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Newsline - December 20, 2001


DUMA RATIFIES RUSSIAN-IRANIAN TREATY ON FRIENDSHIP AND COOPERATION
At its plenary session on 19 December, the Duma ratified the "friendship" treaty between Moscow and Tehran signed by the heads of both states in Moscow in March 2002, Russian news agencies reported. Presenting the treaty to the Duma, Deputy Foreign Minister Aleksandr Losyukov said the document provides a broad basis for expanding Russian-Iranian military-technical and economic cooperation. He also mentioned that in addition to the nuclear power plant in Bushehr, Russia will to supply additional reactors to Iran for other nuclear plants currently in the planning stages. VY

U.S., RUSSIA HOLD TALKS ON IRAQ
Ambassador John Wolf, the U.S. special adviser on the Caspian, arrived in Moscow to begin negotiations on 19 December with Russian Deputy Foreign Ministers Sergei Ordzhonikidze and Aleksandr Saltanov on strengthening sanctions against Iraq, "Izvestiya" reported. Wolf brought an updated list of the dual-use civilian and military goods the United States would like to see the UN Security Council ban for export to Iraq. Last November, Russia agreed with the position of the United States and Britain that sanctions imposed on Saddam Hussein's regime by the United Nations must be updated, and include more comprehensive international monitoring. "Izvestiya" wrote the same day that, if Moscow agrees with the U.S. list, it will pave the way for a joint U.S.-British-Russian resolution. Thus, the fate of Saddam Hussein could be decided in Moscow. VY

DEFENSE MINISTER OFFERS RUSSIAN INTELLIGENCE INFORMATION TO NATO
Following Permanent Joint Council meetings in Brussels on 19 December, Sergei Ivanov said Russia and NATO discussed measures intended to combat international terrorism and on nonproliferation of weapons of mass destruction, RTR reported. Ivanov added that in contribution to the antiterrorist coalition, Russia is prepared to offer more intelligence information "not only on Afghanistan, but the other regions where antiterrorist actions are possible." Ivanov also announced that Russia gave its consent to the reopening of the NATO mission in Moscow. VY

NEW LABOR CODE PASSES CRUCIAL HURDLE...
State Duma deputies passed the draft Labor Code in its second reading on 19 December. Before the code was passed, more than 2000 proposed amendments were considered, according to Interfax. In addition, the Duma received more than 7,000 letters and telegrams from workers' collectives and other public organizations requesting changes. The vote on the final version was 283 in favor, 125 against, and two abstentions. A third reading is scheduled for 21 December. Among the amendments approved was one requiring that the monthly earnings of employees be no less than the subsistence minimum, according to ITAR-TASS. Other amendments passed was one banning forced labor and another establishing the maximum work week at 40 hours, according to Interfax. The Communist faction and Agro-Industrial group voted against the bill. JAC

...NAMES NEW FEDERAL HOLIDAY
A provision of the draft Labor Code named 23 February as an official federal nonworking holiday, Russian news agencies reported. That day, which was celebrated as Red Army Day in the Soviet era, will be known as Defenders of the Fatherland Day. The Duma also decided to add to rename the 7 November holiday known as the Great October Socialist Revolution Day, which commemorates the anniversary of the Bolshevik Revolution, as the Day of Concord and Reconciliation. The proposal to amend the former Soviet holidays was made by the pro-Kremlin Unity faction. VY

MORE SPLINTERS APPEAR IN SPS
State Duma Deputy Viktor Pokhmelkin announced on 19 December that he is leaving the Union of Rightist Forces (SPS) party, although he will remain in the group's faction in the Duma, polit.ru reported. Pokhmelkin explained that he thinks the SPS is no longer a "liberal party" or a "party of regions," but has instead opted for a path of "maximum cooperation with authorities." He concluded that currently there is not much of a difference between the SPS and the Unity and Fatherland parties. In an interview with Ekho Moskvy the same day, SPS leader Boris Nemtsov dismissed Pokhmelkin's concerns, noting that he believes the real reason for Pokhmelkin's departure is "personal ambition." Commenting on the activities of the new Liberal Russia movement, Pokhmelkin told Interfax that he does not understand "why it is worse to be in a party in which [embattled magnate Boris] Berezovsky is participating than [Unified Energy Systems (EES) head Anatolii] Chubais." Together with Pokhmelkin, fellow SPS deputy Yulii Rybakov also announced his departure from the party, RFE/RL's Moscow bureau reported. JAC

RUSSIA SEEKS CLOSER ECONOMIC TIES WITH POLAND
Prime Minister Mikhail Kasyanov and his visiting Polish counterpart Leszek Miller said following their discussions in Moscow on 19 December that they agreed to intensify and expand Russian-Polish trade and economic cooperation, especially in the energy sector, RIA-Novosti reported. In this context, Kasyanov and Miller said they instructed their governments to prepare a document on cooperation in the gas industry in time for President Vladimir Putin's visit to Warsaw next month. Miller also noted that Poland welcomes Putin's efforts to improve relations with the West, and that the partnership with Poland will open to Russia "the cheapest and shortest route for her resources, energy, investment, and labor to Europe." VY

PUTIN DEMANDS MORE TRANSPARENCY FROM GOVERNMENT
Speaking at the meeting of the State Council devoted to the development of small and medium-sized businesses in Russia on 19 December, President Putin announced that he has demanded more transparency in the functioning of Premier Kasyanov's government, RBK reported. In particular, Putin said he directed all government agencies and departments to make public all of their regulatory acts and norms, and asked the government to work out procedures under which these acts will be invalid unless published in the media. VY

RUSSIAN NEWSPAPER CLAIMS FOREIGN LOANS LINE OFFICIALS' POCKETS
According to "Nezavisimaya gazeta" on 19 December, most foreign loans obtained by the Russian government from international credit organizations were used as a tool for personal enrichment by senior officials. The daily gave as an example the findings of a recent Audit Chamber probe into the fate of a $240 million World Bank loan to the Russian Agriculture Ministry that was intended for structural reforms in the agricultural sector and support of farmers. The daily said that according to the audit the funds from that loan were wasted or disappeared, while no transformation resulting from the reforms can be seen. But most remarkable, according to "Nezavisimaya gazeta," is that the person in charge of the distribution of those funds was then-Finance Minister and current Prime Minister Kasyanov. VY

CONFERENCE OPENS ON THE FATE OF SOVIET JEWISH COMMUNITY
The international conference Soviet Jewry: Yesterday, Today, and Tomorrow opened on 18 December at the Moscow Jewish Community Center in Marina Roshcha, "Kommersant-Daily" reported. Participants include activists of the Jewish emigration movement through the 1970s and 1990s; leaders from most Russian political parties; heads of Duma factions; and a senior official from the presidential administration. According to Vladimir Engel, the director of the Federation of Jewish Communities of Russia, the goal of the conference is to study the impact the Jewish emigration movement had on the democratization of the Soviet Union and to use their findings to solve current issues. Another goal is to create the World Congress of Russian Jewry, which will unite the Jews who emigrated from the Soviet Union and now live abroad. VY

KHRISTENKO TO BECOME POINT MAN FOR OVERHAULING EES
Prime Minister Kasyanov has signed a decree creating a new government commission on reform of the power industry and naming Deputy Prime Minister Viktor Khristenko as its chair, ITAR-TASS reported on 19 December. In accordance with the decree, the Energy, Atomic Energy, Antimonopoly Policy, and Economic Development and Trade Ministries, along with the Federal Energy Commission, will all submit proposals to and about the new commission, according to Interfax. The commission will likely consider such issues as the restructuring of EES. JAC

PURGE UNDERWAY AT ATOMIC ENERGY MINISTRY?
"Vedomosti" reported on 19 December that although Aleksandr Rumyantsev has headed the Atomic Energy Ministry for more than six months, he is finally conducting a purge of the ministry's cadre. For example, it has been decided that First Deputy Atomic Energy Minister Valentin Ivanov, who oversees international relations, will be dismissed as well as the heads of several key departments. According to the daily, the dismissals are more than just routine, and involve allegations of corruption. Former Atomic Energy Minister Yevgenii Adamov himself was accused of using his government position to advance his private commercial interests (see "RFE/RL Russian Political Weekly," 12 March 2001). Adamov is considered to be close to Berezovsky. JAC

PRO-KREMLIN GROUP HEAD DENIES CHANGES IN STORE FOR FEDERATION COUNCIL
On 19 December, Federation group head Valerii Goreglyad dismissed media reports that the Federation Council is about to undergo cardinal changes, Interfax reported (see "RFE/RL Newsline," 19 December 2001). The previous day, "Nezavisimaya gazeta" reported that a number of proposals for restructuring the upper legislative chamber have already been submitted to the newly elected chairman, Sergei Mironov. JAC

SIBERIA PREDICTED AS WINNER IN ATTRACTING INVESTMENT
The Ministry of Economic Development and Trade is predicting that in 2002-2003, the amount of investment in local economies will grow in comparison with 1999, but at an uneven rate across Russia, regions.ru reported on 19 December. The main beneficiaries will be the West Siberian, East Siberian, and Far Northern regions, all of which are expected to experience almost 200 percent growth rates in investment. The largest volume of capital investment will be made in Western Siberian regions, particularly in the oil-producing areas, according to the ministry. JAC

NOTE:
Due to technical difficulties, there is no Transcaucasus and Central Asia report today.

BELARUSIAN PRESIDENT SETS PRIVATIZATION STRATEGY
President Alyaksandr Lukashenka on 19 December briefed the government on guidelines for the upcoming privatization of some enterprises in Belarus's petrochemical industry, Belarusian Television reported. Lukashenka said investors will not be allowed to lay off employees in privatized companies or decrease their wages. "There will be a very complex mechanism for privatizing enterprises in Belarus. No privatization will take place without approval of working collectives and management of the enterprises as well as that of local authority bodies -- the heads of raion, city, and oblast executive committees," he said. Lukashenka added that the state will keep controlling interests in privatized companies "in the first stage of privatization." He also promised that domestic bidders will be able to purchase "some 5-7 percent" of shares in privatized companies at a lower price than foreign companies. JM

TWO SAY THEY WERE TORTURED TO INCRIMINATE FORMER BELARUSIAN PREMIER'S SON
On 19 December, a district court in Minsk began the trial of Alyaksandr Chyhir, the son of prominent opposition figure and former Belarusian Premier Mikhail Chyhir, on charges of car theft, Belapan and RFE/RL's Belarusian Service reported. Alyaksandr Chyhir as well as Anton Yashyn and Dzmitry Yatskevich are charged with stealing eight cars and selling parts from them. If found guilty, they face from seven to 17 years imprisonment. Chyhir, who has been in custody since 10 February, denies any wrongdoing and accuses the authorities of trumping up the charge in revenge for his father's political activities. Meanwhile, Yashyn and Yatskevich told the court that police officers beat and tortured them in an effort to get testimony incriminating Chyhir. The police officers denied in court having used any rough methods against Yashyn and Yatskevich, but medical experts confirmed that both defendants have numerous bruises on their bodies. JM

FOUR WOMEN PUNISHED FOR PICKETING LUKASHENKA'S RESIDENCE
Two women have been jailed for 10 days and two others fined some $950 each for an attempt to picket the residence of Belarusian President Lukashenka on 19 December, Belapan and RFE/RL's Belarusian Service reported. The four women came to Minsk from Babruysk (Mahileu Oblast) to let the president know about their grievances: they were fired from work after they protested what they say was the local authorities' unfair distribution of housing. The authorities promised to help the women after they staged a 10-day hunger strike on Babruysk's central square in August, but subsequently forgot about their promise. "Now it is ridiculous, but I believed Lukashenka, I hoped that he would meet us. Now I am convinced that it is impossible to reach him. Only bandits could treat people the way authorities treated us today," one woman told Belapan after the trial, which lasted for 20 minutes and was conducted without defense counsel. JM

UKRAINE'S SECURITY CHIEF DENIES ALLEGATIONS OF ILLEGAL ARMS TRADE
Yevhen Marchuk, the head of Ukraine's National Security and Defense Council (RNBO), told ICTV television on 18 December that the recent series of reports in "Kievskii Telegraf" accusing him of illegal arms dealing is an act of provocation. According to the newspaper, Marchuk allegedly sold everything from small arms to tanks and jet aircraft to international buyers while heading Ukraine's Security Service from 1992-1995. The newspaper also alleged that Marchuk cooperated with Ukrainian citizen Leonid Minin, who is currently on trial in Italy on smuggling charges, in selling weapons stolen from Ukrainian army warehouses to underworld customers in Sierra Leone, Angola, Serbia, and Afghanistan. Marchuk told ICTV that the incriminating reports were disseminated by media companies controlled by oligarchic lawmaker Andriy Derkach, the son of former Security Service chief and Marchuk's rival Leonid Derkach. According to Marchuk, the Derkachs are now worried by an ongoing RNBO probe into corruption in strategic industries. JM

OUR UKRAINE BLOC DENIES YUSHCHENKO'S INVOLVEMENT IN TAPE SCANDAL
Our Ukraine, the election bloc led by former Prime Minister Viktor Yushchenko, has issued a statement to deny Yushchenko's involvement in the release last year of secret audio recordings implicating President Leonid Kuchma in the killing of journalist Heorhiy Gongadze and a number of other illegal activities, UNIAN reported on 19 December. The statement was made in response to the allusion made by President Kuchma at a news conference the previous day that Yushchenko might have been behind the tape scandal, as he was the only person who was in a position to benefit from Kuchma's resignation. "[If the president] had had a nervous breakdown and resigned, [then Prime Minister Viktor Yushchenko would have become the acting president]. Taking into account the situation and resources then, who would have won [early presidential elections]?" Interfax quoted Kuchma as saying on 18 December. JM

CRIMEA TO HOLD LEGISLATIVE ELECTION ON 31 MARCH 2002
Crimea's Supreme Council decided on 19 December to hold an election for the peninsula's autonomous legislature on 31 March 2002, the same day as elections for the Ukrainian parliament, Interfax reported. The Supreme Council also approved 15 people nominated by Crimean speaker Leonid Hrach for the Election Commission of the Autonomous Republic of Crimea. The approval of the commission, like many other issues debated in the Crimean legislature, took place amid intense controversies and conflicts between lawmakers, UNIAN reported. Crimea's 100 legislators will be elected under a majority system stipulated by an election law dating back to 1998. JM

ESTONIAN PRIME MINISTER TO RESIGN
Shortly after the parliament passed the 2002 budget on 19 December, Mart Laar announced that he will resign from his post on 8 January, ETA reported. He said that he had intended to announce his decision immediately after he learned that the Reform Party decided to withdraw from its coalition with the Pro Patria Union and the Moderates in the Tallinn City Council and form a coalition with the opposition Center Party. Laar said he delayed his resignation until the passage of important measures, such as the 2002 budget. The parliament passed the balanced budget of 33.13 billion kroons ($1.9 billion) by a vote of 52 to 39. The budget is 11.2 percent greater than the 2001 budget. The resignation of the prime minister automatically means the resignation of the whole government and President Arnold Ruutel will have 14 days (until 22 January) to select a new candidate for the post. Laar suggested that Reform Party Chairman Siim Kallas might be this candidate. SG

U.S. PEACE CORPS TO CLOSE ITS PROGRAMS IN LATVIA IN SEPTEMBER 2002
The U.S. Peace Corps will end its programs in Latvia in September 2002 after 10 years of operation, LETA reported on 19 December. Since 1992, 198 volunteers have served in Latvia, focusing on teaching English as a foreign language and assisting small businesses and nongovernmental organizations (NGOs) in improving their management techniques. By the time is finished its operations, the organization's volunteers will have taught English to nearly 22,000 students, and to have helped some 5,500 business people and NGO officers to develop their financial and organizational management skills. The volunteers served for two years or more in 67 towns and villages throughout the country. SG

JAPANESE FOREIGN MINISTRY OFFICIAL VISITS LITHUANIA
First Deputy Foreign Minister Shigeo Uetake arrived in Vilnius on 19 December to mark the 10-year anniversary of restored diplomatic relations between the two countries and to boost bilateral relations, ELTA reported. He is the highest-ranking Japanese official ever to visit Lithuania. Uetake discussed with President Valdas Adamkus scientific exchange and the expansion of economic relations between their countries. Foreign Minister Antanas Valionis proposed that the exchange of political visits be increased and that the foreign ministries hold regular consultations. Uetake also met with parliament Chairman Arturas Paulauskas and traveled to Kaunas, where he was greeted by Mayor Erikas Tamosauskas at the home of former Japanese diplomat Chiune Sugihara, who saved the lives of thousands of Jews during World War II by issuing them visas to Japan. SG

INVESTIGATORS SAY 1941 JEDWABNE POGROM PERPETRATED WITHOUT NAZI ASSISTANCE
Investigators from the National Remembrance Institute (IPN) said on 19 December that they have found no evidence that the killing of hundreds of Jews in the town of Jedwabne in 1941 was perpetrated with the involvement of Nazi forces, Polish media reported. "We have not found any evidence that would indicate that there were other uniformed German formations apart from eight gendarmes, which was known earlier," PAP quoted IPN Chairman Leon Kieres as saying. Another IPN investigator, Radoslaw Ignatiew, said the ammunition found at the pogrom site comes either from World War I or 1942, a year after the Jedwabne massacre. "At this moment, the thesis that shots were fired during the [pogrom] looks very unlikely," Ignatiew added. Meanwhile, Kieres has announced that that he is considering the possibility of resigning in order for the IPN not to be associated solely with the investigation into the Jedwabne pogrom. JM

POLISH COALITION PARTIES WANT TO CHANGE LAWS ON CENTRAL BANK
The ruling Democratic Left Alliance, Polish Peasant Party (PSL), and Labor Union are planning to amend the law on the Monetary Policy Council (RPP), which oversees the activities of the Polish National Bank (NBP). PSL Deputy Chairman Marek Sawicki told PAP on 19 December that the three parties will submit their amendments to the Sejm "tomorrow or the day after tomorrow." According to Sawicki, the draft bill will provide for wider powers and responsibilities for the RPP, and for increasing its membership from nine to at least 15. Sawicki expressed hope that the proposed changes will "contribute to the improvement of cooperation between the RPP and the government, and to the RPP's greater care for the state of the Polish economy." Resisting the government's pressure, the RPP on 19 December refused to lower key interest rates. Simultaneously, the RPP issued a statement saying, "The announcements of legal changes in the status of the RPP and NBP undermine the principles and constitutional order of the state, and Poland's credibility internationally." JM

POLAND'S UNICEF COMMITTEE ACCUSED OF MISMANAGEMENT
Officials from the United Nations Children's Fund (UNICEF) in Geneva withdrew support on 19 December for the Polish arm of the organization, accusing representatives in Warsaw of gross mismanagement, dpa reported. Lucjan Wolniewicz, the UNICEF head in Poland, is accused of racking up a huge debt, mismanaging charitable contributions, and abusing the UNICEF structures for private purposes. UNICEF European Regional Director Stephen Woodhouse said the charge of mismanagement means that less than 75 percent of charitable contributions made in Poland were used to help children. Moreover, according to UNICEF officials in Geneva, the Polish committee failed to deliver some $1 million in funds to UNICEF central structures, and made no financial contribution to international aid campaigns in 1998-99. JM

CZECH LEGISLATURE APPROVES MILITARY DEPLOYMENTS TO AFGHANISTAN, KUWAIT
Both houses of the Czech parliament have approved plans to send military specialists to Afghanistan and, reportedly, Kuwait in connection with a UN peacekeeping mission and the U.S.-led effort to counter international terrorism, CTK and other agencies reported on 19 and 20 December. Czech troops are expected to depart for Afghanistan by the end of December, pending Prague's consent to an expected UN Security Council resolution mandating a peacekeeping force in war-torn Afghanistan. A Czech chemical unit and field hospital are meanwhile expected to head to Kuwait as part of the U.S.-led Operation Enduring Freedom, officials said, adding that the contingent will be limited to 400 men but that details are still classified. Their expected departure date was not disclosed. Senate approval of the Kuwait mission came on 20 December following the approval of both deployments by the lower house on 19 December. AH

CZECH GOVERNMENT WITHDRAWS PLAN TO IMPOSE VISAS ON ROMANIANS
The Czech government backed off threats to impose visa requirements on Romanian citizens beginning on 1 January after a decline in the number of immigrants from that country in recent months, a government spokesman was quoted by CTK as saying after a cabinet session on 19 December. The spokesman credited Bucharest with measures to curb the influx of asylum seekers from that country. The Romanian government will also dispatch a police representative to its embassy in Prague to work with Czech authorities as part of the effort, the agency reported. Bucharest issued a statement describing that liaison officer's duties as cooperation with local police to stem illegal immigration and related criminal activities. The European Union lifted visa requirements on Romanians on 7 December. A total of 811 Romanians applied for Czech asylum in the first half of 2001, compared to 510 Romanian asylum seekers for the whole of 2000. AH

CZECH PRESIDENT SIGNS JUDICIAL BILL INTO LAW, BUT WILL CHALLENGE SOME PROVISIONS
Vaclav Havel signed a bill on 19 December aimed at improving and accelerating court proceedings in the Czech Republic, but a spokesman said Havel will appeal to the Constitutional Court over clauses that could compromise judges' independence, CTK reported. The president said in a letter to parliamentary Chairman Vaclav Klaus that he "expected the law to more widely and consistently separate judicial and executive power, as provided for in the constitution," the agency added. Havel reportedly criticized two aspects in particular: one that allows judges to simultaneously work in public administration, and another giving the justice minister considerable authority over assessments related to judges' performance. AH

FRENCH, JAPANESE TO BUILD AUTO PLANT IN CZECH REPUBLIC
Automakers PSA Peugeot Citroen and Toyota announced plans for a 1.5 billion euro assembly plant in the city of Kolin, east of the Czech capital, dpa reported. Production is expected to start in 2005, and the facility initially should roll out 300,000 compact cars per year. The companies signed a cooperation agreement on joint production for the European market in July, dpa added. AH

CZECH CABINET LIFTS REMAINING SANCTIONS ON ARMS EXPORTS TO YUGOSLAVIA
The government on 19 December approved of scrapping Milosevic-era sanctions against arms sales to Yugoslavia, CTK reported. Other sanctions, which went into effect in 1998 during the Kosova crisis, were already dropped in light of last year's change of regimes in Belgrade. AH

THREE IN FOUR CZECHS WANT FOREIGN POLICY 'COOPERATION' WITH BRUSSELS
Some three-quarters of Czechs polled in November want the country's foreign policy to be determined in cooperation with the European Union, CTK reported on 19 December, citing a STEM survey. A majority of respondents said the EU is a "natural partner" in foreign policy-making. Some 37 percent said Czech foreign policy should be guided also by cooperation with the United States, CTK reported. At the same time, roughly 60 percent said the EU and the United States influence Czech foreign policy more than respondents would like. An overwhelming 87 percent of people said Slovakia is their favorite foreign country. AH

SLOVAKIA'S TRANSPETROL TO BE MANAGED BY RUSSIA'S YUKOS
The Slovak cabinet on 19 December approved the Privatization Commission's decision earlier this month to sell 49 percent of shares in the country's oil pipeline operator Transpetrol to Russia's oil giant Yukos, TASR reported. Yukos offered $74 million for the stake, which includes managing powers. Yukos obliged itself to increase the amount of oil transported through Slovakia as well as to maintain the current management and personnel of Transpetrol. The Privatization Commission announced the same day that Germany's Alliance AG won a tender for a 66.8 percent stake in Slovenska Poistovna, the country's leading insurer. Moreover, Slovakia's financial group Penta said it is ready to sell all of its 24.27 percent stake in Slovenska Poistovna to Allianz at the same price per share paid by Allianz to the government. JM

SOCIALIST WANTS INTERNATIONAL OBSERVERS FOR HUNGARIAN ELECTIONS
Opposition Socialist Party parliamentary group leader Sandor Nagy told reporters on 19 December that he will call on his party's governing board to consider inviting international observers to monitor next year's parliamentary elections, Hungarian media reported. Nagy said the governing majority's election of members to the National Election Commission without consulting opposition parties beforehand was "unprecedented" (see "RFE/RL Newsline," 19 December 2001). He said he does not fear that inviting such observers could tarnish Hungary's reputation. Rather, Nagy added, it is the government that is tarnishing its own reputation. MSZ

HUNGARY'S REBEL SMALLHOLDERS JOIN ELECTION ALLIANCE
According to an agreement concluded on 19 December, 12 Smallholders opposed to Independent Smallholders' Party (FKGP) Chairman Jozsef Torgyan will be included on the national election list of FIDESZ and the Democratic Forum in next year's elections. The 12 rebel Smallholders, which include Environment Minister Jozsef Turi-Kovacs, FKGP parliamentary group leader Peter Szentgyorgyvolgyi, and PHARE Funds Minister Imre Boros, will soon set up a new group called the Smallholder Civic Society. The signing of the new pact was attended, among others, by FIDESZ Chairman Zoltan Pokorni and Democratic Forum Chairwoman Ibolya David. FKGP Deputy Chairman Bela Beres criticized the agreement as being a "payment for Judas." MSZ

BUDAPEST MAYOR WINS LIBEL SUIT AGAINST CSURKA
On 19 December, Budapest Mayor Gabor Demszky won his libel suit against Hungarian Justice and Life Party Chairman Istvan Csurka, who wrote in a 1999 edition of the weekly "Magyar Forum" that Demszky volunteered to be an informant for the communist government in 1976, Hungarian media reported. Csurka's lawyer maintained during the trial that the article said only that Demszky volunteered to be an informant, but did not claim that he actually became one. The Metropolitan Court ruled that the article's unrealistic assertion damaged Demszky's reputation and honor, and was intended to tarnish his credibility as a politician. The court also ordered Csurka to pay a 500,000 forint ($1,800) fine in compensation. Hungarian television quoted Csurka's lawyer as saying he will appeal the sentence. MSZ

UN POLICE SPOKESMAN CHALLENGES RUMSFELD PROPOSAL ON BOSNIA FORCE CUTS...
Stefo Lehmann, a spokesman for the UN police mission in Bosnia, told Reuters in Sarajevo on 19 December that a proposal by U.S. Defense Secretary Donald Rumsfeld to scale down SFOR is premature (see "RFE/RL Newsline," 19 December 2001). Lehmann said that NATO forces "should not be reduced until the job is done... The entire international civilian presence and mission composition in Bosnia is predicated upon SFOR fulfilling the role that it has been set out to do in Dayton," he said. An unnamed SFOR official added: "The current level of NATO soldiers here is also necessary to control possible terrorist activities in the Balkans." PM

...STRESSES SFOR'S ROLE FOR STABILITY
Lehmann also told Reuters in Sarajevo on 19 December that SFOR's presence ensures that interethnic cooperation has a chance to develop: "Any change of SFOR's ability to fulfill this role will have serious consequences for the entire international presence in Bosnia and for its efforts to create a stable self-sustaining democracy. Reducing the numbers now would send a message to the obstructionists in Bosnia that they have succeeded in weeding us out and can resume the policies of division which have been so detrimental for this country and its citizens." Elsewhere, Oleg Milisic, a spokesman for High Representative Wolfgang Petritsch, said that "while significant progress has been made in consolidating the peace in Bosnia, substantial tasks remain, including the apprehension of war criminals, notably Radovan Karadzic and Ratko Mladic." PM

MONTENEGRO APPEALS TO COUNCIL OF EUROPE
The Montenegrin authorities have asked the Council of Europe not to admit Yugoslavia to membership in that body until the question of future relations between Serbia and Montenegro has been resolved, RFE/RL's South Slavic and Albanian Languages Service reported on 19 December from Podgorica. The Montenegrins argue that the present Yugoslav federation is based on illegal legislation enacted by former President Slobodan Milosevic without Montenegro's approval. To admit that federation to the Council of Europe would be to provide international endorsement of Milosevic's move. President Milo Djukanovic said that "one cannot build new relations in the Balkans on the remnants of Milosevic's political architecture." PM

SERBIAN NGO SLAMS KOSTUNICA'S HAGUE 'COOPERATION' PROPOSAL
The Fund for Humanitarian Justice (FHP) said in a statement in Belgrade on 19 December that a legislative bill drawn up by Yugoslav President Vojislav Kostunica's Democratic Party of Serbia (DSS) on cooperation with The Hague tribunal actually calls the tribunal's legitimacy into question, RFE/RL's South Slavic and Albanian Languages Service reported. The bill would require local courts to examine and validate any indictments issued by The Hague. Kostunica regards the tribunal as an anti-Serbian instrument of U.S. foreign policy. Many observers have suspected that any legislation proposed by the DSS would be aimed at obstructing cooperation rather than promoting it. The bill is likely to be regarded as a non-starter by The Hague, where chief prosecutor Carla Del Ponte has said that Kostunica's government is knowingly harboring war criminals (see "RFE/RL Balkan Report," 30 November 2001). PM

BOSNIAN MUSLIM PARTY TO JOIN COALITION IN KOSOVA?
Ibrahim Rugova, who heads the Democratic League of Kosova (LDK), has made an unspecified offer of a political alliance to the Vatan coalition, which represents Kosova's Bosnian Muslim minority, RFE/RL's South Slavic and Albanian Languages Service reported from Prishtina on 19 December. Rugova's party holds 47 seats in the 120-seat legislature, while Vatan has four. It nonetheless remains difficult to see how Rugova can put together a working majority without going into a coalition with either or both of the other two large Albanian parties or with the Serbian Povratak coalition. Rugova recently ruled out the Povratak option (see "RFE/RL Newsline," 19 December 2001). Previous attempts to form coalitions with the other Albanian parties failed because of a lack of agreement on power sharing (see "RFE/RL Newsline," 14 December 2001). PM

CROATIAN PRIME MINISTER CALLS ON KOSTUNICA TO SUPPORT BOSNIAN UNITY
Speaking to RFE/RL's South Slavic and Albanian Languages Service in Zagreb on 19 December, Ivica Racan stressed Croatia's position that it wants to promote good relations with the Bosnian state and not special relations with the Muslim-Croat federation, as allowed by the 1995 Dayton peace agreement (see "RFE/RL Newsline," 19 December 2001). Racan called on Kostunica's Yugoslavia to join Croatia as a fellow signatory of Dayton in promoting stability in Bosnia by treating Bosnia as a whole and not promoting "one-sided" relations with either of the two entities. Kostunica has recently sought to improve ties to Sarajevo, but is a longtime advocate of special relations between Belgrade and Banja Luka. PM

CROATIA, SLOVENIA END DISPUTE OVER NUCLEAR POWER PLANT
Racan and his Slovenian counterpart Janez Drnovsek signed an agreement in Krsko, Slovenia, on 19 December to regulate the management and use of the nuclear power plant there and its electricity, RFE/RL's South Slavic and Albanian Languages Service reported. They also agreed on how to handle the planned shutdown of former Yugoslavia's only nuclear plant in 2024. Croatian Environment Minister Bozo Kovacevic expressed displeasure that the authorities failed to resolve the issue of disposing of Krsko's nuclear waste materials. The waste will be kept at the plant until its closure, at which time the authorities will have to decide what to do, AP reported. Both Ljubljana and Zagreb funded the plant's construction in the 1980s and have bickered over its management and use for the past 10 years. PM

ALBANIA REINTRODUCES VISAS FOR ARABS
The government announced in a statement on 19 December that it is reimposing visa requirements for citizens of Saudi Arabia, Egypt, Kuwait, Bahrain, Qatar, Oman, and the United Arab Emirates. Citizens of Singapore are also affected, dpa reported. The move is aimed at clamping down on potential terrorists. Albanian authorities have worked closely with U.S. CIA officials in identifying and expelling potential Islamic extremists among the numerous foreign aid workers in Albania. Public opinion in Albania -- as in Kosova and western Macedonia -- has been firmly behind the U.S. in the wake of the 11 September terrorist attacks (see "RFE/RL Balkan Report," 28 September 2001, and "RFE/RL Newsline," 17 and 18 September 2001). PM

NEW POLICE GRADUATE INTO MACEDONIAN FORCE
U.S. Ambassador to Macedonia Michael Einik handed diplomas to the 106 graduates of a 12-week U.S.-sponsored course to train new recruits for the multiethnic police force, AP reported from Skopje on 19 December. Most of the graduates are ethnic Albanians. The program is aimed at improving the professionalism and the ethnic diversity of the force. Some 1,000 police are expected to complete the course by July 2003. It covers "democratic policing in a diverse society, first aid, traffic investigation, self-defense, and use of firearms," Einik added. PM

MACEDONIAN POLICE DEPLOYMENT ON TRACK
The latest stage of the redeployment of the ethnically mixed police force into 15 formerly guerrilla-held villages was completed successfully on 19 December, dpa reported from Skopje (see "RFE/RL Newsline," 19 December 2001). It is not clear when the next stage, involving a further 10 villages, will start. PM

EUROPEAN PARLIAMENT CHAIRWOMAN GIVES ROMANIA HOPE
Visiting European Parliament Chairwoman Nicole Fontaine said in Bucharest on 19 December that her organization fully supports Romania in its quest to join the EU, Mediafax reported. She said the EU's Laeken summit last weekend left the "doors to Romania's EU accession wide open." Fontaine added that candidate countries will be admitted to the EU when they are prepared for it, and that Romania has made "very dynamic progress" in that respect. ZsM

MOODY'S IMPROVES ROMANIA'S RATING
On 19 December, Romanian Finance Minister Mihai Tanasescu welcomed the decision by the international rating agency Moody's Investors Service to improve Romania's rating for hard-currency bonds, Romanian media reported. Moody's upped Romania's hard-currency bond rating from B3 to B2, and the hard-currency bank deposit rating from Caa1 to B3. It also improved the rating for national currency bonds from Caa1 to B2. The agency improved the ratings following the Romanian government's recent standby agreement with the IMF and the country's accelerated privatization, a Moody's press release said. However, Moody's will continue to monitor the structural reform process. ZsM

GAGAUZ-YERI DEPUTIES CALL ON MOLDOVAN AUTHORITIES TO SPEED UP RECOGNITION OF REGION
On 19 December, members of the Gagauz-Yeri Popular Assembly called on Moldovan authorities to speed up the constitutional recognition process of the region's special autonomous status, Flux reported. The deputies condemned the stoppage of the activities of the joint parliamentary commission, which was to propose amendments to the Moldovan Constitution. They also said they disapprove with the amendments proposed by the Party of Moldovan Communists, as they were not discussed with Gagauz-Yeri representatives (see "RFE/RL Newsline," 15 November 2001). ZsM

BULGARIAN FOREIGN MINISTER VISITS LIBYA
Foreign Minister Solomon Passy arrived in Libya on 18 December for an official visit, BTA reported. Passy was scheduled to meet his counterpart Abdel Rahman Mohammed Shalqum and Parliamentary Chairman Zenati Mohammad Zenati to discuss bilateral relations in general, Foreign Ministry spokeswoman Elena Poptodorova said. She urged the media not to assess the visit solely in relation to the ongoing trial against six Bulgarian medical doctors, who were charged with intentionally infecting Libyan children with the HIV virus. The next hearing for that trial is to take place on 22 December. Passy has yet to decide whether he will attend the hearing or not. President-elect Georgi Purvanov announced that he was to meet Libyan ambassador to Bulgaria Milad Moktar Karah on 20 December, the Sofia daily "Dnevnik" reported. UB

BULGARIAN PARLIAMENT APPROVES MEASURES TO STEP UP EU ACCESSION EFFORTS
A large majority of 207 out of a nominal total of 240 parliamentarians voted in favor of a decision calling for the government to step up its accession negotiations with the EU, and to prepare a strategy for those talks, BTA reported. The decision comes in the wake of the European Commission's decision at last weekend's meeting in Laeken not to include Bulgaria as a candidate country for the first round of EU enlargement (see End Note). In response to heavy criticism from his predecessor, Nadezhda Mikhailova, Foreign Minister Passy said: "The main reason for leaving Bulgaria out of the group of the first 10 invited to join the EU is the decision of the [now opposition] UDF [Union of Democratic Forces] government to set 2004 instead of 2002 as the deadline for completing the negotiations." UB

RUSSIAN COMPANY TO MODERNIZE BULGARIAN MIGS?
The Russian aircraft manufacturer MiG hopes to win a tender for the modernization of 20 Bulgarian MiG-29 fighter jets, the Sofia daily "Dnevnik" reported. The refurbishment of the aircraft is part of Bulgaria's program to bring the country's army into line with NATO standards. "Whoever wins the tender for the modernization of the MiGs, the airplanes will by no means be transported to Russia," Defense Minister Nikolai Svinarov said. According to Svinarov, it is possible to carry out 90 percent of the refurbishment in Bulgaria, but he said some of the planes' engine parts or electronics could be repaired in Russia, as this kind of work cannot be carried out in Bulgaria. The modernization deal is worth some $300 million. UB

BULGARIA'S CREDIT RATING RAISED
The international rating agency Moody's Investors Service has raised Bulgaria's credit rating from B2 to B1 -- meaning the Bulgaria's economy has a "stable outlook," BTA reported. "The upgrading of the country's credit rating is motivated by the reaction of the new government against the existing external restrictions, the passing of the 2002 National Budget Bill, the agreement with the IMF, and the commitment to accelerate the reforms that were brought to a standstill earlier in 2001," Finance Minister Milen Velchev said. UB

ROMANIA LAGGING BEHIND BULGARIA IN EU ACCESSION EFFORTS


EU enlargement commissioner Guenter Verheugen said on 17 December that Romania can count on extra support from the European Union as it seeks to speed up its preparations to join the 15-country bloc.

Verheugen was speaking in the western Romanian city of Timisoara, where he participated in ceremonies to mark 12 years since the beginning of the violent uprising that eventually led to the overthrow of communism and the execution of dictator Nicolae Ceausescu in December 1989.

Drawing parallels with the 1989 uprising, Verheugen urged Romanians to "battle" for EU membership as they had in fighting to end the communist regime. The European Commission, he added, will assist in that fight by developing a stronger and "even better" pre-accession strategy for Romania.

But Verheugen's comments came after European Union leaders at last weekend's Laeken summit left Romania and Bulgaria off a list of EU candidate countries likely to join the bloc in a possible "big-bang" enlargement move in 2004.

In a statement issued at the end of the Laeken summit, the EU announced, for the first time, that out of 12 candidate countries -- most from the former communist bloc -- 10 (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia) are on track to admission in 2004.

That left just two candidate countries off the list: Romania and Bulgaria, both of which were cited for insufficient progress in reforms. Analysts and EU diplomats said that the two impoverished Balkan states are not likely to join the EU any sooner than 2007.

In Romania, President Ion Iliescu and Prime Minister Adrian Nastase have indicated that while they are ready to speed up the pace of reforms, they do not expect their country to be ready to join the EU before 2005 or 2006 at the earliest.

Bulgaria, considered to be slightly more advanced than Romania in its accession preparations, initially set 2006 as its target for admission. But Bulgarian officials last week indicated they still hope to catch up to the 10 countries slated for 2004 entry.

Bulgarian Foreign Minister Solomon Pasi said on 11 December in Brussels that his country's progress -- highlighted in a recent European Commission report -- led him to believe that Bulgaria may still be able to step up efforts and join first-wave entrants in 2004. Prime Minister Simeon Saxecoburggotski, who attended the Laeken summit, also indicated he wants Bulgaria to join the EU earlier than 2006.

But the Bulgarian officials' comments drew a harsh response from Verheugen, who said Bulgaria would need the magic powers of Harry Potter -- the boy wizard in the best-selling children's books of J.K. Rowling -- to achieve its goal of joining the Union in 2004.

"For Bulgaria, certainly, it is just not humanly possible to catch up with the other candidates within a year," said Daniel Gros, research director at the Brussels-based Center for European Policy Studies (CEPS). "But in four to five years, Romania and Bulgaria -- perhaps Bulgaria a bit earlier -- could certainly be at the point at which the other candidate countries are today."

Gros said the two Balkan countries are lagging behind other former communist states because they did not use the last 10 years to adequately implement reforms and establish a functioning market economy.

He noted that Bulgaria has taken some steps forward since the creation of a currency board in 1997, and has also brought its macroeconomic policy under control. But he said the government still needs to clean up the administration and the judiciary.

Lachezar Bogdanov, a researcher at the Institute for Market Economics in Sofia, said that although Bulgaria may be able to bring its legislation in line with EU standards before 2004, it will be impossible for the government to meet the structural criteria necessary to close its pre-entry chapters, especially in the economic and environmental fields.

"Most of the macroeconomic criteria or indicators that are incorporated in the overall evaluation of the economy are more or less fine," Bogdanov said. "But what is lacking here is properly working institutions, property rights protection, contract enforcement, registers, a properly working judicial system. These are institutions that need a lot of time to be changed and to start working."

Romania, unlike Bulgaria, has not brought forward its target entry date, although the country has said it wants to join as early as possible.

Despite making a more favorable assessment than it had in previous years, the European Commission still ranked Romania last among the 12 EU candidates, citing the lack of a functioning market economy, corruption, and high inflation as the main obstacles on the country's path to joining the EU. The report said vital administrative reforms and measures to curb corruption are needed to accelerate the pace of reform.

Analysts also agree that corruption -- which the report called "a serious and largely unresolved problem" -- is one of Romania's main problems.

"Some people say to me that the corruption is worse than in places such as Russia, only it is cheaper," Phelim McAleer, a Bucharest-based correspondent for the "Financial Times," told RFE/RL. "Corruption here is quite low-level, but it is quite widespread. So they need to tighten up the public administration, they need to change the rules, to reduce bureaucracy," he said.

But EU officials do acknowledge that Romania's new Social Democrat government has made some progress since assuming power in January, and this week Verheugen hailed what he called "Romania's realistic strategy and realistic time frame" for joining the union.

Verheugen's praise was an apparent reference to Prime Minister Nastase's statement in Laeken that Romania does not expect to join the EU sooner than 2005 or 2006.

Verheugen also said that Romania will benefit from what he called "special and privileged treatment to achieve the accession as soon as possible." But he stopped short of giving any specific details on what such special treatment might consist of.

Prime Minister Nastase said this week that next year will be decisive for Romania's bid to speed up preparations and that EU support will be very important. But Nastase also admitted that such support will be possible only if Romania's commitment toward European integration proves sufficiently "serious."

Eugen Tomiuc is an RFE/RL correspondent.

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