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Newsline - August 5, 1997


Citing an appeal from the Procurator-General's Office, Prime Minister Viktor Chernomyrdin on 4 August ordered the State Property Committee and Russian Federal Property Fund to postpone the sale of a 38 percent stake in Norilsk Nickel. The auction was scheduled to take place on 5 August. According to Reuters, State Property Committee Chairman Alfred Kokh on 5 August agreed that the Norilsk sale should be postponed. However, Reuters said that it is not clear whether a government official or an Oneksimbank representative will cast the deciding vote at a 5 August meeting of a commission with the power to postpone the auction. Oneksimbank acquired management rights over the 38 percent stake in November 1995 in exchange for a $170 million loan to the government. Critics have said the planned sale was stacked in Oneksimbank's favor (see "RFE/RL Newsline," 22, 28, 31 July 1997).


The Russian Federal Property Fund on 1 August submitted documents concerning the Cyprus-based Mustcom, Ltd. to the Federal Security Service (FSB), "Kommersant-Daily" reported on 2 August. The Mustcom consortium, which includes Oneksimbank, Deutsche Morgan Grenfell and George Soros's Quantum Fund, won the recent auction for a stake of 25 percent, plus one share in the telecommunications giant Svyazinvest (see "RFE/RL Newsline," 28 July-1 August 1997). The FSB has been given a month to check the documents concerning Mustcom and the Svyazinvest sale. "Kommersant-Daily" said that under a December 1993 presidential decree, if a privatization auction is won by foreign companies, information about those companies must be submitted to the government and the security service. An FSB statement released on 1 August indicated that so far no irregularities connected to the Svyazinvest sale have been uncovered, Interfax reported.


The weekly "Novaya gazeta" has charged that First Deputy Prime Minister Boris Nemtsov inappropriately delayed the publication of a presidential decree. On 4 August the paper published an alleged transcript of a May telephone conversation between Nemtsov and the businessman Sergei Lisovskii. (Lisovskii was one of two workers on President Boris Yeltsin's campaign detained in June 1996 while carrying more than $500,000 out of government headquarters. See "RFE/RL Newsline," 8 April 1997.) In the transcript, Nemtsov demands that $100,000 in royalties for his book "The Provincial" be transferred to his bank account quickly. He says he is holding up the publication of a presidential decree requiring officials to submit income and property declarations, explaining that he needs to declare the book royalties so as not to be accused later of trying to hide the income. "Novaya gazeta" argued that Nemtsov acted out of personal considerations, fearing a scandal that could damage his future political career.


Appearing on Ekho Moskvy, Nemtsov's lawyer Vitalii Khavkin confirmed that a telephone conversation between Nemtsov and Lisovskii took place but said Nemtsov cannot remember what was discussed. Nemtsov has demanded that the Procurator General's Office investigate how his telephone conversation with Lisovskii was recorded, how the recording reached "Novaya gazeta," and whether that recording had been tampered with, Russian news agencies reported on 4 August. Nemtsov argued that the tap on his telephone was an illegal violation of his privacy rights. In an article accompanying the transcript, "Novaya gazeta" journalist Aleksandr Minkin acknowledged he did not know whether Nemtsov's telephone conversation had been recorded legally, but he argued that "machinations with presidential decrees" are a matter of state importance, not Nemtsov's private affair. Meanwhile, Nemtsov departed Moscow on 5 August for a two-and-a-half week vacation in Sochi.


Central Bank Chairman Sergei Dubinin on 4 August said the ruble redenomination planned for 1 January 1998 marks the "end of the era of hyperinflation," RFE/RL's Moscow bureau reported. Dubinin and First Deputy Finance Minister Vladimir Petrov predicted the ruble will not decline against the dollar when the redenomination takes effect and three zeroes are knocked off the ruble, Interfax reported. Dubinin also said new banknotes and coins have already been printed and minted. The new banknotes will be worth 5, 10, 50, 100 and 500 rubles, while the new coins will have face values of 1, 5, 10 and 50 kopecks as well as 1, 2, and 5 rubles. Dubinin and other senior officials, including First Deputy Prime Minister Anatolii Chubais and Deputy Presidential Chief of Staff Aleksandr Livshits, all echoed Yeltsin's promise that the currency reform will not hurt ordinary people.


Patriarch of Moscow and All Russia Aleksii II says he and Yeltsin spoke by telephone on 1 August and agreed to meet on 6 August to discuss amendments to the controversial law on religious organizations. Yeltsin recently vetoed that law despite appeals to sign it from Aleksii and other Russian Orthodox Church leaders (see "RFE/RL Newsline," 23-25 July 1997). In an interview published in "Izvestiya" on 5 August, Aleksii denied that the original version of the law was discriminatory. For instance, he argued that Catholicism cannot be considered a "traditional" religion for today's Russia, because before the 1917 revolution, Catholics lived primarily in the part of the Russian empire that is now Poland. The patriarch also told "Izvestiya" that he has not met with leaders of the Communist Party for two years. Communist Party leader Gennadii Zyuganov has frequently called for supporting the church and blasted Yeltsin's veto of the religion law.


State Duma Defense Committee Chairman Lev Rokhlin says that at its founding congress in September, his movement to support the armed forces and defense industry may call for the resignation of the president and prime minister and the formation of a "government of national trust," RFE/RL's Moscow bureau reported on 4 August. These demands echo positions long taken by the Communist opposition, which has several representatives on the organizing committee of Rokhlin's movement. Although Rokhlin may be expelled from the Our Home Is Russia Duma faction in September, he cannot be removed from his Defense Committee post as long as he has the support of Communists and allied groups who have a majority in the Duma. According to the 5 August "Kommersant-Daily," Rokhlin also warned that Russia is becoming a police state as the army's ground forces are downsized and the Interior Ministry troops increased.


Yeltsin signed a decree on 4 August "liquidating" state-owned Radio-1 and merging the stations Mayak and Yunost into one station which will be called Mayak, RFE/RL's Moscow bureau reported. The move was made because of funding problems. The Russian government was able to pay out only 5 percent of finances planned for radio stations this year. The new system is expected to save 200 billion rubles ($34 million). The most popular state-owned station, Radio Rossii, will continue to broadcast on channel 1, with the new Mayak on channel 2. Channel 3 will be used by state-owned and private radio stations to be announced later.


Chechen first deputy prime minister Musa Doshukaev told journalists in Grozny on 4 August that the "moral and material" damage inflicted on Chechnya during the war of 1994-6 amounts to 1,500 trillion rubles ($25.8 billion), Interfax reported. Doshukaev said this figure had been calculated on the basis of guidelines from the Organization for Security and Cooperation in Europe (OSCE), and that "moral damage" accounts for approximately half of the total. Also on 4 August, Shmidt Dzoblaev, secretary-general of the Assembly of National Democratic and Patriotic Forces of Russia, was released by his Chechen captors, Russian media reported. Dzoblaev was a member of a North Ossetian delegation abducted in Chechnya in December 1996. The delegation was en route for talks with Chechen leaders in Grozny.


For the first time, a Russian city has paid off its debt to an enterprise by granting that enterprise full ownership rights to the land on which it is based, an RFE/RL correspondent in St. Petersburg reported on 1 August. Through a complicated procedure involving a credit from the commercial bank Baltoneksimbank, the Kirov factory received the land underneath its buildings as compensation for St. Petersburg's 12.9 billion ruble ($2.2 million) debt to the factory. The experimental program suits both the city, which lacks the funds to pay its debts, and companies, which lack the cash to purchase the land plots underneath their buildings but view the lack of full land ownership rights as a barrier to foreign investment. According to the 2 August "Kommersant-Daily," some 50 other enterprises in St. Petersburg plan to take advantage of the experimental scheme.


State Planning Minister Ginanjar Kartasasmita announced on 5 August that his country will purchase 12 Russian Sukhoi-30 fighter planes and 8 Mi-17 helicopters, according to ITAR-TASS. Negotiations for buying the planes began after Indonesia cancelled plans to buy nine American F-16 fighters in early June because of human rights criticism from members of the U.S. Congress over East Timor, which Indonesia annexed in 1976. Indonesia will pay for the aircraft with goods, notably palm oil, coffee and rubber.


On 4 August, in his weekly radio address, Eduard Shevardnadze again expressed his readiness to meet with Abkhaz President Vladislav Ardzinba and Boris Yeltsin, Russian and Western agencies reported. Shevardnadze termed Yeltsin's proposals on resolving the Abkhaz conflict "absolutely acceptable" to the Georgian government. These proposals give Abkhazia broad autonomy within "a unified and indivisible Georgian state." Ardzinba likewise accepted Yeltsin's invitation to trilateral talks, but said the only acceptable basis for discussion is the protocol drafted by the Russian Foreign Ministry to which he agreed in talks in Moscow in June. Georgia then demanded changes to the text which Abkhazia rejected as unacceptable. Also on 4 August, the chairman of the Abkhaz parliament in exile, Tamaz Nadareishvili, said in Tbilisi that Abkhaz guerrillas had murdered 14 ethnic Georgians in Abkhazia's Kodori gorge on 3 August, Interfax reported.


On 2 August chairman Vano Siradeghyan told the board of the Armenian Pan-National Movement -- the senior party in the ruling Hanrapetutyun (Republic) bloc -- that his top priority is to "restore people's trust" in the party before the parliamentary elections due in July, 1999, an RFE/RL correspondent in Yerevan reported on 4 August. Siradeghyan, who was elected chairman of the board of the Movement in early July, but is not a parliament deputy, said the Movement must form a "new bloc" with its allies to win the elections, but did not specify whether the Movement will leave the Republic bloc and set up a new alliance. He hinted that the Shamiram party -- the second largest within parliament -- and the Union of Industrialists and Businessmen will be incorporated into the Armenian Pan-National Movement "in the coming months."


Meeting in Yerevan on 1-2 August, a group of Turkish business figures signed a protocol with the Union of Industrialists and Businessmen of Armenia to set up a Turkish trading center in Armenia and expand cooperation in banking, investment and textile production, Armenian agencies reported. The signatories also will conduct surveys on the viability of building a gas pipeline through Armenia to Turkey, and the use of Armenian territory as a transit zone between Turkey and the CIS. The possibility of creating a free economic zone in the Armenian regions of Armavir and Shirak also was discussed. Participants estimated that opening a frontier post between the two countries would facilitate the growth of annual bilateral trade to half a billion U.S. dollars. Turkish leaders say a frontier crossing cannot be opened until a solution is found to the Karabakh conflict.


The Azerbaijani government plans to introduce more stringent banking regulations, including raising the minimum capital requirement from $600,000 to $1.2 million by the end of this year, the "Wall Street Journal" reported on 5 August. A second program drafted in conjunction with the IMF and the World Bank will expedite the privatization of those state-owned banks deemed viable. At the same time, the issuing of licenses to foreign banks has been temporarily suspended. The Azerbaijani government also plans to create an interbank currency market in anticipation that oil revenues will create favorable conditions for full convertibility of the manat. The Multilateral Investment Guarantee Agency has announced the extension of its guarantees of investments into 11 more countries, including Azerbaijan and Georgia, in 1997, an RFE/RL correspondent in Washington reported on 4 August.


A home-made bomb went off outside the Tursunzade aluminum plant in western Tajikistan on 4 August, injuring two people, RFE/RL correspondents in Tajikistan reported. The bomb was planted at a bus stop near the factory gates. There is speculation in Tajikistan that an organized crime group is responsible for the bombing. The aluminum plant is the most lucrative enterprise in Tajikistan and has been the center of contention between various criminal groups since 1992.


China National Petroleum Co. won the tender for the Uzensk oil field in western Kazakhstan, Interfax reported on 4 August. The Chinese corporation now has the exclusive right to negotiate for the contract. The Uzensk field currently produces 2.7 million tons of oil annually but the Chinese side says it can increase that figure to 7 million annually. In order to secure the contract, the Chinese company must form a joint venture with Kazakhstan's Uzenmunaigaz and help construct a pipeline from the field to China and the Kazakh section of a pipeline south to Iran via Turkmenistan. The Kazakh government and China National Petroleum now have one month to agree to terms, otherwise negotiations can begin with the other participants in the tender, Amoco and the U.S.-Malaysian companies Unocal-Petronas. In early June, China National Petroleum Corp. also bought 60 percent of the Aktyubinskmai field and facilities in northwest Kazakhstan.


Garry Pogonyailo, a lawyer for journalist Pavel Sheremet who is currently being held in custody by Belarusian authorities, told Interfax on 4 August that he asked Belarusian Prosecutor General Oleg Bozhelko to move the investigation to Lithuania. Sheremet and cameraman Dmitri Zavadsky were detained by the Belarusian KGB on 26 July on charges of illegally crossing the Belarusian-Lithuanian border. Pogonyailo said Belarusian law enforcement agencies "cannot guarantee an unbiased investigation." Meanwhile, a source in the Belarusian Interior Ministry told Interfax that Belarusian Foreign Minister Ivan Antanovich has sent a letter to his Russian counterpart, Yevgenii Primakov, alleging that "Sheremet showed special interest in military and other secret border facilities." Antanovich also expressed concern about the fact that the conflict over the journalists is being considered at the top state level in Russia.


Emergencies Ministry spokeswoman Tatyana Pomazanova told journalists on 4 August that 12 villages have been flooded and six bridges swept away in floods caused by heavy rains in regions near the Romanian border. A nine-year-old girl drowned in the floods. Pomazanova said the girl drowned near Ivano-Frankivsk, about 400 kilometers southwest of Kyiv. Dozens of villages also have been flooded in the western Ukrainian region around Lviv. More than 700 people had to be evacuated.


Lennart Meri said in a speech at the Danish Foreign Policy Society on 4 August that Estonia sees great importance in the objective of EU members to make EU enlargement a continuing process, BNS reported. The 15 July recommendation by the European Commission to start expansion talks with six countries "is not the finish line, it only fixes the starting line for the integration process," Meri said. He noted Estonia will continue supporting the goals of Latvia and Lithuania during the entire negotiations. "We support the wish of Latvia and Lithuania to provide up-to-date information to Brussels that would better reflect their actual situation," Meri said. He said the European Union and NATO are the last two organizations which will complete the reintegration of the Baltics into Europe.


The parties that form the new Latvian government headed by Guntars Krasts on 4 August agreed on a draft government declaration, which will be prepared for signing 5 August, BNS reported. The parties also will discuss a new coalition agreement on 5 August. Krasts told reporters that the draft declaration is not fundamentally different from the previous government policy. The government envisages a balanced budget and will strive for harmonizing Latvian laws with EU legislation.


Sweden and Latvia on 4 August reached an agreement on visa-free travel, BNS reported. However, Sweden said the deal would not become valid until Latvia signed the Geneva convention on refugees without regional reservations. "Many countries have made certain amendments to, or interpretations of, the Geneva convention but we think Latvia has made too many reservations," a spokeswoman at the Swedish foreign ministry told Reuters. "In particular, Latvia only acknowledges refugees from a limited number of countries."


During a one-day official visit to Vilnius by Finnish Prime Minister Paavo Lipponen, Finland and Lithuania on 4 August also lifted mutual visa requirements, BNS reported. European integration was the main focus of talks between Lithuanian Premier Gediminas Vagnorius and Lipponen. Lipponen assured his counterpart that Lithuania is among the countries that will become European Union members -- if not in the first wave of expansion, then later. He called the EU's invitation to Estonia to start accession talks "a great achievement of the Baltic states." He denied reports that Estonia has been singled out because of its close relationship with Finland. Vagnorius said Lithuania was left out by the European Commission not because of objective criteria, "which Lithuania more or less meets," but because of organizational and political factors."


Polish lustration law came into force on 3 August, RFE/RL'S Warsaw correspondent reported. Under the law, top state officials -- the president, ministers, province governors, deputies, senators, judges, prosecutors, executive directors of province offices, and heads of public TV, radio, and press agencies -- will have to declare whether they served in the communist secret services or were secret collaborators of those services. The statements concerning collaboration will be verified by the Lustration Court. The Lustration Court consists of judges of appellate and provincial courts who will have unlimited access to the archives of civil and military secret services. The screened person will have the right to a legal counselor and the right to appeal to higher courts. A person whose statement is proven false will lose the right to hold public office for 10 years.


The July flood did not influence Polish electoral preferences despite the opposition's criticism of the government's performance during the flood, RFE/RL's Warsaw correspondent reported. An opinion poll conducted by the Public Opinion Research Center (CBOS) on 24-30 July and published by Polish dailies on 5 September indicates that the co-ruling Democratic Left Alliance is supported by 24% of Poles. The Solidarity Electoral Action is second, with 23%, and the coalition Polish Peasant Party is third with 9%. Other parties are close to the 5% electoral threshold and face parliamentary extinction if they fall below the threshold. The centrist Freedom Union has 6%, the pensioners party - 5%, leftist Labor Union - 4%, Movement for Poland's Reconstruction - 4%, and the Union for Real Politics - 3%.


The daily "Pravo" reported on 5 August that in May 1996 someone stole a portable computer from an agent of The Bureau for Foreign Contacts and Information (UZSI), a Czech intelligence agency. The computer reportedly contained a list of all UZSI agents. The agent, whose computer was stolen, reported the incident, but the UZSI covered up the whole matter. "Pravo" says that Internal Affairs Minister Jan Ruml was informed about the incident but chose not to inform the parliament and the public. According to "Pravo," the computer has never been found. The UZSI, the Czech Intelligence Service (BIS), and the Military Defense Intelligence (VOZ) are three top Czech intelligence agencies. While BIS deals with counterespionage, the UZSI deals with espionage abroad. Unlike BIS and VOZ it is not directly supervised by the parliament.


An official of the Slovak National Party (SNS), a Slovak government coalition member, told journalists on 4 August that Jean-Marie Le Pen, the chairman of the ultra-right French National Front, will visit Slovakia on September 18-21 at the invitation of SNS chairman Jan Slota. Le Pen was scheduled to visit Slovakia in the spring, but his visit was postponed due to early elections in France Le Pen is due to meet SNS leaders, members and followers. He also will visit the city of Zilina, where Slota is mayor. The two parties hope to conclude several agreements, including a deal for the National Front to provide assistance in "presenting SNS proposals at the Council of Europe and the European Parliament."


The Budapest Military Prosecutor's Office (BKU) charged on 4 August Colonel Laszlo Foeldi, former director of operations at the Intelligence Office (IH), and three other members of his staff with violation of state secrets and unauthorized data processing. Hungarian media reported. The move reverses the BKU's decision of 19 June that no crime had been committed in the so-called Operation Birch Tree in which intelligence agents collected data on several Socialist politicians. IH director Jozsef Szasz filed a complaint against the 19 June ruling with the Chief Prosecutor's Office, which then filed charges against Foeldi and his associates.


Istvan Lovas, a member of the Hungarian Radio's board of trustees, resigned on 4 August, claiming that news coverage is narrow, biased and intolerant, Hungarian media reported. In a letter to the speaker of the parliament, Lovas said the main radio programs broadcast biased information, misinform the public, and are controlled by a minority selecting information in the interest of sustaining the present government coalition. Lovas's resignation takes effect on 1 September. He was delegated to the board by the Independent Smallholders' Party.


Italian army Colonel Giovanni Bernardi told news agencies in Tirana on 4 August that Italian and Albanian military officials recently agreed in Rome that Italy will help the Albanian army to strengthen security against bandits and gangs, and to reorganize and retrain. He added that "500 Italian soldiers already serving in Albania will be included in this assistance corps. Enlarging this contingent hasn't been excluded." Meanwhile, Foreign Minister Theodoros Pangalos heads a high-powered Greek delegation slated to arrive in Tirana on 5 August. They will discuss a $20 million loan to help strengthen Albanian security forces. Greek officials will also offer opportunities for jobless Albanians to work legally in Greece. The Greeks want a list of names of Albanians who escaped from prison in the recent anarchy. The Greek authorities fear that Albania is becoming a source of arms and drug smuggling via Greece to Western Europe.


Defense Minister Sabit Brokaj in Tirana on 4 August warned top army officers who recently "violated the constitution" by "accepting political orders" to resign voluntarily or face sackings and trials. It is not clear whether he has specific incidents in mind, or whether the new government is simply following the time-honored Balkan practice in which a new government purges the army, police, courts, and ministries of its predecessor's appointees. Indeed, opposition Democratic Party spokesmen said that Brokaj is launching a "political purge." The new Socialist government has already announced top-level changes in the Interior Ministry and told judges to suspend trials, allegedly because too many court facilities were destroyed in the recent unrest.


Unidentified assailants wounded two policemen and one civilian at Gornja Klina near Srbica on 4 August. In a separate incident in Glogovac, one ethnic Albanian civilian, who heads a state-run company, was severely wounded by gunfire. The previous day, gunmen attacked a policeman near Podujevo. These are the latest in a series of violent incidents this year in Serbia's troubled province, which has an ethnic Albanian majority of some 90% but no home rule. The Kosovo Liberation Army (UCK) changed its tactics in late 1996 from random attacks against Serbs to more frequent and clearly targeted assaults on the Serbian authorities and on ethnic Albanians whom the UCK considers to be collaborators.


Sweden, France, the U.K., Austria, Sweden, and the U.S. on 4 August followed Germany's decision the previous day to freeze diplomatic contacts with Bosnia-Herzegovina. Carlos Westendorp, the international community's chief representative in Bosnia, had urged the boycott to show displeasure with the three Bosnian ethnic groups' failure to agree on ambassadorial appointments (see "RFE/RL Newsline," 4 August 1997). Meanwhile, on 4 August the deadline came and went for the three sides to agree on common citizenship and a joint passport. The main bone of contention was the long-standing dispute between the Muslims and the Serbs over whether citizenship in the common state has primacy over citizenship in the Republika Srpska or the mainly Croat and Muslim Federation. The Serbs argue citizenship in the two "entities" should have more weight than that in the common state, whereas the Muslims stress joint statehood.


An unnamed State Department official said in Washington on 4 August that the U.S. is not happy with how Westendorp is doing his job. The official charged that the former Spanish foreign minister spends too much time outside of Bosnia, and that he takes the wrong approach to solving local problems. The spokesman added that Washington is particularly displeased that Westendorp tried to suggest specific diplomatic appointments in resolving the imbroglio over ambassadorial appointments, and that Westendorp had insisted that a Serb be named to head the Washington embassy. The official noted that the State Department's disappointment with Westendorp's performance in implementing the civilian aspects of the Dayton agreement was instrumental in President Bill Clinton's recent decision to send U.S. negotiator Richard Holbrooke back to the Balkans.


International police spokesmen said in Jajce on 4 August that the ethnic tensions between Croats and Muslims in the area had subsided, but only because the recently returned Muslims had all been driven out by Croat mobs, an RFE/RL correspondent reported from the central Bosnian town. Vladimir Soljic, the ethnic Croat president of the mainly Croat and Muslim Federation, said in a letter that refugee return programs to date had discriminated against the Croats, and that it is necessary instead to stress the right of all refugees to go home. Meanwhile in Sarajevo, Westendorp charged that the recent protests in Vogosca by Muslim refugees from Srebrenica were organized. The Srebrenica women blocked attempts by Serbs from Vogosca to return to their homes in that Sarajevo suburb.


Leading indicted war criminal Radovan Karadzic recently held talks in Belgrade with Yugoslav President Slobodan Milosevic, BETA reported on 5 August. The main topic on the agenda was Holbrooke's upcoming visit to the Balkans. In Brcko, Republika Srpska Prime Minister Gojko Klickovic hinted that the Serbs might boycott the September local elections if the question of voter registration is not soon cleared up to the Serbian leadership's liking. And in Zagreb, President Franjo Tudjman was inaugurated for a new term on 5 August. He promised to be "an impartial president of all Croats and Croatian citizens, regardless of their political and other affiliations." Tudjman also pledged his backing for the Dayton agreement and the Croat-Muslim Federation in Bosnia. Also in the Croatian capital, state-run TV said that Defense Minister Gojko Susak has undergone surgery in Washington. He was operated on for lung cancer there in 1995.


Gavril Dejeu, on a tour of several counties in Transylvania, said on 4 August in Cluj that the opening of the Hungarian consulate in the center of the town has been "a mistake." He said a different, less central building should have been found for this purpose to avoid a "conflictual situation," Radio Bucharest reported. He failed to mention that the Cluj mayoralty had refused to assign any building to the consulate, which is now housed in temporary premises belonging to the Hungarian community in the city. Dejeu also said that local authorities in Transylvania should proceed "prudently" with the implementation of the government ordinance allowing bilingual signs. He said the ordinance, though in effect, will eventually have to be approved by the parliament. He said until then one should display "wisdom" to avoid "conflicts that could resemble those in the former Yugoslavia."


The European Bank for Reconstruction and Development (EBRD) on 4 August granted Romania a $75 million loan for the improvement of the water supply and sewage system in 10 towns, Mediafax reported. The European Union also is participating in the project with a $35 million non-refundable credit. The agreement was signed in Bucharest by Finance Minister Mircea Ciumara and Johan Bastin, director of EBRD's infrastructure and environment department.


Landslides and flooding caused by heavy rains over the weekend damaged more than 2,000 homes in the Prahova and Dambovita counties, Romanian officials said on 4 August. The worst hit town is Breaza, some 160 kilometers north of Bucharest. The government on 4 August approved emergency aid for the Vaslui, Bacau, Olt, Dolj, Teleorman, Bistrita-Nasaud, Bihor, Salaj, Hunedoara and Caras-Severin counties, which had been affected by earlier floods. On August 5, the government will discuss emergency aid for the more recently affected regions.


The recent "motorcade incident" (see "RFE/RL Newsline, 4 August 1997) shows that the Tiraspol authorities are "losing control of the situation" and are forced to take "extreme measures" in an attempt to bring about the restoration of the former status quo, presidential advisor Nicolae Taranu told a press conference in Chisinau on 4 August. Taranu said the leaders of the breakaway region were left with "little room for maneuvering" after the signing in Moscow on 8 May of the memorandum on the settling of the conflict, Infotag reported.


Taranu also said in an article published on 4 August, that the Tiraspol authorities are attempting to force a revision of the draft for the final status of the breakaway region. The draft was worked out by the representatives of the three mediators on the Joint Control Commission. The Tiraspol authorities make the easing of the detention conditions of the so-called "Ilascu group" (see "RFE/RL Newsletter," 31 July 1997) conditional on concessions to the text of the draft by Chisinau, RFE/RL's Chisinau bureau reported.


David Owen, the head of an IMF team that recently returned from a visit to Moldova, says it is important for the people in the breakaway region to understand that the fund lends only to central governments, an RFE/RL correspondent in Washington reported. In related news, Infotag reported on 4 August that Roger Grawe, the World Bank's director of the department dealing with Moldovan affairs, told a news conference in Chisinau that Moldova has met "the bulk" of the conditions for a second structural adjustment loan. He said some adjustments for meeting the conditions of the loan are still needed, but he did not expect that this would lead to a reduction in the $100 million planned loan.


Petar Stoyanov on 4 August formally approved the law recently passed by the parliament on opening the country's communist-era secret police files (see "RFE/RL Newsline," 31 July 1997), BTA reported. The law will take effect as soon as it is published in the official gazette.


By John Helmer

One of the best things about Boris Yeltsin, an opposition deputy said before the president's first heart attack, was the way he would listen attentively to what you said, and agree with you. One of the worst things about him, the deputy added, was that Yeltsin agreed with everyone.

First Deputy Prime Minister Anatolii Chubais knows the president's qualities. So he drafted a decree in August 1996 -- while Yeltsin was in medical isolation -- that strictly regulated how presidential decrees could take force. Chubais arranged the paperwork so if someone with a piece of paper managed to see Yeltsin and Yeltsin signed it, nothing could happen until the paper was published. And publication remained under Chubais's control.

Last month, while Yeltsin was on holiday on the Volga, he signed a decree reforming Russia's diamond industry. The document had been in preparation for months. Diamond producers in the Sakha republic, diamond manufacturers and exporters in Moscow, and different parts of the government bureaucracy lobbied for their interests.

Yeltsin wasn't personally involved, as he once was. But prime minister, ministries, and Chubais were all agreed. The decree stripped the Sakha Republic of tax and other privileges it had been granted by Yeltsin five years ago. The monopoly of diamond sales inside Russia and abroad, which Almazy Rossii-Sakha (ARS), a diamond mining company, had sought, was rejected. Price competition was introduced by allowing, for the first time, diamond cutters in Russia to import diamonds from abroad without duty. New Finance Ministry controls were ordered over every aspect of the diamond industry, including the stationing of inspectors inside ARS. The company was prohibited from supplying diamonds at a discount to Sakha Republic President Mikhail Nikolaev's administration or its friends.

This was the biggest defeat Nikolaev has ever suffered at Yeltsin's hands. So, on July 25, he flew down to see the president face to face. Nikolaev had been seeking this meeting for months, but was always blocked. This time, with Chubais on holiday out of Russia, he got his wish.

And more than that. Officials of ARS were saying last week that Yeltsin did the proverbial. He agreed to everything Nikolaev asked for. The ARS officials claim the Sakha government will be able to buy the stones it wants from ARS at a price Nikolaev told Yeltsin was at cost. Re-selling or exporting cut-price goods will be easy and profitable. Yeltsin reportedly agreed, and signed a paper to that effect.

This is awkward, because in section 10 of the paper Yeltsin signed five days earlier, he decreed that Sakha could buy diamonds but only on terms and prices fixed by the Russian government. That meant the Ministry of Finance. Now that he's back from vacation, that means Finance Minister Chubais.

Sensing the potential for embarrassment, some ARS officials now say they can't confirm the meeting between Nikolaev and Yeltsin took place. The presidential press service rummaged in its records, and said a meeting had occurred about a week ago. A Finance Ministry official in charge of the diamond sector said he, as he put it, had "heard something about the meeting, and (was) sure they agreed on something." He wasn't sure what.

The legal department of the Kremlin, which also was ordered by last year's ukaz to check every decree before signing, says it can't do this, because the only place all the decrees must now go is to Chubais's office.

Just what the latest document may say is hinted at by Nikolaev's representative in Moscow, Kliment Ivanov. He claims Yeltsin has approved government action to settle the terms on which the republic will get its stones, taking into consideration the interests of the republic Chubais followed Nikolaev to see Yeltsin four days later. His office hasn't responded to questions about what was decided, if anything.

The author, a journalist based in Moscow, regularly contributes articles to RFE/RL.