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Newsline - December 18, 1998




KREMLIN CONDEMNS NOT ONLY U.S. BUT ALSO NATO...

Russian leaders continued to call for an end to air strikes against Iraq and used the Iraq attack as a new pretext to criticize NATO. Both President Boris Yeltsin and Prime Minister Yevgenii Primakov called for an immediate end to military action. Primakov also called the action against Iraq "intolerable" and "outrageous," while AFP reported that Russian Foreign Minister Igor Ivanov demanded the dismissal of UN weapons inspector Richard Butler, whom he and the majority of Russian newspapers blame personally for the attack on Iraq. Defense Minister Igor Sergeev said that Russia should ask itself what use is Russia's relationship to NATO, if NATO members simply ignore its views. Sergei Kislyak, Russia's permanent envoy to NATO, added that although NATO itself is not involved in the attack, two of its members are. He added that Russian policymakers are concerned about what kind of precedent is being set. JAC

...AS DUMA RECOMMENDS HIGHER DEFENSE SPENDING

Meanwhile in the State Duma, rhetoric was even harsher. Communist Party leader Gennadii Zyuganov called the strikes "an act of terror" and "an extreme manifestation of international gangsterism," while Liberal Democratic Party of Russia (LDPR) leader Vladimir Zhirinovsky called the U.S. "a bandit state that staged a barbarous act." Deputies adopted a resolution condemning the air strikes and calling for an increase in defense spending. They also recommended that the government review Russia's current and future relations with the U.S., Britain, and NATO as well as end Russian compliance with UN sanctions against Iraq. On 18 December, Russia recalled its ambassadors to the U.S. and Britain to Moscow for consultations. JAC

START-II RATIFICATION SWITCHES TO INDEFINITE HOLD

The years-long delay of START-II ratification is likely to be extended for at least another six months, according to various Russian politicians. Presidential spokesman Dmitrii Yakushkin told reporters on 18 December that chances for ratification have "really faded." A spokesman for First Deputy Prime Minister Yurii Maslyukov, who had been one of the treaty's most vocal advocates in Primakov's government, said that although the treaty should still be ratified, it would be inappropriate to do so while air strikes are occurring. JAC

STRIKES AT IRAQ A BLOW TO RUSSIA'S WORLD POWER STATUS?

Influential businessman Boris Berezovskii told Interfax that with the onset of the air strikes, "Russia joined a number of countries that don't have to be reckoned with." One of Berezovskii's arch foes, Zyuganov, agreed, saying that the U.S. does not reckon with Russia as a major nation. Ingushetian President Ruslan Aushev echoed the general sentiment, concluding that the "United States has once again showed who is the master in the world, while Russia showed its weakness." JAC

DUMA PASSES MORE PSA LEGISLATION

After a two-year delay, the State Duma passed in the second reading a package of amendments to the production sharing agreement (PSA) law on 17 December. The vote was 342 in favor and 12 opposed. The amendments will bring 12 federal laws into compliance with the PSA law and are expected to give new impetus to foreign investment in Russia's oil sector, which has been languishing in part because of unfavorable tax treatment. Last week, the Duma passed another set of amendments to the PSA law in what was widely perceived to be a breakthrough in a long legislative stalemate (see "RFE/RL Newsline," 10 December 1998). President Yeltsin is expected to approve both bills. JAC

NEW ROUND OF DEBT TALKS PROMISES TO BE TENSE

Russian government officials and international bank representatives on 17 December began a new round of talks on the terms for resettling debt from the government's defaulted short-term treasury bonds (GKOs). In an interview with the "Financial Times," Finance Minister Mikhail Zadornov said "only technical issues" remain to be resolved. However, discussion of these "technical issues" promises to be heated, since the first item on the bankers' long agenda for their talks is their contention that the government is trying to set terms unilaterally, according to Reuters. MFK Renaissance wrote in one of its reports that the "concerns of foreign holders of GKOs have now been placed a long way down the list of priorities," after the budget and restructuring of foreign debt, the "Moscow Times" reported on 18 December. The government announced earlier that it will reimburse only 5 percent of the its defaulted debt in cash--half the amount previously pledged. JAC

LUKASHENKA WINDS UP RUSSIAN TRIP...

Belarusian Alyaksandr Lukashenka finished a two-day trip to Russia on 17 December after meetings with Prime Minister Primakov, Central Bank Chairman Viktor Gerashchenko, and President Yeltsin. Lukashenka told reporters that a "concrete decision" on whether Belarus will switch to a common or a single currency with Russia will be reached soon. According to Lukashenka, Gerashchenko supports the introduction of a common currency, such as the so-called "transfer ruble," which would then be followed by a single currency. Lukashenka also promised that in the near future Russia and Belarus would sign an agreement offering businesses in both countries equal economic conditions, such as the right to pay the same railway tariffs. On 17 December, Primakov and Belarusian Prime Minister Syarhey Linh signed an agreement establishing a new method of paying for Russian gas with foodstuff from Belarus. JAC

...AND COMMENTS ON ANTI-SEMITISM...

Asked about the increasing controversy over anti-Semitism in Russia, Lukashenka echoed the official response of Russia's Communist Party. He told Mayak Radio on 16 December that "the problem of anti-Semitism has been engendered by Jews themselves, the ones who work for mass media." He added that he "would not allow the mass media to fan up these problems the way it is being done in your country." JAC

...WHILE FINANCE MINISTER SAYS BELARUS CAN TAKE RUBLE OR LEAVE IT

Finance Minister Zadornov told Ekho Moskvy that idea of a transferable ruble is a non-starter and that the only way Belarus could unite its currency with Russia would be to adopt the Russian ruble, Russian tax legislation, and the monetary policies followed by the Russian Central Bank. Lukashenka did not meet with Zadornov during his visit. "Nezavisimaya gazeta" argued that although the idea of a union between the two countries is supported by public opinion as well as the new Russian government, "it is no longer possible to speak for certain of the possibility of closer unification" because "the Belarusians and Russians hold very different opinions of the conditions for such unification." JAC

ZHIRINOVSKY TO RUN FOR GOVERNOR OF SVERDLOVSK?

LDPR leader Zhirinovsky announced that he will compete in the August 1999 gubernatorial elections in Sverdlovsk Oblast, according to "EWI Russian Regional Report" on 17 December. According to the report, the LDPR's popularity in the oblast is growing and a number of mayors in small towns and several enterprise heads have joined the party. Earlier, Zhirinovsky announced his plans to run for governor of Leningrad Oblast, a move that spurred slain Duma deputy Galina Starovoitova to enter the race (see "RFE/RL Newsline," 28 September 1998). However, those elections have been postponed. According to the report, Zhirinovsky will launch his campaign at the LDPR conference on 19 December. JAC

ORPHANAGES VIOLATING HUMAN RIGHTS ROUTINELY

Tens of thousands of Russian children abandoned by their parents live in orphanages where conditions can be prison-like or worse, Human Rights Watch revealed in a report released on 16 December. According to the report, at least 30,000 children in orphanages for the severely disabled are treated in violation of UN covenants and international human rights; some never learn to walk and are confined to bed or tied to furniture. Children deemed normal are often kept in dark rooms or sedated without medical supervision. About 40 percent of the 15,000 children released from orphanages annually become homeless, according to data released by the Prosecutor-General's Office, AP reported. About 40 percent commit crimes, 30 percent become alcoholics or drug addicts, while 10 percent commit suicide. JAC

PRESS HARRASSMENT IN KALMYKIA CONTINUES

Kalmykian authorities are continuing to harass the editors and publishers of the opposition newspaper "Sovetskaya Kalmykia Segodnya," according to "Nezavisimaya gazeta" on 16 December. Gennadii Yudin detailed the government's efforts to curb the newspaper at a Moscow news conference. Yudin became the newspaper's editor after the former editor in chief, his wife, Larisa Yudina, was killed under mysterious circumstances six months ago (see "RFE/RL Newsline," 9 June and 26 August 1998). JAC

CHECHENS CALL ON PRESIDENT TO NEUTRALIZE OPPONENTS

Participants in a mass demonstration in Grozny on 17 December called on Aslan Maskhadov to expel from Chechnya foreign armed groups, crack down on criminal gangs, and neutralize field commander Arbi Baraev and his men without resorting to force, Interfax reported. They also said Maskhadov should rein in his radical Islamist deputy, Vakha Arsanov, if necessary by abolishing the post of vice president. Addressing the demonstrators, Deputy Prime Minister Turpal Atgeriev said the deteriorating situation in Chechnya was to be blamed on defeated presidential candidates Shamil Basaev and Zelimkhan Yandarbiev, whom he accused of supporting criminal elements. Atgeriev added that a coup is being prepared in Chechnya but he did not say by whom, according to Interfax. Speaking on Chechen Television on 17 December, Maskhadov vowed to liquidate all illegal armed formations by exclusively legal means, without resorting to large-scale combat operations, ITAR- TASS reported. LF




SOME CIS CENTRAL ASIAN STATES CRITICIZE ATTACKS ON IRAQ...

Kazakhstan's Foreign Ministry issued a statement on 17 December expressing "deep regret and concern" over the U.S. and British missile attacks on Iraq, ITAR-TASS reported. That view was shared by the Kyrgyz Foreign Ministry, while the country's Muftiat roundly condemned the attack, which is taking place in the month that is "sacred to all Muslims," alluding to the start of Ramadan at sunset on 19 December. The Tajik Foreign Ministry said the next day that it is "alarmed" by the strikes and that it hopes military action will cease immediately. BP

...WHILE OTHERS EXPRESS UNDERSTANDING, SUPPORT

Richard Morningstar, the U.S. presidential adviser on energy in the Caspian region, said at a press conference in Ashgabat, on 17 December, that Turkmen President Saparmurat Niyazov "expressed understanding for the reasons behind U.S. bombing of Iraq," Interfax reported. Uzbek President Islam Karimov said the next day that "what occurred in the Persian Gulf was to be expected." Karimov added, however, that it was "a pity" the attacks were launched without the UN's sanction," ITAR-TASS reported. BP

ARMENIA, GEORGIA RESPOND TO IRAQI BOMBINGS

Armenian Foreign Minister Vartan Oskanian told journalists in Yerevan on 17 December that the U.S. and British air strikes against Iraq "are of serious concern to the Armenian government," RFE/RL's Yerevan bureau reported. "We hope that the bombardment will be halted very quickly and the problem will be solved by diplomatic means," he said. In Tbilisi, Georgian President Eduard Shevardnadze called for an immediate meeting of the UN Security Council "to ensure the unconditional fulfillment of [the council's] resolutions," ITAR-TASS reported. Shevardnadze said that events in Abkhazia testify to the "tragic consequences" of non- fulfillment of UN Security Council resolutions. LF

U.S. PROMISES FINANCIAL SUPPORT FOR TURKMEN PIPELINES

Morningstar, the U.S. presidential adviser on energy in the Caspian region, said in Ashgabat that the U.S. Exim Bank and the Overseas Private Investment Corporation are prepared to finance the Transcaspian gas pipeline and insure it against "political risk," ITAR-TASS reported. Morningstar said many U.S. companies have come forward with proposals for the project. He said much depended on creating an "atmosphere of mutual trust," which is why the U.S. is ready to act as a "mediator" between Turkmenistan and Azerbaijan in their dispute over sectors s of the Caspian Sea. Morningstar said he received promises of support for the project from Azerbaijani leaders when he visited Baku on 16 December (see "RFE/RL Newsline," 17 December 1998). BP

NAZARBAYEV SAYS IT'S HIS "DUTY" TO ENSURE FAIR ELECTIONS

Kazakh President Nursultan Nazarbayev said in a statement released in Astana on 17 December that it is "my duty to draw the attention of all state power structures...to the need to avert any illegal interference with the election process and create equal conditions for all candidates" during the campaign for the 10 January presidential elections, "Nezavisimaya gazeta" reported. Nazarbayev continued that "some insignificant irregularities, not affecting the election campaign as a whole, have been reported." He added that "any officials standing in the way of presidential candidates, electoral commissions, observers or electoral headquarters, will be held accountable." BP

CASPIAN LITTORAL STATES FAIL TO REACH AGREEMENT

Meeting in Moscow on 16-17 December, deputy foreign ministers of Russia, Iran, Azerbaijan, Kazakhstan, and Kyrgyzstan narrowed but failed to resolve their disagreement over how to divide the sea into national sectors, Reuters and Interfax reported. Russia and Kazakhstan continue to advocate dividing the seabed into national sectors, leaving the waters for common use. Azerbaijan and Turkmenistan want to divide both the seabed and the waters into such sectors. Iran signaled at the meeting that it might agree to that approach, which it had previously rejected, but only on condition that all national sectors of the sea are of equal size. Under the present delineation, the national sectors vary in size. A third meeting of the deputy foreign ministers' working group will be held in May in Tehran. LF

ARMENIA REAFFIRMS COMMITMENT TO MEDZAMOR CLOSURE

Speaking in Yerevan on 17 December following the annual meeting of the EU- Armenia commission, Armenian Foreign Minister Oskanian said Armenia will abide by its commitment to shut down the Medzamor nuclear power plant by 2004, RFE/RL's Yerevan bureau reported. An EU statement said the two sides will create a working group to study the prospects for developing alternative sources of energy. Medzamor currently generates some 35 percent of Armenia's electricity. EU officials announced some ECU 50 million ($58.8 million) in new grants and loans to Armenia, raising the total amount of EU aid to Armenia since 1991 to more than ECU 250 million. LF

TALKS ON ABKHAZ CONFLICT OPEN IN GENEVA

Liviu Bota, UN Secretary-General Kofi Annan's special envoy to Georgia, told journalists in Geneva on 17 December that the security situation in Abkhazia is "rapidly deteriorating," Reuters reported. Bota said that the incidence of terrorist activities is increasing and rumors are circulating of a possible resumption of hostilities (see "RFE/RL Caucasus Report," Vol. 1, No. 42, 16 December 1998). Georgian Minister of State Vazha Lortkipanidze and Abkhaz Premier Sergei Bagapsh began two days of behind-closed-doors talks on 17 December that will focus primarily on the repatriation to Abkhazia of ethnic Georgian displaced persons, which Bota termed "a humanitarian priority." U.S., French, British, German, Russian, and OSCE representatives are also present at those talks. LF

SUPPORTERS OF DECEASED GEORGIAN PRESIDENT ARRESTED

Several hundred police rounded up supporters of former President Zviad Gamsakhurdia who were staging an unsanctioned protest demonstration on 17 December outside the parliament building in Tbilisi, Caucasus Press reported. The demonstrators were demanding that the building be turned over to what they called the legitimate Georgian parliament elected in November 1990. Gamsakhurdoia's supporters had a clear majority in that parliament. Most of the demonstrators were transported several kilometers outside Tbilisi and then released. LF

AZERBAIJAN, TURKEY TO FUND BAKU-CEYHAN PIPELINE?

Addressing members of the youth organization of the ruling Yeni Azerbaycan party on 17 December, Ilham Aliev, son of the Azerbaijani president, said that Azerbaijan and Turkey may jointly fund construction of the proposed Baku-Ceyhan pipeline for Azerbaijan's Caspian oil if the Azerbaijan International Operating Company (AIOC) which is engaged in extracting that oil, declines to do so, Turan reported. The AIOC has repeatedly postponed making a firm commitment to the pipeline, saying the estimated cost of $3.5 billion is not viable. Ilham Aliyev also denied categorically that he will accept the post of chairman of the Yeni Azerbaycan party. LF




LUKASHENKA CONDEMNS BOMBING OF IRAQ

Belarusian President Alyaksandr Lukashenka said in Moscow on 17 December that the U.S. and British air strikes against Iraq are "bandit actions" that would never have happened had the Soviet Union existed, Reuters reported. "We have never been so powerless as we are today to oppose such actions," he told a news conference after talks with President Boris Yeltsin. He added that the U.S is behaving "like the master of the house, and a bad master at that." Kyiv had said the same day that it cannot agree to the strikes (see "RFE/RL Newsline," 17 December 1998). JM

WHILE OTHER LEADERS EXPRESS SUPPORT

Estonian President Lennart Meri said the strikes were "an inevitable step," while the Estonian Foreign Ministry commented it considers them "justified." The Latvian Foreign Ministry said it "understands the U.S. and British actions." Lithuanian President Valdas Adamkus said he resolutely supported the strikes, while Vilnius termed the strikes "inevitable active deterrents." Polish President Aleksander Kwasniewski said that "serious circumstances" had compelled the U.S. and Britain to take action. A spokesman for Vaclav Havel said the Czech president "understands the reasons" for the strikes. Slovak Foreign Minister Eduard Kukan said Bratislava "agrees with the hard measures." A Hungarian Foreign Ministry spokesman Gabor Horvath said Hungary "understood the necessity" of the action. Romanian President Emil Constantinescu said his country "regrets" the use of force but understands that "no other solution was possible under the circumstances." And . Bulgarian Foreign Minister Nadezhda Mihailova said Sofia is waiting for a "speedy solution" to the crisis and the "suspension of military operations." JC/JM/MS

MINERS IN LUHANSK OBTAIN BACK WAGES, HALT SIX-MONTH PICKET

Following the attempted storming of the regional administration building in Luhansk by picketing miners (see "RFE/RL Newsline," 17 December 1998), the Coal Mining Ministry has transferred 1.4 million hryvni ($400,000) to pay back wages, Ukrainian Television reported. Some striking miners in Luhansk Oblast will receive payment only after a month, however. In the meantime, miners have dismantled a tent camp where they had lived for nearly six months in order to picket the Luhansk administration building to demand the payment of wage arrears. JM

FORMER UKRAINIAN PREMIER FREED ON BAIL

Pavlo Lazarenko, who heads Ukraine's opposition Hromada, was freed from a jail in Geneva, Switzerland, on 18 December after posting bail of 4 million Swiss francs ($3 million), AP reported. Lazarenko was arrested on 3 December in connection with a money-laundering investigation. Lazarenko has admitted moving money to Swiss accounts but claims he can prove those funds have no criminal connections. He maintains that by accusing him of illegally transferring money to Switzerland, the Ukrainian government wants to discredit him in advance of next year's presidential elections. JM

FRANCE INSPECTS EVICTED AMBASSADOR'S RESIDENCE IN MINSK

Several French diplomats on 17 December visited the Drazdy housing compound for the first time since their eviction in June, RFE/RL's Belarusian Service reported. That visit appears to be the first step in implementing the recently adopted EU-Belarus agreement on the conclusion of the diplomatic housing conflict (see "RFE/RL Newsline," 15 December 1998). The agreement stipulates that the evicted EU ambassadors will have limited access to their former residences at Drazdy in order to inspect their belongings. A source in the German embassy in Belarus told RFE/RL's Minsk correspondent that the German ambassador is planning to return to Minsk on 15 January, as are envoys from Britain, France, Greece, and Italy. JM

ESTONIAN PRESIDENT PROMULGATES CITIZENSHIP LAW AMENDMENTS

Lennart Meri on 17 December promulgated amendments to the citizenship law that will facilitate the granting of citizenship to stateless children born in the country to stateless parents, ETA reported. The amendments were passed earlier this month and will go into effect on 12 July 1998. JC

BABURIN SAYS IT'S SPRINGTIME IN RUSSIAN-LATVIAN RELATIONS

Russian State Duma Deputy Speaker Sergei Baburin told his Latvian counterpart, Gundars Bojars, during a meeting in Moscow on 17 December that "springtime has come in Russia's relations with Latvia," BNS reported. Baburin said that he "personally regards Latvia as being a step ahead of Lithuania and Estonia in respect of improving its relations with Russia." And he added that the problems the two countries had in the past have been "nearly settled." Bojars commented that Baburin, who was previously well- known for his skepticism vis-a-vis Latvia, has now changed his attitude. JC

LITHUANIA, POLAND TO COOPERATE ON EUROPEAN INTEGRATION BIDS

Polish Prime Minister Jerzy Buzek and Lithuanian Prime Minister Gediminas Vagnorius signed an agreement in Vilnius on 17 December pledging mutual support for NATO and EU membership. Poland is to join the alliance in 1999 and is one of five East European countries to have begun entry negotiations in the EU's current round of expansion. Lithuania has applied for membership in both alliances but has not yet been invited to join either organization. However, it is considered to be a frontrunner among candidates for a possible second wave of NATO expansion. The agreement states that "Poland will offer political and practical assistance to Lithuania's bid for NATO membership as soon as possible." JC

POLISH PARLIAMENT OVERRIDES PRESIDENTIAL VETO ON SECRET FILES BILL...

The parliament voted by 282 to 164 on 18 December to override the presidential veto on the bill providing for the opening of communist-era secret police files (see "RFE/RL Newsline," 4 December 1998), AP reported. The Solidarity-led coalition scored a major victory over leftist President Aleksander Kwasniewski by mustering the support of the opposition Peasant Party (PSL). The coalition has agreed to the PSL's proposals to make some minor amendments to the bill. In particular, the PSL insisted that the head of a screening body-- the Institute of National Remembrance--be elected by a 60 percent parliamentary majority instead of a simple majority. JM

ADOPTS BILL ON DEPLOYING TROOPS ABROAD

The parliament on 17 December voted by 234 to 43 with 136 abstentions to pass a law on the deployment of Polish military forces abroad. Under the bill, the decision to send Polish troops to foreign countries will be taken by the president following a motion by the cabinet or the prime minister. The legislators did not pass an amendment proposed by the opposition Democratic Left Alliance whereby the decision would require the parliament's approval. JM

SLOVAK CULTURE MINISTER REINSTATES THEATER DIRECTOR

Milan Knazko has reinstated Dusan Jamrich as director of the Slovak National Theater, the Culture Ministry announced on 17 December. Knazko also apologized to all artists and cultural institutions that had suffered injustice under former Culture Minister Ivan Hudec, CTK reported. Jamrich was dismissed by Hudec in October 1996 for alleged shortcomings in handling the 25 million crowns allotted for the construction of a new building for the theater. His dismissal triggered protests by theater artists, which developed into a large strike. The ministry said in a press release that it will "not divide culture personalities into 'ours' and 'the others,' into 'pro-Slovak and anti-Slovak.'" It added that it will "not take into account their political affiliation, views, and positions" and called on all artists to "cooperate and share responsibility for the development of Slovak culture." MS

HUNGARIAN EXTREMIST LEADER WANTS FOREIGNERS OUT OF MEDIA

Istvan Csurka, chairman of the far-right Hungarian Justice and Life Party, has urged the establishment of a "national press," Hungarian media reported on 17 December. He proposed the banning of advertisements in foreign-owned papers so that "foreign owners will leave the country sooner or later." Csurka also said his party supports a proposal to screen journalists for possible involvement with the communist-era secret services. As a member of the parliament, Csurka was obliged to appear before screening judges on 16 December. He admitted that in 1957 he was recruited as an informant by the internal intelligence department of the security services. He claimed, however, that he had informed on no one. MSZ




RUGOVA WARNS OF EXTERMINATION'

Kosovar shadow-state President Ibrahim Rugova said at RFE/RL in Prague on 18 December that the Serbian forces "will be able to exterminate [the Kosovars] in the spring in a couple of days if they want to." For that reason, he stressed, the shadow state is concentrating its efforts on obtaining a negotiated interim political settlement with the help of the international community. He said that the Kosovars will display "maximum flexibility" in the talks, and that they realize that they have no alternative but to deal with Yugoslav President Slobodan Milosevic as the chief Serbian representative. Rugova said that the Serbian opposition is "fragmented" and that it has the same policies toward Kosova as Milosevic. Time is of the essence in solving the Kosova question, and the Kosovars cannot wait for the democratization of Serbia, Rugova concluded. PM

STRESSES INDEPENDENCE

Rugova also said that his Democratic League of Kosova remains committed to achieving independence. He denied that an independent Kosova would soon join Albania to form a greater Albania because, as he put it, Kosova is multi-ethnic and has Serbian, Montenegrin, and other minorities. Rugova added that independence would be best "for Kosova, for the local Serbs, and for Serbia." He argued that Kosova in practice had the status of a republic in the former Yugoslavia and that it consequently has the rights of a republic, including that of secession. Rugova pointed out that regional integration is currently a topical issue throughout Europe and that he can envision groups of Balkan states joining together in regional cooperation projects. PM

TAKES ISSUE WITH UCK

The Kosova Liberation Army (UCK) is made up of fragmented and widely dispersed groups, including some extremists who are not controlled by anyone, Rugova noted. He stressed that some observers have greatly overstated the strength of the UCK because those observers mistook farmers taking up guns to defend their homes for organized guerrillas. Those farmers, he added, have now gone home. Rugova defended his long-standing policy of non-violence and said that it has achieved much, including the organization of extensive education and health care systems. He added that Kosovar society and his shadow state are secular and religiously tolerant. Rugova pointed out that Kosova's ethnic Albanian population has a Roman Catholic minority in addition to the Muslim majority and that Orthodox ethnic Albanians there have, for the most part, taken Serbian nationality. PM

THREATS IN SERBIA AGAINST OSCE MONITORS

The government-run daily "Borba" on 17 December called for the withdrawal of international verifiers and U.S. envoys from Kosova. The text charged that the foreigners are "direct instigators and helpers of the crimes committed by [ethnic] Albanian terrorists." The commentary urged the foreigners to "go and relieve us of their help. They should return to their homes and defend them against terrorists, separatists, and rapists." Meanwhile in Prishtina, some 300 local Serbs protested that monitors did not respond sufficiently to the recent killings of six Serbian youths in a bar in Peja (see "RFE/RL Newsline," 17 December 1998). The Serbs chanted in reference to the monitors: "Put them in chains!" PM

UCK VOWS REVENGE

The UCK said in a statement in Prishtina on 17 December that it will take revenge for the recent killing of 36 Kosovars near the Albanian frontier by Serbian forces. The text added that the UCK had nothing to do with "the miserable murders of Serbian youths in a Peja caf. We are convinced that this is the act of the Serbian secret police and the military," AP quoted the document as saying. PM

SERBIAN MAYOR FOUND DEAD

Serbian police killed at least two Kosovars and arrested 34 in several areas of western Kosova on 17 December as part of a roundup in the wake of the murders in Peja. The next morning, Zvonko Bojanic, the mayor of Fushe Kosova, was found dead on the main east-west highway near Prishtina, the Serbian Media Center reported. The pro-Belgrade news agency did not say who found the body but noted that his family saw masked men abducting him from his home in a nearby village the previous day. PM

SERBS SHUT DOWN ONE KOSOVAR DAILY

"Bujku," which is the oldest Albanian-language daily published in Prishtina, did not appear on 18 December after unidentified persons cut off the electricity at its printing plant and offices. The previous day, Serbian Interior Minister Aleksandar Vucic warned "Bujku," "Koha Ditore" (the other main independent daily), and other Albanian-language periodicals in a letter that they risk legal measures under Serbia's recent media law unless they change their editorial policy to "respect the territorial integrity" of Serbia. Vucic also charged that some periodicals "directly instigate terrorism," which may refer to the policy of the two dailies to publish declarations issued by the UCK. PM

BUT ANOTHER REMAINS DEFIANT

Veton Surroi, who is Kosova's best- known journalist and the editor-in-chief of "Koha Ditore," said in a statement on 17 December that in his letter Vucic did not give concrete examples of wrongdoing by the Kosovar periodicals. Surroi added that Vucic criticized one periodical that has not appeared for months, as well as one that is slated to begin publishing only in March. The editor also noted that Vucic's letter to the Kosovar journalists sounded very similar to one he sent to independent Serbian newspapers before he shut them down (see "RFE/RL Balkan Report," 25 November 1998). Surroi concluded that Vucic's real goal is to shut down "Bujku" and "Koha Ditore" as soon as possible. PM

ALBANIAN STUDENTS RESUME HUNGER STRIKE

About 50 students resumed a hunger strike on the Tirana university campus on 17 December just hours after police broke up the protest (see "RFE/RL Newsline," 17 December 1998). The students called for the government to resign, Reuters reported. Prime Minister Pandeli Majko said on public television on 17 December that the government used force to evict the students after it received unspecified intelligence reports that unnamed terrorists were planning an attack against the students. He added that doctors had discovered a hepatitis infection among the strikers and that the police intervention came to "safeguard the lives of the students." The same day, opposition leader Sali Berisha spoke to some 1,000 supporters of the striking students. He pledged to "defend the ideals of the Albanian nation and of democracy," adding that "this is the day of the students' victory over the criminal government." FS

BERISHA DEFIES ALBANIAN PROSECUTORS

Berisha issued a statement on 17 December saying that he will ignore a summons to testify before prosecutors over accusations that he was involved in the 14 September coup attempt (see "RFE/RL Newsline" 17 December 1998). Prosecutor-General Arben Rakipi recently ordered Berisha to appear for interrogation on 18 December, but Berisha charged Rakipi with being a "political prosecutor" and said he will respond to the charges only "in public," AP reported. Berisha has ignored previous summons to appear as a witness but is obliged by law to testify now that he has been classified as a defendant. FS

ALBANIAN SATELLITE TV PROGRAM BANKRUPT

The Paris-based company Eutelsat has sent a letter to Albanian public television (RTSH) warning that Eutelsat will shut down RTSH's daily satellite television transmission for Kosova unless RTSH pays its $2.4 million debt, "Koha Jone" reported on 17 December. RTSH broadcasts the satellite program in cooperation with the Kosova shadow state but does not interfere in the work of the Kosovar editors. According to Albania's new broadcasting law, financing a satellite program for ethnic Albanians abroad is the responsibility of the Albanian government. RTSH is responsible for financing only its domestic program. The Albanian and Kosovar authorities, however, have disagreed over financing the Kosovar program. FS

ROMANIAN GOVERNMENT TO APPEAL COURT DECISION ON 'MULTICULTURAL' UNIVERSITY

The government on 17 December announced it will appeal the decision of a Bucharest court one week earlier ruling that the setting up of a "multicultural" Hungarian-German university is unconstitutional and unlawful, RFE/RL's Bucharest bureau reported. Also on 17 December, the Party of Romanian National Unity, which had appealed to the Bucharest court, announced it will challenge in court the Senate-approved article of the public administration law granting national minorities the right to use their mother tongue in contacts with authorities in localities where those minorities make up at least 20 percent of the population (see "RFE/RL Newsline," 11, 15, and 16 December 1998). MS

ROMANIAN MINERS PROTEST PITS' CLOSURE

Miners in the Jiu Valley went on strike on 17 December to protest the decision to close unprofitable pits, RFE/RL's Bucharest bureau reported. Miners at the Baia de Aries mines refused to descend into pits in protest against the decision to cut off the Apuseni Mountains mines from the power grid owing to the mines' unpaid debts. Also on 17 December, Industry and Trade Minister Radu Berceanu announced that 19 loss-making mines belonging to the Minvest company will be closed down. Some 3,000 of the 16,000 Minnvest miners will be laid off as a result of that decision. MS

ROMANIAN PARLIAMENT APPROVES ANTI-MONEY LAUNDERING LAW

The chambers of the parliament approved in a joint session on 17 December a law prohibiting money laundering, Mediafax reported. A National Office for Preventing Money Laundering is to be set up under the legislation. Banks have to notify the office of any operation in excess of ECU 10,000 ($11,700). The office will also supervise casinos and pawn shops. In other news, representatives of Renault and the government on 17 December approved a memorandum on the privatization of the Dacia car-making plant in Pitesti. Under the deal, to be concluded in January 1998, Romania undertakes not to import used cars until 2005, not to impose a profits tax on Renault for 10 years and not to impose customs on machinery imported by the company. MS

BULGARIAN GOVERNMENT APPROVES AMENDMENTS TO ARMS TRADE CONTROL LAW

The cabinet on 17 December approved amendments to the law on arms trade control, BTA and Reuters reported. The amendments envisage stiffening prison sentences to between three and six years and fines of up to 100 million leva ($60 million) for trading, transporting, and facilitating unlicensed exports of arms. Bulgarian arms traders have frequently been accused of violating international arms embargoes, but the authorities said all transactions have been carried out with countries that were not embargoed and with legal buyers. The amendments also allow foreign firms registered in Bulgaria to hold majority stakes in arms trading firms, lifting a previous limit of less than 50 percent. MS




CZECH ECONOMY CONTINUES TO WORSEN


by Jolyon Naegele

The Czech Republic's economic difficulties, which began some 20 months ago, are worsening.

The Czech Statistical Office reported this week that during the third quarter of this year, gross domestic product shrank by 2.9 percent and that for the first nine months of the year, it was down 2.1 percent, compared with the same period last year.

Prime Minister Milos Zeman, commenting on those statistics, said "we are falling into an abyss." He blames the policies of the two previous governments of Vaclav Klaus and Josef Tosovsky. Zeman dismisses Klaus's much touted privatization as "fiction" and says virtually no real privatization has occurred. He told the pro-government daily "Pravo" on 16 December that his cabinet needs nine months of calm without criticism to enable it to start turning the economy around.

Klaus, who is now speaker of the lower house of parliament, says the decline in GDP only confirms just how dramatic the Czech situation is and the importance of finding a way out. Klaus blames restrictive Central Bank policies for the decline. Tosovsky, his immediate successor as premier, is head of the Central Bank.

Central bank spokesman Martin Svehla concedes that the drop in GDP is worse than expected and predicts a further decline.

Zeman, Klaus, Tosovsky, and trade union leader Richard Falbr met last week in a bid to find a mutually acceptable solution to the country's growing economic crisis. All but Tosovsky agreed that economic growth should be the top priority. Tosovsky said he still views the continuation and completion of economic transformation as the main priority. He argued that without this condition being met, growth, if any, can be only short-term, and "will soon run out of breath." He said the revival of economic growth requires "cultivating the market environment." Tosovsky rejected any urgent need to review current economic priorities.

Zeman says any measures must involve changes that go "far deeper than mere financial support." This week he repeated that his government plans to privatize the state's share in banks within two years and to begin by taking over certain bad loans.

Czech firms currently owe Czech banks and one another some $6.333 billion dollars. Most of this debt ($3.79 billion) is owed by Czech industry.

There are many reasons for the huge debts. In the early post-Communist years, banks remained in state hands with minimal changes of personnel at the top. They issued loans to inexperienced entrepreneurs--largely managers at state-owned firms and former bureaucrats--which enabled them to purchase these firms and other properties such as real estate.

Critics call this practice "crony capitalism," since prospective borrowers outside the former communist nomenklatura had considerably poorer chances of getting a loan than did "insiders," who were routinely lent large sums with inadequate controls. In many cases these borrowers took out several loans from different banks on the same collateral or else quickly resold the properties without having paid for them and without repaying the loans.

Inadequate legislation has enabled debtors, who elsewhere would have long ago declared bankruptcy, to remain commercially active by merely transferring their funds to newly founded independent subsidiaries. Private debtors rescue their holdings by transferring their savings, homes, and other properties to a spouse or others.

One Austrian financial analyst in Prague, Guenther Faschang of Die Erste Bank, told "Lidove Noviny" this week that about 30 percent of all outstanding loans in the Czech Republic are unrecoverable. In his words, "Prague has practically no other way of getting out of the problem other than through privatization". He says the Czech state just does not have enough money to help the banks out.

The head of Zivnostenska Banka, Jiri Kunert, told the newsweekly "Respekt" that "every bank that lent to the new owner of a firm...must have known that these people had to 'tunnel' the firm or else default" to pay back the loan. (Tunneling means to sell off or transfer the company's assets.) He said the problem of all semi-state banks is that they granted huge loans to people privatizing Czech enterprises without first demanding an evaluation of the firms in question.

The two banks that have extended the most bad loans, Komercni Banka and Ceska Sporitelna (CS), the country's largest savings bank, experienced losses during the first half of this year totaling $550 million.

CS has confirmed that it has the equivalent of $2 billion in bad debts. The bank said it is preparing to restructure $1.166 billion in assets and predicted a $233 million loss for this year. CS Director-General Jaroslav Klapal says 1999 will be just as difficult for his bank as it will be for the entire Czech economy. The author is an RFE/RL correspondent based in Prague.


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