RFE/RL NEWSLINE Vol. 3, No. 172, Part II, 3 September 1999

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RFE/RL NEWSLINE Vol. 3, No. 172, Part II, 3 September 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 AUTHORITIES START TALKS WITH OPPOSITION

* UCK TO BECOME CIVILIAN CORPS OR NEW ARMY?

* UN 'REMOVES' KOSOVA FROM YUGOSLAV CURRENCY SYSTEM

End Note: REFORMING THE BULGARIAN MILITARY
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EAST-CENTRAL EUROPE

BELARUSIAN AUTHORITIES START TALKS WITH OPPOSITION. Four-
strong delegations representing the authorities and the
opposition began consultations at the OSCE Minsk mission
office on 3 September, Belapan reported. The talks are
focusing on the opposition's access to the state media. JM

UKRAINIAN CABINET SETS MAIN 2000 BUDGET TARGETS... Despite
the continued economic decline, the government has approved
rather optimistic guidelines for the 2000 budget. It predicts
2 percent growth in GDP to 150.8 billion hryvni ($34.3
billion). Budget revenues are foreseen as exceeding
expenditures by 500 million hryvni. According to UNIAN, this
latter guideline was adopted to prevent the budget deficit
from impacting on the "overall economic situation" and to
provide funds to repay the country's foreign debt. Annual
inflation is predicted at 12 percent, down from this year's
envisaged rate of 19.1 percent. The hryvnya exchange rate is
expected to fall from the current 4.4 to $1 to 5 hryvni to
$1. The government indents to submit the budget draft to the
parliament by 15 September. JM

...VOWS TO FULFILL IMF CONDITIONS FOR NEXT TRANCHE. The
government has sent a letter to the IMF confirming that it
has met all requirements necessary to receive the next IMF
loan tranche. A final decision on the last major requirement-
-an increase in tariffs on public utilities--is to be taken
before the IMF Board of Directors meeting on 7 September.
Deputy Premier Serhiy Tyhypko, who is heading a Ukrainian
delegation to talks with the IMF in Washington, said that
"the only thing Ukraine needs to show are good incomes from
natural gas auctions because we are searching for a way to
pay off our social payments which is the only stressful issue
for us," according to the 3 September "Eastern Economic
Daily." JM

LATVIAN PARLIAMENT DEFEATS GOVERNMENT'S AMENDMENT TO PORT
LAW. By a vote of 34 to 40 with 13 abstentions, lawmakers on
2 September defeated a government-supported amendment to the
law on ports, LETA reported. The controversial measure would
have restricted Riga, Ventspils, and Liepaja in disputes with
the government over appointments to the boards of those
municipalities' ports. The measure, which the government had
passed by decree during a parliamentary recess, was heavily
criticized by Ventspils Mayor Aivars Lembergs. Lembergs is
widely considered an arch-enemy of Prime Minister Andris
Skele. MH

LITHUANIAN CENTRAL BANK TO LIQUIDATE FAILED BANK. The
Lithuanian Central Bank on 2 September announced it will
begin bankruptcy proceedings against the failed Litimpeks
Bank (see "RFE/RL Newsline," 16 August 1999). The Central
Bank has asked the Vilnius District Court to revoke the
banking license of Litimpeks and for a receiver to assume
control of the bank's operations, ELTA reported. The Deposit
Insurance Fund said it may need to pay out some 24 million
litas ($6 million) if Litimpeks is indeed declared bankrupt.
BNS added that an audit conducted in mid-August showed the
bank's liabilities exceed assets by almost 10 million litas
($2.5 million). Litimpeks accounts for only 2.2 percent of
Lithuania's banking market. MH

POLISH CABINET APPROVES RESTITUTION LAW DRAFT. The government
on 2 September approved a draft law that will partly
compensate people whose property was confiscated by the
Communist regime from 1944-1962. The government estimates
that there will be some 170,000 property restitution claims
totaling 130 billion zlotys ($32.5 billion) once the bill is
adopted by the parliament and signed by the president. Under
the draft, successful claimants will receive compensation to
the tune of 50 percent of the value of their former assets.
Such compensation will take the form of either the property
itself or stock in state-owned companies undergoing
privatization. JM

POLISH DEPUTY PREMIER RESIGNS OVER LUSTRATION. Deputy Premier
and Interior Minister Janusz Tomaszewski tendered his
resignation on 2 September, following his sacking by Premier
Jerzy Buzek (see "RFE/RL's Newsline," 2 September 1999).
Tomaszewski said he resigned in keeping with his former
pledge to step down if the Lustration Court decided to check
the accuracy of his lustration statement. The same day,
Polish Television confirmed the widespread rumor that the
court has begun examining whether Tomaszewski collaborated
with the Communist secret services. On 3 September, President
Aleksander Kwasniewski approved Tomaszewski's
dismissal/resignation. JM

CZECH OPPOSITION LEADER EVASIVE ON POLITICAL FUTURE. Civic
Democratic Party leader Vaclav Klaus told "Hospodarske
noviny" on 3 September that the continuation of the present
social and economic stagnation is a "horrible thought," CTK
reported. Klaus admitted that the so-called "opposition
agreement" with the Social Democratic minority government has
been "a failure" but said that for the time being there is no
alternative. Klaus said he wants early elections under a new
electoral law that would make it possible for one party to
create a majority in the parliament. But he added that he
doubts whether the necessary 120 signatures in favor of early
elections could be gathered in the Chamber of Deputies. MS

CZECH DEPUTY PREMIER SAYS HE WILL NOT RESIGN. Egon Lansky on
2 September said on Frekvence 1 Radio that he will not tender
his resignation over having opened an account in Austria in
violation of current regulations, CTK reported. He said he
has committed a misdemeanor comparable to "parking a car
improperly" and that he did not commit it "as a member of the
cabinet." He added that he will ask the Senate's Immunity
Committee to strip him of parliamentary immunity so that the
case can be properly investigated. MS

HOLOCAUST SURVIVORS MEETING IN PRAGUE. Hundreds of Jewish
children who survived the Holocaust in Nazi concentration
camps are meeting in Prague on 3 September. This is their
12th meeting and the first to take place in a former
communist country, CTK reported. Some of the events will take
place in the former concentration camp of Theresienstadt. The
conference is organized by the Hidden Child Praha
organization in cooperation with the Federation of Jewish
Child Survivors of the Holocaust. Roma representatives are
among the honorary guests. MS

RACIALIST LEAFLETS DISTRIBUTED IN EASTERN SLOVAKIA. Jozef
Cervenak, chairman of the Roma-Gemer civic association in
Roznava, said on 2 September that racialist leaflets have
been placed in Roma mailboxes in the town. The leaflets
called on "the white man" to stand up and defend what is his
"by right in the name of [his] ancestors," CTK reported.
Meanwhile, CTK cited the Finnish FNB agency as reporting that
the Finnish authorities have processed and turned down all
300 out of the 1,100 requests for political asylum received
from Roma who arrived in Finland over the last two months. MS

POLICE RAID EDITORIAL OFFICE OF BUDAPEST DAILY. Hungarian
police on 2 September raided the offices of the financial
daily "Vilaggazdasag" to search for the original of a list of
"VIP account-holders" who received preferential loans from
Hungary's Postabank. Detectives also searched the car and
home of chief editor Andras Banki and Laszlo Illisz, the
journalist who published the list in the 30 August issue of
the daily. Banki said the original list, which gave the names
and loan amounts of more than 100 politicians and other
prominent personalities, has been destroyed. MSZ

SOUTHEASTERN EUROPE

UCK TO BECOME CIVILIAN CORPS OR NEW ARMY? "The New York
Times" on 3 September reported that officials of NATO, the
UN, and the Kosova Liberation Army (UCK) have agreed that
some 3,000 guerrillas will soon become a "lightly-armed
civilian emergency force." Western officials described the
new corps as a civilian force that will deal with emergencies
such as "forest fires, earthquakes, mountain rescue, and
reconstruction." The corps will have a military organization,
however, as well as uniforms and "sidearms to protect
equipment," the daily continued. It will also have
helicopters. UCK officers "see it as a potential core of a
national army, and are selling it to their followers as
such." General Agim Ceku, who is the UCK's chief of staff,
said: "We will build a new army in the future, and the Kosova
Corps will be one part of it." A KFOR spokesman stressed,
however, that the corps is not a new army but rather a form
of "uniformed public service." PM

THACI APPEALS TO SERBS. The UCK's Hashim Thaci said in London
on 2 September that Kosova's Serbs should return "because we
are interested in establishing in Kosova a multi-ethnic
society." The UNHCR previously estimated that 170,000 of
Kosova's 200,000 Serbs fled the province during or since the
recent conflict (see "RFE/RL Newsline," 12 August 1999). Also
on 2 September, Serbian Deputy Prime Minister Vojislav Seselj
said in Belgrade that Serbian police must return to Kosova
"as soon as possible" to ensure the safety of local Serbs. He
stressed that "if there are no peaceful means available, we
shall have to find other ways" to enable Serbian forces to
return to the province. PM

UN 'REMOVES' KOSOVA FROM YUGOSLAV CURRENCY SYSTEM. A
spokeswoman for Bernard Kouchner, who is the UN's chief
civilian administrator in Kosova, said on 3 September in
Prishtina that he has issued an order allowing currencies
other than the Yugoslav dinar to legally circulate Kosova.
She added that Kouchner's own office will use German marks.
It will accept dinars only for an additional fee, dpa
reported. Observers note that since KFOR forces entered
Kosova in June, local ethnic Albanians have generally refused
to use dinars, which they regard as a symbol of Serbian rule.
The Serbian authorities are certain to protest Kouchner's
decision as a violation of Yugoslav sovereignty in Kosova. In
practice, the German mark has been the second currency
throughout the former Yugoslavia for decades. PM

AUSTRALIAN SAYS SERBS TORTURED HIM. Steve Pratt, who is one
of the two Australian aid workers just released from prison
by Yugoslav President Slobodan Milosevic, said in Sydney on 3
September that he confessed to spying under duress (see
"RFE/RL Newsline," 2 September 1999). He said that he made
the confession in April after his Serbian captors told him
"to cooperate or be strangled," Reuters reported. Australian
Prime Minister John Howard said that he will investigate
Pratt's charge, which he said he has not heard before. PM

U.S. AIR FORCE: DOWNED PILOTS RESCUED FROM SERBIA SWIFTLY. An
Air Force spokesman said in Hurlburt Field, Florida, on 2
September that the military used highly sophisticated
technology in order to rescue two U.S. airmen downed in
Serbia on 26 March and 2 May, respectively. In each case the
pilots were rescued within hours of crashing. The helicopters
that picked them up spent "less than one minute" on the
ground. PM

PARTY MEMBERSHIP A KEY TO SERBIAN JOBS? In response to an
"initiative" by Milosevic's Socialist Party of Serbia, local
employers in Pozarevac have signed contracts with 105 young
professionals, the Frankfurt-based Serbian daily "Vesti"
reported on 3 September. The local branch of the opposition
Democratic Party said in a statement that it is "immoral"
that a powerful party uses its influence to win jobs for its
young members at the expense of other job seekers. Pozarevac
is Milosevic's home town and power base. Among the firms
giving jobs is the Bambi cookie company, which recently
helped finance an amusement park built by Milosevic's son
Marko. PM

HOLBROOKE LAUDS DODIK. U.S. Ambassador to the UN Richard
Holbrooke said in Banja Luka on 2 September that Republika
Srpska caretaker Prime Minister Milorad Dodik is "the most
promising leader of his generation in his country," Reuters
reported. Referring to Dodik's hard-line opponents, Holbrooke
added: "Throughout this area there are people who are
separatists, racists, criminals, and crooks. These are people
not only trying to destroy the [1995] Dayton peace accords
but to walk the Serb people of Bosnia-Herzegovina back to the
dark ages of six years ago" when Bosnia was still torn by
war. Holbrooke proceeded the same day to Mostar, which he
called "the most broken city in Europe, a city whose failures
exemplify the tragedy of the Balkans." The U.S. diplomat met
on 3 September in Zagreb with Croatian President Franjo
Tudjman, who assured Holbrooke that Croatia will cooperate
with the Hague-based war crimes tribunal. PM

PLAVSIC ON HAGUE LIST? Republika Srpska Justice Minister
Milan Trbojevic, citing unspecified "sources," said the
Hague-based tribunal has prepared a list of 10 past or
present Bosnian Serb officials whom it wants to question in
conjunction with a case being prepared against Milosevic for
war crimes he allegedly committed in Croatia and Bosnia
before the Dayton agreement, "Vesti" reported on 3 September.
Trbojevic added that his "sources" tell him that some or all
of the 10 might face indictment themselves by the tribunal.
The minister noted that he himself is on the list, as are
former President Biljana Plavsic, and Momcilo Krajisnik, the
former ethnic Serbian representative on the Bosnian joint
presidency (see "RFE/RL Newsline," 30 August 1999). PM

CROATIAN PARTIES REAFFIRM PACT. Representatives of six
opposition parties signed an agreement in Zagreb on 2
September pledging to continue their alliance against the
governing Croatian Democratic Community at least until after
the upcoming parliamentary elections, RFE/RL's South Slavic
Service reported. The ceremony was intended to dispel rumors
that the coalition is about to break up. The coalition
includes all significant opposition parties except those on
the far right. PM

ITALY DEMOLISHES ALBANIAN BUNKERS. Albanian officials
formally thanked Italian military engineers in Durres on 2
September for demolishing 32 of the country's 300,000
concrete bunkers, Reuters reported. Local soccer teams will
use the reclaimed space, and the broken concrete will be used
to build a marina. Former dictator Enver Hoxha built the
bunkers in the 1970s to defend the country against a foreign
invasion. The attack never came, but the bunkers continue to
litter the landscape. Removing them is a costly and time-
consuming task. PM

ROMANIA INVESTS IN MOLDOVA'S ENERGY SECTOR. Romania intends
to "invest heavily" in Moldova's energy sector, Prime
Minister Ion Sturza told journalists in Chisinau on 2
September on returning from that country. Sturza said
Bucharest has agreed to write off Chisinau's $13 million
electricity debt in exchange for a 51 percent stake in
Moldova's Tirex-Petrol state company, RFE/RL's bureau in the
Moldovan capital reported. Sturza added that he and President
Emil Constantinescu agree that the Moldovan-Romanian basic
treaty must be concluded by the end of 1999. MS

MOLDOVAN PARLIAMENTARY CHAIRMAN ATTACKS PRESIDENT LUCINSCHI.
In an interview with the governmental Russian-language daily
"Nezavisimaya Moldova" on 2 September, parliamentary chairman
Dumitru Diacov said President Petru Lucinschi's drive to
change the Moldovan system to a presidential one has
"tarnished the country's image" abroad. Diacov, who heads the
formerly pro-presidential Movement for a Democratic and
Prosperous Moldova Bloc, said the changes proposed by
Lucinschi have nothing in common with the U.S. Constitution;
rather, it resembles the constitutions of "under-developed
countries, with all their dictatorships and authoritarian
rulers." Diacov said that some of Lucinschi's proposals, such
as changing the electoral system for parliamentary elections
and reducing the number of seats in the legislature, are
designed to "deflect attention...from the essence of the
draft," which, he said, is "aimed at imposing an
authoritarian regime in Moldova of the likes existing in some
CIS, African, and Asian countries." MS

BULGARIAN VICE PRESIDENT EXPECTS POLITICAL CLIMATE TO
IMPROVE. In an interview with BTA on 2 September, Todor
Kavaldjiev said he expects the country's political climate to
improve after the October local elections because, he said,
the "democratic community" will gain access to local
government structures. Most of these structures are now
dominated by the opposition Bulgarian Socialist Party.
Kavaldjiev added that his "optimism" is nonetheless "limited"
because an "undemocratic" provision in the amended local
election law abolished the right of inhabitants of places
with a population of fewer than 500 to elect mayors directly.
He also said he supported demolishing the mausoleum of
communist leader Georgi Dimitrov, noting that Dimitrov
opponents such as Nikola Petkov or Krustyu Pastouhov are "not
even buried in proper graves where friends and relatives can
pay [their] respects." MS

PARTIES GALORE IN BULGARIAN LOCAL ELECTIONS. A spokeswoman
for the Central Electoral Commission on 2 September said 87
parties and coalitions of parties have so far registered for
the October local elections, BTA reported. A total of 94
parties and coalitions have applied for registration. Also on
2 September, controversial Business Bloc leader George
Ganchev told journalists that if the Republican Party wins
the U.S. presidential elections next year, it will back him
if he decides to run for the Bulgarian presidency. MS

END NOTE

REFORMING THE BULGARIAN MILITARY

By Michael Shafir

	When General Mikho Mikhov criticized the government in
an interview with "Standart" late last month, military
observers must have wondered whether his days as Bulgarian
chief of staff were numbered. Mikhov spoke of "tensions" and
"insecurity" among the armed forces stemming from government
plans to substantially reduce their number in a bid to
achieve integration into NATO. Saying that the plan is
"increasingly demoralizing and infuriating" the officer
corps, Mikhov noted that the Ministry of Defense's plans to
close down military schools would "reduce us to the state of
many African and Asian countries." He added that the ministry
has no plans to help those discharged under the envisaged
reform.
	Judging by past practice, Mikhov is unlikely to see the
reform through. Similar criticism, for similar reasons,
triggered the dismissals in 1998 of commander of the
construction troops General Radoslav Peshleevsky, commander
of the missile and artillery forces General Angel Marin, and
two deputy defense ministers, Simeon Petkovski and Rumen
Kunchev. On one of those occasions, Prime Minister Ivan
Kostov commented that "the fairest way for all officers who
do not accept the reform of the army is to resign."
	It is not difficult to see why these officers are
opposed to the envisaged reforms. Schooled in Warsaw Pact
doctrine, with its stress on numbers rather than quality, the
Bulgarian commanders have no reason to welcome the gradual
transformation of the country's armed forces into a
significantly smaller and, eventually, professional army that
can subsist on a reduced budget.
	 The Kostov government has obstinately pursued the goal
of joining NATO ever since it took office, defining that goal
as a "strategic" one in its "Bulgaria 2001" program. That
plan is based on recommendations that NATO made in its "Plan
for Activities of the Candidates for Membership in NATO,"
issued earlier this year, and outlines the first of two
stages envisaged by the military reform. Covering the period
2000-2001, the first stage is viewed by the government as
decisive for securing an invitation to join the alliance. The
second stage, extending from 2002-204, aims at ensuring that
the talks with NATO will be successfully concluded.
	According to Deputy Defense Minister Velizar Shalamanov,
who presented the plan on 19 August, it is estimated that by
2004, Bulgaria will need no more than 300-400 graduates from
military academies annually. Hence, it is unrealistic to
continue financing five military educational establishments.
Rather, a new National Higher Military School is to be
founded to train officers and sergeants.
	Detailing the plan (which must be approved by the
government and the parliament) Defense Minster Georgi Ananiev
on 31 August said that by 2004, the armed forces will be
reduced from their present number of 93,100 to 45,000, and a
total of 10,620 officers and 12,530 sergeants will be
discharged. Contrary to Mikhov's claim that no help is
foreseen for those about to become unemployed, Deputy Defense
Minister Zdravko Zafirov said "social adaptation centers" are
to be set up in major towns, where training and retraining
courses will be offered to such individuals. These are to be
paid the equivalent of 20 monthly wages on being released
from duty.
	Military equipment is also to be drastically reduced. By
2004, the number of tanks is to decrease from 1,475 to 750,
air defense radars from 230 to 100, "aviation equipment" from
665 to 225 pieces, and "navy equipment" from 149 to 120
pieces. Out of the current 94 army garrisons and 178 other
units, only 49 and 71, respectively, will remain by 2004.
This will save some 75 million leva (nearly $41 million),
according to Ananiev. Further savings of some 40 million leva
will be made from the sale of Defense Ministry housing.
	Another source of revenue is to be the privatization of
the country's defense industry. By 2004, according to the
plan, the assets of the army's trade companies are to be
transferred to private hands. As early as 2002, the ministry
expects some 30-40 million leva to be generated as a result
of that transfer. The income is to be partly used toward
updating the country's arsenal, although in view of
Bulgaria's economic situation, purchases of modern technology
are not expected before 2010.
	The privatization of the defense in industry has already
been launched, with several companies formerly owned by the
ministry being privatized in management-employee buy-outs.
The Arsenal company in Kazanluk, the Beta company in Cherven
Bryag, and the Optielecton company in Panagyurishte have all
been privatized this way, and the VMZ ordnance factory in
Sopot may soon follow suit. That, however, may necessitate
converting at least part of the production from military to
civilian. It also poses problems with regard to licensing and
competing on foreign markets, since it is clear that a
downsized Bulgarian army is unlikely to become a prospective
client. For the time being, the state has kept a 34 percent
stake in such major military-industrial plants as Arsenal.
Whether it continues to do so will likely depend on both
military priorities and on the pace of reform.

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