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Baltic Report: March 5, 2002


5 March 2002, Volume 3, Number 6

NOTE TO READERS:
This issue covers events in the Baltic states from 8-21 February 2002.
REGIONAL
GERMANY ACTIVELY SUPPORTS ADMISSION OF BALTIC STATES INTO EU, NATO.
The Foreign Ministers of Germany (Joschka Fischer), Estonia (Kristiina Ojuland), Latvia (Indulis Berzins), and Lithuania (Antanas Valionis) held talks in Riga on 11 February that focused primarily on the accession of the Baltic states into the EU and NATO, BNS reported. At the press conference following the meeting, Fischer stressed that the Baltic states are well advanced and that Germany supports their membership in NATO. In the joint communique, the ministers "expressed their support for further NATO enlargement in 2002 and admission of all qualified candidate countries. The ministers of Estonia, Latvia, and Lithuania emphasized their ongoing effort to consolidate their defense capabilities and expressed their appreciation for Germany's support and assistance in this respect."

BALTIC DIPLOMATS SEEK SOUTHERN SUPPORT FOR NATO MEMBERSHIP.
The president of NATO's Parliamentary Assembly, Rafael Estrella, pleased diplomats from Estonia, Latvia, and Lithuania in Madrid on 14 February by noting that in military terms their countries are better prepared for NATO membership than Spain was when it joined the alliance, BNS reported. Spanish parliament foreign committee head Isabel Tosino assured the diplomats that Spain supports their membership in NATO. The following day in Rome, Italian Deputy Foreign Minister Roberto Antonione told Lithuanian Deputy Foreign Minister Giedrius Cekuolis, Latvian Undersecretary of State Ivars Pundurs, and Estonian Undersecretary of State Harry Tiido that Italy supports NATO expansion but wanted the process to be balanced. According to BNS, Italian officials consider the Baltic states' Soviet past as an asset rather than a hindrance because they know Russia from the inside. On 16 February, Baltic officials held talks on NATO membership with Greek officials in Athens.
* Denmark, Norway and the Netherlands announced on 8 February the postponement of their mission to the U.S.-led mission Enduring Freedom in Kyrgyzstan for at least a month because the Manas airport infrastructure is not yet ready to house them, BNS reported. Soldiers from Estonia, Latvia, and Lithuania are to serve as part of the Danish contingent.
* A meeting of Baltic farmers' organizations in Otepaa, Estonia on 10-11 February expressed dissatisfaction with the European Commission proposal to give farmers in new EU member states only 25 percent of the agricultural subsidies given to current EU members and require 10 years for new members to reach an equal standing, LETA reported. They also declared that the production quotas for their countries are much smaller than desired.


ESTONIA
RUSSIA'S DEMANDS WILL BE IGNORED.
The Foreign Ministry has decided not to respond officially to seven demands submitted by Russian Deputy Foreign Minister Yevgenii Gusarov to Estonian Ambassador Karin Jaani as preconditions for developing better bilateral relations, ETA reported on 18 February. The demands were given orally and as an unsigned text. They are: accelerating the tempo of the naturalization process so that 15,000-20,000 Russians would be granted Estonian citizenship every year; registering the Estonian Orthodox Church subject to the Moscow Patriarchy; creating favorable conditions for the use of the Russian language in the regions where a majority of the population is Russian-speaking; legal guarantees for the continuation of Russian-language secondary education and allocation of more funds for Russian-language higher education; providing social guarantees to former KGB officers and their families by changing the relevant provisions in the Estonian law on aliens; and halting any investigation into crimes against humanity committed by former Soviet army veterans. These demands have dashed hopes for improved relations with Russia which arose after rumors of a possible meeting of the presidents of Estonia and Russia.

NORWEGIAN PRIME MINISTER VISIT.
Kjell Magne Bondevik, on an official visit to Estonia on 19-20 February, declared that Norway will firmly support the entry of the Baltic States to NATO at the summit meeting in Prague in November, ETA reported. He affirmed this to his Estonian counterpart Siim Kallas, who said his country has worked hard to win the invitation by such measures as raising defense spending to 2 percent of GDP. The ministers also discussed EU expansion and bilateral relations, including participation by the Norwegian government in the project to fight contagious diseases. Talks with parliament Deputy Chairman Tunne Kelam and Estonian-Norwegian parliamentary group Chairman Tiit Kabin also focused on these issues. President Arnold Ruutel told Bondevik that Estonia is interested in having good relations with all its neighbors, including Russia. They also spoke about bilateral cooperation in the spheres of environmental protection and energy, joint efforts to preserve the maritime environment, and development of a joint electricity and natural gas network between the Baltic and Nordic countries.

PREMIER COOLS OPTIMISM ABOUT RUSSIAN MARKET.
In an interview in "Postimees" on 9 February, Siim Kallas advised business people to pay more attention to boosting exports to the West and not to expect dazzling prospects in trade with Russia, ETA reported. His comments were prompted in part by the recent talks held with President Arnold Ruutel and Tallinn Mayor Edgar Savisaar in which business leaders urged improvement of relations with Russia. Kallas admitted to the daily that he favors the settlement of the dispute over the registration of the Estonian Orthodox Church subordinate to the Moscow Patriarchate, which has been mentioned as the primary reason why Russia has not granted most-favored-nation status for trade with Estonia.

GOVERNMENT WITHDRAWS 20 DRAFT LAWS FROM PARLIAMENT.
The cabinet decided on 12 February to withdraw 20 bills that were presented to the parliament by the previous government, ETA reported. Among them were legislation simplifying the return of property to expatriated Germans, amendments to the Criminal Code and related laws, a number of bills related to financing and administering local municipalities, a lottery law, and a foreign service bill. Justice Minister Mart Rask noted that the government demonstrated a statesmanlike approach and a strong sense of responsibility in selecting the bills to be withdrawn, as the parliament was considering 185 bills, 94 of which were sponsored by the government. The cabinet also decided to reintroduce daylight-saving time this spring, arguing that it is more convenient to be in the same time zone as neighboring countries.

DEFENSE COOPERATION BETWEEN ESTONIA AND FINLAND.
During a one-day visit to Helsinki on 14 February, Foreign Minister Kristiina Ojuland held talks with her Finnish counterpart Erkki Tuomioja on EU and NATO expansion and bilateral defense cooperation, ETA reported. Tuomioja said that defense cooperation between the two countries will continue after Estonia becomes a member of NATO. Ojuland thanked Finland for help in developing Estonia's border guard system, saying that this had considerably facilitated its integration process with the EU. She also met with parliament speaker Riitta Uosukainen and Defense Minister Jan-Erik Enestam.

TALLINN TO LAUNCH AMBITIOUS INVESTMENT CAMPAIGN IN SWEDEN.
The head of the marketing department of Tallinn's city government, Marju Kullassepp, announced on 13 February the launching of an ambitious campaign to attract investment from Sweden, ETA reported. The campaign, having a green apple as its symbol, will be called "Tallinn -- dream city of every businessman." It emphasizes Tallinn's important place in the Estonian investment landscape. The first posters publicizing the campaign will appear in the Tallinn and Arlanda airports on 1 March. Tallinn Mayor Edgar Savisaar and Hasse Olsson, the editor in chief of the "Dagens Industri" business paper, are scheduled to attend the first event of the campaign in Sweden on 20 March.

GOVERNMENT STOPS 'BRAND ESTONIA' PROJECT.
The cabinet on 19 February decided to end the Brand Estonia project of the Enterprise Estonia Foundation, which was to cost some 40 million kroons ($2.2 million), ETA reported. The project's purpose was to build an easily identifiable image for the country that would help increase exports, foreign investments, and the number of tourists to Estonia. Instead the government approved a proposal of Economy, Transportation, and Communications Minister Liina Tonisson to form a marketing department at the Business Development Foundation to fulfill this task. The cabinet set the immigration quota for 2002 at 665 persons, or 19 less than in 2001. It also allocated 1 million kroons in humanitarian aid for Afghan refugees, and another 1.8 million kroons for donations to international organizations and programs.

EFFORTS TO REDUCE PLANNED PRICE HIKES FOR ELECTRICITY.
Center Party Chairman Edgar Savisaar declared on 21 February that the offer of the supervisory council of the power utility Eesti Energia (Estonian Energy) to reduce the introduction of a monthly electricity fee of 20 kroons ($1.11) to 5 kroons on 1 April, while retaining the price hike for a kilowatt of electricity from the current 0.90 kroons to 1.10 kroons, is still unacceptable, BNS reported. He said the company has enough internal resources to begin needed renovations of its power plants even though the planned privatization of the Narva Power Plants by the U.S. energy firm NRG Energy failed. It appears likely that the government will give Eesti Energia some funds to keep electricity costs lower.
* Prime Minister Siim Kallas told the new head of the IMF Estonian mission, Richard Haas, on 14 February that Estonia will not change its current monetary policies, ETA reported. He affirmed that the new government -- while promising more support for local governments and higher pension payments -- still plans to balance the budget.
* EU Commissioner for Agriculture and Fisheries Franz Fischler informed Environment Minister Heiki Kranich that he cannot continue talks with Estonia over an exchange of cod fishing quotas because of Estonia's protest that Baltic herring quotas were too small last year, BNS reported.
* Officials from the foreign ministries of Estonia and Romania met on 12 February for political consultations on bilateral agreements, EU and NATO enlargement, and development of regional cooperation, BNS reported. The two sides agreed that the existing four agreements between their countries are too few and cooperation in politics, economy, and security should be intensified.
* Environment Minister Heiki Kranich and his Finnish counterpart signed on 21 February an agreement obliging the parties to inform each other of activities with a potential negative environmental effect, BNS reported. Finland has expressed concern about the construction at the Muuga oil port of two new tanker wharves.
* Officials from Estonia, Latvia, and Russia gathered on 21 February at Krivsk -- near the town of Pskov in northwestern Russia -- for a conference on crossborder cooperation sponsored by the Council of Europe, BNS reported. The conference was attended by national and local government officials as well as business people from the three countries who discussed the legal foundations of crossborder cooperation, cooperation of self-governments, and the impact of EU enlargement on crossborder cooperation.
* The Estonian and Bulgarian defense ministries opened talks on defense policies in Tallinn on 20 February, BNS reported. They are to meet through 24 February to lay the groundwork for regular political and defense talks between the two countries. A plan of bilateral cooperation for 2002 will be signed during the talks.
* Moderates Chairman Toomas Hendrik Ilves withdrew his candidacy as a delegate to the Future of Europe Convention on 20 February and suggested that parliament Deputy Chairman Tunne Kelam of the Pro Patria Union take the post, ETA reported.
* The parliament on 12 February unanimously adopted the Churches and Congregations Act with amendments, scrapping the provisions which had prompted President Arnold Ruutel to reject the legislation, BNS reported. The act had been amended in the summer when President Lennart Meri objected to some of its provisions.
* Fulfilling the Reform Party-Center Party government coalition agreement, the government on 13 February withdrew from parliament the widely disputed bill that would have created the legal basis for restitution of property to people who settled in Germany in 1941, BNS reported. Some 7,000 residents of Estonia, including 4,000 ethnic Estonians, moved to Germany under an agreement signed between the Soviet Union and Nazi Germany.
* President Arnold Ruutel signed on 14 February the law on transplanting organs and tissue, which sets conditions for donating human organs and bans material profit from donating organs, ETA reported. A transplant of organs will be allowed only if it is the only effective means of treatment and does not endanger the health of the recipient or donor.
* The Tallinn Municipal Court declared on 11 February the bankruptcy of television station TV1, owned by Polish Polsat, which went off the air in October, ETA reported. The claims against TV1 amount to 125 million kroons ($6.9 million), while its assets are valued at 14.1 million kroons but selling them would provide around 2.5 million kroons.
* President Arnold Ruutel appointed Mait Martinson as Estonia's first ever ambassador to China on 21 February, BNS reported. He had worked before his appointment as chief trade negotiator with the Foreign Ministry's foreign economic policy department. The same day Ruutel also promoted Commander of the defense forces Tarmo Kouts to the rank of vice admiral.
* The Labor Market Board announced on 8 February that the number of registered unemployed in January was 54,700, or 6.6 percent of the country's working-age population, ETA reported. This was higher than the 50,600 unemployed people in December, but lower than the 57,500 registered in January 2001.


LATVIA
NATO SECRETARY-GENERAL URGES AMENDING ELECTION LAWS.
Lord George Robertson told the parliament in Riga on 21 February that NATO will decide on which countries to admit to the alliance on the basis of military, defense, and political achievements, including how they follow standards of democracy and human rights, LETA and BNS reported. He particularly mentioned the need to abolish the stringent Latvian-language requirements for candidates to the parliament and local councils. Robertson also met with President Vaira Vike-Freiberga, Prime Minister Andris Berzins, Foreign Minister Indulis Berzins, Defense Minister Girts Valdis Kristovskis, and parliament Chairman Janis Straume. He noted that the decision on which countries would be invited to join the alliance has not yet been made, but that no non-NATO country, such as Russia, will have a say in the decision.

LATVIAN-EU ASSOCIATION COUNCIL MEETS OVER INTEGRATION EFFORTS.
The fifth session of the European Union's Association Council in Brussels on 19 February praised Latvia's achievements in its bid for EU membership, particularly noting its efforts to facilitate the integration of noncitizens, LETA reported. Foreign Minister Indulis Berzins headed the Latvian delegation while Spanish Foreign Minister Josep Pique, assisted by EU Commissioner for Enlargement Guenter Verheugen, and Danish Foreign Ministry State Secretary Friis Arne Petersen, led the EU delegation. The council said Latvia maintained macroeconomic stability and showed strong growth last year, but requires further measures to reduce unemployment and must maintain its policy of fiscal discipline. The council also noted initiatives aimed at amending the language requirements for candidates in the election laws, and the commitment of the Latvian government to go on with public administration and judicial reforms as well as with anticorruption efforts. It looked favorably upon Latvia's progress in harmonizing its laws with the EU acquis communautaire, but said more needs to be done in such areas as agriculture, energy, environment, and regional policy.

PRESIDENT SAYS LANGUAGE QUALIFICATION HAS TO BE DUMPED FOR NATO MEMBERSHIP.
Upon returning from an extended visit to the U.S., Vaira Vike-Freiberga told a press conference at Riga's airport on 12 February that the U.S.'s favorable attitude toward Latvia's future membership in NATO could change if the country does not lift its language requirement for candidates to the parliament and local councils, LETA reported. She emphasized that on countless occasions during her visit she was told that Latvia has not been given a "free ticket" to join NATO, but must carefully fulfill the action plan for membership, which includes bolstering democracy in the country. Vike-Freiberga expressed satisfaction with her meeting with U.S. President George W. Bush at a reception in Salt Lake City on 8 February prior to the opening of the Winter Olympics, mentioning that Bush said that he hopes to meet with her at the NATO summit in Prague in November.

RUSSIA GRANTS PERMISSION TO OPEN CONSULAR OFFICE IN KALININGRAD.
The Latvian Foreign Ministry finally received a note on 20 February from the Russian government granting it permission to open a consular office in Russia's Kaliningrad exclave, BNS and LETA reported. In March 2001, Latvia sent a note to Russia asking to be allowed to open in Kaliningrad a consular office of the Latvian embassy in Moscow. Russian Prime Minister Mikhail Kasyanov signed the decree on permitting the opening of the office at the end of January and instructed the Kaliningrad regional and city administrations to cooperate with Latvia on setting up the consular office, which should make it much easier for the region's population to get Latvian visas. The funds necessary to establish and maintain the office in Kaliningrad will be taken from the Foreign Ministry and Latvian Port Council budgets for 2002. Foreign Ministry Press Secretary Ilmars Henins said that Latvia will try to open the office as soon as possible.

CZECH FOREIGN MINISTER VISIT.
On a two-day official visit to Riga on 17-18 February, Czech Foreign Minister Jan Kavan met with Latvian leaders, LETA reported. His talks with Prime Minister Andris Berzins focused on the need to increase economic cooperation and trade between the two countries and their shared dissatisfaction with the level of the EU's promised agricultural support for new members. President Vaira Vike-Freiberga expressed satisfaction with Czech support for Latvia's entry into NATO. Kavan discussed bilateral cooperation in the political, defense, and economic sectors with parliament Chairman Janis Straume and the advantages of having a common stance in the EU accession negotiations. He also met with Defense Minister Girts Valdis Kristovskis and delivered a lecture on Czech-Latvian relations at the University of Latvia. Kavan concluded his visit with a joint press conference with Foreign Minster Indulis Berzins, during which he noted that before the NATO summit meeting in Prague in November at which new members will be invited to join the alliance, its current members will meet in Reykjavik to agree on the framework of the expected NATO enlargement as well as NATO's future relationship with Russia.

LATVIA, ESTONIA SIGN NEW TAX AGREEMENT.
Foreign ministers Indulis Berzins and Kristiina Ojuland signed a new agreement in Riga on 11 February on avoiding double taxation and fighting tax evasion, LETA reported. The two countries signed such an agreement in May 1993, but Latvia unilaterally suspended its implementation beginning on 1 June 2001, arguing that Estonia had changed its income tax laws significantly when it began to require companies registered in Estonia to pay taxes on profits only when those profits are distributed in dividends. The two countries set up a task force that drew up a new version of the agreement, which the Latvian cabinet approved in December and the Estonian cabinet approved in early February. The agreement must still be approved by the two parliaments, but will go into effect retroactively from 1 January 2002. The ministers also agreed to work out a joint position concerning the European Commission's proposal to provide farmers in new EU member countries only 25 percent of the agricultural subsidies given to farmers of current EU countries.

LATVIAN PUBLIC TV CHIEF FIRED.
The Latvian National Radio and Television Council decided on 14 February by a vote of six to one with one abstention to dismiss Rolands Tjarve as the director-general of Latvia's public Latvijas Televizija (LTV), BNS reported. The main reason for the dismissal was Tjarve's approval of a trilateral agreement between LTV, Hansa Lizings, and Media Bridge media agency under which LTV was to be a guarantor of a 354,000 lats ($553,000) bank loan taken by the media agency. This agreement was considered to be a direct violation of the law "On Radio and Television," which bans the pledging or sale of LTV assets. LTV news chief Gundars Reders was appointed as acting director-general.

FARMERS UNION HOLDS CONGRESS.
Augusts Brigmanis, the chairman of Latvia's Farmers Union (LZS), told the party's congress in Riga on 9 February that it is very important for Latvia to defend its national interests while seeking EU entry, LETA reported. He said the LZS will protest Latvia's entry into the EU if subsidies provided by the union to farmers in Latvia are lower than the subsidies to farmers in current EU member states. Brigmanis also proposed imposing a moratorium on the sale of agricultural land in Latvia until 2013, arguing that land prices are too high for local farmers but ridiculously low for foreigners. He also said Latvia should follow the example of the new Danish government and permit immigrants to remain in Latvia only if they have found legal employment.

CARGO TURNOVER AT PORTS INCREASED IN JANUARY.
The cargo turnover at the three major ports of Ventspils, Riga, and Liepaja in January was 4.53 million tons or 9.2 percent greater than in January 2001, LETA reported on 13 February. The turnover at Ventspils, the largest port, rose by 5.2 percent to 2.99 million tons, that of Riga grew by 14.5 percent to 1.26 million tons, while the smallest port, Liepaja, had the greatest rate of increase, 26.8 percent, to 276,800 tons.
* In an interview in the daily "Lauku Avize" of 9 February, the European Commission (EC) delegation head in Latvia, Andrew Rasbash, said that no EC annual report had indicated that the current laws requiring candidates to the parliament and local councils to be highly proficient in Latvian would be an obstacle to EU membership. He said, however, that he supports the proposal to abolish these requirements.
* The government on 12 February appointed Minister for International Financial Affairs Roberts Zile as its delegate to the EU's Future of Europe Convention with the head of the parliament's foreign affairs commission, Guntars Krasts, being named an alternate, BNS reported. The parliament had on 7 February elected European Affairs Committee Chairman Edvins Inkens and Rihards Piks as its delegates with Inese Birzniece and Maris Sprindzuks as their alternates.
* During a visit to Germany on 12 February, Justice Minister Ingrida Labucka and her German counterpart Herta Deubler Gmeli agreed to increase cooperation by exchanging information and experts, BNS reported. The previous day Labucka and Brandenburg Justice and European Affairs Minister Kurt Schelte signed a judicial cooperation plan for this year.
* The Office of the United Nation's High Commissioner (UNHCR) for Refugees, the Latvian branch of the International Red Cross, and the Latvia's Foreigners Association signed an agreement on 15 February on cooperation in providing legal and social assistance to refugees in Latvia, BNS reported. The head of the UNHCR Baltic states office, Lars Jonsson, said that the UNHCR office in Latvia would be closed on 31 March and there will be only a representative of the UNHCR working in Latvia until its admission to the EU.
* The cabinet on 19 February endorsed the Latvian and Russian government agreement on cooperation and information exchange concerning tax legislation, BNS reported. The agreement, which is expected to be signed on 27 February, will form the legal basis for the countries' tax administrations to cooperate in preventing tax evasion, establishing correct tax calculations, and improving their collection.
* The government on 12 February approved draft amendments to the Criminal Code, Criminal Law, and the law on the Criminal Law's implementation that would abolish the death penalty, LETA reported. Latvia was required to do this when it accepted the protocol of the International Covenant on Civil and Political Rights, passed on 16 December 1966, envisaging the abolition of capital punishment.
* British Airways announced on 14 February that its planes on the Riga-London route will land at Heathrow Airport instead of Gatwick Airport from 31 March, LETA reported. This is convenient for passengers as Heathrow is Europe's largest airport with many more flights to world airports.
* The Central Statistical Bureau announced on 8 February that the consumer price index in January increased by 0.9 percent compared to December and by 3.5 percent compared to January 2001, LETA reported. In January the prices of goods and services grew by 1.1 and 0.4 percent, respectively. The greatest price rise was 32.1 percent for potatoes while prices of clothes and footwear fell by 4.2 percent.
* The Bank of Latvia estimates that the revenues lost due to the illegal import of oil products since 1989 amount to 30 million lats ($48 million) per year, LETA reported on 11 February. It noted that the number of motor vehicles registered in 2000 was 329,000, some 25,000 or 8 percent more than in 1998, but import of gasoline dropped 79,000 tons, or 18 percent, and import of diesel fuel fell by 87,000 tons or 24 percent.
* The National Employment Service announced on 11 February that the unemployment rate grew to 7.9 percent in January or 0.2 percent more than in December, LETA reported. As of 1 February there were 96,581 registered job seekers in Latvia.


LITHUANIA
FRENCH PARLIAMENT DEPUTIES PRAISE LITHUANIAN EU EFFORT.
At a press conference in Vilnius on 14 February, French National Assembly Vice Chairman Maurice Ligot complimented Lithuanian officials for what he called "earnest, competent, and responsible dealing with EU entrance issues," ELTA reported. Ligot said that "all [EU] member states are looking forward to the admission of Lithuania," which he hopes will take place soon. The previous day, parliament Chairman Arturas Paulauskas received the French delegation headed by Ligot and informed them about the passage of legislation necessary for EU membership. The delegation also met with members of the Lithuanian parliament's European, foreign, rural, education, and science committees. Ligot said he believes that the EU will allow Lithuania to alter its previous decision and ask for a transition period on allowing the sale of farm land to foreigners, since other candidate countries are also applying for this. President Valdas Adamkus is scheduled to meet the delegation before they return home on 15 February.

AGREEMENT SIGNED ON PRIVATIZING LAST STATE-OWNED BANK.
Lithuanian State Property Fund Director Povilas Milasauskas and Norddeutsche Landesbank Girozentrale (Nord/LB) board member Joergen Koesters and Executive Vice President Sven Herlyn signed an agreement on 17 February in Vilnius on the sale of a 76.01 percent share of the Zemes Ukio Bankas (LZUB), BNS reported. Nord/LB will pay 71 million litas ($17.9 million) for the shares and invest a further 145 million litas in the bank. LZUB is the third-largest bank in Lithuania with total assets accounting for around 13 percent of all the domestic bank market. In 2001 it had an estimated pre-audit net profit of 8.46 million litas. Nord/LB ranks 10th among Germany's banks in terms of assets and has the highest possible rating of AAA from the Fitch rating company.

SLOVENIA'S FOREIGN MINISTER VISITS.
During a one-day official visit to Vilnius on 21 February, Dimitrij Rupel held talks with Prime Minister Algirdas Brazauskas, President Valdas Adamkus, Foreign Minister Antanas Valionis, and parliament Deputy Chairman Ceslovas Jursenas, BNS reported. The talks dealt primarily with EU and NATO membership as well as the upcoming Future of Europe Convention. Rupel told reporters that he expects that five to seven countries will be invited to join NATO in November and that he supports continued meetings of the "Vilnius 10" group of NATO applicants, as this will be very useful for the countries that do not receive membership invitations. He noted that all the EU applicant countries are dissatisfied with the agricultural subsidies proposed by the European Commission, but that the other benefits of EU membership are more important. Rupel also visited the Slavic Studies Department at Vilnius University, which offers a course in the Slovenian language.

SWEDISH DEPUTY PRIME MINISTER VISITS.
Lena Hjelm-Wallen discussed EU and NATO expansion and bilateral ties with President Valdas Adamkus in Vilnius on 19 February, ELTA reported. She said that although Sweden is not a member of NATO, it supports Lithuania's efforts to join the Atlantic alliance. In regard to EU agricultural policy she asserted that Sweden is opposed to the current system of direct subsidies to farmers, because it encourages surplus production. Hjelm-Wallen noted that all applicant countries must reform their agricultural sector by reducing the number of people involved in it. Her talks with deputy foreign ministers Evaldas Ignatavicius and Rytis Martikonis primarily focused on EU enlargement. As a member of the executive board of the Swedish Social Democratic Party, she also met with members of the parliament's Social Democratic faction.

PLAN TO EXPAND COOPERATION WITH UZBEKISTAN.
Premier Algirdas Brazauskas met in Tashkent on 19 February with his Uzbek counterpart Utkir Sultanov and with parliament speaker Erkin Khalilov, Russian media reported. The talks focused primarily on expanding economic cooperation and trade; Lithuania imports raw materials from Uzbekistan for its textile sector. Brazauskas and Sultanov signed intergovernmental agreements on encouraging and protecting investments, the prevention of dual taxation and tax evasion, and fighting crime.

WORLD BANK LOAN FOR SCHOOL RENOVATION SOUGHT.
Education Minister Algirdas Monkevicius held talks in Vilnius on 11 February with the World Bank's representative for education, Ernesto Cuadro, on the ministry's program for the reorganization and renovation of Lithuanian educational institutions, BNS reported. Lithuania hopes to receive a 100-million litas ($39.5 million) loan from the bank for the program, which will be carried out from 2002 to 2005. Cuadro said World Bank managers are satisfied with the project to renovate school buildings, improve school environments, prepare courses for teachers and headmasters, and provide transportation for schoolchildren. World Bank officials will spend 10 days in Vilnius to clear up the remaining details regarding the administration of the project by local authorities and the participation of school communities. The loan agreement is expected to be signed in May.

COMMISSION TO COORDINATE ANTITERROR ACTIONS SET UP.
The government on 13 February named Mecys Laurinkus, the chief of the State Security Department, as the head of the newly established interagency commission to coordinate Lithuania's response to threats arising from terrorism, BNS reported. The other members of the commission are the defense, economy, environment, finance, foreign, health, and transport deputy ministers along with the deputy prosecutor-general. The commission will supervise the national program for fighting terrorism adopted at a closed-door session of the National Security and Defense Committee of the parliament in January, for which the government has allocated 7 million litas ($1.77 million) this year. The main task of the commission is to provide intelligence and recommendations to the president, parliament, and government. Last week the cabinet approved a list of the most likely terror targets in Lithuania that the armed forces should defend. These included the president's office, the parliament and government buildings, the Ignalina nuclear power plant, Mazeikiai Nafta, and the international airports.

CONSIDERING WHERE TO STORE NUCLEAR WASTE.
Dainius Janenas, the director of the recently formed Radioactive Waste Regulation Agency, told a press conference in Vilnius on 12 February that the agency's most important task is to find a permanent storage site for the fuel used by the Ignalina nuclear power plant (INPP) once it is closed, "Lietuvos rytas" reported the next day. He noted that the plant produces about 1,100 cubic meters of solid waste and 1,000 cubic meters of liquid nuclear waste each year, and that there are now about 60 intermediate containers at the INPP suitable for holding nuclear waste for 50 years. The number of containers would increase to 700 after the plant's closure and cost about 70-90 million euros ($62-$79 million). Some geologists have suggested a more secure underground burial site near Kaunas, but costs for using that site are estimated at between 100 and 250 million euros. The other suggested alternative of sending the nuclear waste to Russia has the drawback that Russia will agree only to temporary storage.

PRIVATIZATION OF GAS UTILITY.
Germany's main natural gas distributor, Ruhrgas, was the only company to submit a bid by the 19 February deadline to buy the 34 percent share of Lietuvos Dujos (Lithuanian Gas) assigned for a strategic investor, ELTA reported the next day. Another 34 percent of Lietuvos Dujos will be sold to a gas supplier, probably Russia's Gazprom. In the first phase of the competition in December 2001, Gaz de France and the consortium of Ruhrgas and the German company EON Energie submitted applications to participate in the bidding. EON Energie formally asked the German government on 19 February to eliminate objections of the Competition Council to its intentions to take control of Ruhrgas, and is likely to announce on 28 February if it will join the Ruhrgas bid for Lietuvos Dujos.

CONGRESS OF SOCIAL LIBERALS HELD IN VILNIUS.
The 3rd Congress of the New Union (Social Liberals) in Vilnius on 9 February re-elected parliament Chairman Arturas Paulauskas to a four-year term as party chairman by a unanimous vote of the 364 delegates, "Lietuvos rytas" reported on 11 February. The congress also elected an 87-member party council whose members were proposed by Paulauskas. The council will meet on 23 February to choose the party's deputy chairmen. In his report to the party congress, Paulauskas expressed satisfaction that the number of party members has increased to nearly 4,000, and noted that new members include Social Security and Labor Minister Vilija Blinkeviciute and Health Minister Konstantinas Romualdas Dobrovolskis. However, he did not reveal whether he intends to run for Lithuania's presidency, saying that there is still a lot of work to be done before an electoral campaign can begin.
* Vilnius Archbishop Cardinal Audrys Juozas Backis and Warsaw Archbishop Cardinal Jozef Glemp participated in a solemn session called Lithuania and Poland: Common History and Religion, in Warsaw on 11 February, BNS reported. They said that the two nations should grow closer and build their future together.
* The head of the European Commission delegation to Lithuania, Michael Graham, attended the opening ceremonies of a new office of the Lithuanian State Border Guard Service in the Ignalina district on the Belarusian border on 12 February, BNS reported. The construction cost 3.04 million litas ($750,000), of which 1.85 million litas was aid from the EU.
* Interior Minister Juozas Bernatonis and British Ambassador to Lithuania Jeremy Hill met on 13 February to discuss the successful cooperation of Lithuania and Britain in law enforcement and other areas as well as Lithuania's EU membership preparations, BNS reported. They agreed on the need to join forces in fighting organized crime, especially in the areas of trafficking in people and narcotics.
* Vilnius Mayor Arturas Zuokas embarked on a 3-day visit to London on 18 February in order to present major initiatives undertaken in Vilnius to his London counterpart Michael Oliver, ELTA reported. He held talks with consultants of PriceWaterhouseCoopers and top police officials on city security, and cooperation between the private and public sectors. Zuokas also discussed ways to increase the number of tourists to Vilnius.
* Russia's second largest oil producer, YUKOS, on 8 February debuted a website in the Lithuanian language with information about its structure and management, enterprises under its control, relations between Yukos and Lithuania, environmental operations, as well as its plans for 2002, ELTA reported. YUKOS also has websites in Russian, English, and Slovak. Although an agreement with Williams International over the purchase of a 26.85 percent share of Mazeikiai Nafta (Mazeikiai Oil) has not yet been signed, YUKOS has resumed supplying crude oil to the refinery after a one month break, BNS reported on 19 February.
* Economy Ministry spokesman Ricardas Slapsys announced on 13 February that Lithuania will not change to daylight saving time this spring and thus will have the same time as Paris and Frankfurt from the last Sunday in March until the last Sunday in October, BNS reported.
* The state-owned natural gas utility Lietuvos Dujos (Lithuanian Gas), successfully placed a six-month bond issue worth 20 million litas ($4. million) on the domestic market on 20 February, BNS reported. The bond issue, which carried an annual yield of 5.25 percent, was heavily oversubscribed.
* The Mazeikiai Nafta oil concern paid a fine of 2.56 million litas ($640,000) to the Environment Department of the western Klaipeda region for damages caused by the oil spill at the Butinge terminal on 23 November, ELTA reported on 19 February.
* The Lithuanian Competition Council on 21 February imposed a fine of 2.078 million litas ($502,000) on the fixed-line phone operator Lietuvos Telekomas (Lithuanian Telecom) for abusing its dominant position on the Internet telephone services market, BNS reported.
* The State Plant Protection Service on 14 February imposed a three-month ban on potato imports to Lithuania from Belarus and Moldova, BNS reported the next day. The decision was made after the potatoes imported from these countries appeared infected with potato stem nematode and potato ring rot.
* The board of Lietuvos Energija (Lithuanian Energy) appointed Rymantas Juozaitis, the head of the local subsidiary, Kauno Energija, as the company's managing director on 8 February, ELTA reported. He replaced Dangiras Mikalajunas, who resigned earlier in the month.
* The recently established Liberal Democratic Party, which consists primarily of defectors from the Liberal Union led by former Premier Rolandas Paksas, announced on 13 February that it will hold its constituent congress on 9 March in Vilnius, ELTA reported. The congress was originally planned for May, but was moved up when the parliament began discussing changes in the requirements for founding parties in the political party law.
* Ambassador to Japan Algirdas Kudzys presented his credentials to Japanese Emperor Akihito in Tokyo on 21 February, BNS reported. President Valdas Adamkus appointed Kudzys ambassador to Japan last November.
* The Estonian-owned company Olympic Casino Group Baltija opened the first legal gambling hall in Vilnius on 8 February, BNS reported. The hall has 44 unlimited-winnings slot machines. On 15 February, the State Gaming Control Commission allowed the company to open a second hall in Vilnius with 35 slot machines.
* The Statistics Department announced on 11 February that in 2001 Lithuania's imports increased by 15.1 percent over 2000 to 25.12 billion litas ($6.28 billion), while exports rose by 20.3 percent to 18.33 billion litas, BNS reported.
* The Statistics Department announced on 12 February that in January the consumer price index increased by 1.0 percent compared to December and by 3.2 percent compared to January 2001, ELTA reported. The costs of goods and services in January rose by 1.1 and 0.3 percent, respectively.


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