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Newsline - June 1, 2001




CAPITAL FLIGHT SLOWS BUT STILL GREATER THAN FOREIGN INVESTMENT IN RUSSIA

According to figures released by the State Statistics Committee on 31 May, Russian investment abroad fell to $3.11 billion in the first quarter of 2001 from $3.66 billion in the same period in 2001, Interfax reported. But the current figure still exceeds foreign investment in Russia during the first quarter by $396 million. The committee also reported that Russians are spending a smaller percentage of their incomes on purchasing foreign currency, 6 percent in the first four months of 2001 as against 7.1 percent in the same period in 2000. PG

TAX SYSTEM SAID TO FORCE BANKS TO HIDE PROFITS...

According to an article in "Nezavisimaya gazeta" on 31 May, Russian banks are forced by the existing tax system, which requires them to pay 43 percent on profits, to hide their earnings frequently by fraudulent accounting methods. Meanwhile, an article in "Izvestiya" the same day said that many large Russian firms want to improve corporate governance, including the protection of minority stockholders and improved auditing, but that the government acts in ways that makes it impossible for those firms to do so. PG

...AS 40 PERCENT OF REGISTERED FIRMS DON'T PAY TAXES...

In an interview published in "Nezavisimaya gazeta" on 31 May, Federal Tax Service Director Mikhail Fradkov said that approximately 40 percent of registered firms do not pay taxes. Moreover, he said that capital flight is continuing at a rate of $1.5 billion a month. He said that the country's banks are the worst offenders in this regard but that the exporters of oil and gas and other natural resources are also involved. PG

...AND TAX INSPECTORS FOCUS ON BANKS, INSURANCE COMPANIES

A special tax inspection body has been set up in Moscow to track the payment records of more than 1,500 banks and insurance companies, Interfax-AFI reported on 31 May. PG

PUTIN REASSURES BUSINESS LEADERS

Prior to his departure for the Minsk CIS summit, President Vladimir Putin met on 31 May with leading Russian businessmen and said that he wants to reduce tax burdens on business and plans to liberalize current regulations, albeit "slowly and cautiously." Putin noted that preventing capital flight requires greater liberalization of the country's economic system rather than the imposition of new controls. The business leaders who participated said they hope that such meetings will become regular events. VY

NEW REFORMS SAID DRIVEN BY 1985-TYPE CRISIS

An article in "Izvestiya" on 31 May argues that the current situation in Russia "recalls that which existed in the USSR at the time of the coming to power of Mikhail Gorbachev." Now, as then, the article says, people in power are facing up to just how serious the country's problems are, but as then, they are now seeking solutions without having a clear plan of what they should do. In an interview published by "Izvestiya" the same day, Mikhail Gorshkov of the Russian Independent Institute of Social and Nationality Problems, said that the apathy of the overwhelming majority of Russians to their current situation both resembles their feelings in the past and represents a greater threat to Russia's future than protests would. PG

GOVERNMENT TO TAKE MORE ACTIVE ROLE IN GAZPROM

Dmitrii Medvedev, who represents the government in the Gazprom leadership, said in an interview published in "Vedomosti" on 31 May that the government will increase its positions not only in the executive positions of the company but also on the board of directors. PG

KASYANOV SEEKS DELAY IN RATIFICATION OF FOREIGN INVESTMENT ACCORDS

Prime Minister Mikhail Kasyanov has asked the Duma to suspend ratification of agreements on investment protection that Moscow has signed with a number of foreign countries, "Vedomosti" reported on 31 May. He said that some of the provisions stand in the way of Russia's application to join the World Trade Organization and others call for protection of foreign investments that Moscow is not in a position to guarantee. VY

RUSSIA SEEKS EXTENSION FOR DESTRUCTION OF CHEMICAL WEAPONS

Sergei Kirienko, the presidential envoy to the Volga federal district, said on 31 May that Russia will not be able to meet the deadlines for destroying chemical weapons to which it earlier agreed and will seek an extension to the year 2012, Interfax reported. Russia earlier agreed to destroy all such weapons by 2007, but it now lacks the funds to do so, Kirienko said in a presentation to the first meeting of the state commission on chemical disarmament. PG

DUMA DEPUTY WOUNDED IN INGUSHETIA

Duma Defense Committee Deputy Chairman Aleksei Arbatov (Yabloko) was wounded when the helicopter he was riding in was fired upon in Ingushetia on 31 May, Interfax reported. He had been visiting Chechnya and was on his way back to Moscow. The pilot of the craft died of his wounds. PG

BEREZOVSKY SAYS RUSSIA NEEDS A LIBERAL OPPOSITION

Embattled media magnate Boris Berezovsky told NTV on 31 May that Russia needs "a real and not a pocket opposition," including a liberal one, Interfax reported the same day. Berezovsky confirmed that he earlier met with two Union of Rightist Forces (SPS) leaders, but said that his impression of that party is not favorable because its views sometimes fail to set it apart from groups on the left. PG

UNITY, FATHERLAND CONTINUE DISCUSSIONS

Unity leader Sergei Shoigu met with Fatherland leader Yurii Luzhkov to discuss how their two organizations will cooperate and whether they can merge at some point in the future, Russian agencies reported on 31 May. In an interview published in "Nezavisimaya gazeta" on the same day, Unity Duma faction leader Vladimir Pekhtin said that the search for common ground between the two parties is moving in the right direction and that those who predict its collapse are wrong. But in another interview published in the same issue of that paper, Aleksandr Vladislavlev, the secretary of Fatherland's Political Council, said that there is no reason to accelerate the process of cooperation. He noted that cooperation between the two parties has many opponents, including some in the Kremlin. PG

DUMA COMMITTEES APPROVE DRAFT ANTITERRORISM LAW

The Duma security, legislation, and state construction committees have approved antiterrorism legislation submitted by the government, Interfax reported on 31 May. The bill would increase the time persons suspected of terrorism could be held without charges being brought and expands the kinds of information that could be used to bring charges of terrorism against individuals and groups. PG

FEW RUSSIANS KNOW ABOUT 'WALKING WITH PUTIN' GROUP

According to a poll conducted by the Public Opinion Foundation and reported by "Izvestiya" on 31 May, only 6 percent of Russians have heard of the "Walking with Putin" youth organization. Eighty-one percent said they have not heard of the group. But the paper noted that the group's members have identified "the enemies of the president" as "oligarchs, governors, deputies, and their entourage." Meanwhile, an anonymous Internet user has posted a hymn for the group that makes fun of its pretensions, "Izvestiya" said, reproducing the four-verse text of the proposed hymn. PG

MAJORITY OF RUSSIANS SEE CIS BECOMING SINGLE STATE

Fifty-six percent of Russians believe that sooner or later, the member countries of the Commonwealth of Independent States (CIS) will unite into a single state, according to a poll taken by the Public Opinion Foundation and reported by Interfax on 31 May. Seventy-nine percent said that they support the development of the CIS, with only 10 percent opposed, even though a plurality of 44 percent believe that Russia has not benefited from its membership in that organization. PG

SELEZNEV PUSHES U.S. TO DECLARE RUSSIA A MARKET ECONOMY

Duma speaker Gennadii Seleznev has told a U.S. Congressional delegation led by House Speaker Dennis Hastaert that Russia would benefit significantly if Washington would declare that Russia has a market economy, Interfax reported on 31 May. Meanwhile, Duma members and the U.S. delegation agreed to form joint working groups on particularly controversial issues between the two countries and to convene meetings between Russian and American parliamentarians on a regular basis. PG

PRIMAKOV OBJECTS TO U.S. 'MONOPOLY' ON MID-EAST TALKS

After meeting with Egyptian President Hosni Mubarak in Cairo on 31 May, Fatherland leader and former Russian Foreign Minister Yevgenii Primakov criticized the United States for its "monopolization" of efforts to resolve the Israeli-Palestinian conflict, AFP reported. Primakov said that "there is a need for enlargement because the monopolization by one state has brought the situation into a corner, and we should move it from there." PG

CHINESE OBJECT TO RUSSIAN TRANSPORT COSTS

Chinese coal miners are refusing to export coal via the Russian port of Vostochnyi because of a recent rise in the cost of bulk cargo transport on Russian railways, ITAR-TASS reported on 31 May. Meanwhile, Thomas Graham, a senior associate at the Carnegie Endowment, published an article in "Nezavisimaya gazeta" the same day saying that Russian economic reforms could have the effect of weakening Moscow's control over its Far Eastern regions. PG

PUTIN NAMES BOLDYREV TO HEAD SIBERIAN MILITARY DISTRICT

President Putin on 31 May named Colonel General Vladimir Boldyrev as commander of the Siberian Military District, ITAR-TASS reported. Boldyrev, 52, has been acting commander of that district since 1 December 1998. PG

FEDERATION MINISTRY TO HAVE OFFICES ABROAD

Prime Minister Kasyanov on 31 May signed a decree converting the offices abroad of the now-disbanded Federation Migration Service attached to Russian embassies in Armenia, Kyrgyzstan, Tajikistan, and Turkmenistan into representations of the Ministry for Federation Affairs and Nationality and Migration Policy, Interfax reported. PG

JUSTICE MINISTER SAYS HARMONIZATION ALMOST COMPLETE

Justice Minister Yurii Chaika told Interfax on 31 May that the process of bringing regional laws into conformity with the Russian Constitution and federal laws is almost complete, with only 5-6 percent of the regional legal acts still not in full correspondence with the constitution and federal laws. PG

FEDERAL DISTRICT TAX BODIES TO FOCUS ON INTERREGIONAL CASES

A spokesman for the Federal Tax Police said on 31 May that the branches of the service in the federal districts will focus on major interregional cases rather than on local ones, Interfax reported. Meanwhile, finance Ministry officials told Interfax on the same day that the government has proposed creating a fund to compensate the losses of the regions as a result of changes in interbudgetary relations. PG

MURMANSK SAAMI RAPIDLY DYING OUT

Despite government support programs, the Saami, one of the indigenous communities in Murmansk Oblast, are rapidly dying out and may no longer exist by 2004, "Nezavisimaya gazeta-Regioni," No. 9, reported. There are only 1,890 of them left and their situation is desperate, especially compared to their co-ethnics in Sweden and Norway, the paper said. PG

ROSTOV OBLAST WANTS DEBTS PAID BEFORE NUCLEAR POWER PLANT IS BUILT

Sergei Nazarov, the minister of energy and natural resources of Rostov Oblast, told Interfax on 31 May that the regional government will agree to the construction of a new atomic energy station in the region only after the Atomic Energy Ministry pays the debts it owes Rostov as a result of past projects. PG

TUVA'S SHAMANS SEEK TO WARD OFF FLOODS

The members of Dos-Deer, the shaman society of Tuva, are conducting special rites in an effort to prevent flooding in their republic, Interfax reported on 31 May. Shamans from Germany are also taking part, the news service said. PG

VLADIVOSTOK COURT CONSIDERS CHALLENGE TO DARKIN CANDIDACY

The Primorskii Krai court continued hearings on a suit seeking to deprive Sergei Darkin of his right to run for governor, Interfax reported on 31 May. Darkin led the first round of gubernatorial elections on 27 May and is expected to do well in the second round to be held on 17 June. PG

'PEOPLE FROM CAUCASUS' TRY TO BOARD BOAT IN VLADIVOSTOK

Interfax-Eurasia reported on 31 May that "four persons of Caucasus nationality" attempted to board a patrol boat moored in Vladivostok. Two of the attackers were arrested and handed over to the local police for investigation. PG

DOMDEDOVO GETS INTERNATIONAL CERTIFICATION

Moscow's Domdedovo Airport has received international certification and can now handle all classes of domestic and international flights, "Izvestiya" reported on 31 May. Russian officials hope to expand services there in the near future. PG

POLICE STAGE CRIMES TO IMPROVE THEIR STATISTICS

Moscow police are now staging as many as one in every four crimes so that the authorities can solve them and improve their statistics, according to "Versiya," No. 19. This is particularly the case in the area of organized crime, where the police often "arrive at the scene of the imminent crime even before the criminals do." One reason for the upsurge in this kind of fraud, the weekly said, is that the number of complaints from victims of organized crime has fallen by as much as 90 percent since 1996. PG

10 PERCENT OF MUSCOVITES HAVE TRIED DRUGS

Using World Health Organization methods, Moscow's chief drug specialist Yevgenii Briun said on 31 May that 10 percent of the residents of the Russian capital have tried drugs and that 110,000 are regular users and have serious problems, Interfax reported. The news service reported the same day that police have identified an employee of a psychiatric hospital in the Russian capital who was selling psychotropic drugs illegally. Meanwhile, "Vremya MN" reported on the same day that Moscow is opening the first youth drug rehabilitation center. PG

MATVIENKO DOUBTS REPORTED RESTRICTIONS ON SCIENTISTS

Deputy Prime Minister Valentina Matvienko on 31 May said she has no information about an AFP report that scholars in the Academy of Sciences system must in future report all contacts with foreigners, Interfax reported. She said that she does not think there is any basis for this story and noted that human rights activist Sergei Kovalev, who said that the directive cited by AFP shows that Russia is becoming "a police state," often fails to check his sources. PG

MEDIA HAVE TROUBLE COVERING RELIGIOUS ISSUES

According to an article in "Nezavisimaya gazeta" on 31 May, the secular media in Russia have found it extremely difficult to cover religious affairs in a balanced and accurate way. Most editors, the article said, avoid covering religious questions at all. When they do report on religion, they frequently focus on sensationalist and hence distorted aspects of faith. PG

FORMER DEPUTY FINANCE MINISTER INDICTED FOR EMBEZZLEMENT

The Main Military Prosecutor on 31 May indicted former Deputy Finance Minister Andrei Vavilov for gross embezzlement of state funds, "Rossiiskaya gazeta" reported on 31 May. Vavilov is charged with having illegally transferred funds from the defense budget to the Ukrainian Energy Systems company then headed by Fatherland Party leader Yuliya Tymoshenko. The prosecutors said that some of these funds, which totaled $450 million, were diverted into the private accounts of Vavilov and Tymoshenko. VY

RUSSIANS PROTEST CRUELTY TO ANIMALS

The Center for the Ethical Treatment of Animals organized a demonstration in Moscow's Pushkin Square on 30 May to protest the sterilization and killing of stray dogs and cats, RIA-Novosti reported. The protesters demanded that the authorities enforce articles in the criminal code that set prison terms of up to 20 years for those who engage in the mass destruction of animals. PG

PUTIN JOKES COLLECTED

On 1 June, "The Moscow Times" presented a selection of new jokes about Russian President Putin taken from a collection of 100 such jokes published in a small volume in May. The book's compiler, Dmitrii Perevyazkin, who is also a member of the St. Petersburg City Council, said he published the collection because most humor about Putin lacked variety. Most of the jokes appear to be recycled versions of Soviet-era humor. PG

TATARSTAN TO DEFY MOSCOW OVER REPUBLICAN PARLIAMENT

Tatarstan will not comply with a ruling by the Russian Supreme Court that deputies to Tatarstan's State Council may not simultaneously serve as members of city or district governments, "Nezavisimaya gazeta" reported on 1 June. That ruling automatically requires the parliament to dissolve itself by 23 July. But the paper quoted President Mintimer Shaimiev as telling journalists in Kazan on 31 May that the State Council will serve out its full term. LF

BASHKORTOSTAN TO COMPLETE CONSTRUCTION OF NUCLEAR POWER STATION

Bashkortostan's Deputy Premier Midkhat Akhmetov said in Ufa on 26 May that the republic will resume construction of the Agidel nuclear power station, RFE/RL's Tatar-Bashkir Service reported. Construction of the first block is to be completed by 2010 and of two further blocks by 2020. Work on the nuclear power plant, which is located in an urban area, began in the 1970s but was halted in 1990 as a result of lobbying by ecologists in Bashkortostan and by the leadership of neighboring Tatarstan. In December 2000, the Bashkortostan State Assembly passed a resolution rescinding its decision of a decade earlier to suspend construction of the plant. Prime Minister Rafael Baidavletov termed the decision to resume construction "senseless" given that only 60 percent of Bashkortostan's energy-generating capacity is currently being used. LF

DUMA DRAFTS PLAN TO RESOLVE CHECHEN CONFLICT

Duma International Affairs Committee Chairman Dmitrii Rogozin told journalists in Moscow on 31 May that a group of Duma deputies has drafted and submitted proposals for ending the war in Chechnya to a joint working group with the Parliamentary Assembly of the Council of Europe, Russian agencies reported. He said the plan is based on the assumption that "there is a need...to set up a national commission for reconciliation" in Chechnya that would consist of representatives of various clans and ethnic groups. Also needed, Rogozin said, is the appointment of a representative of the federal authorities who would have "broad powers" and whom the Chechen side would respect. He said that person should be appointed by the Russian president. Rogozin said he considers talks with Chechen leader Aslan Maskhadov pointless and elections in Chechnya at the present time premature. He advocated preparing a new draft constitution for Chechnya that would be submitted to a referendum in which all persons who have left Chechnya because of the fighting would be eligible to participate. The Council of Europe has offered to help draft such a constitution, Interfax quoted the council's secretary-general, Walter Schwimmer, as saying in Moscow on 25 May. LF

POLICE IN DAGHESTAN THWART ATTEMPT TO KILL PARLIAMENT SPEAKER

Police in Makhachkala on 31 May discovered and destroyed a grenade launcher aimed at a window of the apartment of parliament speaker Mukhu Aliev, Interfax reported. LF




ARMENIAN PARLIAMENT FAILS TO CALL FOR NO-CONFIDENCE VOTE IN GOVERNMENT

Parliament deputies did not avail themselves on 31 May of their 24-hour window of opportunity to call for a no-confidence vote in Prime Minister Andranik Markarian's government, Noyan Tapan reported. That opportunity was created by the parliament's failure on 30 May to approve the government's report on fulfillment of the 2000 budget (see "RFE/RL Newsline," 31 May 2001). The failure to call for a subsequent vote of no-confidence within 24 hours means that the report on budget fulfillment is nonetheless automatically approved, parliament public relations officer Anahit Adamian said. LF

ARMENIAN PRESIDENT: NUCLEAR FUEL SHOULD NOT FUEL EXTERNAL DEBT

The Armenian government should avoid further purchases of nuclear fuel from Russia over the next couple of years in order not to increase its current $114 million debt to Moscow, Russian agencies quoted President Robert Kocharian as saying on 31 May. Kocharian proposed that the national energy system should pay for such fuel from the proceeds of the sale of electricity. LF

KURDS IN ARMENIA, KAZAKHSTAN DEMONSTRATE FOR OCALAN

Several hundred people attended a demonstration in Yerevan on 31 May in support of Kurdistan Workers' Party leader Abdullah Ocalan, whose trial at the European Court was to have opened that day, ITAR-TASS reported. In Almaty, the Association of Ethnic Kurds of Kazakhstan convened a press conference at which they announced their intention to hold a mass demonstration to coincide with the beginning of Ocalan's trial on 31 August, RFE/RL's Kazakh Service reported. LF

RUSSIAN, SOUTH CAUCASUS PRESIDENTS DISCUSS KARABAKH...

Vladimir Putin met in Minsk on 31 May with Armenian President Kocharian and Azerbaijan's Heidar Aliyev for what Putin subsequently termed an open and productive discussion of the Karabakh peace process, Russian agencies reported. Earlier on 31 May, Russian agencies quoted Sergei Prikhodko, the deputy head of the Russian presidential administration, as saying that no solution to the Karabakh conflict should be imposed "from outside," and that it is up to the parties of the conflict to work out a compromise peace agreement that would be acceptable to public opinion in both Armenia and Azerbaijan. He admitted that the search for such a compromise is "difficult" and said it should not be rushed. Prikhodko added that if a peace agreement is reached, Russia would be prepared to act as guarantor of its implementation. LF

...AND REGIONAL SECURITY

Georgian President Eduard Shevardnadze joined Putin, Kocharian, and Aliyev late on 31 May for a further meeting of the so-called "Caucasus Four." The four presidents focussed on regional problems, specifically security issues, the threat of terrorism, and the aftermath of unresolved conflicts in the Caucasus, and signed a declaration reaffirming their commitment to seeking a fair and lasting settlement to regional conflicts as a precondition for strengthening "comprehensive cooperation," ITAR-TASS reported. Such a commitment was enshrined in the so-called Kislovodsk Declaration signed by the presidents of the four countries at their first such summit in Kislovodsk in June 1996. Repeating a further point contained in the Kislovodsk Declaration, Prikhodko told Interfax that Russia considers the North and South Caucasus an indivisible whole, and for that reason "relations with the countries of the South Caucasus are a priority of Russian foreign policy." LF

AZERBAIJANI PRESIDENT DENIES ASKING FOR POSTPONEMENT OF KARABAKH GENEVA TALKS

Speaking to journalists at Baku airport on 31 May prior to his departure for the CIS summit in Minsk, President Aliyev denied having asked the co-chairmen of the OSCE Minsk Group to postpone the next round of talks between himself and Kocharian on resolving the Karabakh conflict, Turan reported. He said that Kocharian may have done so. The Minsk Group French co-chairman, Philippe de Suremain, had earlier said that the talks scheduled to take place in Geneva some time in June were postponed at the request of the two presidents. Aliyev also told journalists that it would become clear during his meeting in Minsk with Kocharian whether the Geneva talks would take place as scheduled, but no announcement was forthcoming in Minsk on whether the two presidents reached such a decision. LF

GEORGIAN DEFENSE MINISTER SAYS MUTINY INTENDED TO DISCREDIT COUNTRY

Davit Tevzadze told journalists in Tbilisi on 31 May that the 25 May protest by several hundred members of the National Guard (see "RFE/RL Newsline," 25 and 29 May 2001) may have been a deliberate attempt to destabilize the country on the eve of naval exercises to be held in early June in Georgian territorial waters, Caucasus Press and Interfax reported. He suggested that if the situation had deteriorated to the point that those maneuvers were cancelled, Georgia would have found itself in "international isolation." Tevzadze also said he considers inappropriate and unfounded the mutineers' request that the National Guard be subordinated directly to the president, rather than to the Defense Ministry. LF

ASIAN DEVELOPMENT BANK TO FUND KYRGYZ HIGHWAY RECONSTRUCTION

Kyrgyzstan's President Askar Akaev and visiting Asian Development Bank President Tadao Chino signed an agreement in Bishkek on 31 May under which the bank will provide a $126 million loan to Kazakhstan and Kyrgyzstan to fund reconstruction of the 260-kilometer highway linking Bishkek and Almaty, Interfax and RFE/RL's Bishkek bureau reported. Akaev and Chino also reviewed the economic reform process in Kyrgyzstan and bilateral cooperation. LF

NEW INDEPENDENT NEWSPAPER TO BE LAUNCHED IN SOUTHERN KYRGYZSTAN

Bakyt Orunbaev, chief editor of the Djalalabad-based newspaper "Akyikat," told RFE/RL on 31 May that he plans to launch a new independent weekly newspaper, "Ferghana." The paper will initially appear in a print run of 5,000, in Kyrgyz, Russian, and Uzbek; Tajik will be added later. LF

TALIBAN TROJAN CAMELS INTERCEPTED AT TAJIK BORDER

Interfax reported on 31 May that Russian border guards intercepted six camels that had attempted to cross into Tajikistan from Afghanistan. In this way, the Russian commanders on the scene said, "a violation of the border was blocked." PG




EURASIAN ECONOMIC COMMUNITY ADOPTS FOUNDING ACTS, ELECTS LEADER

The presidents of Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan held a session of the Interstate Council of the Eurasian Economic Community (EEC) in Minsk on 31 May, Belarusian Television and Belapan reported. The EEC was created in Astana in October 2000 to replace the Customs Union of the five post-Soviet states. The session approved a number of "founding documents," including regulations for the EEC's governing bodies -- the Interstate Council and the Integration Committee -- as well as a document describing the functions of the Commission of Permanent Representatives, which is intended to work between Integration Committee sessions. Kazakhstan's President Nursultan Nazarbaev was elected chairman of the EEC Interstate Council. The five presidents said in a statement that the EEC's priority tasks are to form a full-fledged customs union and a "common economic space." The EEC is open to other states. JM

CIS PRIME MINISTERS DISCUSS CUSTOMS, TAX ISSUES IN MINSK

The Commonwealth of Independent States' (CIS) Council of the Heads of Government on 31 May discussed more than 20 issues within the framework of the CIS summit in Minsk, Belapan reported. Belarusian Prime Minister Uladzimir Yarmoshyn said the discussions focused on exceptions from the CIS free trade regime and on the switch to collecting indirect taxes on goods in countries of their destination. The council elected Georgian Minister of State Gia Arsenishvili as its chairman. JM

BELARUS CONCERNED ABOUT POSSIBLE LOSSES OVER VAT COLLECTION CHANGE

Russian Prime Minister Mikhail Kasyanov met with his Belarusian counterpart Uladzimir Yarmoshyn in Minsk on 31 May and informed him that Russia plans on 1 July to switch to the principle of collecting indirect taxes, including VAT, on goods in countries of their destination. Belapan reported that the Belarusian government fears Russia may not apply this method of indirect tax collection to Belarus and deprive Belarus of considerable revenue. According to the agency, Russia argues that applying the country of destination VAT collection principle in trade with Belarus would contradict the foundation principles of the Russia-Belarus Union and its "integrated economic space." JM

BELARUSIAN OPPOSITION POLITICIANS SAY GRENADE BLAST TO BENEFIT AUTHORITIES

Anatol Lyabedzka, leader of the United Civic Party, said on 31 May that the recent grenade blast at the Russian Embassy in Minsk (see "RFE/RL Newsline," 31 May 2001) is "advantageous" to the authorities, Belapan reported. "I have repeatedly said that we should expect events like house bombings or attempts on Lukashenka's life in the run-up to the [presidential] elections. So this explosion is not the last one," Lyabedzka said. Alyaksandr Pakhlopka from the Belarusian Party of Communists commented on the blast: "I do not believe there exists a Belarusian terrorist group who timed the explosion to [coincide with Russian President Vladimir] Putin's visit. Perhaps, the blast was staged by the secret services... It may trigger tough [repressive] measures in the run-up to the elections." The Charter-97 website reported the same day that Minsk police arrested 19 distributors of the "Nasha svaboda" issue that highlighted Belarus's political and economic problems. JM

UKRAINIAN PREMIER SAYS NEW CABINET IS 'OPTIMAL COMPROMISE'

Anatoliy Kinakh told journalists in Minsk on 31 May that the appointments made thus far to his cabinet (see "RFE/RL Newsline," 30 and 31 May 2001) are "the result of an optimal compromise" among President Leonid Kuchma, the parliamentary groups that voted for Kinakh's approval, and Kinakh himself, Interfax reported. Meanwhile, Kuchma said in Minsk the same day that "only the premier was changed, while the government remained [the same]" in Ukraine, Belarusian Television reported. JM

KUCHMA'S DECREE ON STATE SECRETARIES SAID TO CONTRADICT CONSTITUTION

Kyiv-based political scientist Mykola Tomenko told Interfax on 31 May that President Kuchma's decree introducing state secretaries for the cabinet and ministries (see "RFE/RL Newsline," 30 and 31 May 2001) contradicts the Ukrainian Constitution "to a significant extent." Tomenko said the functioning of the government, in line with the constitution, is to be regulated by a law on the Cabinet of Ministers that has already been passed but not yet signed by Kuchma. According to Tomenko, Kuchma's decree on state secretaries "violates the constitutional status of the cabinet." Tomenko noted that many ministers from the previous cabinet of Viktor Yushchenko retained their posts in that of Kinakh, but "significantly lost their powers" to state secretaries. "Kinakh is becoming a sort of presidential representative or adviser to deal only with managing the regional system of power, some economic branches, and individual enterprises," Tomenko added. JM

KUCHMA URGES CREATION OF CIS FREE-TRADE ZONE

The Ukrainian president said in Minsk on 31 May that if the CIS does not create a free-trade zone for its members, as it agreed to do in April 1994, its political prospects will be "illusory," Interfax reported, quoting Kuchma's interview with Belarusian Television. "As of today, the CIS is, unfortunately, a large consultative council," Kuchma said, noting that the "economy moves everything." JM

UKRAINIAN ORTHODOX BELIEVERS PROTEST POPE'S PLANNED VISIT

On 31 May in Kyiv, some 1,000 believers of the Ukrainian Orthodox Church (Moscow Patriarchate) staged a protest against the planned visit of Pope John Paul II to Ukraine from 23-27 June, Interfax reported. Valentyn Lukyannyk, one of the leaders of the protest, told the agency that the pope's visit is "inopportune." And he added: "So far, [Ukrainian] Catholic and Orthodox believers have not resolved many problems, in particular, there is continuing suppression of Orthodox Christians in Western Ukraine." JM

MAYOR OF ESTONIA'S CAPITAL RESIGNS

Tallinn Mayor Juri Mois on 31 May handed his formal resignation to the City Council, which later approved it by 40 of 61 votes, ETA reported. The council that day had been scheduled to vote on a no-confidence motion against Mois that was proposed by the Reform Party. Mois told reporters that he decided to leave of his own accord because the city's ruling coalition had decided to support a new candidate for mayor -- telecoms businessman Tonis Palts. However, the Tallinn City Council that night failed to elect a new mayor when both Palts and opposition Center Party Chairman Edgar Savisaar received 31 votes. In order to be elected, a new mayor needs the support of 33 of the 64 City Council members. SG

JOINT SESSION OF BALTIC ASSEMBLY AND NORDIC COUNCIL IN RIGA

Latvian President Vaira Vike-Freiberga officially opened the third joint session of the Baltic Assembly and the Nordic Council in Riga on 31 May, LETA reported. She noted that cooperation between the Baltic and Nordic parliaments is closer than ever before and that European Union accession negotiations have reached a crucial point for EU candidate countries -- Latvia, Estonia, Lithuania, and Poland. Nordic Council President Sven Erik Hovman declared that Baltic-Nordic cooperation is no longer functioning as a "five plus three" model, but as close cooperation among eight friendly countries. Latvian Foreign Minister Indulis Berzins said that for the Baltic states, integration into NATO and the EU are inseparable things, like "two sides of a coin." Sweden's Ambassador to Latvia Tomas Bertelman stated that the EU summit meeting in Gothenburg should define specific dates for candidate countries to join the EU. He hopes that this will take pace by the end of 2002 so new members can take part in the 2004 European Parliament elections. SG

NATO PARLIAMENTARY ASSEMBLY CONCLUDES IN LITHUANIA

On the final day of the NATO Parliamentary Assembly (PA) in Vilnius, NATO Secretary-General Lord George Robertson declared that the alliance remains unswerving in its open-door policy, but declined to comment on the prospects of specific candidate countries for accession at the Prague summit next year, BNS reported on 31 May. He noted that the candidates' chances for admission would be based not only on military potential, but also on many criteria ensuring democracy and economic growth. Assembly Chairman Rafael Estrella hinted that U.S. President George W. Bush's "clear and unequivocal" position on NATO enlargement will determine the position of other members in alliance. The assembly approved two declarations. The first, repeating the resolution of the previous NATO PA in Berlin, "calls upon the North Atlantic Council to issue no later than during its Summit meeting in 2002 invitations to NATO accession negotiations to any European democracy that seeks membership in the alliance and that has met the criteria for NATO membership as established in the alliance's 1995 Study on NATO Enlargement." The declaration, however, was also supplemented by an amendment declaring that no third state shall hold a veto right in the enlargement process. Lithuanian deputy Rasa Jukneviciene, who proposed the amendment, stated: "Some think this amendment is aimed at Russia, but it is mainly aimed at Western states." The second declaration expressed "grave concern at the continued tensions" in the Balkans and support for the democratic processes in the Federal Republic of Yugoslavia. SG

POLAND BACKS ROMANIA'S NATO BID

Polish Foreign Minister Wladyslaw Bartoszewski told his Romanian counterpart Mircea Geoana in Warsaw on 31 May that Poland "has adopted a friendly attitude" toward Romania's aspirations to become a NATO member, PAP reported. Geoana said Romania has a lot to learn from Poland, particularly how to negotiate the terms of accession to the EU. Referring to Romania's aspirations to join NATO, Geoana noted that "at the NATO summit due in Prague in 2002, Poland's voice will be an important one in the adoption of a final decision that should be favorable for Romania," the Rompress website reported. JM

EU READY TO HELP FINANCE TRAINING OF POLISH BORDER GUARDS

EU Commissioner for Justice and Home Affairs Antonio Vitorino said in Warsaw on 31 May that the EU is prepared to cofinance training programs for Polish border guards, PAP reported. "Our assessment of the services under the Polish Interior Ministry is positive but we all have to keep up the present pace," Vitorino said after his meeting with Polish Interior Minister Marek Biernacki. JM

POLISH CABINET CREATES SEVEN NEW DISTRICTS

The cabinet on 31 May decided to create seven new districts, PAP reported. Districts form a middle tier in the country's territorial division, which also includes provinces (top tier) and communes (bottom tier). At present, Poland has 308 districts and 65 towns with district status. The cabinet decision on the new districts will take effect on 1 January 2002. JM

NEW INCIDENT AT CZECH NUCLEAR PLANT...

Several cubic meters of radioactive water leaked on 30 May during reactor tests at the controversial nuclear power plant at Temelin, international agencies reported, citing a plant spokesman. The spokesman said on 31 May that the incident was not a system fault but rather one of "human error." According to dpa, workers had forgotten to close a valve. The spokesman said radiation levels were very low and the water remained within the reactor's safety shell. At no time was the staff or the environment in danger, he said. The Vienna-based International Atomic Energy Agency said the leak "cannot be considered a serious incident." Also on 31 May, Austrian Temelin opponents blocked a truck transporting pipes to Temelin from crossing the border and forced the driver to return to Waidhofen, lower Austria, where the pipes were produced, CTK reported. MS

...AS PROTESTERS' IMPACT GROWS

In related news, dpa reported on 31 May that the German utility giant E.ON announced it wants to terminate a contract for the purchase of Czech electricity following pressures mounted on the company in the wake of protests against Temelin. CTK reported that a 30 May meeting of Czech, Austrian and European Commission experts in Brussels failed to produce an agreement on the final version of the report on Temelin's environmental impact and negotiations on the document's wording are to continue. MS

SOLANA DISCUSSES EU SECURITY POLICY WITH CZECH POLITICIANS

The EU's foreign policy chief, Javier Solana, told Czech politicians in Prague on 31 May that the EU by no means seeks to set up a joint European army, but rather seeks to set up a system whereby the armed forces of individual countries would be able to jointly resolve crisis situations outside the EU, CTK reported. He said this European rapid reaction force should be ready for duty by 2003. Solana met President Vaclav Havel, Foreign Minister Jan Kavan, and other politicians. The crisis in Macedonia was also among the issues discussed. MS

CONFLICT IN CZECH KDU-CSL NOT OVER

Miroslav Kalousek, former deputy chairman of the Christian Democratic Party (KDU-CSL), on 31 May said that a letter of apology he received earlier that day from new KDU-CSL Chairman Cyril Svoboda was "insufficient" to persuade him to renounce his intention to sue Svoboda for defamation, CTK reported. In his letter to Kalousek, Svoboda said he is "deeply sorry" over a statement he made earlier this year, when Svoboda resigned as head of the Four Party Coalition shadow cabinet. Among the reasons for his resignation Svoboda mentioned his refusal to include Kalousek in that cabinet because of alleged questionable deals by Kalousek during his tenure as deputy defense minister. Kalousek, who resigned from the shadow cabinet shortly afterward, said he wants Svoboda to openly admit that "his statements were untrue." MS

CZECH PREMIER BACKS SETTING UP COMMISSION TO SOLVE 'COTTAGE DISPUTE' WITH SLOVAKIA

Prime Minister Milos Zeman said on 31 May that he is in favor of setting up a joint Czech-Slovak commission to solve the dispute over the Czech-owned cottages in the border region of Kasarna, Slovakia, CTK reported (see "RFE/RL Newsline," 31 May 2001). He said such a commission must solve the problem "in the spirit of the Slovak law," as the disputed land plots are on Slovak territory. Foreign Minister Kavan told journalists on the same day that if neither the two countries' premiers nor Slovak courts manage to advance a solution acceptable to both sides, the dispute could end up before one of the European international courts. An international law expert cited by CTK said the Czech owners of the cottages could apply to the European Court of Human Rights in Strasbourg on the grounds of discrimination. MS

NEW SLOVAK INTERIOR MINISTER MAKES CHANGES IN POLICE RANKS

Interior Minister Ivan Simko dismissed Chief Police Investigator Jaroslav Ivor on 31 May, in keeping with his promise upon taking office to undertake "resolute actions instead of mere words," CTK reported. Police President Jan Pipta left the force "at his own request," and was replaced by Pavol Zajac. Ivor told Radio Twist that Simko had not given him any reason for dismissing him apart from telling Ivor he "had to make this decision." An Interior Ministry spokesman said no decision has yet been made on who will replace Ivor. The changes were expected after former Interior Minister Ludovit Pittner's resignation due to criticism that the ministry has failed to act resolutely to discover alleged perpetrators of crime under the government of former Premier Vladimir Meciar. MS

HUNGARIAN SMALLHOLDERS PLEDGE INDEPENDENCE FROM FIDESZ

"The Independent Smallholders' Party is not only a member of the ruling coalition, but is also independent of [the major coalition party] FIDESZ," party Chairman Jozsef Torgyan told journalists on 31 May. Torgyan said that talks on electoral cooperation between the two parties "would be unfortunate at the present moment." He also made it clear that an electoral agreement can only be concluded after the first round of the 2002 parliamentary elections, and "only if mutual services are rendered." Torgyan also charged that the constitutional order would cease to work in Hungary if "no one obliges" parliamentary Speaker Janos Ader to comply with a court decision to reinstate Torgyan in the Smallholders' parliamentary group, Hungarian media reported (see "RFE/RL Newsline," 25 and 29 May 2001). MSZ

HUNGARY TO ATTRACT LABOR FROM NEIGHBORING COUNTRIES?

Prime Minister Viktor Orban on 31 May told a Budapest conference entitled "The Hungarian Model" that Hungary will have to attract labor from neighboring countries to fuel its soaring economy. He pointed out that without foreign labor, the country's supply of quality labor will be unsatisfactory within four to five years. "Five to 7 percent annual growth rates cannot be maintained if the labor supply shrinks," Orban explained, adding that the Hungarian economy should develop at a rate that is double the EU average. Meanwhile, representatives of EU member countries agreed in Vienna to introduce a two-year transition period on the free movement of labor while allowing individual member states to restrict access to their labor markets for up to seven years, Reuters and Hungarian media reported. MSZ




MACEDONIAN SOCIAL DEMOCRATS CRITICIZE GEORGIEVSKI PROPOSAL

Social Democratic leader and former Prime Minister Branko Crvenkovski said in Skopje on 31 May that there is a "danger that the [governing] coalition might fall apart," if the Albanians receive equal rights, as Prime Minister Ljubco Georgievski has suggested (see "RFE/RL Balkan Report," 1 June 2001). "RFE/RL Newsline" has meanwhile learned that there is grumbling in Georgievski's own nationalist party, the Internal Macedonian Revolutionary Organization (VMRO-DPMNE), over any concessions to the Albanians under Western pressure. But in Prague, EU security chief Javier Solana warned Macedonian politicians of all ethnic backgrounds to put their bickering aside and work to end the prolonged crisis. Solana stressed that "the sooner they agree...the better for all of them," AP reported. Observers note that Macedonian politicians have an eye on the January 2002 parliamentary elections as well as on the present crisis. PM

MACEDONIAN BATTLE FRONTS: QUIET NEAR KUMANOVO, MORTARS NEAR TETOVO

Army spokesman Colonel Blagoja Markovski told AP in Skopje on 1 June that the Kumanovo region is quiet after several days of fighting. Near Tetovo, however, guerrillas of the ethnic Albanian National Liberation Army (UCK) in Sipkovica and Brodec fired mortar shells at government positions in the Sar Planina area. PM

MACEDONIAN DEPUTY PRIME MINISTER WARNS OF 'WAR' AND 'BLOODBATH'

Macedonian Deputy Prime Minister Zoran Krstevski told Reuters in Dubrovnik on 31 May that NATO is not doing enough to seal Macedonia's border with Kosova. He also called on the EU and NATO to cut off the UCK's sources of money and supplies from abroad. "A situation in which the international community understands and supports the Macedonian government and the president, but without doing anything to isolate the terrorists by cutting their financial and arms channels, is unsustainable... We expect the European Union and NATO to put more pressure on all Albanian elements in the region, and to oppose any cooperation with militant groups... If security...is such that it requires raising the combat readiness, then we probably won't be able to avoid declaring a state of war." PM

ROBERTSON SAYS NATO DOING BEST TO SECURE MACEDONIA'S FRONTIERS

NATO Secretary-General Lord George Robertson said in Dubrovnik on 31 May that "we have increased patrols [in Kosova near the Macedonian border] over the last few weeks very substantially. There have been substantial interdictions of people and equipment. It's a very difficult border and there are massive difficulties involved in trying to protect it. But any supply lines that may have existed have certainly been disrupted. A lot of the people who were involved have been interdicted and detained and that will continue until the situation in Macedonia is resolved," Reuters reported. PM

MACEDONIAN COLD SHOULDER FOR TAIWAN?

Foreign Minister Ilinka Mitreva said in Skopje on 31 May that "we are on the way to sever ties with Taiwan," Reuters reported. She added that she will not meet her visiting Taiwanese counterpart Tien Hung-mao "even if he asks me to do so," dpa reported (see "RFE/RL Newsline," 31 May 2001). Mitreva belongs to the Social Democratic Party, which was strongly critical of the previous government's decision in 1999 to switch recognition from Beijing to Taipei. Prime Minister Georgievski, who also headed that government, did meet with Tien, but it is not clear what the outcome of the talks was. Taiwan has provided Macedonia with $20 million in direct investment and a further $150 million in loans and technical assistance out of a much larger package of promised aid and assistance. PM

OSCE HAILS PROGRESS IN KOSOVA...

Daan Everts, the OSCE's top representative in Kosova, told a news conference in Vienna on 31 May that there is "good chemistry" within the Kosova delegation that arrived in the Austrian capital to discuss the 17 November elections (see "RFE/RL Balkan Report," 20 April 2001). He added that problems remain, but also that it is a good sign that Ibrahim Rugova, Hashim Thaci, Ramush Haradinaj, and Rada Trajkovic are working together. Kosovar moderate leader Rugova said: "We will do everything for the Serbian community to have freedom of movement," adding that he hopes for Serbian participation in the elections, AP reported. PM

...BUT SERBIAN CONCERNS REMAIN

Trajkovic, who represents Kosova's 7 percent Serbian population, said in Vienna on 31 May that she fears that Serbian rights will not be spelled out in the projected constitution. It is not clear what she meant by that (see "RFE/RL Newsline," 9 May 2001). She noted that Serbs are still subjected to physical danger and that refugees have been unable to go home. Trajkovski added that her Serbian constituents are willing to take part in the elections but want "security, the return of those who wish to return, and the disclosure of the [fate] of those who are missing" in return for doing so, AP reported. For his part, Everts replied that the OSCE-designed electoral system constitutes a "package of overrepresentation" to ensure that minority groups have a say. Out of 120 assembly seats, 20 have been set aside for non-Albanians, he noted. Meanwhile, in Belgrade, the Serbian parliament passed a declaration calling the proposed Kosova constitution "unacceptable" because it does not give the Serbs enough rights, RFE/RL's South Slavic Service reported. PM

SERBIAN POLICE DETAIN MILOSEVIC MEDIA CRONY

Police detained Zoran Jevdjevic in Belgrade on 31 May on a court order after the former director of the state-run Tanjug news agency ignored 11 summons to appear in court in conjunction with a lawsuit by several of his former subordinates, "Danas" reported. PM

BOSNIAN DEFENSE MINISTER SAYS HARD-LINERS BLOCKING REINTEGRATION OF CROAT TROOPS

Defense Minister Mijo Anic, a moderate Croat, told Reuters in Sarajevo on 31 May that hard-liners in the Croatian Democratic Community (HDZ) are actively discouraging mutineer Croatian soldiers from reentering the Muslim-Croat army under a deal brokered recently (see "RFE/RL Newsline," 17 May 2001). PM

ROMANIAN PRESIDENT DISMISSES NICHOLSON DRAFT...

Ion Iliescu said on 31 May that the draft submitted by the European Parliament rapporteur on Romania, Baroness Emma Nicholson, to a commission of the European Parliament (see "RFE/RL Newsline," 31 May 2001) reflects "nothing more than her personal opinions." Iliescu said that accession negotiations "are not carried with the European Parliament, but with the European Commission," RFE/RL's Bucharest bureau reported. MS

...AND PREMIER ENLISTS VERHEUGEN SUPPORT

Adrian Nastase said he is in the process of preparing a written reaction to the "many errors and mistaken interpretations" included in the baroness's draft. Nastase said he has spoken on the telephone with Guenter Verheugen, the European commissioner for enlargement, who assured him that the draft is "just a proposal" that has not yet been accepted by the Foreign Affairs Commission and that, even if it were accepted, the parliament would still have to vote on it. Furthermore, Nastase quoted Verheugen as saying, "negotiations for accession are the exclusive prerogative of the European Commission" and the European Parliament cannot decide on suspending accession talks, RFE/RL's Bucharest bureau reported. On 31 May, the government approved five programs for coping with the problem of abandoned children -- one of the main points of criticism cited in the Nicholson draft. MS

ROMANIAN PRESIDENT BACKS (ALLEGEDLY NONEXISTENT) AMNESTY PROPOSAL

While Justice Minister Rodica Stanoiu said on the private Antena 1 channel on 31 May that the rumor about the intention to amnesty those involved in "social unrest movements" since 1989 (see "RFE/RL Newsline," 31 May 2001) is "either a misunderstanding or misinformation," President Iliescu on the same day said "the idea is praiseworthy." He said this is not a measure aimed at solving "the Miron Cozma problem" but a "more general attempt...to bring about national reconciliation." In a reference to miners' rampages in Bucharest in 1990 and 1991, Iliescu reiterated his view that violence at that time was not started by the miners but by his then-political adversaries, who protested in Bucharest University Square and later allegedly attacked government buildings. MS

ANTONESCU HAS STATUE IN BUCHAREST AS WELL

A religious ceremony was held on 1 June in a Bucharest church founded by Romania's wartime dictator and Hitler ally, Marshall Ion Antonescu, marking 55 years since his execution by a firing squad. A bust of the marshal was unveiled in the church's courtyard. Greater Romania Party (PRM) leader Corneliu Vadim Tudor attended the ceremony, as did several generals in active service, an RFE/RL correspondent reported. The event was organized by the Marshall Antonescu League and Foundation, which is headed by PRM Senator and Senate Deputy Chairman Gheorghe Buzatu and by the Pro Bessarabia and Bukovina associations. Both these organizations have long been involved in attempts to judicially rehabilitate the leader, who was executed for war crimes in 1946. MS

PORTUGAL FOREIGN MINISTER MEETS MOLDOVAN OFFICIALS...

Portuguese Foreign Minister Jaime Gama on 31 May met in Chisinau with his Moldovan counterpart Nicolae Cernomaz and with President Vladimir Voronin, RFE/RL's Chisinau bureau reported. Portugal is currently in charge of efforts for the settlement of the Transdniester conflict as a member of the OSCE's leading "troika." Gama told Cernomaz he is "impressed" with the "promising evolution of the conflict settlement process" and that "Moldova can count on OSCE support to consolidate security in the Transdniester region." Voronin told Gama that Moldova plans to make "certain proposals that would leave Tiraspol no choice but that of accepting them." He said the planned special status to be offered to the separatist region will grant Tiraspol "enough prerogatives" and that the parliament where his Party of Moldovan Communists (PCM) has an absolute majority is certain to approve the special status. MS

...AND SEPARATIST LEADERS

Separatist leader Igor Smirnov told journalists after meeting Gama in Tiraspol that "the Transdniester Republic must be recognized as an independent state and this will solve all problems," RFE/RL's Chisinau bureau reported. Smirnov said negotiations with Chisinau will not advance until "the equal status of the two sides is respected" and "all agreements signed before [between Chisinau and Tiraspol] are ratified" by the Moldovan parliament. Gama said his visit was one of "information collecting" and that it is "important" to learn about Tiraspol's positions in order to "be in the position to present this information to international public opinion [and] in order to give an impetus to the OSCE and the other conflict mediators to advance the dialogue between the two sides." MS

MOLDOVAN PARLIAMENT REJECTS LUSTRATION BILL

The parliament on 31 May rejected a draft bill proposed by the opposition Popular Party Christian Democratic (PPCD) that would have instituted lustration for holders of the office of president, parliamentary deputy, and cabinet members, as well as for judges and journalists, RFE/RL's Chisinau bureau reported. Sixty-one deputies from the PCM and three from the Braghis Alliance voted to reject the draft, which was endorsed by only 13 deputies. The envisaged bill would have also made access to personal files in the former KGB and NKVD archives possible. In presenting the bill, PPCD Deputy Stefan Secareanu said former members of the communist secret police are now "in control of [important] economic sectors" and are "blackmailing" politicians who are afraid that their past collaboration with the communist secret police will be revealed. MS

LIBYAN TRIAL OF BULGARIAN MEDICS SET TO START

Defense lawyers for the six Bulgarian medics charged in Libya with willfully infecting children with the HIV virus told Reuters on 31 May that they plan to ask the court to accept as evidence the written opinion on the case by two prominent virologists, after the court rejected the defense's request that they be allowed to testify at the trial. The virologists are Professor Luc Montaigner of the Pasteur Institute in Paris and Professor Luc Perrin of the Geneva University Hospital. The trial is now set to start on 2 July, after having been postponed 12 times at the request of the defense. The two lawyers representing the Bulgarians say the trial's outcome is likely to be decided after either the defense or the prosecution files an appeal of the People's Court decision before a higher court. Libya has a two-tier judicial system. MS

LARGE U.S. INVESTMENTS IN BULGARIA IN OFFING

Prime Minister Ivan Kostov on 31 May announced that the government will guarantee a $1.4 billion deal with the U.S. AES and Entergy companies for the upgrading of the Maritsa-Iztok-1 and Maritsa-Iztok-3 coal-fired power plants, situated some 300 kilometers southeast of Sofia, AP reported. The two plants are the only ones in Bulgaria fueled by the country's low-quality coal deposits and the overhaul of the two units will prolong their life span by more than 18 years. The project also includes the introduction of environment-friendly technologies that will cut toxic sulfur dioxide emissions, in compliance with EU standards. Kostov said the project will bolster Bulgaria's position as a major electricity producer and exporter and will lessen the dependence on higher quality coal imported mainly from Russia. MS




BULGARIAN ELECTION CAMPAIGN TAKES SHAPE


By Kathryn Mazur

The official opening of the election campaign in Bulgaria last month showed that the major political parties are running on similar platforms: they all promise European and NATO integration, more jobs, and better living standards. This is the first time since 1990 that all contenders agree on the issues of major concern to the Bulgarian people. The similarities, however, end there.

With the former king, Simeon II, entering Bulgarian politics, political reality has dramatically changed. His electoral alliance, the National Movement Simeon II (NDSV), has moved into a comfortable first-place lead by all serious accounts, RFE/RL's Bulgarian Service reported. Sociologists and political analysts are trying to explain this phenomenon as a protest vote by many disappointed and frustrated people, who are tired of Bulgaria's post-communist partisan confrontations. Some Western experts wonder how the ruling coalition lost so much support despite the fact that it saved the country from a major economic disaster four years ago and ensured stable growth for three consecutive years.

Support for the governing Union of Democratic Forces (SDS), which was running a few points ahead of the opposition Socialist Party before the former king's arrival in April, plunged to 15 percent in May. The Socialists were marginalized to only 10 percent. It thus seems that Simeon's party is attracting not only undecided voters and those who initially did not want to vote, but that it also appeals to segments in the hardcore electorate of the two major parties.

Although some consider that Simeon's support comes from the poorest segments of the population (over 50 percent of Bulgarians live below the poverty line), public opinion surveys show that it is equally spread among all social groups.

Some of the Bulgarian media have compared Simeon's popular support to nationalist Vadim Tudor's success in Romania, Joerg Haider's strength in Austria, and even Adolf Hitler's rise to power in Germany. One Russian expert has warned that Simeon threatens Bulgaria with the establishment of an authoritarian regime of the "Balkan type." In stark contrast, others argue that Simeon's role in the upcoming elections will be beneficial for Bulgarian democracy, since "an old, decent gentleman" will gather the protest vote, instead of somebody similar to Tudor or Haider from the far right.

Bruce Jackson, head of the nongovernmental U.S. Committee on NATO, argued at a conference in Bratislava on 11 May that the U.S. will not support the restoration of the monarchy in Bulgaria. He, too, compared Simeon to Haider and Tudor. "The Washington Post" published an editorial on 10 May claiming that Simeon's gaining power could be disastrous for Bulgaria. However, there has not been any official statement by the U.S. or any European government, including that of Russia, on the new political situation in Bulgaria.

Although Simeon has declared that restoring the monarchy is not among his priorities, many think that this is indeed his long-term goal. Such analysts speculate that Simeon's name will not appear on the ballot because he would not want to take an oath to the republican constitution and thereby give up legal grounds for the eventual restoration of the monarchy. President Petar Stoyanov has pointed out that by not actually running for office himself, Simeon failed to fulfill his promise to allow Bulgarians to vote for him.

The announcement on 21 May of the names of Simeon's candidates for parliament in the 17 June vote provoked mixed reactions, because along with many talented young economists and lawyers, some individuals widely regarded as compromised were also included on the lists. Some supporters from the town of Russe left the movement for this reason, and there are also some compromised candidates running in Burgas.

There is a possibility that Simeon's campaign may incur additional negative publicity once the candidates are officially screened for collaboration with the communist-era security services, as the law requires. The NDSV was the only one that failed to request such a check before the start of the election campaign.

The opinion research company MBMD expects that the popularity of the NDSV will drop by approximately 10 percentage points by election day. After an initial period of high emotional support for the king, people are now asking questions about Simeon's election platform.

However, the presence of some young Bulgarians who have built impressive careers abroad -- such as the vice president of the London-based Lazard Bank, Nikolay Vasilev; Milen Velchev from Merrill Lynch; and Ljubka Kachakova from PricewaterhouseCoopers in Brussels -- may be a sufficient basis for electoral success. The young group of economists wrote the NDSV's economic program, which is based on cutting taxes, stimulating economic growth, providing incentives for reinvesting enterprise profits, and promoting the development of capital and stock markets. Prime Minister Ivan Kostov has sharply criticized this platform, arguing that any changes in Bulgaria's tax system would jeopardize the country's progress toward EU accession.

Despite the serious blow that the SDS experienced with the appearance of the king's electoral alliance, it launched an optimistic and confident election campaign. The SDS declined to make commitments regarding any postelection coalition, declaring that it will win the elections outright. The NDSV nonetheless announced that its natural partners in the next parliament will be the SDS and the Movement for Rights and Freedoms, also known as the Turkish party.

The Turkish party has experienced serious problems in this election because part of its traditional support base has now evidently opted for the king's coalition and another part for the SDS. The Turkish minority has been steadily declining over the past decade due to emigration to Turkey. This has cost the party almost half of its potential voters. It may be left out of parliament altogether if its voter support does not increase to over 4 percent. Current polls give it between 2 and 3.8 percent of the vote.

Veteran party leader Ahmed Dogan was absent from the official campaign opening rallies in the southern town of Djebel and the northern town of Isperih on 19 and 20 May, respectively. His deputy, Osman Oktaj, said that all other political parties are trying to destroy the Movement for Rights and Freedoms by including ethnic Turks on their lists of candidates in hopes of luring Turkish voters.

The Turkish party has been long considered by many Western experts to be one of the most important contributors to Bulgaria's multiethnic harmony, in contrast to the interethnic wars in neighboring Yugoslavia.

If the Turks and Muslims in Bulgaria emerge from the 17 June voting without serious parliamentary representation, this may seriously damage interethnic relations and may contribute to new political tensions in an already unstable Balkans.

Kathryn Mazur is an independent analyst based in the U.S. (Kathryn_Mazur@hotmail.com).


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