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Newsline - February 5, 1997


KULIKOV GETS POWERFUL NEW POST.
President Boris Yeltsin issued a decree on 4 February appointing Interior Minister Anatolii Kulikov the government's ninth deputy prime minister, international agencies reported. Army General Kulikov, who will retain his powerful Interior Ministry post, will also be responsible for the Tax Police, the Customs Service, and economic security. Yeltsin's spokesman, Sergei Yastrzhembskii, said Kulikov's promotion was aimed at improving coordination in the fight against crime, particularly in the economic sphere. The long-rumored appointment gives Kulikov expanded powers on the critical issue of tax collection, presided over by presidential Chief of Staff Anatolii Chubais, but, contrary to some predictions, it does not give him jurisdiction over the military. Kulikov, who is widely viewed as a conservative, is well-regarded by the left-wing majority in the Duma. He was critical of the Chechen peace deal and instrumental in the ouster of former Security Council Secretary Aleksandr Lebed. -- Penny Morvant

OSCE MISSION HEAD EXPELLED FROM CHECHNYA.
Tim Guldimann, the head of the OSCE mission in Chechnya, was called to the Chechen Foreign Ministry on 4 February and declared persona non grata, Russian and Western agencies reported. According to an OSCE spokesman, Chechen Foreign Minister Ruslan Chimaev, a member of outgoing President Zelimkhan Yandarbiev's government, expelled Guldimann because of his recent public statements that Chechnya remains part of the Russian Federation. Guldimann left Grozny the same day for Nazran, the capital of neighboring Ingushetiya. Ironically, the Swiss diplomat's mediation efforts had earlier drawn criticism from pro-Moscow Chechen leader Doku Zavgaev and the Russian Duma, which accused Guldimann of facilitating Chechnya's secession from Russia. An anonymous source close to Chechen president-elect Aslan Maskhadov, however, told ITAR-TASS that Maskhadov did not support Guldimann's expulsion, saying he could still help Grozny and Moscow resolve their outstanding differences. -- Scott Parrish

DUMA REFERS RESOLUTION ON YELTSIN'S HEALTH FOR FURTHER REVISION.
The State Duma Council referred a motion to remove Yeltsin on health grounds to three Duma committees for examination and refused to include it on the agenda for the Duma's 5 February plenary session, Russian media reported on 4 February. Duma Security Committee Chairman Viktor Ilyukhin, a leading Communist who sponsored the resolution, indicated that the final version of the motion will merely ask Yeltsin to step down voluntarily. The Duma Council's decision followed escalating rhetoric from the pro-Yeltsin camp in the last two days. Both Yeltsin's representative to the Constitutional Court Sergei Shakhrai and Duma Deputy Aleksandr Shokhin (Our Home Is Russia) have warned that, if the Duma demanded the president's dismissal on health grounds, Yeltsin might dissolve the lower house for violating Article 3 of the constitution, which prohibits attempts to seize power, RIA-Novosti reported. -- Laura Belin

YELTSIN AND CHERNOMYRDIN DISCUSS FOREIGN POLICY.
Yeltsin met with Prime Minister Viktor Chernomyrdin on 4 February for an hour-long meeting which focused on foreign policy issues, ITAR-TASS reported. Presidential spokesman Sergei Yastrzhembskii said the two leaders discussed the upcoming 5-7 February session of the U.S.-Russian economic cooperation commission in Washington, D.C., which Chernomyrdin will co-chair with U.S. Vice President Al Gore. Yastrzhembskii said the Russian delegation will present a bilateral economic cooperation plan for 1997-2000, aiming to boost direct U.S. investment in the Russian economy. He added that the issue of NATO expansion would also be on the agenda. While public Russian criticism of the alliance's expansion plans has recently escalated, U.S. President Bill Clinton pledged in his state of the union address on 4 February that "we must expand NATO by 1999." -- Scott Parrish

ZYUGANOV STILL DOUBTS PRESIDENT'S FITNESS.
Communist Party leader Gennadii Zyuganov on 4 February insisted that despite the president's recent publicized meetings in the Kremlin, "Mr. Yeltsin is absolutely unable to function," NTV reported. Zyuganov said that on a recent trip to Western Europe he saw video footage of Yeltsin's 4 January meeting with German Chancellor Helmut Kohl. "Now I understand why our Russian television [networks] do not show these tapes," he commented. Meanwhile, footage of Yeltsin's 4 February meeting with Chernomyrdin, which was aired on Russian TV (RTR), showed the president looking pale and tired, with an unsteady walk, according to the BBC. -- Laura Belin

LUZHKOV: RUSSIA CAN COUNTER NATO EXPANSION.
Continuing the foreign policy rhetoric that many link with his presidential ambitions, Moscow Mayor Yurii Luzhkov told a news conference on 4 February that "Russia is strong enough to take defensive measures which will force hot heads in the West to reconsider" expanding NATO, ITAR-TASS reported. Luzhkov accused the West of using Russia's current economic difficulties to renege on earlier pledges not to expand NATO eastward. He recommended that Russia take "a rigid and adequate" stance on the issue, which he argued would force the West to back down. In response to a question about Ukraine's desire for an "enhanced relationship" with the alliance, Luzhkov retorted that "Ukraine will not be so stupid as to join NATO." -- Scott Parrish

MOSCOW CRITICIZES COUNCIL OF EUROPE ON ESTONIA.
Russian Foreign Ministry spokesman Mikhail Demurin on 4 February accused the Parliamentary Assembly of the Council of Europe of employing "double standards" when it decided to end human rights monitoring in Estonia, ITAR-TASS and BNS reported. Demurin argued that although the assembly admitted Estonia does not meet European human rights standards, it nonetheless voted on 30 January to end monitoring, despite objections by the Russian delegation. He complained that Tallinn was now using the assembly decision to justify its refusal to conduct talks with Moscow about the Russian minority in Estonia. While the assembly did say that Estonia needs to maintain the availability of Russian-language education and simplify the Estonian language exams required for citizenship, it also praised Tallinn's "rapid success" in meeting European human rights criteria. -- Scott Parrish

FORMER PRESIDENTIAL CANDIDATE IN TROUBLE WITH TAX POLICE.
Billionaire Vladimir Bryntsalov, who finished last in the 1996 presidential election, has been accused of tax dodging, ITAR-TASS reported on 4 February. A Moscow government official claimed that Bryntsalov has reregistered his Moscow-based pharmaceutical company Ferein in Kabardino-Balkariya in order to avoid paying 18 billion rubles in taxes and other mandatory payments, such as pension fund contributions. Moscow Mayor Yurii Luzhkov said he would inform Valerii Kokov, the new president of Kabardino-Balkariya, of Bryntsalov's intentions and threatened to use the Moscow Property Committee to evict Ferein from its Moscow real estate. -- Penny Morvant

PENSION REFORM DEBATED.
First Deputy Prime Minister Viktor Ilyushin told ITAR-TASS on 5 February that the government has submitted two draft laws on pension reform to President Yeltsin. Under the drafts, he said, pensions would consist of two parts: the base pension, equal to 80% of the subsistence minimum for pensioners; and an additional sum dependent upon the size of the pensioner's former salary and the length of time he or she contributed to the Pension Fund. He denied that the pension age--55 for women and 60 for men--would be raised in the near future but admitted that a proposal to reduce payments to working pensioners is under discussion. The money freed by such a scheme would be used to raise pensions for the poorest groups, he said. On 4 February, the Communist faction in the Duma, the Federation of Independent Trade Unions, and the Union of Pensioners all spoke out strongly against plans to adjust payments to Russia's numerous working pensioners. -- Penny Morvant

DUTCH AND FRENCH BANKS TO FINANCE SAKHALIN-1 PROJECT.
Russian participants in the Sakhalin-1 oil project have signed a financial agreement with the Dutch bank ABN-AMRO and the French bank Lazard Freres & Cie, Kommersant-Daily and Segodnya reported on 4 February. Rosneft and Sakhalinmorneftegaz --which hold 17% and 23% stakes in the project, respectively--will get a $13 billion credit to finance the development of oil reserves in the Sea of Okhotsk. Of that, $8 billion will be provided by ABN-AMRO. The deal envisages opening a six-month $10 million credit line to Russian companies immediately. The disbursement of money for longer-term programs, however, will depend on agreement being reached on the route for transporting the extracted oil. Foreign participants in the Sakhalin-1 project include Japan's Sodeko and Exxon of the U.S., which each hold a 30% equity stake. -- Natalia Gurushina

INFLATION 2.5% IN JANUARY.
Consumer price inflation reached 2.5% in January, the highest since March 1996 when it was 2.8%, ITAR-TASS reported on 4 February. Still, the figure compares favorably with the 4.1% inflation rate in January 1996 and the 17.8% of January 1995. The rise is likely to have been caused by seasonal factors such as traditional holiday bonuses, end-of-year payouts, and the government's attempts to repay wage and pensions arrears in November-December 1996. However, Deputy Economics Minister Vladimir Panskov said that the January increase in inflation stemmed from heightened inflationary expectations caused by political developments, primarily President Yeltsin's illness and the Duma's attempts to dismiss him. -- Natalia Gurushina


TROUBLE AT ARMENIAN NUCLEAR POWER PLANT.
Problems in the turbo-generator led to the shutdown of Armenia's only nuclear power plant for several hours on 4 February, according to AFP and ITAR-TASS. Faulty wiring was discovered but officials at the Metzamor plant stressed that there was no danger to workers or the environment. The plant resumed normal operations later the same day. -- Bruce Pannier

U.S. AID TO ARMENIA.
U.S. Ambassador to Armenia Peter Thomsen reiterated Washington's policy of providing aid to Armenia to support its democratic reform, ITAR-TASS reported on 3 February. Thomsen told journalists the U.S. will provide $95 million in aid to Armenia in 1997, including a $30 million credit to buy natural gas and $6 million to increase safety at the Metzamor nuclear power plant. He noted that the U.S. provided $150 million in aid to Armenia in 1996. -- Lowell Bezanis

STATUS OF AZERBAIJAN'S ACADEMY OF SCIENCES TO CHANGE.
President Haidar Aliyev on 2 February declared his intention to subordinate Azerbaijan's Academy of Sciences to the office of the president, Turan reported. The move effectively overturns a 1992 law making the academy an independent, if partially state-funded, body. In an address to an enlarged session of the academy's presidium, Aliyev also said he accepted the resignation of Eldar Salayev, the body's chairman since the early 1980s, and appointed Farmaz Maksudov to replace him. The same day Aliyev raised the salaries of academy members by 50%. -- Lowell Bezanis

UN OBSERVERS TAKEN HOSTAGE IN TAJIKISTAN.
Four UN military observers and their translator were taken hostage on 4 February on a road 68 km from the Tajik capital Dushanbe, according to Western and Russian sources. The group, which includes two Swiss, one Austrian, one Ukrainian, and a Tajik interpreter, were stopped by a group loyal to renegade field commander Rezvon Sadirov. His group in late December held 23 people from the ceasefire monitoring committee, among them seven UN observers, and used the hostages to secure the release of two of their members from the Tajik opposition. However, a demand for Russian border guards to clear a corridor and allow more of their group passage from Afghanistan into Tajikistan was not met and appears to be the motive behind this latest action. Sadirov himself is rumored to be among those presently in Afghanistan. The UN is demanding the immediate release of the five captives. -- Bruce Pannier

KAZAKSTANI PARLIAMENT OPPOSED TO RUSSIAN TESTING.
The Kazakstani parliament on 4 February refused to ratify an agreement signed by Prime Minister Akezhan Kazhegeldin and his Russian counterpart Viktor Chernomyrdin last fall on Russian use of four weapons test centers in Kazakstan, RFE/RL and AFP reported. Deputy Sharip Omarov recalled that nuclear testing during the Soviet era had caused damage which has cost the Kazakstani government $115 million to alleviate since 1991. Omarov said Kazakstan had already become a non-nuclear state and the next step is to ban conventional weapons testing on the country's soil. The terms of the deal allow Russia to use the sites for a 10-year period at a cost of $26.5 million annually. -- Bruce Pannier and Merhat Sharipzhan

EARTHQUAKE HITS TURKMENISTAN.
Two earthquakes, 30 minutes apart, struck northeastern Iran and Turkmenistan on 4 February, Western sources reported. The quakes, which measured 5.6 and 6.1 on the Richter scale at their epicenters in Iran, caused extensive damage there, destroying 34 villages, but Turkmenistan is presently reporting no damage and no casualties. In Ashgabat, the Turkmen capital, the two quakes were measured at 3.5 and 4.5, which normally indicates little damage. In rural areas, however, most houses are made of clay and many small villages are in remote desert regions where conditions are impossible to assess immediately. Turkmenistan has lived in fear of earthquakes for some time. In 1948 an earthquake nearly leveled Ashgabat; among the thousands killed were the parents of current President Saparmurad Niyazov. -- Bruce Pannier


UKRAINIAN MINERS PICKET PARLIAMENT.
Some 2,000 miners picketed the parliament in Kyiv on 4 February, demanding back wages, support for the coal industry, and a halt to pit closures, Reuters reported. The miners, most of whom were from the Donbass region, have not received wages for months. They want the parliament to approve funds to reduce back payments, estimated at 3.9 billion hryvnyas ($2.1 billion). About 50 of Ukraine's 270 pits are to be closed by 2000, and the more profitable mines are to be modernized with the help of a $300 million World Bank credit. The picketing was timed to coincide with the opening of the parliament's seventh session, which is to approve the 1997 budget. President Leonid Kuchma has said the draft budget is "unrealistically large." -- Saulius Girnius

UKRAINE'S GRADOBANK DECLARED INSOLVENT.
Gradobank--one of the banks in charge of disbursing German money to compensate victims of the Nazis--is insolvent, although it still owes 119 million marks ($72.5 million), Western agencies reported on 4 February. The cabinet is scheduled to meet on 7 February to decide how to handle the payment problems. Since 1993, Germany has paid 400 million marks in compensations ranging from DM 400 to DM 1,900 to about 541,000 Nazi victims. But some 20% of those eligible have not yet received any compensation. The original 1 February deadline for filing claims has been extended to 7 February. Claims from people living in remote provinces are still coming in. -- Saulius Girnius

BELARUS, ISRAEL SIGN POLICE COOPERATION AGREEMENT.
Belarusian Interior Minister Valyantsin Agelets and Israeli Foreign Minister David Levy, meeting in Jerusalem on 4 February, signed an agreement on police cooperation to combat organized crime, terror, and drug smuggling, AFP reported. Agelets is on a five-day visit to Israel at the invitation of Security Minister Avigdor Kahalani. -- Saulius Girnius

ESTONIAN GOVERNMENT ENDORSES 1997 POLITICAL PROGRAM.
The Estonian government on 4 February endorsed its political program for this year, ETA reported. Prime Minister Tiit Vahi noted that the top foreign-policy priority is to be in the first wave of EU expansion. On the domestic front, reform of pensions and health care and increased subsidies for rural areas and education are planned. Economic goals include 5% growth, an annual inflation rate of 10-14%, and large-scale administrative reform paving the way for the reduction of corporate income tax from 26% to 15% beginning in 1998. Vahi also said that interethnic relations would be improved by granting permanent resident permits to non-Estonians who currently have only temporary ones. -- Saulius Girnius

LATVIAN PREMIER-DESIGNATE WANTS SIX-PARTY CABINET.
Andris Skele on 4 February said that he wants his new cabinet to be formed by six parliamentary parties, BNS reported. Those parties are the Democratic Party Saimnieks, Latvia's Way, For the Fatherland and Freedom, For People and Justice, the National Independence Party and Green Party coalition, and the Farmers' Union and Christian Democratic coalition. Skele's draft action plan provides for inflation at 11% in 1997 and a 50% increase in state subsidies to develop the infrastructure. It also calls for setting up a state institution to supervise Latvijas Gaze (gas), Lattelekom (telecommunications), and Latvenergo (energy), all of which have a monopoly over their sectors. The new cabinet is to be presented to the Saeima for approval on 13 February. -- Saulius Girnius

RUSSIAN DUMA SPEAKER IN POLAND.
Gennadii Seleznyov wrapped up his visit to Poland on 4 February by meeting with President Aleksander Kwasniewski and other officials. Seleznyov said
that Russia will have to undertake "adequate measures"--including revising its national security policy and increasing its defense expenses--if NATO comes closer to its borders. He also said that Moscow would have to revise its commitments under international disarmament treaties. NATO enlargement would hamper the Russian parliament's ratification of the START-2 treaty, Seleznyov said. Meanwhile, Marek Belka has been appointed finance minister, replacing Grzegorz Kolodko, Polish media reported on 5 February. Belka is an expert in monetary policy as well as an avid supporter of a market economy and Poland's integration into the EU, according to Rzeczpospolita. -- Jakub Karpinski

CZECH RAILROAD WORKERS ON STRIKE.
Czech railroad workers went on strike at midnight on 3 February, Czech media reported. The strike is scheduled to last for 48 hours and may be repeated if the demands of the trade unions representing railroad workers are not met. The unions claim that the railroads are not run efficiently. They are demanding changes in the railroad management and higher wages. The government has rejected most of the unions' demands. Prime Minister Vaclav Klaus on 4 February said the strike was "unnecessary." -- Jiri Pehe

SLOVAK PARLIAMENT SESSION BEGINS ...
The parliament on 4 February voted to alter the composition of the Mandate and Immunity Committee, giving all parties proportional representation, Slovak media reported. After the fall 1994 elections, the opposition was overrepresented on the Environmental Committee but underrepresented on certain key parliamentary bodies, including the Mandate and Immunity Committee. That committee played an important role in the parliament's decision in December to strip Frantisek Gaulieder of his deputy mandate after he quit the ruling Movement for a Democratic Slovakia (HZDS). The committee was expanded from 15 to 19 members, eight of whom now represent the HZDS. The ratio between the ruling coalition and the opposition representatives on the committee has changed from 10:5 to 11:8. -- Sharon Fisher

... WHILE OPPOSITION PROPOSALS ARE REJECTED.
The parliament rejected most of the opposition's proposals for the session's agenda, Slovak media reported. Those included issues concerning the Gaulieder case, the opening of communist-era secret police files, and a report on the cabinet's fulfillment of its program in its first two years in office. Changes in the parliamentary leadership and in the composition of boards overseeing the Slovak media and the National Property Fund were also rejected. Also on 4 February, Deputy Premier Katarina Tothova, a HZDS member, announced that legislation on changing the electoral system will be debated this year, CTK reported. Prime Minister Vladimir Meciar has called for changing from a proportional system to a majority or mixed system. -- Sharon Fisher

SLOVAK FOREIGN MINISTER ON GABCIKOVO.
Pavel Hamzik has confirmed that no mutually acceptable agreement was reached during recent Slovak-Hungarian talks on the Gabcikovo-Nagymaros hydropower plant, Hungarian dailies reported on 5 February. Hamzik told the Hungarian-language Slovak newspaper Uj Szo that Budapest and Bratislava have no choice but to wait for the ruling of the Hague-based International Court of Justice. The hearings are due to begin next month. Meanwhile, Gyorgy Szenasi, Hungary's legal representative in The Hague, warned that increasing speculation in Hungary about the outcome of secret Slovak-Hungarian negotiations could be to Hungary's disadvantage. The governments' attempt to seek an out-of-court settlement has unleashed a storm of protest from opposition political parties and environmentalists in Hungary. Even the junior coalition party, the Alliance of Free Democrats, has said that Prime Minister Gyula Horn is jeopardizing Hungary's chances at the hearings by continuing the consultations. -- Zsofia Szilagyi


BULGARIAN POLITICIANS AGREE ON ELECTIONS IN APRIL ...
President Petar Stoyanov and the major political parties have agreed on early parliamentary elections in April, Bulgarian media reported on 4 February. The agreement was reached "in the name of civil peace" at a four-hour meeting of the Consultative Council for National Security. According to 24 chasa,
Stoyanov called that meeting after Bulgarian Social Party Chairman Georgi Parvanov and BSP premier-designate Nikolay Dobrev submitted to the president two folders--one containing the lineup of a new BSP-led government and the other giving notification that the BSP will not form a government --and Dobrev asked Stoyanov to pick one. Stoyanov said he will name a caretaker government within a week. Trud reported that Sofia Mayor Stefan Sofiyanski will head this government. -- Stefan Krause

... WHILE BULGARIANS CELEBRATE VICTORY.
Tens of thousands of Bulgarians flooded the streets of Sofia and other cities on 4 February to celebrate the new agreement, RFE/RL and Bulgarian media reported. In Sofia alone, an estimated 100,000 gathered in front of the Aleksandar Nevski Cathedral, where opposition rallies have been held over the past 30 days. Opposition supporters lifted Stoyanov on their shoulders and carried him through the streets. Road blocks in Sofia and throughout the countries were lifted, and public transport in Sofia and other cities will resume operation on 5 February. -- Stefan Krause

SERBIAN PRESIDENT PREPARED TO RECOGNIZE OPPOSITION WINS?
The daily Politika on 4 February published a letter sent from Serbian President Slobodan Milosevic to Premier Mirko Marjanovic asking the government to prepare draft legislation recognizing opposition wins in the November local elections. Milosevic proposed that the Serbian government "submit a draft of emergency legislation to the [republican] parliament that will declare final that part of the local elections in Serbia that are in keeping with the findings of the OSCE mission." An OSCE fact-finding mission concluded in late December that the opposition won in 14 localities. Also on 4 February, Marjanovic announced on state radio and TV that draft legislation recognizing local election returns would likely be presented to the parliament on 5 February. -- Stan Markotich

SERBIA'S OPPOSITION CAUTIOUS, SKEPTICAL.
Democratic Party leader Zoran Djindjic, addressing protesters in Belgrade on 4 February, said Milosevic's latest move may be just another ruse to deceive them. He vowed that "We will continue [the protests] until all [municipal] councilor mandates are verified, until freedom of the media is established, and until responsibility is established of all those who took part in the vote theft and brutal beating up of citizens," Reuters reported. For his part, Vuk Draskovic, Zajedno leader of the Serbian Renewal Movement, said Milosevic's move may be little more than "a trick" to buy time and undermine opposition resolve. Milosevic and his ruling Socialists have several times conceded opposition wins, only to have the state-controlled courts "legitimize" Milosevic's authoritarian regime, Nasa Borba reported on 5 February. -- Stan Markotich

CLINTON PLEDGES SUPPORT FOR BOSNIA.
U.S. President Bill Clinton said in his annual State-of-the-Union address on 4 February: "With American leadership, the killing has stopped in Bosnia. I ask Congress to continue its strong support of our troops there." He did not elaborate. SFOR's mandate runs through mid-1998. Meanwhile, in Bosnia, federal Defense Minister Ante Jelavic and other top defense officials met with diplomats from Turkey and from Egypt. Jelavic, a Croat, thanked the two countries for their support in the U.S.-sponsored "Train and Equip" program for the Bosnian military. He stressed the need to bolster defense links between Sarajevo and Ankara and between Sarajevo and Cairo. The Egyptian deputy defense minister is slated to arrive on 6 February, Onasa wrote. -- Patrick Moore

MORE VIOLENCE IN MOSTAR.
News agencies on 4 February reported continuing violent incidents by Croats directed at Muslims and foreign aid workers. In one case, a rifle grenade was fired from the area of a Franciscan monastery in the direction of Muslim east Mostar. And in the latest chapter of a dispute in Herzegovinian Croat politics going back to the Middle Ages, Novi List suggested on 5 February that the Franciscan fathers and their conservative allies in the Croatian parliament may be holding up ratification of the treaty between Zagreb and the Vatican. The agreement was concluded in December and regulates the role of the Roman Catholic Church in Croatian public life. The Herzegovinian Franciscans, who are pillars of Croatian nationalism and regarded as close to the people, have a traditionally uneasy relationship with the regular clergy and with the Church hierarchy, who are often seen in Herzegovina as more alien and distant. -- Patrick Moore

TENSIONS ON THE RISE IN EASTERN SLAVONIA.
Representatives of the local Serb population announced on 4 February that they have temporarily suspended talks with the Croatian authorities and will discuss relations with Zagreb at a session of the Serbian "parliament" on 5 February. Eastern Slavonia is the last Serb-held part of Croatia and is slated to return to full Croatian rule in July (see Pursuing Balkan Peace, 4 February 1997). In the latest in a series of violent incidents against symbols of Croatian authority, an explosion rocked the office that distributes Croatian identity papers in Tenja on 3 February, news agencies reported. Meanwhile, some 47 more Serb families have left the region, adding to the total of 15,000 out of a wartime population of 130,000. Croatia has urged the Serbs to stay and to take part in the 16 March local elections. The big sticking point is the Serbian demand for local autonomy, which both Zagreb and the UN say is not acceptable. -- Patrick Moore

THREE KILLED ALBANIANS WERE MEMBERS OF KOSOVO LIBERATION ARMY.
The Kosovo Liberation Army (UCK) has said that the three ethnic Albanians killed in a shoot-out with Serbian police last week were UCK members on an unspecified "special mission." Police said the men were killed when police returned fire after coming under attack. Three Serbian policemen were injured. The UCK, in a statement to ethnic Albanian media, pledged revenge for the death of its members. Meanwhile, Tirana denounced the arrests of more than 100 ethnic Albanians last week, saying that Serbian President Slobodan Milosevic "is trying to distract domestic and international public opinion from Serbia to Kosovo and to terrorize Albanians in Kosovo," Reuters reported. -- Fabian Schmidt

CONSTANTINESCU PUSHES ROMANIAN CASE FOR NATO MEMBERSHIP.
President Emil Constantinescu, at a meeting in Brussels with the NATO countries' ambassadors to the alliance, argued that Romania has achieved "political maturity" and is now ready for NATO membership. In his welcoming address, NATO Secretary-General Javier Solana praised Romania for having tread "a long way" in a very short time but also noted the country's present economic difficulties. He hinted that Romania's increased involvement in NATO may come as a member of an enhanced Partnership for Peace Program rather than a full-fledged new member of the alliance, international media reported on 4 February. -- Zsolt Mato

ROMANIAN TELEVISION REPORTING ON POLL CREATES CONTROVERSY.
Evenimentul zilei on 5 February harshly criticized Romanian Television for attempting to conceal "the dark side" of a poll conducted over the past two months by the Bucharest IMAS polling institute. Romanian TV had told its audience that according to the results of that poll, the presidency, the parliament, and the government enjoy the confidence of more than half the population for the first time in recent years. Cristoiu accuses the station of manipulating the poll results by failing to report that the poll also shows "great differences" in the results of polling conducted in the two months. The percentage of those who said they believed the new cabinet's performance will be worse than that of its predecessor increased from 6.7% in December to 14.3% to January. And while only 11% believed in December that "things were going in the wrong direction," that figure had doubled to 22.3% by January. The combined December and January results show Victor Ciorbea as the most popular leader (62% support) and the Democratic Convention of Romania as the most popular formation (58%). -- Dan Ionescu

MOLDOVAN ECONOMIC NEWS.
The investment company Eurobonds Moldova is to issue bonds worth some $70 and to trade them on European and U.S. stock markets, Infotag and BASA press reported on 3 February. in accordance with an agreement reached with the London branch of Merrill Lynch, 85-90% of the bonds are to be introduced on European markets. Interest on the five-year maturity bonds will be 7-9%, depending on market demand. The earnings will be used to pay foreign debts as well as wage and pension arrears. -- Dan Ionescu

REPAYMENT OF ALBANIAN PYRAMID SCHEME INVESTMENTS GETS OFF TO SLOW START . . .
Only a handful of the 150,000 investors due to receive 60% of their deposits with the collapsed Populli scheme received hard cash on 4 February, Reuters reported. Half the potential claimants were in Tirana to collect their money, but some said they have been left off the lists. Most people insisted on cash, rather than government bonds. Others refused partial payouts, demanding their entire stake. Under a new law adopted last week, reimbursements are to be calculated on the basis of how much money was invested and how much remains as frozen assets. More than 200,000 people are scheduled today to receive 52% of their investments in the failed Xhaferri scheme. -- Fabian Schmidt

... WHILE ANOTHER SCHEME COLLAPSES.
Fitim Gerxhalliu, owner of the Gjallica scheme in Vlora, went on local TV to tell investors that his company was bankrupt. He said all the company's assets--which include real estate and enterprises--would be made available to the investors, but he added that he could not say when that would take place. Police, fearing a repetition of riots, have set up roadblocks on the main road to Vlora and have refused entry to motorists with out-of-town registrations. VEFA, the country's largest investment company, reduced its monthly interest rates from 5% to 3% percent on 4 February. President Sali Berisha offered help to worst-hit depositors but warned that the government could not fuel inflation by promising more than it was able to provide. -- Fabian Schmidt

[As of 1200 CET]

Compiled by Steve Kettle and Jan Cleave



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