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Newsline - June 16, 1998




STOCK MARKET HITS ANOTHER LONGTIME LOW

The index of leading shares on the Russian stock market fell 7 percent on 15 June, hitting its lowest point since 1996, the "Financial Times" reported. The bond market declined as well, as yields on government treasury bills rose above the Central Bank's annual refinancing rate of 60 percent. Share values rose slightly in early trading the next day, after Russian news agencies quoted unnamed government officials as saying the IMF will send a team to Moscow next week to negotiate an additional aid package for Russia. Financial analysts have said a multi-billion-dollar bailout is needed to restore the confidence of Russian and foreign investors. Meanwhile, the presidential press service announced on 15 June that President Boris Yeltsin will chair a meeting of government and parliamentary officials on 23 June to discuss an "anti-crisis" economic program. That meeting was previously scheduled for 30 June. LB

FINANCE MINISTER WON'T CONFIRM SECRET BORROWING

Interfax reported on 16 June that Finance Minister Mikhail Zadornov declined to confirm a "Financial Times" report saying Russia has secretly borrowed at least $200 million from Western banks in recent weeks (see "RFE/RL Newsline," 11 June 1998). In June and December 1997, Russia borrowed hundreds of millions of dollars from U.S. billionaire George Soros and from foreign banks, but news of those short-term loans first emerged months after the fact (see "RFE/RL Newsline," 19 February and 5 March 1998). LB

RAILROADS SLASH CARGO RATES FOR SOME GOODS

Russian railroads lowered shipping rates for coal, iron ore, oil, and fuel oil by 25 percent on 15 June in line with a government decision the previous week, Russian news agencies reported. Deputy Prime Minister Boris Nemtsov told journalists on 8 June that the reduction in cargo rates is a "major structural step in the [government's] industrial policy." The change will cost the railroads an estimated 6 billion rubles ($970 million), with half of the losses from coal transportation alone, according to Nemtsov. He has said that the monopoly Unified Energy System will in June or July adopt significant reductions in electricity rates for industries. LB

INTERIOR TROOPS FACE SHARP CUTS

Interior Minister Sergei Stepashin on 15 June announced that the ministry's troops will be reduced during the next two years from some 250,000 to 120,000-140,000, Russian news agencies reported. Stepashin and Colonel-General Pavel Maslov, the commander of the Interior Ministry's troops, briefed Yeltsin on the planned restructuring earlier the same day. Stepashin told journalists that Russia does not need the ministry's troops to "duplicate" the Defense Ministry's ground forces and said the Interior Ministry troops will become a more mobile force. The size of the troops grew significantly during Anatolii Kulikov's tenure as interior minister. Shortly after Yeltsin sacked Kulikov in March, officials said the Interior Ministry's troops would be downsized from 257,000 to 220,000 (see "RFE/RL Newsline," 25 March 1998). LB

YELTSIN RESTRUCTURES TRAFFIC POLICE

Stepashin on 15 June announced that Yeltsin has signed a decree transforming the State Automobile Inspectorate (GAI) into the State Road Safety Inspectorate, ITAR-TASS reported. The GAI has long been notorious for corrupt officers who stop vehicles arbitrarily and demand bribes from drivers. According to Stepashin, the restructuring of the inspectorate will help motorists by introducing simpler registration rules. He also said vehicles that are less than 10 years old will no longer have to have technical checks every year. Instead, they will be checked every five or 10 years, which will save time for motorists and give officers fewer opportunities to take bribes. LB

NEMTSOV SAYS 50,000 OFFICERS TO ACQUIRE APARTMENTS

Deputy Prime Minister Boris Nemtsov says 50,000 officers who are leaving the armed forces will be able to acquire apartments this year, Russian news agencies reported on 15 June. Speaking to journalists after a meeting with Yeltsin, Nemtsov said the government has already transferred money for purchasing apartments to some 3,000 officers. There is an acute housing shortage in the military, and career officers who leave military service rarely have the funds to buy apartments. In May, the government began to implement its policy to help retiring military personnel buy housing, but as military spending remains below budget targets, it is unclear whether the program will be implemented in full. LB

CHERNOMYRDIN MAKES IT OFFICIAL

Former Prime Minister Viktor Chernomyrdin on 15 June confirmed that he plans to run for a State Duma seat this September, Russian news agencies reported. He made the announcement during a visit to Yamal-Nenets Autonomous Okrug, where the by- election will be held to fill the seat Vladimir Goman gave up to become chairman of the State Committee on the North. Most of Russia's gas reserves are located in the okrug, and Chernomyrdin is a former head of the gas monopoly Gazprom, the largest employer in Yamal-Nenets. LB

YELTSIN NOT TO ATTEND TSAR'S REBURIAL

Deputy Prime Minister Nemtsov on 15 June confirmed that Yeltsin will not attend the 17 July reburial of Nicholas II, Russia's last tsar. The president's decision was expected, particularly after the Holy Synod of the Russian Orthodox Church decided not to send high-level clerics to the ceremony in St. Petersburg (see "RFE/RL Newsline," 10 and 11 June 1998). Nemtsov said Prime Minister Sergei Kirienko will appoint an official government representative to attend the ceremony. LB

SUSPECT IN CORRUPTION CASE TO BE RETURNED TO RUSSIA

Greek Justice Minister Evangelos Yiannopoulos on 15 June approved plans to extradite Andrei Kozlenok, a key suspect in a high-level corruption case, to Russia, ITAR-TASS reported. The Greek Supreme Court rejected Kozlenok's final appeal against extradition last month (see "RFE/RL Newsline," 19 May 1998). Kozlenok then applied for political asylum in Greece, but the Greek minister for public order rejected his application on 9 June. Kozlenok, who is accused of embezzling $180 million worth of precious metals and gemstones, claims that his life will be in danger in Russia. If he cooperates with investigators or is tried, several former high-ranking officials may be implicated in the case. LB

DUMA DEPUTY PROPOSES NEW LIBEL LAW

Iosif Kobzon, a popular singer and State Duma deputy, has announced that he and an academic, Yurii Bokan, are preparing a draft law on protecting the honor and dignity of Russian citizens, ITAR-TASS reported on 15 June. He did not specify any of the draft's provisions or explain why he considers current legislation prohibiting libel and slander inadequate. In 1996, Kobzon won a libel lawsuit against "Sovetskaya Rossiya," which accused him of having ties to organized crime (see "OMRI Daily Digest," 6 March 1996). He is a culture adviser to Moscow Mayor Yurii Luzhkov, who recently lost a libel suit against Russia's Democratic Choice leader Yegor Gaidar (see "RFE/RL Newsline," 21 May 1998). LB

TWO SUSPECTS CONFESS TO MURDERING JOURNALIST...

Two suspects arrested in connection with the murder of "Sovetskaya Kalmykia Segodnya" editor Larisa Yudina have confessed to the crime, Interfax reported on 16 June, quoting Yurii Biryukov, the deputy head of the Prosecutor-General's Office's Main Department in the North Caucasus. He said Sergei Vaskin, a former aide to Kalmykian President Kirsan Ilyumzhinov, and Tyurbi Boskomdzhiev, Ilyumzhinov's representative in Volgograd Oblast, have been charged with premeditated murder. Authorities are still searching for a third suspect in the case, Biryukov said. Investigators believe Yudina's murder was linked to her journalist activities. "Sovetskaya Kalmykia Segodnya," which is printed outside the republic, is the only local newspaper that criticizes Ilyumzhinov. Yeltsin remarked on 15 June that "not everything" relating to the investigation can be shared with law enforcement officials in Kalmykia. LB

...AS KALMYK AUTHORITIES BAN RALLY IN JOURNALIST'S MEMORY

The authorities in the Republic of Kalmykia have prohibited a rally planned in memory of Yudina, ITAR-TASS reported on 15 June. Lidiya Dordzhieva, a close friend of Yudina's and head of a grass-roots organization in Kalmykia, told the news agency that the authorities banned the rally on the "pretext" that it might stir up ethnic strife in the republic. Dordzhieva came to Moscow on 15 June, saying she has received death threats in Elista, the capital of Kalmykia, since Yudina was killed. Yudina's last story, published posthumously in "Sovetskaya Kalmykia Segodnya," covered Dordzhieva's forced treatment at a psychiatric clinic in Elista this March. LB

YELTSIN CONGRATULATES BASHKIR PRESIDENT...

Yeltsin has congratulated Murtaza Rakhimov on his victory in the 14 June presidential election in Bashkortostan, ITAR-TASS reported on 16 June. A telegram from Yeltsin said Bashkortostan's voters demonstrated that "they tie their hopes for the well-being of the republic with your political leadership. The latest elections are convincing evidence that the republic's population supports the economic strategy and reforms that are being carried out." Rakhimov has been a loyal ally of Yeltsin and is believed to have helped Yeltsin substantially improve his showing in Bashkortostan during the 1996 presidential election. In the first round of that election, Yeltsin trailed Communist candidate Gennadii Zyuganov in the republic by 42 percent to 34 percent. However, in the second round, Yeltsin gained 51 percent of the vote in Bashkortostan to 43 percent for Zyuganov. LB

...AS RACE DRAWS MIXED REACTION FROM OTHERS

Commenting on the presidential election in Bashkortostan, some Russian media and politicians noted that voters had no genuine alternative to Rakhimov, as the incumbent's opponents were excluded from the ballot (see "RFE/RL Newsline," 15 June 1998). Russia's Democratic Choice leader Yegor Gaidar on 15 June denounced the election as an "anti-constitutional farce," RFE/RL's Moscow bureau reported. "Kommersant-Daily" on 16 June quoted unnamed sources from Rakhimov's campaign as saying the incumbent did not want to tarnish his image as an unchallenged leader by competing against opponents such as Duma deputy Aleksandr Arinin. Meanwhile, Federation Council Speaker Yegor Stroev welcomed Rakhimov's victory on 15 June. Stroev was re-elected last October as governor of Orel Oblast with some 95 percent of the vote. As in Bashkortostan, the only alternative candidate on the ballot in Orel spoke out in favor of the incumbent. LB

RUSSIA TO PAY ARREARS FOR USE OF CHECHEN PIPELINE

Russian Deputy Prime Minister Nemtsov told journalists on 15 June that by the end of this week, Moscow will settle its debts to Chechnya for the maintenance and security of the Baku-Grozny-Tikhoretsk-Novorossiisk oil pipeline, Russian agencies reported. The previous day, Chechen acting Prime Minister Shamil Basaev threatened to halt shipments of oil through the pipeline unless Moscow honored its commitments under the agreement signed in September 1997. Chechen President Aslan Maskhadov told Interfax on 15 June that Russia has not yet provided any funds for security measures but added that he hopes shipments will not need to be suspended. LF

RUSSIA DENIES SHIPPING S-300 COMPONENTS TO CYPRUS

A Russian Defense Ministry spokesman on 15 June denied that the missile-launching pads found by Turkish authorities the previous day on a Maltese-registered ship transiting the Turkish straits were part of a consignment of S-300 missiles intended for Greek Cyprus, Russian agencies reported. The ship's cargo was designated as tractors and cars bound for Egypt. Also on 15 June, Russian Foreign Ministry spokesman Vladimir Rakhmanin denied a Turkish news agency report that Russia may reconsider the delivery of the S-300s to Cyprus if Ankara agrees to purchase large amounts of Russian weaponry, Interfax reported. LF




GEORGIAN-ABKHAZ TALKS MAY RESUME THIS WEEK

Georgian presidential press secretary Vakhtang Abashidze told Interfax on15 June that talks between the Georgian and Abkhaz presidential envoys that were suspended in Moscow on 11 June may resume this week. At a meeting with journalists in Sukhumi on 15 June, the Abkhaz representative at those talks, Anri Djergenia, said he believes a meeting between the Georgian and Abkhaz presidents should take place as soon as possible. The chairman of the Abkhaz parliament in exile, Tamaz Nadareishvili, told Caucasus Press it should assume responsibility for conducting talks with the Abkhaz leadership. He added that it should also liaise with the Georgian guerrilla movement and allocate emergency aid to the Georgian displaced persons who fled Abkhazia during last month's fighting. The previous day, an Abkhaz policeman was shot dead when Georgian guerrillas ambushed a patrol in Abkhazia's Gali Raion, Russian agencies reported. LF

GEORGIAN PRESIDENT PRAISES RUSSIAN POSITION

In his weekly radio address on 15 June, Eduard Shevardnadze expressed his approval for Moscow's "clear-cut and radical" assessment of last month's fighting in Gali. Shevardnadze said that if the present situation does not change, Moscow will classify what happened in May as genocide and ethnic cleansing. He did not say, however, what exactly would impel Russia to revise its evaluation of events that have already taken place. LF

GEORGIAN FOREIGN MINISTER IN YEREVAN

Irakli Menagharishvili made a brief stopover in Yerevan on 15 June on his return from a three-day official visit to Tehran, RFE/RL's Yerevan bureau reported. Menagharishvili and his Armenian counterpart, Vartan Oskanian, reached agreement on coordinating activities aimed at expediting the two countries' integration into European structures and on resuming the work of a joint commission on economic issues. The two also discussed the recent fighting in Abkhazia but subsequently refused to comment on reports that Yerevan may join ongoing efforts to mediate a settlement of that conflict. Menagharishvili told journalists that Georgia's policy of maintaining good relations with both Armenia and Azerbaijan does not impinge on either country's interests. Oskanian positively assessed Georgian President Shevardnadze's "Peaceful Caucasus" initiative but noted that Azerbaijan is an obstacle to Armenian participation in pan-Caucasian initiatives, Caucasus Press reported. LF

ARMENIANS FROM KARABAKH PUSH FOR REPATRIATION

Armenians forced to flee Nagorno- Karabakh's Shaumian raion during an assault by Soviet army and Azerbaijani OMON troops in June 1991 visited the Yerevan embassies of the three countries that co-chair the OSCE Minsk Group, Noyan Tapan reported on 12 June. The fugitives are classified as internally displaced persons, not as refugees, because they fled within the confines of the USSR. They appealed for help in returning to their homes and in tracing missing relatives. LF

DEMIRCHIAN REGISTERS OWN POLITICAL PARTY

The Armenian Ministry of Justice on 15 June formally registered the National Party of Armenia Noyan Tapan reported. That formation is headed by former Armenian Communist Party First Secretary and defeated presidential candidate Karen Demirchian. "Azg" on 16 June described the new party's orientation as "centrist, moderately liberal, and social democratic," predicting that it will result in a "redistribution of forces in Armenia's political landscape." LF

KAZAKH PRESIDENT MEETS WITH TURKISH COUNTERPART

Nursultan Nazarbayev and Suleyman Demirel held talks at the latter's Ankara residence on 15 June, an RFE/RL's Kazakh Service correspondent reported. Nazarbayev called for increasing the annual trade turnover between the two countries from $267 million to $1 billion, according to dpa. Nazarbayev also met with Foreign Minister Ismail Cem and Premier Mesut Yilmaz. Kazakh Presidential spokesman Kairat Sarybaev told Interfax on 14 June that Nazarbayev's talks with Turkish leaders would focus on the expansion of bilateral economic ties and Kazakhstan's possible use of the proposed Baku-Ceyhan pipeline simultaneously with other routes for the export of Kazakh oil. LF




GAZPROM CUTS GAS SUPPLIES TO BELARUS BY 40 PERCENT

Russia's gas monopoly notified Belarus on 15 June that it will cut gas supplies to the republic by 40 percent beginning 16 June, Belapan reported. The reason for the reduction is Belarus's debt to Gazprom, which totals $240 million. In April, Gazprom and Belarus agreed that Minsk will repay 26 percent of that debt in hard currency and 74 percent in goods (see "RFE/RL Newsline," 22 April 1998). Belarus has been able only to partly fulfill the repayment agreement. ITAR-TASS on 16 June quoted a source in the Belarusian government as saying the reduction in gas supplies "has not broken the usual life rhythm in the republic."JM

BELARUSIAN OPPOSITIONIST SENTENCED TO 10 DAYS FOR GRAFFITI

A Minsk court has found journalist and former Supreme Soviet deputy Valeryy Shchukin guilty of petty hooliganism and sentenced him to 10 days in prison, RFE/RL's Belarusian Service reported on 15 June. Shchukin, a Communist Party member, was accused of defacing the Interior Ministry building by spray-painting the words "Free Andrey Klimau" on it. Klimau, a former deputy, has spent the last four month in prison on charges of grand larceny. Shchukin's sentence is mild compared with that handed down to 21-year-old Aleksey Shydlouski, who was found guilty of criminal hooliganism for a similar offense and is now serving an 18-month prison term. JM

BELARUS SIGNS 10 COOPERATION ACCORDS WITH EGYPT

On the second day of Belarusian President Alyaksandr Lukashenka's official visit to Egypt, 10 economic cooperation accords were signed between the two countries, dpa reported on 16 June. Egyptian Foreign Minister Amr Mussa who attended two rounds of Lukashenka's talks with Egyptian President Hosni Mubarak, told the German agency that the talks focused on bilateral ties, mainly in trade and investment. Lukashenka also expressed his country's interest in joining the movement of non-aligned countries. JM

STRIKING MINERS MAY LEAVE KYIV

Mykhaylo Volynets, leader of the Independent Coal Miners Trade Union, has said miners from Pavlovhrad who are picketing government buildings in Kyiv may go home if the government pays some of the money owed to them, Interfax reported. Volynets said the government has promised to pay some 17 million hryvni ($8.2 million) in back wages and offered a loan of 30 million hryvni to the striking miners. However, Deputy Coal Industry Minister Volodymyr Radchenko said on national television that it would be "incorrect and unjust" to pay overdue wages only to the Pavlovhrad miners and leave the payment problem unresolved at other mines. JM

LATVIA TO INCREASE DEFENSE BUDGET

Latvia will increase its defense budget to 1 percent of GDP by 1999 and to 2 percent by 2003, according to a document on Latvia's integration into European and Euro-Atlantic security structures (see "RFE/RL Newsline," 11 June 1998). The document, which was discussed by the government on 15 June, states that the current defense budget of 0.67 percent of GDP does not allow Latvia to sufficiently develop its armed forces and is impairing the country's chances of integration into NATO. Noting that Latvia spends less on its armed forces than either Lithuania or Estonia, President Guntis Ulmanis said the insufficient defense budget will make it difficult for him to discuss Latvia's readiness for NATO membership with Secretary-General Javier Solana, who is due to visit all three Baltic States this week, BNS and Interfax reported. JC

LITHUANIAN DEFENSE MINISTER ON NATO EXPANSION

Ceslovas Stankevicius on 15 June said that Russia's opposition to NATO enlargement is "unjustified." He told Interfax that neither Lithuania's membership in NATO nor expansion of the alliance as a whole will pose a threat to Russia's security. "Our position remains unchanged: we are preparing for membership in the alliance," he said. Stankevicius's comments follow Russian Foreign Minister Yevgenii Primakov's statement on the weekend in Vilnius that the Baltic States' membership in NATO would be "unacceptable" to Russia (see "RFE/RL Newsline," 15 June 1998). JC

POLAND TRIES OFFICIALS RESPONSIBLE FOR WORKERS' MASSACRE IN 1970

Following two years of preliminary procedures, the trial of former communist officials accused of complicity in the December 1970 workers' massacre has begun in Gdansk. Seven persons are charged with the murder of 44 people during protests in Polish coastal cities in 1970. The cases of five other defendants, including then Defense Minister Wojciech Jaruzelski, will be examined in separate trials because of the defendants' poor health, Polish Radio reported. JM

U.S. DEFENSE SECRETARY URGES POLAND TO MAINTAIN MILITARY SPENDING

William Cohen said during his visit to Warsaw on 15 June that Poland should maintain its current military spending or even increase it if the Polish economy continues to grow, Reuters reported. Cohen met with Prime Minister Jerzy Buzek and Defense Minister Janusz Onyszkiewicz to discuss Poland's integration with NATO, the Kosova conflict, and the purchase of multi-purpose fighter aircraft. He praised the pace of bringing the Polish military up to NATO standards and stressed that the country should improve, above all, its communications networks and the English-language skills of its officers before purchasing expensive new weapons systems. JM

CZECH ROM HOSPITALIZED AFTER SKINHEAD ATTACK

A 24-year-old Romani man was hospitalized in Kolin, central Bohemia, on 14 June after being attacked at the local train station by a young skinhead, CTK reported on the next day. Police arrested the skinhead, who claimed he attacked the man because "he was giving me evil looks," on charges of hooliganism and grievous bodily harm. MS

AUSTRIA WANTS GOOD RELATIONS WITH SLOVAKIA

Helmut Wessely, a high-ranking official at the Austrian Foreign Ministry, told an RFE/RL correspondent on 15 June that Vienna has no intentions of withdrawing its ambassador to Bratislava in connection with the activation of the controversial Mochovce nuclear plant and wants "good relations" with all its neighbors. Wessely said Vienna does not want to "dictate" Bratislava how to meet its energy needs, but he added that the safety of the Mochovce plant is a "prime concern" to Austria because of the facility's location close to the border. He added that officials from the two countries will meet at the offices of the International Atomic Energy Agency in Vienna on 19 June to further discuss safety issues. MS

HUNGARIAN FAR-RIGHT PARTY CAN FORM PARLIAMENTARY GROUP

The Constitutional Court on 15 June ruled that the Hungarian Justice and Life Party (MIEP) can form a parliamentary group, despite house rules requiring parties to have at least 15 parliamentary seats to form a faction. The court ruled that "every party that passes the 5 percent threshold has the right to form a parliamentary group and the house rule prohibiting this is unconstitutional." MIEP won 14 seats in the May elections. Also on 15 June, MIEP chairman Istvan Csurka was elected the leader of the party's parliamentary group. In other news, the parliamentary group of the Alliance of Free Democrats elected former party chairman Gabor Kuncze as its leader. MSZ




YELTSIN, MILOSEVIC MEET

President Boris Yeltsin and his Yugoslav counterpart, Slobodan Milosevic, held talks in Moscow on 16 June. Following the meeting, Yeltsin said that Milosevic agreed to talks with the Kosovar Albanians but did not elaborate. The previous day, U.S. President Bill Clinton urged Yeltsin in a 40-minute telephone conversation to make clear to Milosevic that his position on Kosova is "precarious." After the Clinton-Yeltsin conversation, a White House spokesman said that Yeltsin is "much more anxious to see a diplomatic solution, but I think it's very clear, and the Russian government knows, that we intend to proceed with [force] if necessary." The spokesman added that "Milosevic listens very carefully to what President Yeltsin has to say." In fact, however, Moscow's influence on Belgrade has been limited since the collapse of the Soviet Union. Serbian-Russian relations historically have been uneven. PM

NATO, RUSSIA DIFFER ON MANEUVERS

Russian Defense Minister Igor Sergeev said in Moscow on 15 June that NATO officials did not properly consult him regarding air maneuvers that the Atlantic alliance staged over Albania and Macedonia the same day (see "RFE/RL Newsline," 15 June 1998). Following talks with Sergeev in Moscow, General Hugh Shelton, who is chairman of the U.S. Joint Chiefs of Staff, said "Russia has not expressed any concern today about the exercises actually taking place, just about their timing." Shelton suggested that the Russians had not expected NATO to carry out so quickly the decision to hold the maneuvers, which its defense ministers reached in Brussels on 12 June. Shelton added that the exercises provided support for Yeltsin in his negotiations with Milosevic. Sergeev was at NATO headquarters from 9-12 June. Elsewhere in Moscow on 15 June, a Russian representative to NATO denied media reports that Russia has withdrawn its military envoy to NATO to protest the exercises, RFE/RL's South Slavic Service reported. PM

U.S., KOSOVARS HAIL EXERCISES...

In London on 15 June, NATO Secretary-General Javier Solana said the Milosevic- Yeltsin talks are the Serbian leader's "last chance" to achieve a diplomatic solution to the Kosova crisis, the "Frankfurter Allgemeine Zeitung" reported. In Washington, a State Department spokesman said that the maneuvers were necessary because diplomacy alone had not proven effective in dealing with Milosevic, the VOA reported. Kosovar shadow-state President Ibrahim Rugova said in Prishtina that the exercises show that "genocide has no future in Europe." PM

...AS DOES ALBANIA

The Albanian government issued a statement on 15 June welcoming the NATO display of air- power as a means to "stop the police and military violence by Belgrade in Kosova and [Belgrade's] notorious policy of ethnic cleansing." Prime Minister Fatos Nano said "Albania is ready to put at the disposal of NATO troops all its logistics and allow flight paths for NATO planes, as was the case with today's encouraging maneuvers." He also told visiting Swedish Defense Minister Bjorn von Sydow that "it is most necessary to stop the Serbian war machine because the political parties in Kosova cannot negotiate under present conditions." And President Rexhep Meidani said NATO air strikes against Serbian targets might be required if Belgrade's forces continue to attack villages in Kosova. FS

COOK SAYS UN MAJORITY FOR ACTION

British Foreign Secretary Robin Cook said in London on 16 June that "there is absolutely no doubt there is a great majority in the Security Council for a resolution" in support of military intervention to resolve the conflict in Kosova. He added that NATO did not mislead Russia regarding its air maneuvers over Albania and Macedonia (see above). "I'm not entirely sure that is something [the Russians] really can stand up. After all, there was a Russian representative, currently attached to Brussels. He was aware of the discussions that took place last week." Meanwhile in Beijing, a Foreign Ministry spokesman said that "as a sovereign country, Yugoslavia's sovereignty and territorial integrity should be respected. China does not agree to outside interference with military force" in the Kosova question. PM

EU SENDS ULTIMATUM TO MILOSEVIC

EU leaders issued a declaration in Cardiff on 15 June to demand that Milosevic end attacks on civilians, withdraw his armed forces from Kosova, admit international monitors to the province, allow refugees to go home, and launch talks with Kosovar representatives. The text stated that "no state that uses brutal military repression against its own citizens can expect to find a place in modern Europe." The document added that "an immediate cessation of violence will be required as well from the Kosova Albanian side. The EU will play its part in stopping the flow of money and weapons to Kosova Albanian armed groups." EU Foreign Affairs Commissioner Hans van den Broek said that the key issue is to end "a situation on the ground where innocent men, women and children are being slaughtered," regardless of whether the UN gives NATO a mandate to do so. PM

UCK SETS CONDITIONS FOR TALKS

Jakup Krasniqi, who is the main spokesman for the Kosova Liberation Army (UCK), said on Albanian Television on 15 June that negotiations with Serbia can be held on three conditions: the prior withdrawal of Serbian armed forces from Kosova, international mediation for talks, and "proper preparation" of the negotiations. It is unclear whether he would accept Rugova's current negotiating team as the Kosovars' representative or whether Krasniqi would insist that the UCK also participate. He said only that "political pluralism among Albanians in Kosova is now a luxury." The Serbian authorities are unlikely to enter into any talks with the UCK, which they call "separatist and terrorist." PM

UCK ACTIVITIES IN ALBANIA INCREASE

Foxton William, who is the OSCE representative in Bajram Curri, told dpa on 15 June that "last night...300 fighters with horses loaded with weapons crossed the border into Kosova." The statement is in line with other media reports that UCK fighters are using the Tropoja region as a safe haven and training base. The dpa reporters also saw vans transporting armed, young UCK recruits into Kosova. One UCK fighter said that "we are getting better armed and better organized with each passing day." Persistent but unconfirmed reports suggest that the UCK has been using the family home of former Albanian President Sali Berisha as an operational base and arsenal for the past several months. FS

REFUGEES CONTINUE TO ARRIVE IN ALBANIA

An unnamed Western official in Bajram Curri told Reuters on 15 June that 365 refugees crossed into Albania that day. The refugees reported that Serbian helicopter gunships attacked their village the previous day. Other refugees told reporters that Serbian infantry and helicopters followed them up to the border in the night from 14-15 June. They added that some 3,000 people fled the village of Junik over the weekend and that many of them remain trapped in the mountains because Serbian forces are now patrolling some of the paths refugees previously took to cross the border. FS

UN ORGANIZATIONS CALL FOR HELP

In Geneva on 16 June, the United Nations High Commissioner for Refugees, UNICEF, and four other UN aid agencies issued a joint emergency call to international donors for $18 million to help cope with the Kosova refugee crisis. UNHCR representatives said that 13,000 refugees have recently arrived in Albania and 9,000 in Montenegro. An estimated 45,000 are displaced within Kosova itself but do not fall under the mandate of the UNHCR. UNHCR chief Sadako Ogata warned that "while we hope for a peaceful resolution of the Kosova crisis, we must be ready for an even larger number of refugees." FS

BOSNIAN SERB PARLIAMENT DUMPS HARD-LINERS

Legislators in the Republika Srpska parliament voted by 43 to 35 in Banja Luka early on 16 June to remove speaker Dragan Kalinic and his deputy, Nikola Poplasen, from office. Kalinic, who backs former Bosnian Serb leader Radovan Karadzic, said his opponents have shown "their true colors of servility to outside masters." The international community's Carlos Westendorp recently asked the parliament to elect a Croat or Muslim as speaker. It is unclear when the new speaker and deputy will be selected. In New York the previous day, the Security Council voted to extend the mandate of 33,000 SFOR troops and 2,000 UN police until June 1999. PM

EXTREMIST ROMANIAN LEADER DENIES HE WAS SECURITATE INFORMER

Corneliu Vadim Tudor, chairman of the Greater Romania Party (PRM), has said he will sue the daily "Ziua" for having "fabricated" evidence of his links with the communist secret police. "Ziua" on 15 June published a hand-written statement signed by Tudor and pledging to work as an informer for the Securitate. The letter is from the private archives of Ilie Merce, a former Securitate officer, who is now a member of the PRM leadership. It supports earlier articles in the press according to which Merce supervised Tudor's activity as a Securitate informer. Meanwhile, Democratic Party deputy Adrian Vilau, who has admitted to having been an informer, says he refuses to resign as chairman of the parliamentary commission supervising the Foreign Information Service, RFE/RL's Bucharest bureau reported. MS

NATO DEPUTY SECRETARY-GENERAL IN ROMANIA

Klaus-Peter Kleiber on 15 June told Prime Minister Radu Vasile that the decision on whether to admit Romania to NATO in a second enlargement wave may well depend on the progress of the reform process in Romania, RFE/RL's Bucharest bureau reported. Vasile told the guest that he does not expect Romanian-Hungarian relations to deteriorate as a result of the change of government in Budapest. After meeting Foreign Minister Andrei Plesu, Kleiber said a NATO peace-keeping process in Kosova could well be open to those countries taking part in the Partnership for Peace. MS

ZHIRINOVSKY ALLY WOUNDED IN TIRASPOL

Aleksandr Saidakov, the Transdniester representative of Vladimir Zhirinovsky's ultra-nationalist Liberal Democratic Party of Russia, was shot and seriously wounded in Tiraspol on 12 June, ITAR-TASS reported on 15 June. He is in critical condition, after being hospitalized with bullets in his head and neck. The authorities have arrested a suspect but it is unclear whether he is the person who shot Saidakov. Saidakov is a prominent businessman and a former minister of transportation in the separatist government. Zhirinovsky denounced the attempt as a "political crime," but Infotag, citing sources close to the Transdniester leadership, said the attempt on Saidakov's life was more likely connected with his business activities. MS

SNEGUR ON REUNIFICATION WITH ROMANIA

In an interview with "Kishinevskiye Novosti" on 12 June, Mircea Snegur said that Moldova's reunification with Romania is "not on the current political agenda" and that everyone must "realize that the period of political romanticism is over." The former president also denied he intended to seek Romanian citizenship, saying "I have a motherland of my own" in which "I invested too much effort" to seek another citizenship. Snegur also said he does not intend to run again for the presidency in 2000, Infotag reported. MS

BULGARIAN FOREIGN MINISTER IN ISRAEL

Nadezhda Mihailova and Israeli Prime Minister Benjamin Netanyahu signed several cooperation agreements on 15 June. They also discussed the situation in Kosova and in the Middle East, dpa reported. In other news, visiting German Defense Minister Volker Ruehe and his Bulgarian counterpart, Georgi Ananiev, have signed an agreement providing for the training of Bulgarian military at German military academies. The agreement extends a similar accord signed in 1994, BTA reported. The two ministers also discussed the situation in Kosova. MS




POWER COUNTERVAILING AND OTHERWISE


by Paul Goble

The weakness of the Russian state increasingly allows privatized firms there to challenge its authority, but the strength of these firms on occasion may help Moscow to extract more resources from the international financial community.

That dual role of large Russian firms was highlighted at the weekend, when Gazprom chief Rem Vyakhirev told European officials that his firm would not be able to afford to sign new gas export contracts if the Russian government implemented plans to collect more taxes from his company.

But because the IMF reportedly has demanded that Moscow break up the Russian gas monopoly, Vyakhirev's threat at a meeting in Sardinia could trigger a new financial and hence political crisis in the Russian capital.

In a speech in Sardinia to the European Business Congress, which Vyakhirev himself founded, the Gazprom chief said that Moscow's plans to impose a value-added tax of 22 percent and an excise duty of 30 percent on exports would effectively "bury" future gas supplies from Russia to Europe.

Such taxes, Vyakhirev said, were making the export of gas increasingly unprofitable, with his company now losing approximately "a dollar for every 1,000 cubic meters." No privately owned firm, he noted, could continue to operate for very long with such losses.

By painting the situation in such dark colors, Vyakhirev was clearly hoping to use the threat of reduced natural gas deliveries to force the West to stop putting pressure on the Russian government over tax collection. The West wants Moscow to improve its collection of taxes, particularly from large firms like his.

But Vyakhirev's effort to enlist Western support for his company against the Russian authorities may paradoxically work to the advantage of that very government as well.

In order to ensure that Russian gas keeps flowing westward, Europeans and those dependent on the European economies are likely to press both for a more understanding approach to Moscow's difficulties with tax collection and for additional loans to the beleaguered Russian government. And they may even back away from the support they apparently have given to IMF plans to demand that the Russian government break up Gazprom and make other reforms if Moscow is to receive more aid.

If Vyakhirev's threat works in that way, the Russian government would be the beneficiary in the short run, but the Russian economy and political system might be its victims over the longer haul.

Greater IMF assistance and less IMF micro- management of the Russian economy could indeed give Moscow the resources it needs to get through its current financial crisis and also allow it greater freedom of action in dealing with powerful interests in Russian society. But this victory could prove a Pyrrhic one both for the Russian government and for Gazprom itself.

More foreign assistance and fewer conditions on it would allow the Russian government to put off some reforms that will be necessary if it is to put its economy back on track. And to the extent that happens, the crises that Russia is experiencing may be put off but will not be solved.

And any success by Gazprom in holding both the Russian government and Western Europe hostage on tax collections and gas deliveries is likely to increase demands from reformers in the Russian government for breaking up a domestic firm with so much power.

Such demands and the certain resistance by Gazprom and other members of the oligarchy that now dominates the Russian economic scene could trigger a new and potentially more serious political crisis. And that crisis, in turn, would provide another measure of the strengths and weaknesses of both sides as well as of the ways in which each continues to depend on and support the other.


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