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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 3, No. 223, Part II, 16 November 1999


___________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 223, Part II, 16 November 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 PRESIDENT REJECTS ACCORD ON OPPOSITION ACCESS TO
MEDIA

* INTERNATIONAL OBSERVERS SAY UKRAINIAN ELECTIONS FLAWED

* THOUSANDS PROTEST MACEDONIAN ELECTION RESULT

End Note: OVERCOMING CORRUPTION
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EAST-CENTRAL EUROPE

BELARUSIAN PRESIDENT REJECTS ACCORD ON OPPOSITION ACCESS TO
MEDIA. Alyaksandr Lukashenka on 15 November rejected a
protocol granting the opposition limited access to the state-
controlled media. That document was signed earlier this month
by the president's representatives and oppositionists (see
"RFE/RL Newsline," 4 November 1999), Belarusian Television
reported. Under the protocol, the opposition would have been
allowed to show pre-recorded videos on state television.
According to Lukashenka, the protocol contravenes "all
civilized and democratic norms" because it allows the
opposition "to introduce its censorship in the state media,"
while depriving journalists of their "authorship right."
Belapan reported the same day that opposition and government
experts agreed to resume consultations on access to the media
after the 18-19 November OSCE summit in Istanbul. JM

BELARUS-RUSSIA UNION TREATY TO BE SIGNED ON 26 NOVEMBER?
Mikhail Myasnikovich, head of the Belarusian presidential
staff, told Interfax on 15 November that the signing of a
treaty establishing the union state of Belarus and Russia
will take place in the Kremlin at noon on 26 November.
According to Myasnikovich, the signing ceremony will be
preceded by a "face-to-face meeting" between Lukashenka and
Russian President Boris Yeltsin and will be followed by a
session of the Higher Council of the Belarusian-Russian
Union. JM

INTERNATIONAL OBSERVERS SAY UKRAINIAN ELECTIONS FLAWED.
Observers from the OSCE and the Parliamentary Assembly of the
Council of Europe (PACE) have criticized the Ukrainian
authorities for voting irregularities and unfair campaigning
in the 14 November presidential runoff in Ukraine. "The
second round was worse than the first.... The elections were
far from fair and democratic," Reuters quoted a PACE observer
as saying. Simon Osborn, an OSCE observer, said his
organization had seen voters being given more than one ballot
and individuals voting for their families. The OSCE also
expressed concern over pressure exerted on voters in prisons,
hospitals, and educational institutions. Osborn added,
however, that it was difficult to assess to what extent the
irregularities affected the outcome. International observers
also noted that the state media failed to provide balanced
and fair coverage for both candidates in the runoff. JM

KUCHMA SAYS UKRAINE NEEDS DEBT PAYMENT RESCHEDULING.
President Leonid Kuchma said on 15 November that Ukraine
needs to reschedule foreign debt payments. Kyiv will soon
begin negotiations on this issue, he added. As of 1 October,
Ukraine's foreign debt stood at $12.9 billion, and the
country is due to pay some $3 billion each in 2000 and 2001.
Kuchma also told journalists that he does not see any
barriers to cooperation with the IMF, including the
resumption of the IMF's $2.6 billion loan program for
Ukraine. He pledged to accelerate market reforms in the
country, saying that by re-electing him, Ukrainians have
chosen "a democratic way to build their country based on a
market economy," according to Interfax." JM

UKRAINE'S SYMONENKO WARNS OF IMMINENT ECONOMIC WOES. Petro
Symonenko, leader of the Communist Party and Kuchma's rival
in the runoff, said on 15 November that the government will
soon stop paying wages and pensions, prices will increase,
and the hryvnya exchange rate will decline still further.
"This will be one of the results of Kuchma's victory in the
presidential polls," Symonenko said. He added that Ukraine
"will [begin to] catastrophically lose its economic
independence," and he blamed the centrist forces that
"unambiguously" supported Kuchma in the runoff for that
possible outcome. Symonenko noted that official reports on
industrial growth in Ukraine this year are a "myth," noting
that the World Bank forecast a 4 percent slump in Ukraine's
1999 industrial production. JM

HRYVNYA STRENGTHENS AFTER KUCHMA'S VICTORY. The Ukrainian
currency rose against the U.S. dollar on 15 November,
following Kuchma's triumph in the runoff. Kyiv street traders
offered to buy $1 for 4.9 hryvni, down from 5.05 last week.
On the interbank currency exchange, $1 was selling at 4.83-
4.86 hryvni on 15 November, and traders expect the hryvnya to
stabilize at 4.7 to $1 "in two to three days," according to
Interfax. "Many so-called presidential candidates have
forecast that the national currency will fall after the
elections. They should not rejoice. The hryvnya will be
stable," Kuchma said the same day. National Bank Chairman
Viktor Yushchenko also affirmed that the hryvnya will
stabilize since "the political factor in pressure on the
hryvnya exchange [rate] exhausted itself" on the day of the
presidential runoff. JM

ESTONIA'S BUDGET COLLECTION IN TROUBLE. The Finance Ministry
on 15 November announced that 85.94 percent of funds for this
year's budget were collected in the first 10 months (or 87.5
percent) of this year, ETA reported. That figure includes
funds from privatization deals, including the initial public
offering of Eesti Telekom shares early this year (see "RFE/RL
Newsline," 11 February 1999). Tax collection remains slow,
with the collection of corporate income tax highest at 87.1
percent. Personal income tax collection stood at 77 percent
and value-added tax at 71.75 percent. Excise collection
remains low at 61.01 percent, while motor vehicle excise
collection is lowest at 35.13 percent. MH

ESTONIAN PRESIDENT TO BOYCOTT OSCE SUMMIT. Lennart Meri has
announced he will boycott the OSCE summit scheduled to begin
in Istanbul on 18 November, ETA reported on 15 November. Meri
commented that "the OSCE will be celebrating when it should
be acting." Meri stressed that the OSCE should be focused on
the crises in the Caucasus as well as xenophobia and anti-
Semitism. "Staying away from the forum is a way to draw
attention to this and at the same time underscore faith in
the ideals espoused by the OSCE and hope for a cooperation
that would allow ideals to be translated into reality."
"Postimees" noted that Prime Minister Mart Laar and Foreign
Minister Toomas Hendrik Ilves will lead the Estonian
delegation. Latvian President Vaire Vike-Freiberga will also
not attend the ceremony, as 18 November is Latvia's
Independence Day. Prime Minister Andris Skele will lead the
Latvian delegation. MH

POLISH COALITION USES RUSE IN BID TO PUSH TAX BILL AHEAD. The
parliamentary Commission for Public Finances, a majority of
whose members belong to the coalition Solidarity Electoral
Action (AWS) and Freedom Union (UW), voted on 15 November to
reject the AWS-UW tax reform bill (see "RFE/RL Newsline," 15
November 1999). That move is seen as a ruse to end the bill's
obstruction by opposition members of the commission. The
opposition Democratic Left Alliance (SLD) pledged to block
the bill and began submitting numerous amendments to the
parliamentary commission. Today, coalition deputies are
expected to submit the same bill for a second reading as a
so-called minority motion. At the same time, the SLD promised
to continue obstructing the bill by flooding the parliament
with amendments. JM

CZECH POLICE DROP SUDETEN INVESTIGATION. Czech police on 15
November halted an investigation into the alleged mass
execution of 21 Sudeten Germans in the village of Tocov in
1945, CTK reported. Police were unable to find anyone who
could confirm testimony of about 30 German witnesses or
remember the names of the Czechs who allegedly carried out
the massacre. Also, the police noted that the 1946 criminal
code did not consider acts carried out as "fair revenge" to
be illegal. The German state attorney launched the case in
the border town of Hof earlier this year. VG

HAVEL INVITES SERBIAN OPPOSITION LEADERS TO OSCE MEETING.
Czech President Vaclav Havel has invited Serbian opposition
leaders Vuk Draskovic and Zoran Djindjic as well as
Montenegrin President Milo Djukanovic to attend the 18-19
November OSCE meeting in Istanbul under the auspices of the
Czech delegation, Czech media reported. VG

CZECH SENATOR CRITICIZES TREATMENT OF CHECHEN OFFICIAL.
Czech Senate Foreign Relations Committee Chairman Michael
Zantovsky on 15 November criticized the lukewarm reception
that the government accorded visiting Chechen Foreign
Minister Ilyas Akhmadov, CTK reported. The agency noted
that the Foreign Ministry appeared to distance itself from
Akhmadov, who met only with the head of the ministry's
Russian department. Zantovsky, who met with Akhmadov, said
the Czech government should behave like "a normal European
country" and put more pressure on Russia to find a peaceful
solution to the Chechen conflict. Foreign Ministry
spokesman Ales Pospisil described Akhmadov as a "legitimate
representative of the Chechen administration," adding that
the ministry respects the territorial integrity of Russia,
of which "Chechnya is a part." VG

RATING AGENCY PRAISES SLOVAK GOVERNMENT. The international
rating agency Standard & Poor's has improved its rating for
Slovakia from negative to stable, TASR reported on 15
November. However, the agency has not changed the ratings
of Slovakia's long-term obligations in domestic or foreign
currency, which remain at BBB+ and BB+, respectively.
Standard & Poor's praised the government's fiscal measures
and structural reforms, noting that the overall environment
for investors has improved. Last month, Moody's also
improved its rating for Slovakia. VG

AUSTRIA SAYS IT WILL NOT BLOCK SLOVAK-EU TALKS. Austrian
Foreign Minister Wolfgang Schuessel on 15 November said his
country will not try to block the start of EU accession
talks with Slovakia, TASR reported. Schuessel was speaking
at a meeting of EU foreign ministers in Brussels. An EU
official said that earlier in the meeting Schuessel asked
his EU counterparts to support Austria's call for two
reactors at Slovakia's Jaslovske Bohunice nuclear power
plant to be shut down before the planned closure dates of
2006 and 2008. EU Enlargement Commissioner Guenter
Verheugen said later that the EU will not re-open the talks
on the plant until after the Helsinki summit next month. VG

HUNGARIAN JEWS ASK FOR ACTION AGAINST ANTI-SEMITISM. The
Federation of Jewish Religious Communities in Hungary
(MAZSIHISZ) has asked the cabinet to take action against
"fascist, racist, and anti-Semitic" outbreaks that are
causing concern among the public, Hungarian media reported
on 16 November. The statement objects to the planned
rehabilitation of Hungary's World War II Prime Minister
Laszlo Bardossy, the desecration of Jewish cemeteries, and
the publication of ant-Semitic books. Maria Schmidt, an
adviser to Prime Minister Viktor Orban, recently described
the Holocaust as a marginal issue of the war. MAZSIHISZ
expressed the hope that such comments would be rendered
illegal in the criminal code. MSZ

SOUTHEASTERN EUROPE

THOUSANDS PROTEST MACEDONIAN ELECTION RESULT... An estimated
30,000 people gathered in central Skopje on 15 November
charging that the 14 November election of Boris Trajkovski as
president was fraudulent, AP reported. The state election
commission said Trajkovski received some 77,000 more votes
than did rival candidate Tito Petkovski. Turnout was reported
to be about 70 percent. Petkovski supporters chanted
"thieves, thieves" and waved Macedonian flags. Petkovski's
Social Democrats--the former Communists--issued a declaration
demanding that the election be annulled. Petkovski charged
that vote counting at some 200 polling stations in western
Macedonia--which is heavily populated by ethnic Albanians--
was "completely falsified." The election commission said cast
ballots outnumbered listed voters in five electoral
precincts. PB

...WHILE OSCE GIVES ELECTION LUKEWARM APPROVAL. Election
observers from the OSCE said on 15 November that the election
was "generally carried out satisfactorily" but that officials
should investigate a number of irregularities, particularly
in the western part of the country and near the capital,
Reuters reported. The OSCE noted that "large-scale proxy
voting and instances of multiple voting" took place and that
election officials should "carefully scrutinize" complaints
of fraud. Mark Stevens, the OSCE's mission head, said there
was an "extreme turnout of up to 97 percent" in some regions
dominated by ethnic Albanians. He said if all those people
did vote it was "a wonderful display of democratic practice."
PB

NATO SECRETARY-GENERAL CALLS KOSOVA CONFLICT 'WAKE-UP CALL.'
George Robertson said on 15 November in Amsterdam that the
alliance's air campaign in Yugoslavia was a "wake-up call" to
NATO that it must strengthen its military, AFP reported.
Robertson, speaking to the NATO Parliamentary Assembly, said
the alliance's military capabilities are insufficient to meet
future security needs. Robertson also complained of European
members' poor contribution to the air campaign compared to
the U.S. He said European countries contributed less than 5
percent to the NATO operation. In other news, Bernard
Kouchner, the UN mission head in Kosova, said in Paris on 16
November that he has received only 1,700 of the some 6,000
international police he has requested for duty in Kosova.
Kouchner added that he supports the idea of elections in
Kosova before the summer of 2000. PB

MONTENEGRIN PRESIDENT MEETS WITH UN BALKAN ENVOY. Milo
Djukanovic met with special UN envoy to the Balkans Carl
Bildt in Podgorica on 15 November, AP reported. Djukanovic
and Bildt urged the international community to step up its
efforts in protecting the Serbian minority in Kosova. The two
also discussed Montenegro's monetary reform and the
republic's relations with Belgrade. Bildt said the West "will
have to find effective mechanisms to help democratic
Montenegro." He also met with Montenegrin Premier Filip
Vujanovic. In other news, Ljubisa Krgovic, a member of
Montenegro's Monetary Council, said the republic will ignore
a ruling by the Yugoslav Constitutional Court that the
decision by Montenegro to introduce the German mark as a dual
currency is unconstitutional. PB

RADIO FREE MONTENEGRO BACK ON AIR. The independent radio
station Free Montenegro was allowed back on the air on 15
November, the Belgrade-based independent agency Beta
reported. The radio was banned by the Montenegrin government
for not having proper "technical documentation." The radio's
editorial board challenged that ruling as politically
motivated. The station is broadcasting on FM frequency 103.
PB

BOSNIAN PRESIDENCY VOWS GREATER COOPERATION. The three
members of the Bosnian presidency agreed in a declaration at
the UN in New York on 15 November to increase cooperation in
an effort to fulfill the Dayton accords and create a
multiethnic, democratic country, an RFE/RL correspondent
reported. The declaration, proposed by U.S. Ambassador to the
UN Richard Holbrooke, Croat Ante Jelavic, Muslim Alija
Izetbegovic, and Serb Zivko Radisic pledged to strengthen
Bosnia-Herzegovina's central government and condemned "forces
advocating ethnic hatred and division." They agreed to
establish 400-strong multiethnic border patrol, support one
national passport, and create a permanent executive staff for
the joint presidency. Bosnia's high commissioner, Wolfgang
Petritsch, said he welcomes the statement but added "it is
now time that actions supported words." In other news,
Bosnian Serb customs officials said they have seized $1.4
million worth of goods since beginning a "Stop Smuggling"
campaign two months ago. PB

REPORT ON SREBRENICA BLAMES UN AND SERBS. A report on the
1995 fall of the UN safe haven of Srebrenica released on 15
November sharply criticizes the UN for not using force
against Bosnian Serb forces, Reuters reported. The document
concludes that a fighting force and air strikes should have
been used in Bosnia much sooner. It states that "a deliberate
and systematic attempt to terrorize, expel, or murder an
entire people must be met decisively with all necessary
means." It adds that the UN "failed to do [its] part to help
save the people of Srebrenica from the Serbian campaign of
mass murder." The report is also critical of the Dutch
peacekeepers that were supposed to protect the town. The
report covers events before and after the fall of the mainly
Muslim town, from which the Red Cross says some 7,300 men and
boys are still missing. PB

DOCTORS CLAIM TUDJMAN RECOVERING. Doctors attending Croatian
President Franjo Tudjman said on 16 November that his
condition continues to stabilize and that he is recovering
from surgery performed two days earlier, Reuters reported,
citing Hina. The independent weekly "Nacional" said the
president no longer needs a respirator to breath but that his
overall condition is critical. Officials from his ruling
Croatian Democratic Community said they are not considering
asking the Constitutional Court to declare Tudjman
incapacitated. Tudjman must formerly declare a date for new
parliamentary elections one month in advance. With the vote
scheduled for 22 December, he thus has until 22 November in
which to do this. If he or someone in his place does not do
so, then the elections will be postponed. PB

SERBIAN OPPOSITION SAYS PARALLEL GOVERNMENT TO BE SET UP.
Vladan Batic, the coordinator of the opposition movement
Alliance for Change (SZP), said on 15 November that a
parallel government will soon be established, Beta reported.
Batic said he hopes the government will receive international
recognition. He said the government will be led by Dragoslav
Avramovic. Batic also said that the representatives from 11
parties and associations have agreed to join the SZP
electoral coalition, which is now composed of 19 parties,
associations, and trade unions. PB

SERBIA RELEASES SOME ETHNIC ALBANIAN PRISONERS. A group of 47
ethnic Albanians was released by the Serbian Justice Ministry
on 15 November and taken to Kosova, Beta reported. That group
had been imprisoned in Leskovac and Zajecar. The ministry
claims to have released 267 of the estimated 2,000 or so
prisoners whom Serbian forces took with them to Serbia when
they left Kosova ahead of NATO forces. In other news, a
Serbian prosecutor in the central town of Pozarevac charged a
Kosova Serb with murdering three ethnic Albanians during
NATO's air campaign in the province. No trial date has yet
been set. PB

ROMANIA TO RESUME ENERGY SUPPLIES TO MOLDOVA. Romania
announced on 15 November that it will resume energy
supplies to Moldova at midnight the same day, Rompres
reported. Romania cut off its energy supplies to Moldova on
11 November, after the Moldovan government fell in a no-
confidence vote (see "RFE/RL Newsline," 12 November 1999).
Chisinau experienced power outages after Romania's
decision. Romania supplies about 15 percent of Moldova's
energy needs. Romanian Prime Minister Radu Vasile said on
15 November that a new contract for energy supplies to
Moldova will be signed soon. Moldova owes Romania about $16
million. VG

ROMANIAN UNION THREATENS TO START STREET PROTESTS. The
National Trade Union Bloc on 15 November announced that it
will launch street protests on 24 November if the
government does not meet its demands to improve living
standards, according to a 15 November Mediafax report cited
by the BBC. The bloc is demanding that the government index
wages to inflation, freeze prices for six months, and allow
the bloc to take part in negotiations on next year's state
budget. Union members warned that the street demonstrations
could result in early elections. VG

VERHEUGEN REASSURES ROMANIA, BULGARIA. EU Enlargement
Commissioner Guenter Verheugen said on 15 November that he
expects "positive results" for Romania and Bulgaria at the
December EU summit in Helsinki, an RFE/RL correspondent
reported. He added that he expects both countries to meet
the conditions that the EU has set for starting accession
negotiations with them. Verheugen was responding to French
European Affairs Minister Pierre Moscovici, who expressed
concerns that the EU was marginalizing Romania and Bulgaria
by imposing extra membership conditions on them. The EU
recently asked Romania to reform its orphanage system and
Bulgaria to work out a plan for the closure of the Kozloduy
nuclear plant before accession negotiations can begin. VG

MOLDOVAN CURRENCY LOSING VALUE. The leu fell to a record low
of less than 12 leu to $1 over the weekend, Infotag reported
on 15 November. On the black market, it was trading at about
13 leu to $1. Meanwhile, the associate director of the bread
producer Franzeluta, Spiridon Danilescu, said bread prices
will go up by 10 percent in Chisinau on 16 November. He noted
that the wheat and flour market has "practically disappeared"
in Moldova as suppliers are refusing to sell to Franzeluta
owing to the devaluation of the leu. He said the company is
also hampered in making purchases of supplies abroad because
of a shortage of dollars in the country's commercial banks.
VG

END NOTE

OVERCOMING CORRUPTION

by Paul Goble

	Macroeconomic reforms--such as privatization, price
liberalization and making national currencies convertible--
are not in themselves sufficient to overcome the corruption
now holding back many post-communist countries, according to
the European Bank for Reconstruction and Development.
	In its annual report on transition economies released
last week, the EBRD argues that such reforms have not had the
effects on either relations between the state and the economy
or hence on the level of corruption that both that bank and
most other advocates of reform had expected.
	 And it concludes that post-communist governments must
do more to promote fair and transparent laws, strong
regulatory agencies, and efficient and effective court
systems if they are to bring corruption under control,
something the bank said few of these countries have been able
to do so far.
	In short, the solutions to the multifaceted problems of
corruption are more often to be found in politics rather than
economics.
	In the past, the EBRD, like other international lenders,
has tended to shy away from discussing corruption in these
countries, typically treating it as a transitional problem
certain to be cured by the kind of free market reforms it and
other Western institutions have advocated.
	But as the bank's report acknowledges, the high levels
of corruption in these countries and, more important, the
real sources of that corruption have prompted the EBRD to
change its approach.
	The level of corruption in many of these countries is
staggering. According to the report, officials in Georgia
extract in the form of bribes some 8.1 percent of the annual
revenues of companies operating there. In Ukraine, that
figure is 6.5 percent, and in the Commonwealth of Independent
States as a whole 5.7 percent.
	By adding to the costs of doing business, bribery keeps
many firms from making a profit and thus dooms them to an
early end. At the same time, demands for bribes discourage
new investors from both within the countries involved and
abroad.
	Indeed, the EBRD found that newly formed companies in
these countries had to pay almost twice as much of their
revenues in bribes as did more established concerns--5.4
percent, compared with 2.8 percent. And thus bribes serve as
yet another barrier to the establishment of new businesses.
	Perhaps the most striking aspect of this year's EBRD
report on transition economies, however, is its focus on what
macroeconomic reforms cannot achieve by themselves. The bank
noted that most post-communist countries have privatized many
firms and reduced direct state intervention in the economy.
	But those macroeconomic steps have not necessarily
reduced "the overall level of intervention or the informal
tax imposed on firms in the form of bribes and time spent
dealing with government officials."
	Indeed, the EBRD found that state-owned firms and
privatized ones of the same size were forced to pay
approximately the same percentage in bribes, an indication
that privatization has not had the impact on corruption that
many had expected.
	Sometimes this appears to be because the new owners are
the former communist-era managers, who have a special
relationship with government officials. Sometimes it is
because the firms or the government agencies with which they
must deal have one or another kind of monopoly power,
something privatization has done little to change.
	Because economic changes alone have failed to overcome
corruption, the EBRD argued that these countries must turn to
political means instead. Indeed, in releasing the report, the
bank's president, Horst Koehler, said: "I underline this
twice. Weak institutions are the main obstacle to economic
growth in a number of transition countries."
	But in contrast to some analysts who have written off
any chance for improvement in these societies, the EBRD notes
that the fight against corruption can be won by leaders and
governments willing to take the political risks involved in
breaking with the past and building institutions capable of
managing a modern, free market economy.

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