before the court without fear," the 76-year-old Jaruzelski told PAP. Jaruzelski, who was defense minister in 1970, is accused, along with 11 other communist decision-makers, of indirect involvement in the massacre. JM CZECH PRESIDENT THREATENS TO QUIT. Vaclav Havel on 28 August said he will resign his post if the parliament approves constitutional amendments that would limit his prerogatives, CTK reported. Under changes currently being drafted by the Social Democratic Party (CSSD) and the Civic Democratic Party (ODS), the president would lose the power to name the premier after an election, appoint Central Bank members, or grant amnesties. Havel said that those changes would "turn the president into a mechanical puppet," adding that they are being drafted out of "intense hatred [for] or fear" of himself. Havel also rejected CSSD-ODS criticism of the new Impulse '99 civic initiative, saying that the reaction of people who believe that politics is only a matter for political parties shows "the misery of our public and social life" (see "RFE/RL Newsline," 26 July and11 August 1999). MS INDEPENDENT CANDIDATE WINS CZECH SENATORIAL ELECTION. Vaclav Fischer, who owns a travel agency chain and a charter airline, won the 27-28 August by-election to replace the late ODS Senator Vaclav Benda. Fischer garnered 71.24 percent of the vote, well ahead of Jirina Jiraskova of the ODS, who came in second. His victory means that the CSSD and the ODS have lost their three-fifths majority in the 81-seat chamber and may now be unable to push through their envisaged constitutional changes. MS BAHAMAS REINTRODUCE VISAS FOR SLOVAK CITIZENS. The Foreign Affairs Ministry on 27 August announced that the Bahamas have reintroduced visa requirements for Slovak citizens as of 15 September, SITA reported. The ministry said the decision was "a delayed reaction" to a similar step taken by the U.K. last fall. The Bahamas are a member of the Commonwealth. MS HUNGARIAN PREMIER IN SLOVAKIA. Viktor Orban, meeting with his Slovak counterpart, Mikulas Dzurinda near Bratislava on 27 August, said the Hungarian government "views relations with Slovakia above all through the [eyes] of ethnic Hungarians" living there, Duna Television reported. Orban said that "the extent of our satisfaction [with these relations] depends on the extent to which Hungarians in Slovakia are able to say that they are all right, are not discriminated against, and can feel at home" in the country. Chairman of the Slovak Coalition Party Bela Bugar, who also participated in the meeting, said the recently passed law on the use of minority languages in contacts with the authorities is only "a gesture for the EU." MS HUNGARY EXTENDS INVESTIGATION AGAINST RUSSIAN BUSINESSMAN. Officials from the Hungarian Tax Office said that tax authorities have extended an investigation into companies controlled by Semyon Mogilevich, who is suspected of being a leading figure in the international "Russian mafia," Hungarian media reported on 30 August. A U.S. official commented, however, that Hungarian authorities are putting up obstacles to cooperation between U.S. and Hungarian law enforcement agencies, noting that Mogilevich was able to leave Budapest before an investigation into his activities had ended there. A Hungarian government official expressed "shock" at that remark, pointing out that U.S. authorities have not issued an arrest warrant for Mogilevich. He added that there are no reasons to restrict Mogilevich's personal freedom in Hungary. MSZ SOUTHEASTERN EUROPE NORWAY CALLS FOR MACEDONIA TO FREE PEACEKEEPER. A vehicle driven by two Norwegian KFOR soldiers hit a car carrying Macedonian Minister without Portfolio Radovan Stojkovski, his wife, and daughter on 28 August southeast of Skopje. The Stojkovskis died in the crash. Their driver and the two soldiers were injured. The two soldiers, who had been driving on the left side of the highway, refused to take a breath test. Spokesmen for the Macedonian government and KFOR engaged in mutual recriminations over the incident. On 29 August, Macedonian police arrested the Norwegian driver in the hospital. The next day, Norwegian Foreign Minister Knut Vollebaek said on Norwegian television that Macedonian authorities violated their agreement with KFOR, which specifies that peacekeepers must be prosecuted in their home countries. Vollebaek demanded the driver's release. The second Norwegian has meanwhile arrived in Kosova. PM RED CROSS: SERBS HOLD 2,000 KOSOVARS. A spokeswoman for the International Committee for the Red Cross said in Geneva on 30 August that the Serbian authorities are holding at least 2,000 ethnic Albanians from Kosova in Serbian prisons. She said that the prisoners include those who have been in Serbian jails for a long time, those taken to Serbia during the recent conflict, and those sent to Serbian jails when Serbian forces left Kosova in June. Among those held is student leader Albin Kurti (see "RFE/RL Newsline," 13 August 1999). On 27 August, several thousand people held a silent march through Prishtina to demand the prisoners' release. Among those participating was the UN's Bernard Kouchner. PM HOLBROOKE: 'PROGRESS, PROBLEMS' IN KOSOVA. U.S. Ambassador to the UN Richard Holbrooke said in Prishtina on 29 August that "sometimes forging a peace is more difficult than winning a war." He added that "this place has been a mess for a long time, but a different kind of mess. The war was messy, the decade that preceded the war was messy, the history back to 1912 was messy...and the [current] task is immense." He praised the role of the UN and of KFOR. Holbrooke said after meeting with Serbian Orthodox Archbishop Artemije that any attack on cultural monuments is a "criminal, vandal act." Holbrooke noted that ethnic Albanian leader Hashim Thaci assured him that he would do "anything in his power" to make Kosova a pluralistic society. The ambassador stressed that "the most important thing is that Albanians now can decide about their own destiny and that NATO forces are here to provide security for everybody." PM EXPLOSION DAMAGES MONUMENT IN PRISHTINA. A blast from an explosive charge weakened the foundations of the communist- era Brotherhood and Unity Monument in central Prishtina on 28 August. No one was injured. KFOR peacekeepers subsequently removed additional explosive charges from the monument. PM DRASKOVIC DRAWS CLOSER TO MILOSEVIC. Vuk Draskovic's Serbian Renewal Movement issued a statement in Belgrade on 29 August accusing KFOR and the UN mission in Kosova of being "essentially in close cooperation with the [Kosova] Liberation Army." KFOR and the UN thereby "help accomplish the most monstrous plans of the Albanian terrorists and separatists," AP reported. The Serbian authorities made similar charges against the U.S. last week (see "RFE/RL Newsline," 27 August 1999). In an apparent reference to Draskovic, opposition leader Veran Batic said on 30 August that one of the foundations of Yugoslav President Slobodan Milosevic's rule is the group of opposition leaders who cooperate with him. The other sources of Milosevic's power are "electoral fraud, media manipulation, and repression," Batic added. PM VEDRINE: SERBIA COULD LOSE CLAIM TO KOSOVA. French Foreign Minister Hubert Vedrine told "Le Figaro" of 28 August that Serbia must replace Milosevic if it wants to keep Kosova. The minister stressed: "If the regime does not change, the sovereignty of Yugoslavia...will be increasingly contested. Conversely, the installation of a democratic regime boosts the chances for a combination of Yugoslav sovereignty and an autonomous [Kosova]." In a warning to the ethnic Albanians, Vedrine said that "nothing will be possible if security is not assured for all. That is a precondition for [the broad- ranging self-government that] is to follow." He nonetheless rejected the Serbian proposal to set up ethnic Serbian "cantons" (see "RFE/RL Newsline," 26 August 1999). Vedrine argued that "we have to find other methods to ensure security and coexistence." PM MONTENEGRIN MINISTER WARNS CLANS. Interior Minister Vukasin Maras said in Podgorica on 29 August that the government will firmly oppose any attempt by "tribes" to secede from Montenegro and attach the territory they inhabit to Serbia, RFE/RL's South Slavic Service reported. He was referring to a gathering of the Vasojevic clan in the north the previous day. Speakers at that meeting said that they will "defend Yugoslavia by all means" and secede from Montenegro should that republic withdraw from the Yugoslav federation. Observers note that clans form the basis of Montenegrin society and play a key role in political life. PM DJILAS: MONTENEGRO KEY TO CHANGE. Sociologist and political commentator Aleksa Djilas, who is the son of leading communist-era dissident Milovan Djilas, said that the most serious threat to Milosevic comes from Montenegrin President Milo Djukanovic, the Frankfurt-based Serbian daily "Vesti" reported on 30 August. Djilas stressed that the Serbian opposition is not sufficiently united to challenge Milosevic successfully. Djilas argued that sooner or later Milosevic will have to agree to Djukanovic naming a new federal prime minister. That will mark the end of Milosevic's grip on power, the commentator continued. PM BILDT: REFORM MUST ACCOMPANY BALKAN RECONSTRUCTION. Carl Bildt, who is UN Secretary- General Kofi Annan's senior envoy to the Balkans, said in New York that southeastern Europe needs thorough-going political and economic reforms in addition to development assistance. Bildt stressed that old- style communist systems remain in place in much of the region and that "crony capitalism" predominates in some post- communist societies like Croatia and Bosnia, the "International Herald Tribune" reported on 30 August. Bildt identified Serbia as the core of the problem. "It's such a big chunk of land in the middle of the Balkans that if it does not reform itself, it will be very difficult to do anything substantial with the rest. Serbia is the core nation of the region," Bildt concluded. PM DID BOSNIAN SERB GENERAL RISK ARREST IN VIENNA? Unknown persons leaked the secret list of war criminals indicted by the Hague-based tribunal to the Bosnian Serb authorities "weeks ago," Reuters quoted the Dutch daily "De Volkskrant" as saying on 30 August. The daily argued that General Momcilo Talic knew that he was on the list and risked arrest last week in Vienna (see "RFE/RL Newsline," 27 August 1999). The newspaper quoted an unnamed former Bosnian Serb military official as saying that Talic "was blinded by power and status.... He thought that his senior position in the army rendered him" immune from arrest. PM CROATIA PREPARING TO EXTRADITE 'TUTA'? A Zagreb county court may soon decide to extradite Mladen "Tuta" Naletilic to The Hague, where he is wanted for war crimes in conjunction with the 1993-1994 Croatian-Muslim conflict in Bosnia-Herzegovina, "Novi List" reported on 30 August. Croatia's failure to extradite Tuta has led to serious tensions in its relations with the tribunal and with Washington (see "RFE/RL Newsline," 27 August 1999). AP reported that some Croatian authorities are reluctant to extradite Tuta lest he implicate top officials in his testimony. PM MOLDOVAN PREMIER IN ROMANIA. Ion Sturza unexpectedly arrived in Romania on 27 August on a visit scheduled to begin three days later. After meeting with President Emil Constantinescu the next day, Sturza said that prospects for improving relations "have never been better" because both countries are ruled by centrist coalitions. He added that Moldova is particularly interested in the development of the transportation links between the two countries and in energy deliveries. Romania, he said, must become a "main electricity supplier" for Moldova. He also said that Romania will assume a 51 percent stake in the Moldovan Tirex Petrol Company. With regard to the pending basic treaty between the two countries, Sturza said the governments must "take over [from experts] the finalization" of that document, adding that he hopes it will be ready for signing by year's end. On 30 August, Sturza is scheduled to meet with Prime Minister Radu Vasile and the chairmen of the parliament's two chambers. MS MOLDOVAN PRESIDENT RE-WRITES HISTORY. Speaking at ceremonies marking Moldova's Independence Day on 27 August, President Petru Lucinschi said the day marks "the common denominator of our national history throughout the 640 years that passed since [the first declaration of] Moldovan statehood," RFE/RL's Chisinau bureau reported. For the first time since independence was declared in 1991, a military parade took place in Chisinau to mark the anniversary. MS DIMITROV MAUSOLEUM DEMOLISHED IN SOFIA. Workers in Sofia on 28 August completed the dismantling of the mausoleum that housed the body of Communist leader Georgi Dimitrov, BTA reported. Dimitrov's body was removed from the tomb and cremated in 1990 (see "RFE/RL Newsline," 23 August 1999). MS BULGARIAN PARTIES BRACE FOR LOCAL ELECTIONS. The two parties representing ethnic Turks--the Movement for Rights and Freedoms and the Party of Democratic Changes--have concluded an agreement on cooperation in the October local elections, BTA reported. leader Also on 28 August, the Liberal Democratic Alternative (LDS) and the Euro-Left signed an agreement on "pragmatic cooperation." LDS leader and former President Zhelyu Zhelev, said the agreement lays the foundation for a new liberal centrist formation. MS END NOTE BULGARIA'S ECONOMY ANAEMIC UNDER CURRENCY BOARD By Michael Wyzan In July 1997, in the aftermath of a severe economic crisis, Bulgaria introduced a currency board arrangement (CBA), under which the exchange rate is fixed to the Deutsche mark and the only changes in the money supply must arise from inflows and outflows of foreign currency. Such an arrangement, which has also been adopted by transition countries Bosnia-Herzegovina, Estonia, and Lithuania, is designed to instill credibility in economic policy. It has been universally successful in bringing down inflation and interest rates to acceptable levels. A study by IMF economists found that countries employing CBAs have lower inflation and more rapid economic growth. The Bulgarian experience corroborates the results of that study as far as inflation is concerned. After experiencing 578.6 percent consumer price inflation (December to December) in 1997 (242.7 percent in February 1997 alone), such inflation was just below 1 percent in 1998 and stood at 1.7 percent in the 12 months to July 1999. The fall in the national bank's annual base interest rate was equally dramatic, from a peak of 300 percent in September 1996 to the current 4.42 percent. Bulgaria's experience with economic growth, however, has been less encouraging. While GDP was up by 18.9 percent in the first quarter of 1998 over the very depressed first quarter of 1997, the recovery quickly ran out of steam. For 1998 as a whole, the rate of GDP growth was only 3.5 percent, and this indicator fell by 0.7 percent in the first quarter of 1999, even before the effects of the Kosova crisis began to be felt. The official forecast is for GDP to grow by 1.5 percent this year, although many observers expect a decline. Industrial production was down by 16.2 percent in the first quarter, compared with the first three months of 1998. Wages have recovered to pre-crisis levels under the CBA, even if production has yet to do so. The average monthly wage in the public sector, which had fallen to $25 in February 1997, recovered by May 1999 to $124--close to the post- communist peak of $128 in September 1993. The unemployment rate, at 13.04 percent in May, has moved in no particular direction during the CBA era. The rapid rise in wages may not have led to higher unemployment, but some argue that it has played a role in Bulgaria's deteriorating current account balance. From January-May, the current account deficit was $433.5 million, up from $88.2 million a year earlier. This is a significant change for a country that has typically run surpluses or small deficits. Behind the current account imbalance during the first five months stands a trade deficit of $357.4 million (up from $48.5 million a year earlier). While growing trade and current account imbalances are common after successful macroeconomic stabilizations, it is striking that in Bulgaria these deficits result from declines in exports, rather than increases in imports as the economy expands. Both exports and imports were lower during the period January-May, compared with the same period in 1998, but exports fell by 22.7 percent and imports by only 5.6 percent. There are a number of factors that contributed to the export collapse. Some are related to the crisis in Kosova, which cut off trade with Yugoslavia and trade routes to the EU through that country (some 50 percent of Bulgarian exports were transported through Yugoslavia before the war). Another factor is the continuing effect of the Russian crisis, which has caused a significant drop in trade with that country. Exports to Russia were only $39.7 million from January-March, compared with $272 million during that period last year. Under the CBA, there is not much scope for growth of the money supply when the country is running current account deficits and receiving relatively little foreign direct investment ($85.2 million in the first four months, down from $199.2 million during that period last year). Moreover, only a small share of the credit generated has gone to enterprises. Banks, which were burned during the pre- CBA era by enterprises that never repaid loans, would rather lend to the government or foreigners. However, there has been improvement on this front. Whereas loans to enterprises accounted for 23.7 percent of banks' financial assets at the end of 1997, that figure had risen to 32.1 percent by the end of 1998. Large persistent current account deficits will make the CBA difficult to sustain. To avoid such strains, Bulgaria will have to do a better job in placing its exports on Western markets and/or in attracting foreign investment. Estonia, whose economy has performed well under the CBA (which was introduced in 1992), has excelled in both respects. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1999 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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