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Newsline - July 12, 1995


OMRI DAILY DIGEST

Vol. 1, No. 134, 12 July 1995
YELTSIN CARRIES OUT HIS DUTIES.
In spite of his hospitalization, President Boris Yeltsin continues to carry out his duties and is making plans to visit Norway and Murmansk on 19 July after a short period of rest, Ekho Moskvy reported on 11 July. The ruble fell and then recovered against the dollar and Western financial markets took little notice of the incident, with many traders saying that Yeltsin was no longer crucial to Russian stability, Reuters reported. Prime Minister Viktor Chernomyrdin's success in negotiating the Budennovsk hostages' release and his recent showdown with the Duma have made him a plausible replacement for Yeltsin. Viktor Ilyukhin, a member of the Duma from the Communist faction, said that Yeltsin is "already dead politically" due to his low popularity ratings, AFP reported. -- Robert Orttung, OMRI, Inc.

QUESTIONING BEGINS IN CONSTITUTIONAL COURT CASE ON CHECHNYA.
On the second day of Constitutional Court hearings concerning secret decrees on Chechnya, the legal team representing the president and government answered questions, Russian Public Television reported on 11 July. Deputy Prime Minister Sergei Shakhrai testified that the military campaign authorized by the November and December 1994 secret decrees was the government's only option after peaceful attempts to remove the "illegitimate" and "anti-constitutional" regime of Dzhokhar Dudaev had failed. Judge Valerii Zorkin called the court's attention to the fact that Shakhrai "evaded a direct question" about whether the Chechnya decrees, formed in the Security Council, were ever presented to the cabinet. Shakhrai later testified that as soon as "illegal armed formations" in Chechnya were liquidated, the government would introduce a state of emergency in Chechnya. The parliamentary court appeal argues that the constitution prohibits the deployment of troops on the territory of the Russian Federation without a publicly declared state of emergency. -- Laura Belin, OMRI, Inc.

GROZNY NEGOTIATIONS STALL.
Despite reportedly reaching agreement on an approach to the question of Chechnya's future constitutional status, Russian and Chechen negotiators adjourned their talks on 11 June without a concrete deal, Russian and international agencies reported. Russian negotiator Arkadii Volskii told journalists that the Russian delegation had worked through the night on a new set of proposals on the region's status, and would resume discussions this morning. Commenting on the lack of progress, Izvestiya reported on 12 July that optimistic statements by Russian negotiators predicting an imminent agreement are beginning to sound like "disinformation." Meanwhile, ceasefire violations continue. Russian military spokesmen said on 12 July that five Russian servicemen had died in sporadic fighting over the past 24 hours. -- Scott Parrish, OMRI, Inc.

YAVLINSKII SEES NO PROBLEM IN DEMOCRATIC DISUNITY.
Grigorii Yavlinskii, leader of the Yabloko bloc, declared that there is no tragedy in the current split within democratic ranks in a 12 July Izvestiya article. He accused the other democratic politicians of seeking to concentrate power in Yeltsin's hands and supporting an economic policy that only benefits a minority. He asserted that Russian voters have more choices than just pursuing the status quo or returning to Communism and that only by separating himself from leaders like Yeltsin, Yegor Gaidar, and Chernomyrdin could he preserve a democratic alternative in Russia. -- Robert Orttung, OMRI, Inc.

DRAFT LAW REVISES ELECTORAL DISTRICT BOUNDARIES.
The Central Electoral Commission's proposed law determining the boundaries of the Duma's 225 single-member electoral districts has changed almost all of the lines without public explanation, Izvestiya reported on 11 July. The districts in Moscow and St. Petersburg have been completely altered, mainly complicating the electoral prospects of democratic politicians who have criticized Yeltsin's Chechnya policies. If the draft is adopted, the incumbents representing those cities will have to compete in new districts. In the provinces, the plan attempts to dilute reform-oriented urban voters with their more conservative counterparts. Nizhnii Novgorod, for example, is divided into four parts that are each paired with rural voters. Some of the districts' peculiar shapes provide clear evidence of gerrymandering. -- Robert Orttung, OMRI, Inc.

RUSSIAN ELECTORATE DECLINED BY TWO MILLION VOTERS SINCE 1993.
Russia has 104,977,895 eligible voters, according to the Central Electoral Commission, approximately 2 million fewer than were registered for the December 1993 parliamentary elections, Izvestiya reported on 11 July. The figure is important because it will be used to determine whether a sufficient number of people voted for the elections to be valid. At least 25% of eligible voters must participate. -- Robert Orttung, OMRI, Inc.

DUMA DEPUTY CRITICIZES PLAN TO PRIVATIZE BOOK PUBLISHERS.
In a 10 July interview on Moscow Television, Duma deputy Igor Yakovenko, a member of the Yabloko group and the Duma Press Committee, criticized the State Press Committee's alleged plan to combine large state-owned book publishers into one enterprise and subsequently sell half its shares to a German corporation. Yakovenko warned that implementing the plan would be a "national tragedy" that would allow foreigners to "dictate to the Russian government." Yakovenko said that in principle, he is not against privatizing parts of the publishing industry or even to foreign investment in publishers. However, he said such privatization should be carried out on a "competitive basis," without allowing "monopolies" to develop. According to Yakovenko, the Duma will soon request that the State Press Committee give a full report to the government on its policy regarding book publishers. -- Laura Belin, OMRI, Inc.

RECOMMENDATIONS ON PRESS FREEDOM AND JOURNALISTS' RESPONSIBILITIES.
The president's Judicial Chamber on Information Disputes and the Union of Journalists published a joint statement on freedom of the press and the responsibilities of journalists in Rossiiskaya gazeta on 11 July. The statement criticized journalists for excessive reliance on anonymous sources and frequently publishing information without verifying its accuracy. The authors added that the media too often absolved itself of responsibility for running inaccurate or unlawful advertisements. They recommended both "legal measures" and "self-limitations" by publishers to protect the "moral health" of children against pornography and publications calling for violence or advocating racial supremacy. The statement also criticized the presidential and government apparatus, which it described as more closed to journalists than party committees of the Soviet period. -- Laura Belin, OMRI, Inc.

RUSSIA AND BURYATIA SIGN AGREEMENTS.
Prime Minister Chernomyrdin and Buryat President Leonid Potapov signed a number of agreements in a Moscow ceremony, Russian Radio reported on 11 June. Among the documents signed were agreements on natural resource utilization, environmental protection, economic development of the Lake Baikal region, and the division of powers between the federal and republican authorities on foreign trade. The agreements are the sixth in a series of such packages signed by Moscow with Russian Federation subjects. Chernomyrdin told journalists after the signing that such agreements fell "within the framework of the constitution," and that similar accords would be signed with other federation subjects soon. -- Scott Parrish, OMRI, Inc.

ILLEGAL TRADE IN GROWTH HORMONES.
Finnish customs officials said on 11 July that at least 75,000 ampoules of growth hormones worth millions of dollars have been smuggled from Russia to Finland, AFP reported the same day. The illegal trafficking came to light in May, when a Finnish businessman was arrested on the border between the two countries with 2,000 ampoules of Moscow-made Somatropine and Gonadotropine in his car. The man, who is to stand trial on 18 July, said he had made more than 25 trips. Growth hormones are taken by bodybuilders, but their uncontrolled use can cause cardiovascular problems, diabetes, and aggressive behavior. -- Penny Morvant, OMRI, Inc.

RUSSIA CONDEMNS TURKISH INCURSION INTO IRAQ.
Russian Foreign Ministry spokesman Grigorii Karasin condemned a recently completed one-week Turkish military offensive aimed at rooting out Kurdistan Workers' Party (PKK) rebels in northern Iraq, international and Russian agencies reported on 11 July. Karasin characterized the Turkish action as "unacceptable," because it violates the "territory of an independent state." Moscow's reaction to the latest Turkish operation involving an estimated 3,000 troops is markedly different from the tacit approval it gave to Ankara's decision to send in some 35,000 troops for a six-week operation in March. At the time, Karasin termed the "one-off" operation an "internal affair" of the states concerned. The change may be attributed to the fact that Moscow is now less exposed to criticism over Chechnya, as well as its efforts to court Iraq. -- Scott Parrish and Lowell Bezanis, OMRI, Inc.

RUSSIA TO SIGN MILITARY ACCORD WITH SOUTH AFRICA.
A South African military spokesman told Reuters on 11 July that South African Defense Minister Joe Modise, currently visiting Russia, would sign a defense cooperation agreement with his Russian counterpart on 14 July. The two countries have already been cooperating to upgrade South Africa's aging French-built Mirage fighters by installing more powerful Russian engines. -- Doug Clarke, OMRI, Inc.

RUSSIANS TO MODERNIZE INDIA'S MIG-21s.
Russia and India are expected to sign a deal this month for the modernization of over 100 Indian MiG-21 jet fighters, the Chinese new agency Xinhua reported on 10 July. Quoting Indian Air Force sources, the agency said that the deal would be worth between $200 and $350 million, and would involve the complete replacement of the fighters' avionics and weapons system. The same sources said a Russian delegation would visit New Delhi soon to sign the agreement since the two sides had resolved their differences over pricing. -- Doug Clarke, OMRI, Inc.

FOOD GROUP LAUNCHES FIRST PUBLIC TAKEOVER BID ON RUSSIAN MARKET.
A major Russian food group, Koloss, launched the first public takeover bid in the country's rapidly developing financial market, offering to buy 51% of the shares in the major Moscow chocolate company Red October, AFP reported on 11 July. Koloss offered $7.50 for each share in Red October before 25 July, payable in rubles. The entire bid, being handled by a branch of Menatep Bank, is worth some $25 million. In Moscow stock trading on 10 July, market shares in Red October were quoted at 26,710 rubles ($5.90) each--the highest level since the company was privatized. Koloss representatives said there are no management changes planned for Red October if the bid is successful. -- Thomas Sigel, OMRI, Inc.

GOVERNMENT IMPLEMENTS PLAN TO IMPROVE TAX COLLECTION.
The Russian government began implementing a plan to make tax collection more efficient, Rossiiskaya gazeta reported on 12 July. The goal is to channel all taxes, customs duties, and other mandatory payments to the State Treasury. Beginning on 1 August, the State Tax Service will require enterprises and organizations submitting federal taxes to specify their registration number. Those numbers will be used to create a corporate taxpayer database. The government also plans to impose stricter administrative measures and criminal prosecution to crack down on tax evasion. -- Thomas Sigel, OMRI, Inc.

MANUFACTURERS' ENERGY PRICES INCREASE.
The prices manufacturers pay for energy (crude oil, petrochemicals, and coal) increased by an average of 130% during the first half of 1995, Rabochaya tribuna reported on 11 July, citing Goskomstat statistics. The combined output of the country's fuel and energy sector during the first six months of 1995 dropped 3.6% compared to the same period last year, while electrical power production declined 3% and oil and gas production fell 2%. -- Thomas Sigel, OMRI, Inc.



OMRI DAILY DIGEST

Vol. 1, No. 134, 12 July 1995
RESPUBLIKA TRIAL ENDS.
A Kyrgyz court handed two journalists from the Bishkek daily Respublika one-year suspended sentences for "libelous publications insulting the honor and dignity" of the president, Radio Liberty's Kyrgyz service reported on 11 July. The two reporters, Zamira Sydykova and Tamara Slashova, will be banned from working as journalists and traveling abroad for 18 months, according to Radio Liberty sources. If they repeat the offense, they can be sent to prison. President Askar Akayev brought the charges against them after they wrote an editorial for the newspaper saying he has a villa in Switzerland and a house in Turkey. -- Lowell Bezanis, OMRI, Inc.

CANADIANS IN THE CASPIAN.
The Canadian firm International Petroleum Corporation will invest $38 million to develop two key offshore Turkmen oil fields, AFP reported on 11 July. The fields in question presently produce some 8,200 barrels per day (bpd); after development this figure is expected to rise to 80,000 bpd. As the legal status of the Caspian Sea resources has not been finalized the agreement is of interest; to date Turkmenistan has joined with Russia and Iran in demanding a negotiated solution to this problem. -- Lowell Bezanis, OMRI, Inc.

TAJIKISTAN'S TROUBLED MONETARY REFORM.
Only 10% of the new Tajik rubles (totaling 18 billion rubles), which were introduced on 15 May, have returned to the bank, Komsomolskaya pravda reported on 11 July. Without adequate reserves, the republic's national bank will have to print more currency than it had anticipated in order to pay state employees' wages, but this increase in the money supply could trigger an inflationary spiral. -- Lowell Bezanis, OMRI, Inc.



OMRI DAILY DIGEST

Vol. 1, No. 134, 12 July 1995

CENTRAL AND EASTERN EUROPE

UKRAINIAN PARLIAMENT ADOPTS LAWS ON EDUCATION, CORRUPTION.
Ukrainian lawmakers approved a new law on education that continues to guarantee free state secondary education but no longer provides free universal higher education, UNIAR and Ukrainian TV reported on 11 July. Socialist deputies refused to take part in the vote. Legislators also amended a law on public officials and passed a corruption law that allows not only the recipients of bribes but their so-called intermediaries to be prosecuted. Those who give bribes to officials but report the offense to the authorities may be freed from prosecution. The parliament also ordered wage increases of 20-50% for Interior Ministry employees who specialize in investigating corruption. -- Chrystyna Lapychak, OMRI, Inc.

CRIMEAN LAWMAKERS ELECT NEW DEPUTY SPEAKERS.
The Crimean legislature elected three new deputy speakers on 11 July, Ukrainian TV reported the same day. The choice of Yurii Podkopayev of the Russia caucus, Anushevan Danelian of the Reforms caucus and Refat Chubarov of the Crimean Tatar Kurultai caucus reflects a significant loss of separatist forces' influence in the 98-member assembly. Only Podkopayev represents a pro-Russian caucus, while the others are considered loyal to Kiev. Lawmakers recently replaced the separatist leader Serhii Tsekov as speaker with Yevhen Supruniuk, who supports improved ties with the Kiev government. -- Chrystyna Lapychak, OMRI, Inc.

UKRAINIAN OIL DEAL WITH TATARSTAN.
Pravda on 12 July reported that Ukraine and Tatarstan have signed an agreement on establishing the Ukrtatneft financial industrial corporation, which will rely on the Keremechuk oil refinery in Poltava, Ukraine, to refine Tatarstan's oil. The corporation's issued share capital has been divided equally between Ukraine and Tatarstan; its assets are estimated at $1 billion. Tatarstan has said it plans to invest its share of future profits in modernizing the Keremenchuk refinery and in prospecting in Tatarstan. Valerii Pustovoitenko, minister of Ukraine's Cabinet of Ministers, announced that Ukrainian farmers will be harvesting with gasoline from Tatarstan this fall. -- Ustina Markus, OMRI, Inc.


ESTONIA, RUSSIA FAIL TO RESOLVE BORDER DISPUTE.
Russian Deputy Foreign Minister Sergei Krylov on 11 July met with Estonian officials, international and Russian agencies reported. Krylov told journalists after the meetings that no headway was made on the Estonian-Russian border dispute. Estonia insists that the border correspond with that defined in the 1920 Tartu Treaty, which would require the transfer to Estonia of territory currently in Russia's Leningrad and Pskov Oblasts. Krylov reiterated Russia's stance that the treaty not be used as a basis for resolving the dispute, saying "it has no legal power whatsoever." He also complimented Estonia for recent "positive changes" in policy toward the Russian minority there. -- Scott Parrish, OMRI, Inc.

OPTIMISM OVER ESTONIAN, LITHUANIAN ECONOMIES.
Reuters and BNS on 11 July reported that the Estonian and Lithuanian economies are expected to grow this year but that Latvia is suffering from a banking crisis. Estonia's GDP is expected to register a 5% increase for 1994 and grow 6% this year. Much of the success is attributed to its export sector. The IMF estimates that Lithuania's GDP grew between 1-5% in 1994 and will increase by 5-7% this year. In other news, BNS reported that Estonia has so far been granted $477 million in credits, of which $247 million have been paid out. But it decided not to accept 100 million kroons from a 588 million kroon loan provided by the EBRD to update the country's energy sector. The official reason was that it was difficult to meet EBRD conditions and that repayment of the principal would begin next year. -- Ustina Markus, OMRI, Inc.

MORE TROUBLE AMONG LATVIAN BANKS.
BNS on 11 July reported that the Bank of Latvia has revoked the license of the commercial Kredo Banka and will take it to the Economic Court to have it declared insolvent. The Bank of Latvia the same day issued a statement calling for the public to ignore the Latvian Shipping Company's threats against the collapsed Baltija Bank. The shipping company, which was the bank's largest creditor, has claimed that Blatija Bank pledged all its assets to the company in the event that it failed to return the company's $44 million deposit on time. The company has argued that it should receive all incoming payments to the bank. The Bank of Latvia said the shipping company's statement violates Latvian civil code. -- Ustina Markus, OMRI, Inc.

SWEDISH EUROPEAN AFFAIRS MINISTER IN POLAND.
Mats Hellstroem, visiting Poland on 10 July, met with Polish Foreign Trade Minister Jacek Buchacz, Polish and international media reported. Hellstroem said that "Sweden is a strong supporter of Poland's accession to the European Union" and would back Poland's requests to the EU for an easing of anti-dumping procedures against Polish goods, such as textiles, food stuffs, cement, and steel. He noted that Poland, in turn, should liberalize its customs policy and other trade barriers. Hellstroem also said that Poland was Sweden's most important economic partner in Eastern Europe, with total trade turnover exceeding $1 billion in 1994. -- Jakub Karpinski, OMRI, Inc.


CZECH REPUBLIC TO END WAGE REGULATION.
Czech ministers on 11 July announced it will stop wage regulation immediately, Czech media reported. Labor and Social Affairs Minister Jindrich Vodicka was instructed to prepare the necessary documents for a plenary cabinet meeting the next day. Although the government decided in May that wages would remain regulated until the end of this year, Prime Minister Vaclav Klaus said the time has come to free them. Wages have been controlled since July 1993 for firms with more than 25 employees, and rises have been pegged to inflation and company performance. According to Finance Ministry figures, firms breaching the regulations have paid almost 200 million koruny in fines. -- Steve Kettle, OMRI, Inc.


SLOVAK UPDATE.
Parliament Chairman Ivan Gasparovic on 11 July announced that President Michal Kovac has vetoed the recently passed amendment to the law on the Slovak army, which will be discussed again on 13 July. The Slovak cabinet the same day approved draft laws on labor and prices and also discussed a protest by the Slovak Confederation of Trade Unions against increased public transportation rates and cuts in social benefits. In other news, according to a Financial Times report on 11 July, the EBRD has taken a 10.5% stake in the petrochemical giant Slovnaft, after a global share offering failed to attract Western investors because of political uncertainty in Slovakia and the high price of the shares. -- Sharon Fisher, OMRI, Inc.

SLOVAKIA TO MEET CFE CUTS.
The remaining 14 Slovak T-55 tanks to be destroyed in order to meet the country's Conventional Forces in Europe ceilings left their base for the scrap yard on 11 July, CTK reported. A total of 822 tanks, 386 infantry fighting vehicles, and 424 artillery systems have had to be destroyed. Besides the 14 tanks, all that remains are 38 howitzers, which are due to scrapped later this month. -- Doug Clarke, OMRI, Inc.




OMRI DAILY DIGEST

Vol. 1, No. 134, 12 July 1995
SERBS OVERRUN SREBRENICA, THREATEN TO SHELL REFUGEES.
Bosnian Serb forces took the UN-designated "safe area" of Srebrenica on 11 July. Belated NATO air strikes halted a Serbian tank column, but Serbian infantry and artillery carried the day. Dutch peacekeepers fled to their base to the north, where some 30,000 refugees have also sought protection. The French group Doctors without Borders told Croatian Radio that the town of 42,000 is "completely empty" and that those who have not fled to the Dutch have gone to the hills. Reuters on 12 July quoted Bosnian Serb commander General Ratko Mladic as threatening to shell the refugees if further air strikes are launched against his forces, which have stepped up their attacks against the "safe areas" of Zepa, Gorazde, and Sarajevo. Bosnian Croat army sources told Croatian Radio that more Serbian militiamen are moving into Bosnia from Serbia via the northern Posavina corridor. -- Patrick Moore, OMRI, Inc.

"TOO LITTLE, TOO LATE."
This is how a number of people, including the Bosnian prime minister and foreign minister, described the NATO air strikes on 11 July. Croatian Radio quoted Prime Minister Haris Silajdzic as saying the UN forces have cooperated with the Serbs, while the VOA noted his remarks that the UN has deliberately delayed employing air strikes as long as possible. Bosnian Ambassador to Croatia Kasim Trnka told AFP that Srebrenica was the "price to be paid" for the secret deal in which the UN got back the hostages from the Serbs last month. The BBC quoted Mladic as saying that his aim is to "demilitarize" Srebrenica, and that the civilians have nothing to fear if they stay. A BBC analyst suggested that the Serbs are anxious to "mop up" the eastern Bosnian Muslim enclaves to free their troops for use around Sarajevo. -- Patrick Moore, OMRI, Inc.

TURNING POINT FOR THE UN IN BOSNIA.
International media on 12 July generally agreed that a new stage has been reached in the conflict. Not only has a major humanitarian crisis emerged, but for the first time a "safe area" has fallen to a Serbian assault and the UN has undeniably failed to carry out its mandate. This "calls into question the vitality" of the UN mission in Bosnia, according to U.S. Secretary of Defense William Perry, the VOA said. The BBC reported that the safety of Gorazde, Zepa, and Sarajevo now appears precarious, but UN Secretary-General Boutros Boutros Ghali and U.S. Secretary of State Warren Christopher warned that for the UN to withdraw or change its approach would be to invite a blood bath. U.S. Senate Majority leader Robert Dole, however, said that it is now clear that the only way out of the imbroglio is for the UN to pull out and for the U.S. to lift the arms embargo against the Bosnian government. -- Patrick Moore, OMRI, Inc.

WILL THE UN GET TOUGH AFTER ALL?
The International Herald Tribune on 12 July quoted French President Jacques Chirac as saying "France is ready to use its means at the request of the Security Council. I do not see what will stop the Serbs in the other enclaves or in Sarajevo" if the world body accepts the fall of Srebrenica without a fight. The Security Council on 11 July began work on a resolution drafted by France, Britain, and Germany that would allow use of "all available means" to oust the Serbs from Srebrenica if they refuse to go peacefully. But the VOA on 12 July noted that "nothing is clear in this resolution." The UN might decide to try diplomacy, which has largely proven useless in the past. In any event, the final word on use of force would rest with the cautious Boutros Ghali. Reuters says Bosnian Serb leader Radovan Karadzic has no intention of pulling back his forces: "What withdrawal? From our country? Srebrenica is our country." -- Patrick Moore, OMRI, Inc.

SERBIAN RENEWAL MOVEMENT FEARS DELAY OF SANCTIONS' LIFTING.
Reactions from Belgrade to the latest Bosnian developments are so far limited to a statement by the opposition Serbian Renewal Movement, published in Nasa Borba on 12 July. Party spokesman Ivan Kovacevic is quoted as saying "the war activities of Pale will delay the lifting of the sanctions" against the rump Yugoslavia. Meanwhile, the U.S. House of Representatives adopted an amendment saying the embargo against rump Yugoslavia may not ended until excessive Serbian control over Kosovo ceases, international agencies reported on 11 July. -- Fabian Schmidt, OMRI, Inc.

NEW EU POLICY ON FUTURE OF EASTERN SLAVONIA?
Belgrade's Politika on 11 July quoted Portugal's ambassador to the EU, Jose Manuel de Costa Arsenio, as saying he could well imagine eastern Slavonia, western Srijem, and Baranja soon becoming part of Serbia. Those territories at present constitute the UN-designated Sector East of Serbian-occupied Croatia, which the Portuguese diplomat was visiting. The area is already well integrated with Serbia, although it lies within Croatia's internationally recognized boundaries. Vjesnik on 12 July wondered whether the diplomat's remarks are perhaps a straw in the wind suggesting a change in EU policy. -- Patrick Moore, OMRI, Inc.


ROMANIA REJECTS HUNGARIAN CRITICISM.
The Romanian Foreign Ministry on 10 July rejected Hungarian Foreign Minister Laszlo Kovacs's criticism of Romania's new education law (see OMRI Daily Digest, 11 July 1995), Radio Bucharest reported. The ministry said Kovacs's statement was an attempt to put pressure" on Bucharest. It noted that the law meets European standards and even "goes beyond what is required." Above all, the ministry argued, the law is far more responsive to the needs of national minorities than is the case in Hungary, where "the Romanian and other national minorities . . . continue to face the danger of assimilation." -- Michael Shafir, OMRI, Inc.

ROMANIA'S WESTERN CONTACTS.
Greek Foreign Minister Karolos Papoulias, on an official visit to Romania, held talks with his counterpart, Teodor Melescanu, and Senate chairman Oliviu Gherman on 11 July. Papoulias was received the same day by President Ion Iliescu, Radio Bucharest and Romanian Television reported. Talks concentrated on bilateral relations, regional affairs, and what was termed as "concrete tripartite projects" with Bulgaria on transport and telecommunications infrastructure. Papoulias expressed support for Romania's integration into NATO and the EU. He also said Athens would ease visa procedures for Romanian citizens. Romanian Television reported that Iliescu the same day received Gebhardt von Moltke, NATO assistant secretary-general for political affairs. Von Moltke said NATO wished Europe to be built on collaboration among states and thus the admission of new members to NATO must ensure European security rather than create "new cleavage-lines on the continent." -- Michael Shafir, OMRI, Inc.

NO BREAKTHROUGH IN TALKS BETWEEN ROMANIA, WORLD BANK.
Talks in Washington between the World Bank and a Romanian delegation, headed by Finance minister Florin Georgescu and National Bank Governor Mugur Isarescu, have failed to produce concrete results. The bank on 11 July said the talks focused on Romania's progress in implementing economic reforms. The press release said that although some important reform measures have already been implemented, a number of steps still have to be taken before negotiations on a proposed "financial and enterprise sector adjustment loan" can take place. Following the "constructive exchange of views," the press release said, the prospects that negotiations can begin in September 1995 are good. -- Michael Shafir, OMRI, Inc.

CHISINAU, TIRASPOL ON SNEGUR-SMIRNOV MEETING.
Transdniestrian Supreme Soviet chairman Grigori Markutsa, commenting on the 5 July meeting between Moldovan President Mircea Snegur and leader of the Transdniester region Igor Smirnov, said Tiraspol would not agree to an arrangement whereby the special status of the region would be determined by Moldovan law. BASA-press reported on 10 July that Markutsa said Tiraspol insisted on an agreement "between two equals," with the OSCE, Russia, and Ukraine guaranteeing its fulfillment. Snegur, speaking on Moldovan Television on 10 July, said Chisinau proposes "an autonomy status for the region within the framework of the Republic of Moldova," Infotag reported on 11 July. -- Michael Shafir, OMRI, Inc.

SNEGUR ON REFERENDUM ON OFFICIAL LANGUAGE, POLITICAL OPPONENTS.
Moldovan President Snegur also said on Moldovan Television on 10 July that the proposal for a referendum on his initiative to designate Romanian as the country's official language was "an aberration," BASA-press reported on 11 July. He said the true motive for the proposal, made by 65 parliamentary deputies, was to demonstrate that the legislature has more power than the president to make "fundamental decisions." He accused his opponents of trying to discredit him, saying that a political party that "would consolidate the presidential team" should be set up. -- Michael Shafir, OMRI, Inc.


U.S. APPROVES MOST-FAVORED-NATION STATUS FOR BULGARIA.
The U.S. House of Representatives on 11 July passed a bill to extend permanent most-favored-nation status to Bulgaria, Reuters reported the same day. Bulgarian exports to the U.S. can thus enter the country at the lowest possible tariffs. The decision was considered non-controversial and no objections were raised. Bulgaria was granted most-favored-nation status in 1991 but had to renew it each year. The bill has now been sent to the Senate. -- Stefan Krause, OMRI, Inc.

BULGARIAN OPPOSITION WITHOUT JOINT CANDIDATE FOR SOFIA MAYORAL ELECTIONS.
The Union of Democratic Forces (SDS) on 11 July named Stefan Sofiyanski as its candidate for the post of mayor of Sofia, 24 chasa reports the following day. The decision came one day after former Prime Minister Reneta Indzhova was nominated mayoral candidate by the People's Union (see OMRI Daily Digest, 11 July 1995). A meeting between the leadership of the two groups aimed at finding a common candidate is scheduled for this week. Meanwhile, SDS leader Ivan Kostov confirmed that his party had initially considered backing Indzhova's candidacy. -- Stefan Krause, OMRI, Inc.

U.S.-ALBANIAN MILITARY EXERCISES KICK OFF.
U.S. and Albanian troops on 11 July began joint exercises within the framework of the Partnership for Peace program, AFP reported. The exercises continue until 8 September, during which period Albania's only military hospital will be modernized. The cost of reconstructing the hospital, built by the Italians during World War II, is estimated at $ 1.5 million and will be met by the U.S. Defense Minister Safet Zhulali said the maneuvers are the "most important military exercises between the American army and a Central or Eastern European country." Meanwhile, the U.S. has started deploying unmanned Predator spy planes in northern Albania to gather intelligence over Bosnia. -- Fabian Schmidt, OMRI, Inc.


[As of 1200 CET]

Compiled by Victor Gomez and Jan Cleave




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