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Newsline - January 4, 2002


RUSSIAN PRESIDENT SACKS RAILWAYS MINISTER
By presidential decree Vladimir Putin on 3 January fired Railways Minister Nikolai Aksenenko, who for the last several months has been at the center of a criminal investigation into massive corruption, Russian news agencies reported. According to the presidential press service, Putin's move was initiated by Prime Minister Mikhail Kasyanov, who presented the president with material related to the investigation released that day by Prosecutor-General Vladimir Ustinov. Reportedly, the material clearly demonstrates that Aksenenko is to blame for tax evasion in his agency worth many millions of dollars, as well as his personal misuse of over $1 million. Gazeta.ru commented the same day that behind the affair is the fight between the pro-presidential "St. Petersburg team" and their allies in power agencies versus holdovers from former President Boris Yeltsin's regime, one of whom Aksenenko was one. The website opined that the Railways Ministry's position as the third-largest Russian natural monopoly, behind Gazprom and Unified Energy Systems (EES), led to a fight between the two groups for control over the ministry's enormous cash flows and assets. Remarkably, the website added, EES head Anatolii Chubais and Kasyanov were until recently two of the chief defenders of Aksenenko's "reputation." VY

ACCUSED 'NATO COUNTRY' SPY FILES APPEAL TO RUSSIAN SUPREME COURT
Igor Sutyagin, the researcher from the Institute of USA and Canada who is accused of espionage for "a NATO country" and whose trial has been suspended pending further investigation (see "RFE/RL Newsline," 28 December 2001), submitted an appeal to the Russian Supreme Court on 3 January, RIA-Novosti reported. In the appeal Sutyagin wrote that the state prosecution failed to specify in its case what exact data he allegedly handed over to foreign special services, and what particular damage it caused to Russia's national security. Moreover, Sutyagin claimed that the Kaluga Oblast Court that heard the case failed to disprove his statement that all information he exchanged with his foreign colleagues was obtained from open sources. In conclusion, Sutyagin asked the Supreme Court to release him from custody until the additional investigation is completed. VY

FEDERATION COUNCIL SPEAKER AGREES TO DISCUSS PASKO CASE PUBLICLY
In his interview with NTV broadcast on 28 December, Sergei Mironov said he is ready to meet "very soon" with members of human rights and environmental organizations to discuss the case of Grigorii Pasko. The military journalist was found guilty of "high treason in the form of espionage" by the military court of the Pacific Fleet in Vladivostok on 25 December and sentenced to four years imprisonment (see "RFE/RL Newsline," 28 December 2001). Mironov said that problems related to Russia's ecological security are very acute and should discussed "loudly and openly." He added that in the context of ecological security he is ready to discuss "concrete steps to help Pasko." VY

TV-6 WINS ANOTHER LEGAL VICTORY IN MOSCOW...
A Moscow court ruled on 3 January that Yevgenii Kiselev's earlier appointment as general director of TV-6 was valid (see "RFE/RL Newsline," 15 May 2001). TV-6 minority shareholder LUKoil-Garant sought to have Kiselev's appointment last May declared invalid, according to Interfax. LUKoil-Garant has 30 days to appeal the decision. JAC

...BUT GOES OFF THE AIR IN OMSK AND LIPETSK
Meanwhile, television viewers in Omsk saw TV-6 for the last time at the end of December, RFE/RL's Omsk correspondent reported on 3 January. Several months ago, the leadership of the Moscow Independent Broadcasting Company (MNVK), which controls TV-6, canceled its agreement with local television company Agava for rebroadcasting TV-6's programs. Local observers connect TV-6's disappearance from local airwaves with the larger plan by oblast authorities to monopolize regional television. In Lipetsk Oblast, TVK, the local channel that currently owns the rights to rebroadcast TV-6, went off the air at the end of December due to a legal dispute over control of the company, lenta.ru reported on 31 December. TVK journalists have charged that the station's takeover is motivated by upcoming gubernatorial elections (see "RFE/RL Newsline," 12 September 2001). JAC

ANOTHER MILITARY FIGURE LANDS IN UPPER HOUSE
Admiral Vyacheslav Popov, the former commander of the Northern Fleet, has agreed to represent Murmansk Oblast in the Federation Council, Interfax reported on 3 January. Popov will join a host of other former military officials in the upper legislative house, such as former First Deputy Defense Minister Valerii Manilov (Primore), former Baltic Fleet officer Nikolai Tulaev (Kaliningrad), former Defense Ministry official Major General Aleksandr Kalita (Ulyanovsk), and former air force General Vasilii Klyuchenok (Tambov). Popov's candidacy was expected to be confirmed at the 4 January meeting of the oblast's legislature. Popov was dismissed last December (see "RFE/RL Newsline," 3 and 4 December 2001). Joining Popov on the council will be Boris Nikolskii, most recently the first deputy mayor of Moscow, who will represent the Moscow mayoral administration; Yurii Kovalev, a former State Duma deputy; and Yurii Gurdin, the former general director of Siblesprom, polit.ru reported on 30 and 28 December. Kovalev and Gurdin will represent Tomsk Oblast's legislature and executive respectively. JAC

DUMA LEADER CRITICIZES PUTIN'S FEDERATION REFORMS
In an interview published in "Respublika Tatarstan" on 27 December, Oleg Morozov, the leader of the Russian Regions group in the State Duma, charged that the current system for interbudgetary relationships between Moscow and regions smacks of "feudalism," RFE/RL's Kazan bureau reported on 28 December. According to Morozov, the current system suits only those regions that rely on federal subsidies to fund more than 60 percent of their expenses. Morozov added that the strengthening of vertical power is unavoidable, but noted that it is still unclear which model of a federative state will emerge from that process. In addition, he said the institution of presidential envoys was created without the necessary legal groundwork. Morozov also criticized the existing process for forming the Federation Council and called for elections for that body. JAC

FBI AND MVD WORK TOGETHER TO ARREST ACCUSED SWINDLER
In a joint operation of the FBI and the Russian Interior Ministry, Moscow police on 3 January arrested Gennadii Vostretsov, also known as Gennadii Arzhanik, who is accused of obtaining through different fraud activities over $3 million from the citizens of Russia and the United States, RTR reported. Vostretsov allegedly started his machinations in Russia when he created a fictitious company for the import of baby food, according to RTR. After collecting money from his potential customers, he emerged in the United States, where he attempted to continue his fraudulent activities. He eventually arrived in Moscow with a scheme to collect money for a nonexistent Russian-American film project, but was detained by the Interior Ministry after it received a tip from the FBI. VY

MVD BREAKS UP SYNDICATE FOR MAKING FALSE IDENTITY PAPERS
An Interior Ministry spokesman announced that the office of the agency's Directorate for Combating Organized Crime has disrupted the activity of a criminal syndicate for fabricating identification papers of various Russian state and public institutions, RIA-Novosti reported on 28 December. The syndicate was operating from Makhachkala, Daghestan, and produced over 60 types of forged documents including identification cards of members of the State Duma, the Prosecutor-General's Office, as well as university diplomas and pension cards. The spokesman noted the very high quality of the false identity papers, and did not exclude their possible use by members of criminal and terrorist groups. VY

RUSSIA INKS DEAL TO SUPPLY DESTROYERS TO CHINESE NAVY
Upon arriving in Moscow on 3 January, Zhou Wei, the head of the Procurement Bureau of the Chinese People's Liberation Army, met with Rosoboroneksport First Deputy Director Sergei Chemezov and signed a contract under which Russia will provide two new destroyers to the Chinese navy, gazeta.ru reported. The destroyers belong to the same 956E class as the two ships Russia sold to China in 1999-2000. Chemezov said the "big new contract testifies to the extension of bilateral military cooperation," but he failed divulge how much the deal is worth. VY

RUSSIAN SHIPBUILDING INDUSTRY STAYING AFLOAT
Russian maritime companies began the construction of 33 new ships in 2001, about half of which will be produced at domestic shipbuilding yards, Interfax quoted a Transport Ministry spokesman as saying on 28 December. The spokesman specifically noted that several Russian oil companies have begun constructing their own fleets; for example, LUKoil is manufacturing a series of 10 icebreaker oil tankers to transport hydrocarbons across the Arctic Ocean. VY

FAR EASTERN PROVINCE EMPLOYS MORE CHINESE WORKERS
The Jewish Autonomous Oblast administration has decided to increase the number of foreign workers that it allows in its region by one-third, Interfax-Eurasia reported on 3 January. However, the number of applications for work continues to exceed the number of permits. According to the agency, authorities in the oblast's capital, Birobidzhan, has received more than 2,000 applications from foreign workers, and some 1,868 permits have been granted, mainly to Chinese citizens. The timber industry is expected to employ many of the additional foreign workers. JAC

MORE FEDERAL WORKERS CONTEMPLATED FOR THE REGIONS
The Transportation Ministry is considering opening representative offices in each of the seven federal districts, Interfax reported on 3 January. According to the agency, the envoys for the Southern and Urals federal districts have suggested to the ministry that they open such offices in their areas. JAC

IT'S ALL DOWNHILL FOR MOSCOW OFFICIALDOM
Prime Minister Kasyanov and almost half of his cabinet ministers will take vacations during the first half of January, polit.ru reported on 3 January. Kasyanov, who will spend some of his vacation skiing in Slovenia, will be gone until 14 January. Deputy Prime Minister Aleksei Kudrin also intends to go skiing, according to "Izvestiya" on 29 December. President Putin too is an avid skier, having spent a vacation last year skiing in Khakasia. "Argumenty i Fakty" reported last year that in addition to Kasyanov and Putin, Defense Minister Sergei Ivanov and Security Council Secretary Vladimir Rushailo both like to spend time on the slopes (see "RFE/RL Newsline," 4 January 2001). During former President Yeltsin's tenure, tennis became the sport of choice among Kremlin officials. JAC

CHECHEN PRESIDENT EXTENDS HIS TERM IN OFFICE
Aslan Maskhadov has issued a decree extending by one year his five-year presidential term that was due to expire on 27 January 2002, according to "Kommersant-Daily" on 27 December. Maskhadov explained that at the beginning of the current war in Chechnya the State Defense Committee banned all elections and referendums for its duration. Russian presidential aide Sergei Yastrzhembskii commented in Moscow the same day that as a result of Maskhadov's decision, the Chechen president's legitimacy "has now dropped to a level below zero." Maskhadov has also reportedly issued decrees stripping Vakha Arsanov of the post of Chechen vice president and demoting field commander Ruslan Gelaev for tactical errors during the retreat from Grozny in February 2000. Arsanov has the reputation of an Islamic radical and is believed to be implicated in kidnappings for ransom. LF

RUSSIAN TROOPS CLAIM TO INFLICT HEAVY LOSSES IN CHECHEN BATTLE
Up to 100 Chechen fighters have been killed in a special operation in the villages of Novye and Starye Atagi, Chiri-Yurt, and Tsotan-Yurt in Chechnya's Kurchaloi district south of Grozny that began on 30 December, Russian agencies reported on 3 January, quoting a Russian military spokesman. LF

AZERBAIJANI COURT SENTENCES VOLUNTEERS FOR CHECHEN CAUSE
After a six-week trial, Azerbaijan's Court for Serious War Crimes handed down sentences on 3 January of between three and five years imprisonment to three young Azerbaijanis who underwent military training with the objective of joining the Chechen fight for independence from Russia, Turan reported (see "RFE/RL Newsline," 8 November 2001). Two other accused on the same charges were released after giving a written pledge not to leave their place of residence, and seven more received suspended sentences of between one and four years. The defense counsel for the accused had argued that the case should be closed, as there was no evidence that the accused had committed any crime. Also on 3 January, the National Security Ministry announced that on 29 December it detained four more Azerbaijanis who planned to travel to Chechnya to fight there as mercenaries. LF

AZERBAIJANI JOURNALIST TO FACE LIBEL CHARGE
Eynulla Fatullaev, a journalist with the recently closed independent newspaper "Milletin sesi," was taken by police from his home to a Baku district court on 3 January and informed that the criminal case for libel brought against him by Ramiz Mekhtiev, the head of the Azerbaijani presidential administration, will begin on 8 January, Turan reported. Meeting in Baku on 3 January, the Council of Editors of leading media outlets issued a statement condemning Mekhtiev's decision to proceed with the libel charge in the wake of President Heidar Aliev's decree outlining measures to liberalize the conditions under which the media operate (see "RFE/RL Newsline," 3 January 2002). LF

AZERBAIJANI OPPOSITION PARTY PROTESTS IMMINENT EVICTION FROM ITS HQ
Leading members of the opposition Musavat Party staged a picket on 3 January outside the Baku Mayor's Office and the Economic Development Ministry, Turan reported. The ministry owns the building in Baku where Musavat has its headquarters, and warned the party last month that its lease will not be renewed when it expires. LF

OSCE EXTENDS MONITORING OF GEORGIAN BORDER
In compliance with a decision last month by the OSCE's Permanent Council (see "RFE/RL Newsline," 17 December 2001), five unarmed monitors began patrols of the border between Georgia and Ingushetia on 3 January, Caucasus Press reported. A team of some 40 OSCE observers began monitoring the Georgian-Chechen border in February 2000. LF

NEW BLOW TO GEORGIAN ELECTRICITY SUPPLIES
Heavy snowfalls in Karachaevo-Cherkessia on 2 January damaged the Kavkasioni powerline via which Georgia is currently receiving additional electricity supplies from Russia to compensate for the disabling of two units of the thermal power station that provides electricity for much of Tbilisi (see "RFE/RL Newsline," 28 December 2001), Caucasus Press and ITAR-TASS reported on 3 January. At present, Tbilisi is supplied with only 300 megawatts of the total 600-650 it needs. To make up the shortfall, Georgia will receive 130 megawatts per day from Armenia until 10 January, and a further 100 megawatts a day from Azerbaijan, Caucasus Press reported on 4 January. LF

DETAINED KAZAKH POLITICIAN BEGINS HUNGER STRIKE IN UZBEK JAIL
Oral Saulebay of the Azat movement is being held in detention in Tashkent, having been charged with organizing an unsanctioned mass gathering, a charge that carries a prison sentence of up to three years, RFE/RL's Kazakh Service reported on 3 January (see "RFE/RL Newsline," 2 January 2002). Saulebay has begun a hunger strike to demand a meeting with Kazakh Embassy personnel. LF

KYRGYZSTAN CALCULATES FINANCIAL LOSSES FROM SMUGGLING
The revenues lost to Kyrgyzstan as a result of smuggling during the first 10 months of 2001 exceeded the entire annual state budget for that year, according to data compiled by the presidential Commission on Economic Crimes and reported by RFE/RL's Bishkek bureau on 3 January. Those losses totaled 15 billion soms ($31.5 million), while the annual budget totaled 11 billion soms. Contraband alcohol amounted to 4 billion soms and smuggling of oil and gasoline accounted for a further 4 billion soms. LF

POLL INDICATES KYRGYZ PREFERENCE FOR RUSSIAN-LANGUAGE MEDIA
A survey conducted in November 2001 by the Bishkek-based M-Vector agency of some 1,200 people aged between 15-50 indicated that the two most popular TV stations in Kyrgyzstan are Russia's ORT with an average daily audience of 250,000 and RTR (125,000), followed by the independent Kyrgyz TV station Pyramid (85,000), whose programs are primarily in Russian. Radio listenership follows a similar pattern: Evropa Plus and Radio Rossii have an average audience of 110,000 and 70,000 listeners respectively, followed by Hit-FM with 25,000 listeners. The most popular newspapers are the Russian-language daily "Vechernii Bishkek," the independent "Delo Nomer," and Russia's "Komsomolskaya pravda." LF

TAJIKISTAN APPOINTS NEW AMBASSADOR TO AFGHANISTAN
Farhod Mahkamov, a member of the staff of the Tajik Embassy in Tashkent, has been appointed ambassador to Afghanistan by a presidential decree signed on 4 January, Asia Plus-Blitz reported. Tajikistan thus becomes the first Central Asian state to name a diplomatic representative in Kabul after the downfall of the Taliban. LF

BELARUSIAN PRESIDENT CRITICIZES LETHARGY IN CREATING UNION WITH RUSSIA
Alyaksandr Lukashenka said on 4 January that although "the aims of the Belarusian-Russian union" are defined, the "tactics" for the construction of the union "are not yet agreed upon," Interfax reported. Lukashenka, speaking at the start of a government meeting, said that adopting the Union Constitutional Act is of "crucial importance" because it lays out the principles on which the union will be based and defines how its bodies will function. Lukashenka said the economic aspects of the union are the most important, and that Russia is "guilty" of dragging its feet in approving previous agreements. He stated that a single economic space has not been created, as planned, and cited the single tax policy and common import/export tariffs as issues that have yet to be settled. PB

BELARUS TO CHARGE PATIENTS FOR SOME MEDICAL SERVICES
Alyaksandr Tsybin, an official in the Belarusian Health Care Ministry, said on 4 January that the introduction of payments for certain health care services "will not shock the Belarusian people." Tsybin, in an interview with the newspaper "Zviazda," said the new system of paid medical care will be introduced over the next decade and will amount to "about 30 percent of the total financing" of health care in Belarus. He said the Belarusian government is working on a list of services that will be offered by the state only upon payment by the patient. PB

BELARUS GETS $30 MILLION FROM RUSSIA
The Belarusian Finance Ministry said on 4 January that it has received the second tranche of a $100 million credit line from Russia, Interfax reported. The credit was established as part of preparations for the creation of the Belarus-Russia Union. The money is being loaned to Belarus at the benchmark LIBOR (London Interbank Offered Rate) rate plus 0.75 percent. A first portion of the loan, $30 million, was sent to Belarus in August and the final tranche of $40 million is to be sent to Minsk later this year. PB

UKRAINIAN PRESIDENT SIGNS 2002 BUDGET INTO LAW
Leonid Kuchma signed the 2002 budget for Ukraine into law on 3 January, Infobank reported. Andry Chyrva, the deputy head of Kuchma's information department, said the president also sent a letter to parliament speaker Ivan Plyushch that urges the deputies to consider the government's proposals to strengthen macroeconomic stability and broaden the tax base. Kuchma also called on the parliament to ensure that the budget is a "realistic" one. PB

IMF POSTPONES MEETING ON RELEASE OF LOAN TO UKRAINE
Lorenzo Filiuoli, the IMF's senior permanent representative in Ukraine, said on 4 January that a meeting scheduled for next week to determine whether a $370 million tranche should be disbursed to Ukraine has been postponed, Infobank reported. Filiuoli said the 9 January meeting of the IMF's board of governors was postponed to allow the IMF to clarify whether Ukraine is meeting its commitments, which include: enacting the government-submitted budget; completing an audit of Naftohaz Ukrayiny; raising electricity tariffs; strengthening oversight of the banking industry; and refunding VAT arrears. PB

ESTONIA'S CAPITAL LOWERS 2002 BUDGET
The Tallinn city government approved on 3 January a new 2002 city budget, which is 700 million kroons ($39.6 million) lower than the 5.2 billion budget proposed in November by former Mayor Tonis Palts of the Pro Patria Union, ETA reported. New Mayor Edgar Savisaar said the amount of planned loans will be reduced from 1.5 billion kroons to 395 million kroons. Other changes to the budget include the reduction of funds for the renovation of schools from 339 to 207 million kroons, and for road repairs from 226 to 116 million kroons, while funding for housing construction will be increased from 48 to 145 million kroons. SG

LATVIA'S 2001 BUDGET DEFICIT SMALLER THAN PLANNED
The State Treasury announced on 3 January that preliminary calculations indicate that the state budget for 2001 will have a deficit of 74 million lats ($116 million), BNS reported. A budget deficit of 91.5 million lats was originally planned, but was later reduced to 79 million lats in an agreement with the International Monetary Fund. The main reason for the most recent reduction was better-than-expected results in the social insurance sphere in 2001, in which revenues were 513 million lats and expenditures 525 million lats. A deficit of 28 million lats had been anticipated. SG

LITHUANIAN GOVERNMENT SETS UP CRISIS PREVENTION COMMITTEE
The cabinet decided on 3 January to establish a Crisis Prevention Committee as another step in implementing an effective crisis management system that meets NATO standards, BNS reported. The committee will consist of deputy defense, interior, social security and labor, environment, agriculture, foreign, economy, and finance ministers. The committee will meet at least once a month to discuss information on hazardous phenomena and potential threats. The Lithuanian Crisis Management Center, whose headquarters in central Vilnius began functioning on 1 January, will operate 24 hours a day and provide information to the committee. The Crisis Management Committee, which was created by the government at the end of last year and is made up of defense, interior, foreign, economy, and finance ministers, is the leading institution in Lithuania's new crisis management system. It will have the authority to make decisions and develop measures to head off disasters, as well as to present recommendations for further action to the president, prime minister, and parliament chairman. SG

POLISH PREMIER SPEAKS WITH POPE ABOUT FOREIGN POLICY, EU
The Vatican's press office said Pope John Paul II and visiting Prime Minister Leszek Miller spoke primarily about international affairs and European integration during Miller's 40-minute audience on 3 January, PAP reported. Miller told reporters after the meeting that the Roman Catholic Church's support for European integration could be of great importance in the run-up to a referendum on Polish membership in the European Union. Miller also announced on behalf of himself and President Aleksander Kwasniewski that he invited the pontiff to visit his native Poland. AH

CZECH BUDGET DEFICIT AMOUNTS TO RECORD SHORTFALL
Finance Minister Jiri Rusnok announced an estimated state budget deficit of nearly 68 billion crowns ($1.9 billion) in 2001, agencies reported on 3 January. The figure is the highest in the country's brief history, the daily "Mlada fronta Dnes" added on 4 January, and represents about 7,000 crowns ($197) per citizen. The ruling Social Democrats far exceeded the 49 billion crown deficit envisaged in the 2001 Budget Act, something that Rusnok blamed on unexpectedly low revenues and the high cost of state-bank bailouts, dpa reported. Rusnok told Czech Radio on 3 January that last-minute cuts prevented an even larger shortfall, which was worsened by borrowing to cover losses at the state's workout bank, Konsolidacni Banka, among failed credit unions, and as a result of drought. International financial institutions and the country's central bank have cautioned Prague that growing state deficits are a threat to the Czech economy. AH

CZECH OPPOSITION PARTY FILES SUIT OVER DEAL TO RECOVER RUSSIAN DEBT
The Freedom Union filed a suit with the Prague High Court in December to challenge the classified status of a roughly 20 billion crown contract with a little-known firm to help recover Soviet-era debts, CTK reported on 3 January. "The whole financial transaction including the selection of the Falkon Capital company, is not transparent and raises many [questions]," party Chairwoman Hana Marvanova said. The public has a constitutional right to be informed of such state activities, she added, according to CTK. Under the deal, Falkon Capital was reportedly to pay 20 billion crowns to the Czech government by the end of 2001, after which the government would hand over Russian debt claims worth a nominal $2.5 billion (92.5 billion crowns). The Finance Ministry argues that such international agreements are classified and subject to business confidentiality. Both the Russian side and Falkon insisted on the confidentiality clause, other media have reported. AH

ABOUT 1,000 SUSPECTS FREED UNDER NEW CZECH PENAL GUIDELINES
Roughly one-fifth of the nearly 5,000 suspects in custody in the Czech Republic have been released in the past month to comply with new legal requirements that demand a trial within three months, CTK reported. Under the amended Penal Code, accused criminals who cooperate with authorities cannot be jailed indefinitely while awaiting court proceedings, which in the Czech Republic can take years. The move was accompanied by changes that should help authorities provide speedier investigations and justice proceedings. AH

SLOVAK APPLICATIONS 'TRICKLE IN' FOR HUNGARIAN DESCENT STATUS
Applications for the so-called "Hungarian licenses" have gradually started flowing in to Hungarian officials in Slovakia since the Hungarian Status Law granting privileges took effect on 1 January, TASR-Slovakia reported on 3 January. The consular department in Bratislava reported five inquiries early on 2 January, CTK reported, while TASR said a consulate in Kosice had received 20 applications by the following day. Only Hungarian embassies and consulates are accepting the applications thus far, though there are plans to distribute the forms through Hungarian compatriot organizations in the coming days. AH

RIVAL CAPITAL MARKET LICENSED IN BRATISLAVA
RM-System Slovakia received a license from financial authorities on 28 December to create a Slovak Securities and Stock Exchange (SBCP), TASR-Slovakia reported on 3 January. The SBCP should start operating as a stock exchange on 14 January, leaving it to compete with the existing Bratislava Stock Exchange (BCPB). "It is up to the market to choose," TASR quoted the director of the Finance Ministry's Financial Markets Division, Frantisek Palko, as saying. The transformation of RM-System to a stock exchange came about as a result of legislation allowing for a public securities market on the basis of the membership principle, and follows aborted talks between the potential rivals on some kind of joint participation. AH

HUNGARY'S PROSECUTOR-GENERAL AIMS TO END POLITICAL SCANDAL IN JUDICIARY
"A prosecutor must never enter the political arena, even when speaking in his capacity as the president of a prosecutors' association," Prosecutor-General Peter Polt was quoted as saying on 3 January by "Nepszabadsag." Polt made the comments in response to a statement issued by leaders of the National Society of Lawyers and two chambers of lawyers in late December warning of political threats to the independence of the judiciary. A scandal resulted after Polt revoked the appointment of one of the statement's signatories, Andras Hegedus, as a senior prosecutor. As a consequence, Hegedus announced that he will leave the legal profession in the interest of judicial independence. Opposition Socialist and Free Democrat politicians alleged that the action against Hegedus is part of a campaign to intimidate the opposition. MSZ

MORE ROMA FROM HUNGARY GRANTED ASYLUM IN FRANCE
The French Refugees Office has granted asylum to three Roma adults and eight minors from the Hungarian village of Zamoly, the Roma group's defense lawyer, Christine Mengus, told "Nepszabadsag" on 3 January. The Zamoly Roma arrived in Strasbourg in July 2000 to apply for asylum, claiming persecution in Hungary. The group's spokesman, Jozsef Krasznai, said 37 people, including 15 adults and 22 children out of the original 46-member group, have been granted refugee status in France, while several others have departed for Canada. Meanwhile, Florian Farkas, the president of the Hungarian National Gypsy Authority, said emigration will not solve the problems of the Roma, while Antal Heizer, the deputy president of the Office for Ethnic Minorities, denied that Roma are subjected to state persecution in Hungary. MSZ

GERMANY SET TO TAKE KOSOVA JOB?
Germany is preparing to put forward a candidate to head the UN civilian administration in Kosova (UNMIK) following the sudden departure of Denmark's Hans Haekkerup, who alienated many Albanians and his own staff, Reuters reported from Prishtina on 4 January (see "RFE/RL Newsline," 3 January 2002). Speculation centers on Michael Steiner, a former foreign policy adviser to Chancellor Gerhard Schroeder who is regarded as able and knowledgeable. Steiner is also widely viewed as arrogant and abrasive, which cost him his last job in November 2001 after he insulted some German military officers. Another possible candidate is Klaus Reinhardt, a retired general and a former NATO commander in Kosova. An unnamed Western diplomat told the news agency: "The Germans are pushing. I'm guessing that consensus will form fairly rapidly around someone like Steiner." PM

SERBIAN LEGISLATOR SAYS GERMAN LIKELY TO HEAD UNMIK
In Belgrade on 4 January, the daily "Blic" quoted Gojko Savic, a Serbian member of the Kosova legislature's presidency, as saying that Haekkerup's successor will most likely be a German. Savic did not mention any name. Germany currently does not hold any major post in the Balkans. Austrians head the EU Balkan Stability Pact and the High Representative's Office in Bosnia, while a French diplomat represents the EU in Macedonia. Having cut what many Germans regard as a poor figure in providing concrete help in Afghanistan, the Schroeder government may now be anxious to show that is able to successfully take on responsibilities abroad. PM

UN CALLS ON KOSOVARS TO HAND IN FAKE EUROS
UN police have appealed to Kosovars to destroy or hand in to police thousands of envelopes containing color copies of euro banknotes, which were distributed as part of an information drive by the daily "Zeri," AP reported from Prishtina on 4 January (see "RFE/RL Newsline," 3 January 2002). The problem is that the sample banknotes are not marked "specimen" to show that they are just examples and not the real thing. There is no question of any criminal intent by the newspaper, but police fear that some people might mistake the samples for authentic currency. PM

YUGOSLAV AUTHORITIES SHUT DOWN FOUR BANKS
National Bank Governor Mladjan Dinkic said in Belgrade on 3 January that he has "no choice" but to close four state-run banks that employ some 8,500 people, RFE/RL's South Slavic and Albanian Languages Service reported. Beogradska Banka, Beobanka, Jugobanka, and Investbanka became insolvent by giving credits to state-run companies over many years, which were never repaid. Personal and corporate savings accounts will be transferred to a postal savings network. Yugoslav President Vojislav Kostunica will discuss the situation with Dinkic on 4 January, but Dinkic stressed that he intends to do no more than inform the president of the reasons for his decision. Serbian Finance Minister Bozidar Djelic will also take part in the talks. PM

BOSNIAN SERB GENERALS TO GO TO HAGUE?
Reuters reported from Banja Luka on 3 January that Generals Vinko Pandurevic and Dragomir Milosevic may soon turn themselves in to The Hague-based war crimes tribunal, which has indicted them for war crimes in conjunction with the 1992-1995 Bosnian war. It is not clear whether Republika Srpska President Mirko Sarovic played a role in encouraging the two men to give themselves up, RFE/RL's South Slavic and Albanian Languages Service reported. Several international and local media say that Sarovic spoke to the two men in Belgrade, but his office denies that he did so. If the two generals give themselves up, it will help alleviate some international pressure on the Republika Srpska and will increase their chances of favorable treatment in The Hague. Pandurevic has been indicted in conjunction with the 1995 Srebrenica massacres, while Milosevic -- no relation to the famous Serbian family -- faces charges stemming from the 1992-1995 siege of Sarajevo. PM

SARAJEVO COURT SENTENCES BOSNIAN SERB
A court in the Bosnian capital sentenced Goran Vasic to 4 1/2 years imprisonment on 3 January for mistreatment of prisoners of war at the Medjarici camp during the 1992-1995 conflict, Deutsche Welle's Bosnian Service reported. The court acquitted him of charges of murdering Bosnian Deputy Prime Minister Hakija Turajlic in 1992, saying that it does not consider Vasic innocent but lacks evidence to convict him. The judge released Vasic provisionally because he has already spent three years in prison and promised to return to complete his sentence after his appeal is over. PM

POWER SHORTAGES IN MONTENEGRO
Power company authorities reimposed power cuts on 3 January following a five-day holiday relaxation of the "reductions," RFE/RL's South Slavic and Albanian Languages Service reported from Podgorica. Officials of Elektroprivreda Crne Gore called the electric power situation in the republic "alarming." Blackouts and power shortages are no strangers to much of the former Yugoslavia and to Albania. Improving the reliability of power supplies is a top priority for the Albanian government in 2002, Deutsche Welle's "Monitor" reported. PM

CROATIAN GOVERNMENT TO TACKLE ECONOMIC ISSUES
The government announced on 3 January that the first two years of its four-year term were difficult but that the worst is now over, RFE/RL's South Slavic and Albanian Languages Service reported. Prime Minister Ivica Racan will concentrate his efforts in 2002 on maintaining a growth rate of about 4 percent and on reducing unemployment, which stands officially at 400,000, or one-fourth of the work force. PM

HEAVY SNOW STORMS BLOCK ROADS AND CRIPPLE POWER SUPPLIES IN ROMANIA
Heavy snowfalls and strong winds have rendered dozens of state highways, local roads, and railways impassable throughout much of Romania, and have isolated and crippled power supplies in several villages in the north of the country, National Radio reported on 4 January. The largest city cut off by snow is Suceava in the northeast, while strong winds closed harbors on the Black Sea and several ports on the Danube River. In addition, areas of the Danube Delta and the artificial channel linking the Danube River and the Black Sea across Dobrudja were closed to navigation. However, all Romanian airports were open and functional on 4 January. LB

PLANNED ANTI-RUSSIFICATION DEMONSTRATION IN MOLDOVA HITS SNAGS
Popular Party Christian Democratic (PPCD) parliamentarians and Chisinau City Hall are engaged in a squabble over the venue for a proposed public meeting on 9 January to protest the "Russification policies promoted by the Moldovan government," Flux reported on 4 January. While the PPCD parliamentary group has requested that it be treated as a "meeting of voters" and allowed to be held in the Grand National Assembly Square, the Chisinau City Council has dealt with the meeting according to the Law on Public Assembly and on 3 January granted permission for it to be held in the National Opera Plaza. Upon hearing the news, PPCD Chairman Iurie Rosca blasted the municipal authorities' "subordination" to the government, and announced that the meeting will be held in the Grand National Assembly Square anyway, according to the agency. LB

MOLDOVAN TEACHERS PROTEST RUSSIAN-LANGUAGE COURSES
In response to the Education Ministry's decision to require the compulsory teaching of Russian language courses in primary schools (see "RFE/RL Newsline," 28 December 2001), which is to begin on 9 January, 138 teachers in Chisinau have signed a petition to protest the decision. Education Minister Ilie Vancea declared during a radio show broadcast by National Radio on 2 January that "no one will force students to study the Russian language," and that the decision "can be modified if it is not accepted by the public." LB

BULGARIAN FOREIGN MINISTER TO VISIT IRAN
Foreign Minister Solomon Pasi was expected to arrive in Iran on 4 January for a visit that will last until 6 January, Bulgarian media reported on 3 January. A group of deputy ministers and a business delegation will accompany Pasi, who is to meet Iranian President Mohammad Khatami as well as parliament speaker Hojatoleslam Mehdi Karrubi. According to the Bulgarian Foreign Ministry, the talks will focus on the development of joint energy projects and transport corridors connecting Europe and Asia. The fight against terrorism as well as measures against drug trafficking will also be on the agenda. Pasi will be the first Bulgarian foreign minister to visit Iran in 10 years. UB

BULGARIAN PRIME MINISTER LOSES VOTER CONFIDENCE
Simeon Saxecoburggotski has lost much of the voter confidence that brought him to power in June 2001, the daily "Novinar" reported on 3 January. A recent opinion poll showed that while in September some 68 percent of the voters supported Saxecoburggotski, his December rating fell to about 46 percent. Nevertheless, Saxecoburggotski's party, the National Movement Simeon II, still leads the polls, followed by the Bulgarian Socialist Party. The Union of Democratic Forces (SDS) came in third. Analysts ascribe the loss of confidence largely to the growing poverty in the country, which during the hard winter has been felt more painfully. According to the poll, some 80 percent of the population does not have any savings, about half has to cut expenses, and about 7 percent believes that it lives in misery. UB

EURO INTRODUCTION EXPECTED TO BRING HIDDEN MONEY TO LIGHT IN BULGARIA
As in other Eastern and Southeast European states, Bulgarian financial experts believe that the introduction of the euro will bring forth huge amounts of so-called "mattress money," the daily "Dnevnik" reported on 3 January. According to estimates of the Bulgarian National Bank, Bulgarian citizens hold money from the 12 states of the eurozone worth about 400 million euros ($360 million). International financial institutions, however, place the sum much higher -- between 500 million and 1 billion euros ($450 to $900 million). During the past few months many citizens opened euro bank accounts in order to deposit their foreign currency savings. Others had their German marks, Greek drachmas, or Italian lira exchanged for Bulgarian leva or U.S. dollars. UB

BULGARIAN BORDER POLICE STEPS UP CONTROLS
The Bulgarian Border Police have asked the Turkish government for cooperation to step up controls along their common border, "Monitor" reported on 4 January. Bulgaria has already reinforced its border patrols in an effort to prevent the rising number of illegal immigrants from entering the country. According to the head of the Border Police, Colonel Valeri Grigorov, over the past two years Bulgaria has also improved its technical equipment for surveillance of the border. UB

There is no end note today.


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