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Newsline - December 12, 1996

Russia marked the third anniversary of the adoption of its constitution on 12 December 1993. In a written address to the nation distributed by ITAR-TASS, President Boris Yeltsin called the past year "particularly important for the consolidation of the constitutional system" since elections were held at the national, regional, and local levels. He stressed the fact that even the majority of those who do not like the constitution try to change it through constitutional procedures, meaning that the country's progress toward democracy is irreversible. Moskovskaya pravda on 11 December, however, reminded its readers that the constitution was drawn up "with Yeltsin in mind" and that its approval in the December 1993 referendum was surrounded by numerous allegations of fraud. The article complained that the constitution gives Yeltsin so much power that he cannot use it all, and it falls into the hands of unelected officials. -- Robert Orttung

Communist Party leader Gennadii Zyuganov announced that the opposition has prepared 12 constitutional amendments to alter the balance of power, which is currently heavily weighted toward the president, ITAR-TASS and Russian Public TV (ORT) reported on 11 December. He regretted that the current constitution does not sufficiently guarantee economic rights, such as a right to a job and decent income, and again advocated creating a State Council to approve policy, on which the presidential administration, government, and parliament would all be represented. Constitutional amendments must be approved by two-thirds of the State Duma and three-fourths of the Federation Council before being sent to regional legislatures. Zyuganov's proposals could gain enough votes in the Duma but are unlikely to do so in the council. Meanwhile, Zyuganov predicted that the only big celebrations of Constitution Day in Russia would be on national television networks, NTV reported. -- Laura Belin

Russia's Defense Council on 11 December decided to increase the powers of the General Staff, granting it the authority to coordinate some two dozen federal agencies that employ uniformed servicemen, Russian media reported. But Defense Council Secretary Yurii Baturin said the change would take time to implement. Russian TV (RTR) reported that the council also discussed streamlining the number of service branches while reducing military manpower to 1.2 million by 2001. The new military doctrine under consideration also reportedly provides for the use of nuclear weapons if Russia faces an overwhelming conventional attack, a move Russian officials have linked to NATO plans for eastward expansion. -- Scott Parrish

President Yeltsin fired his representatives in Kirov, Vologda, and Vladimir oblasts, ITAR-TASS reported 12 December. In Kirov and Vladimir, the firings were apparently connected to the recent gubernatorial elections in which the pro-Yeltsin incumbents did poorly. The presidential representative in Vladimir, Nikolai Yegorov, even competed unsuccessfully against the Yeltsin-appointed incumbent in the race there. In Vologda, however, Governor Vyacheslav Pozgalev won his 6 October race with 80% of the vote. -- Robert Orttung

Moskovskii komsomolets on 11 December published what it described as an expert analysis of the tape-recording on which its controversial 15 November article "Vote or..." was based. The transcript--of a conversation between Anatolii Chubais and Viktor Ilyushin--raised awkward questions about the financing of President Yeltsin's re-election campaign and the influence of the executive branch on the Procurator's Office. Both Chubais and Ilyushin have denied that the conversation took place. Moskovskii komsomolets reported that the U.S.-based Dinatronic Laboratory found that the tape had not been edited or tampered with and that the recording was probably made on a portable cassette recorder. The paper said it had turned to a U.S. company because it doubted the impartiality of the Federal Agency for Government Communications and Information (FAPSI), which is examining the tape for the Procurator's Office, and predicted that the whole affair will be allowed to drop. -- Penny Morvant

Journalists gathered in Moscow on 11 December to honor colleagues who have been killed in the line of duty, Russian media reported. Union of Journalists Chairman Vsevolod Bogdanov noted that 135 journalists have been killed in the former Soviet Union over the last five years, 24 of them in Chechnya. So far in 1996, 22 reporters have been killed. A new insurance fund has been created to help Russian journalists who have been injured or who have worked in dangerous areas, such as the Chornobyl region, Bogdanov said. In addition, accredited journalists will be able to obtain insurance for free or at reduced rates. The fund will also pay $10,000 to families of journalists who have been killed, and the South Korean firm Samsung has already donated some money for 50 such families, ITAR-TASS reported on 10 December. -- Laura Belin

Russian Deputy Prime Minister Aleksei Bolshakov and Chinese Central Military Council Deputy Chairman Liu Huaqing signed a military-technical cooperation agreement in Beijing on 11 December, Russian and Western agencies reported. While details of the accord were not released, Bolshakov said Russia is "determined to expand" military cooperation with China, according to AFP. The agency also reported that an accord allowing China to produce SU-27 fighters under license was finalized during Bolshakov's visit, and cited Valery Mikhailov, head of the Russian government's military industry department, as saying that future arms contracts with China will be worth "billions of dollars." Russian officials often cite increased military cooperation with China as a possible response to NATO enlargement. Bolshakov's delegation also discussed possible Russian participation in the Three Gorges hydroelectric project, and proposed oil and gas pipelines to run from Irkutsk through Mongolia and northern China. -- Scott Parrish

The European Commission is extremely concerned about Russia's plans to impose taxes on individuals and vehicles entering or leaving its territory, commission spokesman Nico Wegter told Reuters on 11 December. The new law envisions fees aimed at helping to finance the border troops and also gives the service 25% of the value of any seized contraband (see OMRI Daily Digest on 10 December
1996). Citizens of CIS countries will be exempt from the fees when travelling to and from Russia. The law officially went into effect on 10 December, when it was published in the official Rossiiskaya gazeta. However, the government has yet to establish the procedure for collecting the fees. Wegter said the new measure violates the spirit of the EU's interim agreement with Russia. --
Nikolai Iakoubovski

A Cyclone-2 booster launched from the Baikonur cosmodrome sent a Russian Kosmos-2335 photo intelligence satellite into orbit on 11 December, AFP and ITAR-TASS reported. The satellite will restore Russia's ability to acquire high-quality photo intelligence, which it has lacked since late September, when a similar satellite fell from orbit, while earlier attempts to replace it had failed. "Now we will be more comfortable," said a duty officer at the cosmodrome, explaining that Russia also has a number of older spy satellites, but they cannot produce high-quality photos or transmit them to the ground as quickly as the Kosmos-2335. -- Scott Parrish

The presidium of the miners' union Rosugleprof decided on 11 December to suspend the national strike begun on 3 December, ITAR-TASS reported. A union spokesman quoted by the agency said that the government had met many of the miners' economic demands. He noted in particular the government's pledge to pay all the 1996 state subsidies to the industry by 27 December. Before leaving the Kuzbass, where he headed a government delegation looking into the crisis in the coal industry, First Deputy Prime Minister Vladimir Potanin said he would hold talks with World Bank representatives on the disbursal of the second 1.3 trillion ruble tranche of a $500 million loan to support the restructuring of the industry. The loan was counted in the 10 trillion rubles earmarked for the industry this year. -- Penny Morvant

More than 110,000 army families are without apartments and many others require better housing, Main Military Procurator Valentin Panichev said on 11 December. He added that in the Interior Ministry's Internal Troops, one in four families--and in the North Caucasus, one in two families--are without accommodation, ITAR-TASS reported. Another 132,500 families of ex-servicemen are without apartments, up from 27,800 five years ago. The situation will deteriorate further in 1997, when a reduction in the number of officers and NCOs is due to begin. Panichev said that money allocated for housing construction is often misused, noting that apartments for officers sometimes cost an unreasonable amount. He said his office is investigating several instances in which large sums were handed over to dubious construction companies. A number of senior officers have been implicated in housing scandals, but the cases have made little headway. -- Penny Morvant

The Duma will reconvene on 15 December to discuss the draft 1997 budget, having postponed a vote on it on 6 December. If the budget is not signed into law by the beginning of the new year, spending will be limited to the average monthly outlays in 1996, according to Rossiiskaya gazeta on 11 December. Aleksei Golovkov, the deputy head of the Duma Budget Committee, said this would mean a sharp fall in spending in comparison with the 1997 draft. Industrial subsidies would be down 39%, social spending down 38%, and regional subsidies down 59%. Sergei Belyaev, head of the pro-government faction Our Home Is Russia, admitted that "Our faction is not very enthusiastic about the budget draft ... we believe that it should have been formulated on the basis of different principles," Rossiiskie vesti reported on 10 December. However, given that the government is unwilling to submit an inflationary budget, deputies may see little alternative to accepting the current draft. On 11 December, the controversial draft law on money laundering failed to pass the Duma (see OMRI Daily Digest, 10 December 1996). -- Peter Rutland

The Turkish Foreign Ministry on 11 December announced that Turkey will not open its border with Armenia unless the latter "takes steps" toward respecting Azerbaijan's sovereignty over Nagorno-Karabakh and provides for a withdrawal of Armenian forces from the "occupied Azerbaijani territories," international agencies reported. The ministry statement contradictsa an earlier announcement by Foreign Minister Tansu Ciller that the border will be opened soon (see OMRI Daily Digest, 24 October 1996). The ministry might be reacting to Armenia's refusal to sign a document that mentioned Nagorno-Karabakh as part of Azerbaijan at the OSCE's recent summit in Lisbon. Turkey closed its border with Armenia in early 1992 after accusing it of "military aggression" against Azerbaijan. -- Emil Danielyan

Representatives of more than 80 independent television and radio stations in Kazakstan sent a letter of protest to President Nursultan Nazarbayev complaining of "abuses" against non-governmental stations, ITAR-TASS reported on 11 December. The letter specifically pointed to the shut down of the radio and broadcasting company "M" and the radio station Totem, both still off the air, as well as other stations banned for several days at the beginning of November. The pro-government Kazak TV on 9 December, in a broadcast monitored by the BBC, attributed the independent stations' displeasure to their unwillingness to broadcast in the state language, Kazak. -- Bruce Pannier

Children in Kyrgyz orphanages are mostly handicapped, live in buildings with little or no electricity and where hygienic conditions are appalling, and they receive minimum attention from staff, according to Reuters on 12 December. They are not given toys because, as one worker said, "they would just break them." Tatyana Rupyova, a nurse at one of the orphanages who is paid $15 a month, explained "we don't have medicine, clothes, or vitamins to give them." The Kyrgyz economy is in crisis and many families with handicapped children cannot afford to take care of them, and often give them up to one of the country's four orphanages. Orphanage Director Maksim Yelizanov said when they die at the orphanages "the parents don't even come to bury their children." A Norwegian worker with the Save the Children agency in Kyrgyzstan said the situation is "worse than in Romania." -- Bruce Pannier

Tajik President Imomali Rakhmonov and United Tajik Opposition leader Said Abdullo Nuri agreed to a ceasefire on 11 December during their meeting in northern Afghanistan, according to Russian and Western press. The ceasefire was due to come into effect at midnight the same day and the two leaders will formally sign it at a 19 December meeting in Moscow. However, government forces were reportedly launching an assault on Garm on 11 December in an attempt to free a special forces unit trapped in the town. NTV reported that the opposition had suffered heavy losses in the battle. In the Tajik capital Dushanbe, two bombs went off on 12 December killing one person and injuring another. One of the bombs exploded outside the Tajik Parliament, the other near the Pakistani Embassy. -- Bruce Pannier

The item in the OMRI Daily Digest of 11 December 1996 (No. 238), titled "19 Former OPON Members Arrested in Azerbaijan," should have said that Yagub Mamedov is the former Azerbaijani parliament speaker.

The World Bank approved a $300 million loan to Ukraine for its coal sector reforms, Reuters reported on 11 December. The loan will be dispersed in two equal tranches. It has a 17-year maturity and a five-year grace period, and was made at the bank's standard interest rate for dollar loans. Ukraine's coal sector reform program spans eight years. The same day, Ukrainian radio reported that the head of the national agency for reconstruction and development, Roman Shpek, signed a memorandum with the EU on funding for 1996. By the end of the year Ukraine will have received $40 million under the program for financing state structure reform, economic restructuring, private sector development, and for non-nuclear energy projects. -- Ustina Markus

Deputy Foreign Minister Kostyantyn Hrishchenko called on the U.S. to make an official declaration that Ukraine had not violated its international commitments and sold arms to Libya, AFP reported on 11 December. The request was made in response to a Washington Times article, allegedly based on top-secret CIA documents, that said Kyiv sold SS-21 missiles to Libya. Reuters reported that the official Libyan news agency Jana denied Tripoli had made such a deal. Libya is under a UN arms embargo for its failure to hand over two suspects in the 1988 bombing of a U.S. airliner over Scotland that killed 270 people. Ukraine is the third largest recipient of U.S. aid and has been cautious not to engage in any deals that could strain its relations with the U.S. -- Ustina Markus

The Ukrainian Parliament approved a law on financing the 1997 budget, Ukrainian television reported on 11 December. The law stipulates that current expenditures will be financed proportionately to budget revenues. Social expenditures--including wages, pensions, stipends, and subsidies for medicines--will have priority in budget financing. The law comes into force on 1 January. The budget itself hasn't been approved yet, and the government is pushing the legislature to do so by the end of 1996. -- Oleg Varfolomeyev

Belarusian and Russian defense ministry delegations met in Minsk on 6 December, Belarusian TV reported. The defense officials approved a number of documents that are to be ratified at their next meeting later this month. The documents include a common defense policy draft and a new agreement between the two defense ministries, based on the April agreement on the establishment of the Belarusian-Russian Community. A joint Belarusian-Russian commission also worked out a protocol on Russian troops being withdrawn from Belarus. This included environmental issues and tax problems regarding Belarusian citizens employed by the Russian army, as well as compensation for Russian-built housing and the handing over of military facilities. -- Sergei Solodovnikov

Members of the old parliament continued meeting on 12 December, RFE/RL reported. The rump parliament includes Speaker Syamyon Sharetsky, six of the nine presidium members of the old legislature, and nine out of 16 chairmen of its permanent committees. Some 40 deputies refuse to acknowledge the legitimacy of the new legislature. The deputies decided to include four deputies elected in the 24 November runoff elections. Despite their continued activity, the rump parliament hasn't been able to achieve anything, and the opposition doesn't seemingly pose any real threat to President Alyaksandr Lukashenka, NTV reported on 10 December. RFE/RL reported that the Communist Party met on 7-8 December and expelled Anatol Malafeev--the newly-elected speaker of the lower house of the new legislature. The party also voted to oppose Lukashenka's domestic policies, but voiced continued support for his policy of integration with Russia. -- Ustina Markus

A group of Russian Foreign Ministry officials investigated the human rights situation of the Russian-speaking minority in Estonia on 10-11 December, BNS reported. The group was headed by the deputy head of the international and human rights department, Vladimir Parshikov. After meetings with Estonian Foreign Ministry officials, the OSCE mission in Tallinn, the parliament, and other government
departments as well as representatives of the ethnic minorities, they admitted the situation was not as bad as they had thought. The inability of Russians to obtain citizenship, however, remained the key problem. The visit had been agreed upon at the 5 November meeting of the Estonian and Russian foreign ministers (see OMRI Daily Digest, 11 November 1996). The experts did not connect their visit with the signing of a Russian-Estonian border treaty. -- Saulius Girnius

Gediminas Vagnorius on 11 December met with the IMF representative to Lithuania, Domenico Fanizza, to discuss the tax policies of his new government, Radio Lithuania reported. Reports said the value added tax is to be reduced from 18% to 15%; taxes on profits, interest, and dividends redirected into investments will end; and the property tax will be increased from 1% to 1.5%. He also discussed his economic plans and Lithuania's banking and energy problems with the World Bank's Baltic States Department Manager James Harrison. Noting that both officials stressed that Lithuania has already exceeded the 1996 borrowing limit of 1.98 billion litai ($495 million), Vagnorius said December would be "a diet month" and that the government will have problems in meeting commitments assumed earlier in the year. -- Saulius Girnius

Polish Deputy Defense Minister Andrzej Karkoszka said Poland welcomes the NATO ministers' decision, made on 10 December in Brussels, not to deploy nuclear weapons on the territory of any new pact members. The decision removes the ground for escalation of "suspicions and distrust" in the neighboring countries, Karkoszka said after the "Integra '96" international seminar on strategic planning after NATO enlargement. Polish Foreign Minister Dariusz Rosati, commenting on recent statements by his Russian counterpart Yevgenii Primakov in Brussels, said Russia wants to slow down the process of NATO enlargement but is preparing to accept the inevitable fact. -- Jakub Karpinski

A "Round-table Conference on Rebuilding Chechnya, Peace in the Caucasus, and Democracy in Russia" opened on 11 December in Warsaw under the auspices of the Warsaw and Krakow town councils, Polish dailies reported. The Chechen interim deputy prime minister and foreign minister are at the conference, and Alla Dudayeva, deceased President Dzhohar Dudayev's widow, is a guest of honor. Answering Russian official demands to clarify his government's position on the conference, the Polish ambassador in Moscow, Andrzej Zalucki, said it is a municipal and not a governmental initiative. He was told that Russia is concerned by the activities of the "so-called Chechen representatives" in Poland. The Russian Foreign Ministry warned on 27 November that efforts to establish Chechen representations abroad with diplomatic status will be considered a gesture "inimical to Russia." A Chechen center is active in Krakow and another one is to open in Warsaw on 15 December. -- Jakub Karpinski

Poland's birthrate has declined from 79 live births per 1,000 women in reproductive age at the beginning of the 1980s to 45 live births/1,000 women, Polish media reported on 12 December, citing Main Statistical Office data. A drop in the birthrate characterized the period between 1994 and 1996, despite the introduction of a restrictive abortion law in early 1993 (recently amended). In the first quarter of this year there were more deaths than live births, the first time this has occurred in post-war Poland. Demographers estimate that by 2020 the total number of children in the country will decline by 1.1 million (compared to 1995). Polish couples frequently cite difficult economic conditions as the reason for having fewer children. -- Beata Pasek

President Michal Kovac delivered a very critical annual report on the state of the nation on 11 December, saying the ruling coalition is leading Slovakia into international isolation, press agencies reported. Before the speech, all governing coalition deputies left the parliament. Kovac said it is becoming customary that Slovakia is excluded from the first group of candidates for NATO and EU membership and added that the government is not reacting to such signals. He also criticized state TV for broadcasting "disinformation, apparently produced to manipulate public opinion," and called for a dialogue with minorities and implementation of the Slovak-Hungarian treaty. -- Anna Siskova

Ralph Johnson held a two-hour long confidential talk with Vladimir Meciar on 11 December, Slovak media reported. Calling the meeting "friendly," Meciar's spokeswoman Magda Pospisilova denied that Johnson had issued a demarche. Over the past two years, Slovakia received one U.S. and two EU demarches over domestic political developments. Observers speculated that Johnson's meeting with Meciar dealt with the parliament's controversial decision to strip Frantisek Gaulieder--a breakaway deputy from Meciar's party-- of his parliamentary mandate (see OMRI Daily Digest, 5 December). The meeting came one day after parliament Chairman Ivan Gasparovic held talks with a group of EU diplomats. Meanwhile, a Focus agency poll released on 11 December showed that 30% of Slovaks thought it was mainly the opposition that is damaging Slovakia's interests abroad, while 50% disagreed, TASR reported. -- Sharon Fisher

Organized labor is beginning to add its voice to the peaceful mass protests, which concluded their 22nd day in Belgrade on 11 December, Nasa Borba reported. Meanwhile, CNN said that in some centers, such as Serbia's second largest city, Nis, crowds are beginning to thin. Nevertheless, delegations from throughout Serbia have arrived in the capital and Belgrade demonstrations continue to draw at least 100,000 supporters. Nasa Borba also reports that Italian Foreign Minister Lamberto Dini is due in Belgrade on 12 December for talks with both Serbian President Slobodan Milosevic and leaders of the opposition Zajedno coalition. Dini has told reporters he hopes to make "a contribution to resolving the crisis." Reuters reported on 12 December that Zajedno leaders are "pinning ... hopes on [trade] union backing and growing international support" in their efforts to have their 17 November municipal election victories recognized. -- Stan Markotich

Serbian opposition leaders asked the international community to freeze overseas assets of twenty of Serbia's most influential families involved in the governing of the state, international media reported. Miodrag Perisic, vice president of the opposition Democratic Party, explained the request, observing "this is a way in which the international community can punish this dictatorship without imposing an economic embargo against the entire population." Opposition leaders oppose a reintroduction of sanctions, saying they hurt only ordinary people. Meanwhile, AFP reported that VOA announced on 11 December it will be broadcasting a daily 30-minute TV program throughout much of the former Yugoslavia in response to the political upheaval in Serbia. The show, called "America Calling Serbia," will air five times weekly and feature newscasts. -- Stan Markotich

Members of the International Police Task Force (IPTF) saw indicted war criminal and former Bosnian Serb leader Radovan Karadzic pass by in a car en route to his offices but did nothing to stop him, Oslobodjenje wrote on 12 December. Karadzic was accompanied by Republika Srpska special police armed with Kalashnikovs. The IPTF informed IFOR of the incident but the peacekeepers took no action. "We are not authorized to chase war criminals," IFOR Spokesman Major Brett Boudreau said in Sarajevo, AFP reported. Critics have charged that IFOR and the IPTF deliberately avoid bothering indicted war criminals. The IPTF's spokesman nonetheless publicly reminded the Bosnian Serb leadership that they are obliged to provide Karadzic with only one escort, "and that's to The Hague." -- Patrick Moore

President Franjo Tudjman has fired Interior Minister Ivan Jarnjak, Radio 101 reported on 11 December. The ostensible reason was the discovery of a bugging device in the office of the opposition mayor of Rijeka, but some observers say the real reason was that Jarnjak failed to prevent massive anti-government protests in late November. There was no official confirmation of the firing, but the independent daily Novi List also ran the story on 12 December. Tudjman has taken a tough line against all manner of foreign and domestic "enemies" since his recent return from medical treatment in the U.S. (see Pursuing Balkan Peace, 10 December 1996). -- Patrick Moore

Apparently to dispel rumors that he has terminal cancer, Tudjman appeared on Croatian Television playing tennis with the government in attendance, Reuters reported on 11 December. Critics called the event "surreal" and likened it to similar public shows of vitality once put on by communist leaders. Tudjman's recent statements against "enemies" have also been compared to communist-era rhetoric. An unnamed diplomat said that Tudjman is behaving like a man who has nothing to lose and will do as he wants. -- Patrick Moore

A joint session of the parliament's two chambers on 11 December approved Victor Ciorbea's coalition government with 316 votes to 152, Radio Bucharest reported. The vote followed a five-hour debate in which the former ruling coalition, now in opposition, criticized the new government's economic program for containing "little concrete." Referring to the issue of Romania's integration into European and Euro-Atlantic structures, the premier told the parliament that the next five years would determine "the future of many generations." Ciorbea and his government are committed to speed up the country's admittance into NATO and the EU. The new government will be sworn in today. -- Zsolt Mato

Outgoing Moldovan President Mircea Snegur on 11 December decried the persecutions to which his supporters were allegedly submitted to by the new administration, Infotag reported. The statement came in response to an appeal sent by the Pro-Snegur Civic Movement to both Snegur and President-elect Petru Lucinschi, claiming that its members have been fired from their jobs or received threats of physical violence. Snegur described the campaign as "political blackmail" and warned that it "may seriously destabilize the political situation." In a separate development, acting Premier Andrei Sangheli on 11 December concluded a three-day official visit to Moscow, the second in less than two months. Sangheli met with his Russian counterpart, Viktor Chernomyrdin, and other senior officials, with whom he discussed loan agreements and Russian fuel deliveries for the winter. In exchange, Moldova will deliver, among other things, between 5 and 6 million liters of vodka. -- Dan Ionescu

A three-day conference on combating organized crime and corruption opened in Sofia on 11 December, RFE/RL reported. The meeting is jointly sponsored by the Council of Europe (CE) and the EU. Ministers and experts from 16 Central and East European countries (Albania, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Poland, Romania, Russia, Slovakia, Slovenia, and Ukraine) and CE legal and crime experts will attend. The conference is part of a year-long "Octopus" project, which aims at providing the participating countries with legal instruments to fight crime. -- Stefan Krause

The united opposition's Political Council on 11 December supported the Union of Democratic Forces' (SDS) formula for national consensus on setting up the currency board--an independent body in charge of monetary policy--Duma and Demokratsiya reported. The plan links the consensus over the board with the demand for early parliamentary elections. SDS Chairman Ivan Kostov warned that if the currency board is set up by the current government without a broader consensus, it will fail and hyperinflation and a new moratorium on the foreign debt payments could be in the cards. The opposition project will be forwarded to the Bulgarian Socialist Party (BSP) for consideration before it reaches the parliament. BSP Deputy Nikola Koychev told Trud on 10 December that Kostov's demands are "nebulous," adding that the currency board could be adopted even without a political consensus, although this was not "desirable." -- Maria Koinova

Albanian President Sali Berisha has asked the country's two journalists' associations to present him with concrete proposals for a lifting of taxes on newspapers, Koha Jone reported on 12 December. Berisha's announcement came as a surprise for the papers, which long demanded such a step. Newspapers are currently subject to 11 different taxes, and many of them are reportedly facing bankruptcy. Berisha, meanwhile, said the introduction of the VAT and the discontinuation of price controls and subsidies on bread, fuel, and electricity earlier this year had given the economy a boost, but admitted that it also resulted in a budget deficit due to tax evasion and an increase in inflation from 7% in 1995 to an estimated 16% this year. -- Fabian Schmidt