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Newsline - October 8, 1997




CHERNOMYRDIN ASKS DUMA NOT TO "FIGHT" WITH GOVERNMENT

Prime Minister Viktor Chernomyrdin on 8 October appealed to State Duma deputies not to start a "fight" with the government by passing a vote of no confidence, RFE/RL's Moscow bureau reported. Addressing a plenary session of the Duma, Chernomyrdin argued that the Russian economy is improving and warned that the public does not need more political confrontation. Before Chernomyrdin's speech, the Duma rejected a Yabloko-sponsored motion to put a no-confidence vote on the Duma's 8 October agenda. But after the prime minister's address, Duma Speaker Gennadii Seleznev announced that the Duma is likely to consider a confidence motion on 15 or 16 October. Communist Party leader Gennadii Zyuganov announced on 7 October that his faction has collected 146 signatures in favor of calling such a vote (90 signatures are required).

CHUBAIS DEFENDS GOVERNMENT'S WORK

After Chernomyrdin's speech, First Deputy Prime Minister Anatolii Chubais addressed the Duma and defended the government's economic policies, RFE/RL's Moscow bureau reported. Chubais acknowledged that tax collection remains a major obstacle to fulfilling the budget. Tax revenues improved significantly in the second quarter of 1997 only to fall again in the third quarter, he said, according to Reuters. But Chubais promised that the government will further improve tax collection. He also noted that by exceeding planned social spending by 41 percent, the government had managed to pay off all pension arrears. "I don't think the government should be criticized for that," Chubais added. Earlier this year, the government imposed spending cuts in many areas in accordance with a "sequester" plan not approved by parliament (see "RFE/RL Newsline," 6 May and 20 June 1997).

COMMUNISTS NOT AFRAID OF DUMA DISSOLUTION

Communist Party leader Zyuganov told journalists on 7 October that his party will back a no-confidence vote because the government's "radical wing ...has gained the upper hand" and is imposing "destructive" policies on the country, Interfax reported. He acknowledged that a no-confidence vote could eventually lead to the dissolution of the Duma, but he added that "the country is more important" than seats in the parliament. Duma Legislation Committee Chairman Anatolii Lukyanov, a prominent Communist, told RFE/RL's Moscow bureau on 7 October that he believes Yeltsin will not dissolve the Duma because the government cannot pass a new tax code or a budget if the lower house is not in session. A single no-confidence vote would not give Yeltsin the constitutional right to dissolve the Duma. But if deputies vote no confidence twice within three months, Yeltsin will be able to decide whether to dismiss the government or dissolve the lower house.

GOVERNMENT NOT AFRAID OF BEING DISMISSED

First Deputy Finance Minister Aleksei Kudrin told RFE/RL's Moscow bureau on 7 October that he is not concerned about the consequences of a possible no-confidence vote by the Duma, since "the president is on our side." Kudrin, who spent the day discussing the 1998 budget with Duma deputies, added that within the government and the Finance Ministry, "more radical" approaches to forming next year's budget have been suggested. Duma deputies would therefore do well to negotiate with the government now, Kudrin added, rather than sending the draft budget back to the cabinet.

DRAFT BUDGET LIKELY TO GO TO CONCILIATORY COMMISSION

The Duma is virtually certain to reject the draft 1998 budget in the first reading, but deputies appear likely to support creating a conciliatory commission to work out a compromise with the government. In remarks to the Duma on 8 October, Communist Party leader Zyuganov argued that Duma deputies, Federation Council deputies, and government representatives should discuss the budget, RFE/RL's Moscow bureau reported. The support of communist deputies would ensure passage of a motion to form a conciliatory commission. Following meetings with various government ministers on 7 October, deputies from the Agrarian, Russian Regions, Liberal Democratic Party of Russia, and Our Home Is Russia factions indicated that they will support forming such a commission.

NEMTSOV DOUBTS NEED FOR "EXTREME CONSTITUTIONAL STEPS"

First Deputy Prime Minister Boris Nemtsov told reporters in the Republic of Karelia that the government does not expect to have to take "extreme constitutional steps" against the State Duma, Russian news agencies reported on 7 October. However, he said Yeltsin may take such steps "in order to maintain law and order" if Duma deputies are "intransigent." Nemtsov commented that he is closer to Grigorii Yavlinskii's Yabloko movement than to any other political group, but he professed not to understand why Yabloko members have refused to join the government. "If there is a chance to do something properly, this chance must be taken," he argued. Speaking to the Duma's plenary session on 8 October, Yavlinskii sharply criticized government policies and said the government deserves a vote of no confidence at the earliest possible date, RFE/RL's Moscow bureau reported.

SPOKESMAN SAYS YELTSIN LEGALLY ENTITLED TO SEEK THIRD TERM

Presidential spokesman Sergei Yastrzhembskii says Yeltsin is legally entitled to seek a third term as president in 2000, even though the constitution adopted in December 1993 allows a president to serve only two consecutive terms. In an interview published in the Belgian newspaper "Le Soir" on 7 October, Yastrzhembskii argued that Yeltsin served his first term under a previous constitution and has been elected president only once under the new constitution. Yastrzhembskii refused to speculate on the likelihood of Yeltsin seeking a third term. Yeltsin announced in September that he would not run for president again. But during a recent visit to Nizhnii Novgorod, he refused to rule out his possible candidacy in 2000 (see "RFE/RL Newsline," 2 October 1997).

YELTSIN HAILS LONDON CLUB DEAL...

Yeltsin on 7 October met with representatives of 11 leading banks in the London Club and praised a recent debt restructuring deal as an "enormous political step for Russia," Russian news agencies reported. Russia and the London Club signed a 25-year, $32 billion debt restructuring deal the previous day (see "End Note" below). Yeltsin told the bankers that Russia has "mastered the market," saying that current economic indicators are strong and that 70 percent of property is privately owned. But he called on the London Club banks to invest more in the Russian economy and to extend more loans to both Russian and foreign investors.

...CRITICIZES PROPOSED RUSSIAN-JAPANESE PROJECTS

Yeltsin has instructed the presidential administration and government to draft new proposals on joint projects to be discussed at his November meeting with Japanese Prime Minister Ryutaro Hashimoto, Russian news agencies reported on 7 October. During a meeting with Prime Minister Chernomyrdin, Yeltsin said he was dissatisfied with a list of proposed Russian-Japanese projects given to him recently. He called the projects too small and too narrowly focused on developing Russian raw materials, adding that he would like to see proposals on more "strategic" matters and on developing new technologies.

CHERNOMYRDIN DENIES VIOLATING PRESIDENTIAL DECREE

Prime Minister Chernomyrdin has sent a letter to the editorial board of "Komsomolskaya pravda" denying the accuracy of a recent report published by the newspaper, government spokesman Igor Shabdurasulov told ITAR-TASS on 7 October. The newspaper alleged that Chernomyrdin violated a presidential decree by granting loan guarantees for a commercial satellite television project (see "RFE/RL Newsline," 3 October 1997). The company behind the project was reported to be linked to Vladimir Gusinskii's Media-Most company. Shabdurasulov commented that political rumors and accusations against government ministers appear whenever the government takes on "serious tasks," such as its current work to gain parliamentary approval for the 1998 budget and new tax code.

PROMINENT U.S. BANKER STRIPPED OF RUSSIAN ENTRY VISA

Russian authorities have revoked the multiple entry visa of Boris Jordan, a U.S. citizen who heads the Moscow-based investment banks MFK and Renaissance Capital. Sources in the Foreign Ministry told Interfax on 7 October that unspecified "state interests" are behind the decision, which, the sources said, was not made by the Foreign Ministry. Jordan, who was denied a Russian entry visa in 1996, has applied for a new visa. MFK is part of the Oneksimbank empire and was involved in the consortium that recently acquired a major stake in Svyazinvest. According to Reuters, Renaissance Capital is involved in a controversy over management of one of Russia's largest steel mills. First Deputy Prime Minister Nemtsov said it is "outrageous" to revoke Jordan's visa and attributed the incident to the "continuation of the bank war," ITAR-TASS reported on 8 October.

KEMEROVO GOVERNOR MAKES NEW ALLEGATIONS AGAINST PROSECUTOR

Aman Tuleev has vowed that Valentin Simuchenkov, the prosecutor of Kemerovo Oblast, will be brought to justice for allegedly not taking action against the oblast's "mafia structures." In a 7 October interview with RFE/RL's Moscow bureau, Tuleev accused Simuchenkov of creating and overseeing a fund collecting contributions from organizations that owe taxes to the oblast budget. He charged that Simuchenkov has "closed his eyes" to many crimes and is responsible for a "disgraceful practice" whereby accused murderers are often set free on bail and people charged with less serious crimes remain in custody. Simuchenkov recently filed several slander lawsuits against Tuleev (see "RFE/RL Newsline," 7 October 1997). Tuleev said he will seek to have the court hearings held in any Russian region except Kemerovo.

PRIMORE LEGISLATURE STANDS BEHIND APPOINTED MAYOR

The Primorskii Krai Duma continues to consider Yurii Kopylov the legitimate mayor of Vladivostok, despite a court ruling, a protest by the krai prosecutor, and a criminal case recently opened against Kopylov, RFE/RL's correspondent in Vladivostok reported. Deputies on the krai Duma's Council heard a report from Kopylov on 7 October and praised him for showing courage in difficult political conditions. The legislature has appealed to officials at Vladivostok's law enforcement agencies and the local treasury, as well as to commercial banks authorized to handle city funds, asking them not to hinder Kopylov's attempts to carry out his duties. Meanwhile, ITAR-TASS reported on 8 October that Vladivostok Mayor Viktor Cherepkov has undergone unspecified surgery and will remain hospitalized for another two weeks. When he went on sick leave, Cherepkov appointed Nikolai Markovtsev acting mayor (see "RFE/RL Newsline," 1 and 6 October 1997).

BASHKIR PRESIDENT NOT TO RUN FOR SECOND TERM

Murtaza Rakhimov has announced he will not run for reelection in late 1998, "Kommersant-Daily" reported on 7 October. Until now, he was considered the only prospective candidate. The newspaper cited unsubstantiated allegations in other Russian media that Rakhimov is implicated in the illegal sale of petroleum products. The 63-year-old Rakhimov was elected chairman of the Bashkir Oblast Soviet in 1990 and president of Bashkortostan three years later.



KARABAKH PRESIDENT REJECTS MINSK GROUP PEACE PLAN

Arkadii Ghukasyan told journalists on 7 October that Karabakh cannot accept any proposed peace plan based on the region's subordination to Baku, RFE/RL's correspondent in Stepanakert reported. Ghukasyan said Nagorno-Karabakh is ready to discuss a "confederative relationship" with Azerbaijan and to cede part of its de facto independence to establish such a relationship. Ghukasyan also rejected a "phased" resolution of the conflict whereby a decision on Karabakh's status will be postponed until the final stage of the peace process. He admitted that a "package" solution resolving all contentious issues within one framework document would be more difficult to achieve, according to Noyan Tapan. Ghukasyan also admitted that he recently discussed with Armenian President Levon Ter-Petrossyan unspecified differences in their approaches to resolving the conflict. Also on 7 October, the Karabakh Foreign Ministry released a statement protesting violations of the confidentiality of the peace process by Azerbaijani leaders, including President Heidar Aliev.

"NO DIFFERENCES" OVER KARABAKH BETWEEN ARMENIAN PRESIDENT, FOREIGN MINISTRY

Speaking at a news conference in Yerevan on 6 October, Foreign Ministry spokesman Arsen Gasparyan denied Turkish press speculation about differences of opinion over Karabakh between Levon Ter-Petrossyan and the Foreign Ministry. Gasparyan said that such differences "do not and cannot exist." Gasparyan differentiated between applying the "phased" approach to the negotiating process and to a settlement document. At the same time, he declined to elaborate on the provisions of the "phased" plan proposed by the Minsk Group co-chairmen before the three conflict sides have submitted their written responses to that plan. They are scheduled to do so within the next few days. Gasparyan also expressed the hope that Baku will at last consent to direct talks with the Karabakh Armenian leadership. He said that only such talks could "yield a breakthrough and give new impetus to the peace process."

RUSSIAN FOREIGN MINISTER IN BAKU

Following his meeting with President Aliyev in Baku on 7 October, Yevgenii Primakov told journalists that the two-hour talks were "useful and interesting," Russian agencies reported. Primakov again stressed that the Russian-Armenian treaty on friendship, cooperation and mutual assistance, signed in late August, is not directed against Azerbaijan and will not be used to support forces that oppose Azerbaijan's territorial integrity. Primakov welcomed Baku's positive assessment of the most recent Karabakh peace proposals by the co-chairmen of the Organization for Security and Cooperation in Europe's Minsk Group. Aliyev said those proposals entail the withdrawal of Armenian forces first from six districts adjacent to Karabakh and then from the Karabakh town of Shusha and the district of Lachin, which lies between Karabakh and the Azerbaijani-Armenian frontier.

GEORGIA WON'T OPEN AIR SPACE TO CHECHNYA

Zurab Chankotadze, the head of the Georgian Air Transport department, told Interfax on 7 October that Chechnya has not officially asked Georgia to open an air corridor across its territory. Chankotadze commented that if the Chechen leadership were to make such a request, it would be "impossible" for Georgia to comply without Russia's consent. Also on 7 October, Chechen parliamentary speaker Ruslan Alikhadzhiev told ITAR-TASS that Chechnya is preparing to issue its own domestic and international passports.

CHEVRON ON PIPELINE ROUTES FOR KAZAKH OIL

Chevron President Richard Matzke has held separate talks in Almaty and Baku with Presidents Nursultan Nazarbaev and Heidar Aliyev on the optimal route for exporting oil from Kazakhstan's Tengiz field. That field will yield some 7.5 million metric tons by the end of 1997, but only 3 million can be exported via the existing pipeline across Russia. Matzke told journalists in Almaty on 3 October that he would prefer to export larger quantities via Russia but that if this proves impossible Chevron will consider the Baku-Batumi pipeline. Meanwhile, Vladimir Stanev, director-general of the Russian affiliate of the Caspian Pipeline Consortium, which is to build a pipeline from Tengiz to the Russian Black Sea port of Novorossiisk, said on 7 October that a feasibility study for that pipeline will be completed by April 1998. Construction will begin in September 1998 and will be completed by August 2000.

TENSIONS RISE BETWEEN KAZAKH MARCHERS, POLICE

Police continue to prevent workers from the Achisay Polimetal plant in Kentau from crossing a bridge over the Arys irrigation canal near Turkestan, ITAR-TASS reported. The workers are planning to march on Almaty to protest non-payment of wages. They have rejected an offer by regional officials to pay half the accumulated wage arrears and are demanding payment in full. Representatives of the local trade union branch in Kentau have met with Turkestan's mayor and agreed to send five delegates to the capital to meet with President Nazarbaev, RFE/RL's Almaty bureau reported. Workers' representatives from the cities of Tekeli, Pavlodar, and Oskemen have traveled to Turkestan to demonstrate solidarity with the marchers, whose numbers have grown to some 2,000, including 300 women and 100 children.

UZBEKISTAN PROPOSES AFGHAN PEACE PLAN

Addressing the UN General Assembly on 7 October, Uzbek Foreign Minister Abdulaziz Kamilov proposed creating a "Contact Group" for Afghanistan composed of Russia, the U.S., China, Iran, and countries bordering on Afghanistan, AFP reported. The group would hold talks with the various warring Afghan factions in a bid to mediate an end to the war. Kamilov also called for an arms embargo against Afghanistan. "The New York Times" on 5 October quoted Kamilov as saying that Uzbekistan advocates creating a coalition government in Kabul that would include the Taliban and other political groups. He said that no single faction is strong enough to build a stable government.




BELARUS RELEASES ORT JOURNALIST

Belarusian Radio announced on 8 October that Minsk has released Russian Public Television journalist Pavel Sheremet from the Hrodna detention center. Sheremet's arrest and detention had soured relations between Belarusian President Alyaksandr Lukashenka and Moscow. Sheremet still faces trial on charges that he illegally crossed the Belarusian-Lithuanian border. Until his trial takes place, he is not permitted to leave the country.

LUKASHENKA THREATENS LOCAL BUSINESSMEN

President Lukashenka has blamed local businessmen for the 6 October explosion that killed Mohilev State Control Committee chairman Yevhenii Mikolutsky (see "RFE/RL Newsline," 7 October 1997), Interfax-West reported . Speaking at Mikolutsky's funeral, Lukashenka said that "if in one week, commercial structures do not hand over the names of those who organized the murder..., his killers will face tougher steps than anyone can imagine." He added that "we will not look for a lot of evidence--your every misdemeanor, even the smallest one, will lead to inevitable demands from our side." Lukashenka's comments may set the stage for increased authoritarian rule. On 6 October, Lukashenka had said on Belarusian Television that he completely agrees with the policies of the local communist party.

UKRAINE PROTESTS TO MOSCOW OVER CHURCH INCIDENT

The Ukrainian Foreign ministry on 7 October presented the Russian embassy in Kyiv with a diplomatic note protesting the seizure of a pro-Ukrainian Orthodox cathedral in Noginsk on 29 September, according to Ukrainian media. Local police are reported to have seized several church buildings in that Russian city after a Russian court ruled that the new Russian law on religion meant the cathedral there should belong to the Moscow Patriarchate. Ukrainian priests and believers had protested Kyiv's failure to lodge a protest. Ukrainian Foreign Ministry officials said the Russian action could lead to the "polarization of believers in Russia and Ukraine."

MOSCOW SAYS NO POLICY CHANGE TOWARD BALTIC RUSSIAN-SPEAKERS

Russian Foreign Ministry spokesman Gennadii Tarasov on 7 October denied reports in the Latvian media that Moscow is about to change its policy toward the rights of Russian-speakers in the Baltic States, BNS and ITAR-TASS reported. Calling the reports "groundless," Tarasov said that the "protection of the rights of the Russian-speaking population has always been and will remain a priority of Russian foreign policy." He added that progress in relations between Russia and the Baltic States depends on steps taken by the latter to improve the situation of their Russian-speakers.

ADAMKUS APPEALS BAN ON PRESIDENTIAL CANDIDACY

Valdas Adamkus, a 71-year-old U.S. citizen of Lithuanian origin, has appealed the Lithuanian Supreme Electoral Commission's decision barring him from running in the December presidential elections, BNS reported on 7 October. The commission ruled that Adamkus does not meet the requirement, stipulated in Article 78 of the constitution, whereby a candidate for the presidency must have lived in Lithuania for at least three years before registering for the elections. In a September opinion poll, Adamkus led the field of potential candidates with 29.7 percent support. Incumbent President Algirdas Brazauskas polled 26.7 percent and former Deputy Prosecutor-General Arturas Paulauskas 21 percent, according to dpa.

COALITION TALKS CONTINUE IN POLAND

Talks between Solidarity Electoral Action and the Freedom Union continue to make progress. Polish reported on 7 October that the two sides have agreed on a declaration of principles and on candidates for some positions. But they will not announce those candidates until shortly before the current government leaves office on 17 October.

CANADA REINTRODUCES VISA REQUIREMENTS FOR CZECHS

Canada has announced it is reimposing visa requirements for Czech citizens following an influx of Roma asylum seekers from the Czech Republic. Canadian Citizenship and Immigration Ministry spokesman Rene Mercier told CTK on 7 October that the ministry sees no change in the trend and that measures taken so far seem to have had no effect. Of the 1,285 asylum seekers who arrived from the Czech Republic this year, more than half came in the last two months, she said. Czech Prime Minister Vaclav Klaus said he regrets the move but he added that he understands that countries need to protect themselves from migrants. The decision gives the Czech Republic an idea of how it could protect its own borders, Klaus said.

CZECH REPUBLIC REGISTERS RECORD HIGH UNEMPLOYMENT

Unemployment in the Czech Republic reached 4.8 percent in September, the highest level since 1989. Employment Ministry spokesman Tadeas Kokotek said on 7 October that the rise was caused by government austerity measures as well as the ongoing transformation of the economy, which includes businesses' efforts to reduce labor and increase productivity, CTK reported. He predicted unemployment will continue to rise to 7-8 percent.

SLOVAK GOVERNMENT, PARLIAMENT TWO LEAST TRUSTED INSTITUTIONS

In a study published on 7 October, the government Statistical Office's Institute for Public Opinion Research reported that 62 percent of citizens distrust the government and 67 percent the parliament. In contrast, the Slovak Army came out on top with 73 percent of respondents saying they have confidence in the military. Sixty-seven percent said they have trust in Slovak Radio and 66 percent in TV Markiza, a private television station.

SLOVAKIA REJECTS HUNGARIAN "ZERO" PROPOSAL FOLLOWING HAGUE RULING...

Spokeswoman Magda Pospisilova on 7 October said the Slovak government will not accept the zero option that Hungarian Prime Minister Gyula Horn proposed following the Hague Court's 25 September ruling on settling mutual claims for damages related to the controversial Gabcikovo-Nagymaros hydroelectric power project. Pospisilova said Horn's suggestion that both countries should waive claims is premature and propagandistic. She cited remarks by the Slovak attorney at the hearing, who said that paying damages and paying construction costs are two different things. Therefore, Pospisilova said, Hungary should pay the costs of the work that Slovakia carried out after Hungary had withdrawn from the agreement.

...WHILE HORN ADMITS "ERROR" IN HUNGARIAN DEFENSE

Prime Minister Gyula Horn says Hungary was wrong to cite only environmental reasons for its withdrawal from the Gabcikovo-Nagymaros project at the International Court of Justice in The Hague. Horn said the losses to the economy and to shipping should also have been mentioned before the court, Reuters reported on 7 October. He said the planned bilateral talks with Slovakia must now embrace all aspects of the issue, including Danube navigation, energy production, and sewage purification.

HUNGARIAN PARLIAMENT APPROVES REFERENDUM QUESTIONS

The parliament on 7 October approved the three questions for the planned referendum on NATO membership and land ownership by foreign companies registered in Hungary. President Arpad Goncz must now decide whether to endorse the referendum. Opposition deputies, who are against holding a referendum on both issues and oppose the formulation of the two questions on land ownership, walked out in protest before the vote, Hungarian media reported. At a meeting with Goncz earlier the same day, Tamas Deutsch, the deputy chairman of the Young Democrats, and Zoltan Pokorny, the chairman of the party's parliamentary faction, asked the president not to call a referendum until the Constitutional Court has ruled on an opposition appeal against the plebiscite. Goncz said he will strictly abide by the constitution and the "interests of the people."




WESTENDORP, KRAJISNIK DISCUSS RESTRUCTURING TV

Carlos Westendorp, the international community's High Representative, met in Sarajevo on 7 October with Momcilo Krajisnik, the Bosnian Serb member of the Bosnian tripartite presidency and the chairman of the board of Bosnian Serb Radio and Television (SRT). Westendorp set out the criteria for restructuring SRT to enable the Pale studio to resume broadcasting, which was halted on Westendorp's orders on 1 October. A spokesman for Westendorp said one of the main conditions is that politicians withdraw from the SRT's board of directors and give up their right to control the station. He added that SRT's board is primarily made up of politicians loyal to the hard-line Serbian Democratic Party. The spokesman also said that Westendorp's goal is to reform all SRT programming, meaning in Banja Luka as well as in Pale.

PALE INTERIOR MINISTER DISCUSSES POLICE REORGANIZATION WITH UN

Bosnian Serb Interior Minister Slavko Poleksic, who is loyal to the Pale leadership, held talks in Pale on 7 October with the UN International Police Task Force (IPTF). Poleksic said the Republika Srpska is interested in reorganizing the police in line with the requirements of the IPTF and other international organizations. But he told IPTF deputy commissioner Werner Schumm that such a reorganization will require much time and money.

EASTERN SLAVONIA NOT READY FOR RETURN TO CROATIA

UN Secretary-General Kofi Annan said in New York on 7 October that conditions are not yet in place for Croatia to take over eastern Slavonia. Annan said Croatia has failed in confidence-building and reconciliation efforts in the region but still has time "to comply fully with its obligations before 15 January 1998," when the UN must decide whether to renew the mandate of its mission in eastern Slavonia. Meanwhile in Zagreb, Croatian Foreign Minister, Mate Granic, told ambassadors of the Contact Group that Croatia wants to do everything necessary to ensure the successful conclusion of the UN's mission in eastern Slavonia.

DRASKOVIC TO RUN IN NEW SERBIAN POLL

The opposition Serbian Renewal Movement (SPO) has said party leader Vuk Draskovic, who came third in the first round of the 21 September presidential elections, will run again in the new vote expected to be held later this year, "Nasa Borba" reported on 8 October. SPO spokesman Andeljko Trpkovic said the failure of the 5 October second round shows that an opposition candidate could win the elections in the first round, provided he had backing from all three parties united in the Zajedno movement. The other two Zajedno parties boycotted the poll, but their leaders, Zoran Djindjic and Vesna Pesic, have already declared their readiness to run in new elections (see "RFE/RL Newsline," 7 October 1997).

OSCE RULES MONTENEGRO POLLS FAIR, VOTER LISTS SUSPECT

The mission of the Organization for Security and Cooperation in Europe monitoring Montenegro's presidential elections has said that voting in the 5 October Montenegrin elections appeared to have been fair. But the OSCE suggested that the register of voters should be reviewed before the 19 October run-off between incumbent President Momir Bulatovic and Prime Minister Milo Djukanovic.

EU TO OPEN OFFICE IN PRISTINA

The EU Council of Foreign Ministers, meeting in Luxembourg on 6 October, denounced the use of force by the Serbian police against Albanian protesters in Pristina on 1 October. It also approved the opening of an EU bureau in Pristina. The council stressed its concern over the dangers of a further deterioration of the situation in Kosovo and insisted that the 1996 education accord between Serbia and Kosovo "be implemented without delay." Rexhep Gjergji, a member of the Presidency of the Democratic League of Kosovo and its Foreign Relations Committee, told the Kosovo Information Service that the EU bureau will be a "second window" in Kosovo, alongside the U.S. library, from which the world will closely watch the situation in Kosovo.

MACEDONIAN SERBS DECLARE SUPPORT FOR BRETHREN IN KOSOVO

The Democratic Party of Serbs in Macedonia announced on 7 October that Serbs from Macedonia will help Kosovar Serbs if the situation in Kosovo escalates, BETA reported from Skopje. Party leader Dragisa Miletic said in a statement that "We, the Serbs from Macedonia, are well organized for any escalation of the situation in Kosovo...and we will not allow any foul play from the Albanians from Macedonia." The previous day, Arben Xhaferri, leader of the Democratic Party of Albanians in Macedonia, had said "Albanians from Macedonia will, in the event of war in Kosovo, fight together with the people of Kosovo.". Miletic's party has branded Xhaferri's statement as an "immature political move."

GOSTIVAR MAYOR RELEASED FROM JAIL

Rufi Osmani was freed from prison on 7 October, BETA reported. His release came 90 days after he was detained in connection with the 9 July demonstrations, in which three Albanians were killed and 100 policemen and demonstrators sustained injuries of various degrees. Osmani was accused of inciting religious and ethnic hatred. He was released by a court decision noting that the 90-day deadline for a final judgment had expired.

ALBANIA SIGNS COMMITMENT AGREEMENT WITH IMF

The government signed a six-month commitment agreement with the IMF in Tirana on 7 October, ahead of the upcoming donors' conference in Rome and Brussels. IMF and other donor countries have made further aid to Albania conditional on fiscal reform, including raising value-added tax from 12.5 percent to 20 percent on 1 October. Albanian Prime Minister Fatos Nano said after signing the agreement that "economic reform...will be tough and intensive." Nano also welcomed an offer by Daan Everst, the head of the EU's monitoring mission in Albania, to extend the mission by six months.

ALBANIAN PARLIAMENTARY COMMISSION TO INVESTIGATE UNREST

The parliament on 6 October set up a commission to investigate the unrest in Albania earlier this year. Deputy Spartak Ngjela, who formerly was interim justice minister, was appointed to chair the 11-member commission, to be composed of representatives of all parliamentary parties as well as two independents. The opposition Democratic Party has not yet named its candidates, ATA reported.

ROMANIAN FOREIGN MINISTER SAYS HE WON'T RESIGN

Adrian Severin on 7 October told the press that he has no intention to resign, RFE/RL's Bucharest bureau reported. After being questioned by the Foreign Relations Committees of the parliament's two chambers about his allegations on "foreign agents" among the leaderships of several parties and in the media, Severin said that to resign now would be an indication of "cowardice" as well as "encouragement" to those he is seeking to expose.

MINERS' STRIKE IN ROMANIA

Members of the largest miners' trade union staged a 24-hour strike on 8 October, despite an agreement reached with the government the previous day (see "RFE/RL Newsline," 7 October 1997). Union leader Marin Condeescu said the miners are demanding a 100 percent wage hike and the creation of a national mining agency to oversee mines still in operation. The action follows a two-hour warning strike on 5 October. The miners have said they will launch a general strike on 14 October if their demands have not been met by then, RFE/RL's Bucharest bureau reported. Deputy Minister of Trade and Industry Nicolae Staiculescu commented that it is "strange" to go on strike at a time when the mining industries face a crisis of over-production. He called the strike "blackmail."

IMF WANTS MOLDOVA TO FULFILL COMMITMENTS

Mark Horton, the IMF's permanent representative to Moldova, has said that further IMF loans will be closely linked to Chisinau's fulfilling commitments undertaken by the government, in particular those on reducing the budget deficit, RFE/RL's bureau in the Moldovan capital reported on 6 October. Similarly, James Parks, the World Bank's representative in Moldova, has said he hopes the parliament will soon pass legislation that the bank regards as crucial for the country's economic development. Parks singled out legislation on developing the private sector, reforming education, and setting up a national properties register. He also announced that the bank's board of directors has approved granting Moldova a $100 million structural adjustment loan. The first $35 million installment will be paid out before the end of 1997.

RUSSIA REFUTES SPY ALLEGATIONS BY BULGARIAN MEDIA...

In a statement released on 7 October, Russian Ambassador to Bulgaria Leonid Kerestedzhiyants said Bulgarian media reports alleging that the embassy is engaged in spying are "scandalous," ITAR-TASS reported. The previous day, Bulgarian pro-government daily "Standard" had claimed that the Russian ambassador is involved in recruiting spies and seeks to upset Bulgarian plans to join NATO soon. Kerestedzhiyants said the embassy is "disturbed" that the Bulgarian government is doing nothing to stop the "defamation" and that some ministers, in particular Interior Minister Bogomil Bonev, have dropped hints that the security services have exposed Russian spying activities. The Russian ambassador commented that "over-zealous government-close quarters" are doing a disservice "not only to Bulgaria but also to NATO," which, he said, "does not want to strain relations with Moscow by using the 'Bulgarian card.'"

...WHILE BULGARIA WANTS "NEW IMPETUS" IN RELATIONS WITH RUSSIA

Bulgarian Foreign Minister Nadezhda Mihailova on 7 October said that while Sofia is determined to join the EU and NATO, it also wants to give new impetus to its traditional relations with Moscow. She told a news conference that Bulgaria wants to "develop contacts with Russia at every level--political and economic." She added that she hopes to visit Russia in November to prepare a visit by President Petar Stoyanov before year's end, Reuters reported. In other news, Prime Minister Ivan Kostov, addressing the General Assembly of the Atlantic Treaty Association in Sofia on 7 October, said his country wants to introduce Western standards in its security and defense policy. He invited foreign investors to invest in Bulgaria's defense industries, RFE/RL's Sofia bureau reported.




RUSSIA'S LANDMARK DEAL WITH LONDON CLUB


by Stephanie Baker

Russia and the London Club of commercial creditors have signed a landmark agreement to restructure Soviet-era debts totaling billions of dollars. Russia inherited the massive debt after the collapse of the Soviet Union under a deal with the former republics that gave Moscow control over all Soviet foreign assets. The long-awaited restructuring deal allows Russia to pay off some $32 billion over 25 years. It comes shortly after Russia joined the Paris Club of official creditors, following an agreement that $40 billion in Soviet debts to foreign governments would be rescheduled over 25 years.

Officials hail the London Club deal as paving the way for a new wave of investment in the Russian economy. Talking to journalists after the 6 October signing ceremony, First Deputy Prime Minister Anatolii Chubais said "leaders of the biggest banks in the world recognized the irreversibility of our reforms and the prestige of Russia in the international community." He said the agreement would speed up Russia's efforts to join other international financial institutions and help pump desperately needed funds into the economy. He also commented that the deal would allow Russian enterprises to tap international financial sources, weaning them off dependency on the nation's powerful banks. "In effect it opens the door to a non-oligarchic capitalism in Russia," he remarked.

Tessen von Heydebreck, a board member at the Deutsche Bank who worked on the restructuring, told reporters that the agreement heralds Russia's return to the international capital markets "as a reliable creditor." He said the agreement could result in a credit rating upgrade for Russia, which would reduce Moscow's costs of borrowing on global financial markets.

Top officials from 13 major banks took part in the 6 October signing ceremony in Moscow, together with officials from Vneshekonombank, which has been the Russian government's agent in the negotiations. The deal restructures $24 billion in principal and $8 billion in interest payments on a combined total of 27,000 loans extended to Russia by foreign commercial banks. Von Heydebreck described the agreement as "one of the largest financial transactions of its kind."

Banking officials attending the signing said the deal would be an incentive for commercial banks to lend to Russia. Thomas Wells, the vice president of Bank of America in London, said it would "give commercial banks additional confidence to lend to Russia and to private enterprises."

Chubais moved to bolster confidence further on 6 October when he announced that Russia will now focus on restructuring an additional $4 billion in outstanding debts owed by Soviet-era enterprises to commercial creditors outside the London Club deal. Those credits were not guaranteed by the Soviet authorities.

The closing date for the London Club deal is 2 December, when Russia is scheduled to pay $3 billion in cash toward overdue interest. At that time, the holders of the loans will retire the original debt and receive new Vneshekonombank bonds in exchange. There will be two kinds of the new bonds: some representing interest owed, others principal owed.

Eric Fine, an analyst at Morgan Stanley, said there could be volatility on the market as the closing date approaches. But he maintained that in the long term, the London Club deal would help Russia attract a new class of investors and boost its reputation as a reliable creditor on international markets.

The author is a Moscow-based RFE/RL correspondent.


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