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Baltic Report: March 18, 2002


18 March 2002, Volume 3, Number 7

NOTE TO READERS:
This issue covers events in the Baltic states from 22 February to 7 March 2002.
REGIONAL
BALTIC PRIME MINISTERS ADOPT COMMON STATEMENT ON EU ASSISTANCE PACKAGE.
Meeting at the Lithuanian resort town of Nida, Premiers Algirdas Brazauskas (Lithuania), Andris Berzins (Latvia), and Siim Kallas (Estonia) agreed on 1 March that the aid model proposed by the European Commission is a good starting point for negotiations, but it needs revisions to the parts on direct subsidies to farmers, agricultural quotas, and transition periods, BNS reported. They said that the European Commission's proposal to offer farmers in new EU states in 2004 just 25 percent of the subsidies given to current union members is too low, and waiting until 2013 for full subsidies would delay the establishment of a unified market for agricultural goods and a common EU agricultural policy. The premiers also agreed that the EC-proposed agricultural production quotas for the Baltic states should be raised, since they are considerably lower than current output. The premiers also discussed NATO membership, setting up a common free market for electricity, and progress with the Via Baltica highway project.

BALTIC DEFENSE MINISTERS SIGN ACCORD ON JOINT CAMPAIGN FOR NATO MEMBERSHIP.
Defense Ministers Sven Mikser (Estonia), Girts Valdis Kristovskis (Latvia), and Linas Linkevicius (Lithuania) meeting in Vilnius on 1 March signed an agreement to cooperate in securing invitations to join NATO during the Atlantic alliance's November summit in Prague, ELTA reported. They agreed to send a joint delegation for talks with U.S. Secretary of Defense Donald Rumsfeld in mid-March and with German Defense Minister Rudolf Scharping in April. The ministers issued a statement that the Baltic states will do everything in their power to support the worldwide fight against terrorism, and will continue to participate in the SFOR and KFOR peacekeeping operations. They also signed the action plan of the joint Baltic naval squadron BALTRON for 2002, and agreed to the financing, operation, and administration of a Baltic Sea Marine Training Center in Liepaja, Latvia. The next meeting of the Baltic defense ministers is scheduled to take place in Tallinn in May.

BALTIC AGRICULTURE MINISTERS ADOPT JOINT POSITION ON EC PROPOSAL.
Agriculture Ministers Jaanus Marinade (Estonia), Atis Slakteris (Latvia), and Jeronimas Kraujelis (Lithuania) signed a joint agreement at a meeting in Riga on 28 February on the European Commission's proposal regarding agricultural support to EU candidate countries once they join the union, LETA reported. The agreement stated that the proposed lower assistance level to farmers in candidate countries does not ensure equal competition within the EU market. Moreover, it said that the production quotas and projected consumption levels at the time of entry for the Baltic states are too low, as they are based on 1995-99 figures.

ESTONIA
BRITISH DEFENSE SECRETARY VISIT.
Geoffrey Hoon, on a one-day visit to Tallinn on 25 February, held talks with Prime Minister Siim Kallas, Defense Minister Sven Mikser, Foreign Minister Kristiina Ojuland, and defense forces commander Vice Admiral Tarmo Kouts, ETA reported. Hoon said that he cannot reveal which countries will be invited to join NATO at the Prague summit in November, but declared: "In any case my role in visiting Estonia was to support your aspirations." Kallas and Hoon agreed that small countries can contribute to enhancing global security by forming and training small specialized units that could be sent to conflict areas. The same day, Kallas also discussed his country's NATO candidacy with the U.S. permanent representative to NATO, Ambassador Nicholas Burns. Burns mentioned two criteria for NATO candidates -- whether its invitation would strengthen the military alliance and whether the country is staunchly devoted to the protection of democratic values.

PRIME MINISTER VISITS BRUSSELS.
Siim Kallas ended a two-day visit to Brussels on 7 March with talks with European Commission President Romano Prodi, ETA reported. Prodi noted that the provision in Estonia's law on income tax that exempts companies' reinvested profits is not acceptable to Spain, Italy, and France. Those countries claim that the provision would give Estonia an advantage not permitted in Europe, he said, but added that he is sure a mutually acceptable solution can be found. He also said that he understands Estonia's position concerning an increase in milk quotas and the survival of its oil-shale energy industry. The previous day, Kallas met with Belgian Prime Minister Guy Verhofstadt and EU Enlargement Commissioner Gunter Verheugen to discuss EU and NATO enlargement.

ESTONIAN AND RUSSIAN FOREIGN MINISTERS MEET.
During a meeting of the foreign ministers of the Council of the Baltic Sea States in the Svetlogorsk resort in Russia's Kaliningrad Oblast on 6 March, Kristiina Ojuland and Igor Ivanov discussed ways to improve their countries' relations, ETA reported. The last meeting of the foreign ministers of the two countries was in November 1996 in Petroskoye, northwestern Russia, where Siim Kallas and Yevgenii Primakov initialed a border agreement that has not yet been signed. Ivanov suggested that experts from the ministries should hold regular consultations and that Estonia should not regard Russia's statements about the situation of the Russian-speaking population as extortion. Ivanov accepted Ojuland's invitation to visit Estonia in the second half of the year. Ojuland raised the issue of Russia's higher tariffs on imports from Estonia and noted that several agreements have been prepared that Estonia is ready to sign. She said the agreement regulating shipping on the Peipsi and Pskov lakes will probably be the first one to be signed.

TRANSITION PERIOD FOR TAX-FREE TRADE MAY NOT BE SOUGHT.
Foreign Minister Kristiina Ojuland said that Estonia may give up on its calls for a 6 and one-half year transition period for tax-free trade in its ongoing EU membership negotiations, ETA reported on 25 February. She noted that the EU has never responded to this request, which would be part of the taxation chapter that Estonia wants to close in the first half of this year. The Estonian Association of Tourist Firms claims that ending the tax-free system would deprive Estonia of 5 billion kroons ($278 million) a year, and raise the state's unemployment rate by 8 percent. Ojuland asserted that the government may consider granting state subsidies to shipping companies to prevent a fare hike.

PRESIDENT CALLS FOR REFORM OF ENERGY INDUSTRY.
In a speech to the parliament on 27 February, Arnold Ruutel declared that Estonia should end its policies of ensuring concessions to oil shale-based energy production by law, and begin a gradual transition to the principles of an open energy market, ETA reported. He noted that the failure to privatize the Narva power plants -- which supply more than 90 percent of the country's electricity -- to the U.S. firm NRG Energy after six years of negotiations indicated that the state-owned energy utility Estonian Energy, which controls the plants, should be split into parts dealing respectively with the generating, transmission, distribution, and sale of electric energy. Ruutel said that there is no question that the Narva power plants, which generate power from oil shale, will remain in operation for 20 or more years. Consumers will not be able to finance the renovation of the entire energy complex, he said, which would cost some 25-30 billion kroons ($1.39 billion to $1.67 billion). Ruutel said that the state should retain control of the transmission lines, support the use of renewable sources of energy, and move toward transparent energy prices.

PROVISIONAL DELEGATES APPOINTED TO CONVENTION ON THE FUTURE OF EUROPE.
The board of the Estonian parliament decided on 26 February to send to the Convention on the Future of Europe a provisional delegation consisting of parliament deputy chairmen Peeter Kreitzberg of the Center Party and Tunne Kelam of the Pro Patria Union, ETA reported. The parliament on four attempts failed to appoint the delegate who will represent the opposition. The first choice of the parliament's Foreign Affairs Committee, Moderates chairman and former Foreign Minister Toomas Hendrik Ilves, was opposed by the ruling coalition, and the People's Union offered Janno Reiljan as a substitute. The Moderates and Pro Patria Union, however, did not consider the People's Union to be part of the opposition and, after Ilves withdrew his candidacy, decided to back Kelam. Both Kelam and Reiljan, however, failed to receive sufficient backing in the parliament, which will debate the appointment of permanent delegates in March. The government appointed former President Lennart Meri as its delegate with former Economy Minister Henrik Hololei as his substitute.

CABINET TO SUBSIDIZE MERGER OF LOCAL GOVERNMENTS.
The cabinet decided at its 5 March meeting to replace the previous government's decision to merge the number of local governments from 247 into 108 with voluntary mergers encouraged by financial subsidies, ETA and BNS reported. The support will amount to 370 kroons ($20.50) per resident -- 70 kroons in direct support and 300 kroons in investments. The amount of support will be based on the data of the population register on the election day for local councils in October. The meeting also decided not to support amendments to the State Pension Insurance Act sponsored by the People's Union, which call for a 10 percent pension hike for those older than 80 years of age, since such a move would contradict the principle of equal pensions.

PARLIAMENT RE-ELECTS ITS LEADERSHIP.
The parliament, by a vote of 67 to 17 with eight invalid ballots, re-elected Toomas Savi of the Reform Party as its chairman on 28 February, BNS reported. The popularity of Savi, who has led the parliament since 1995, was demonstrated by the fact that he gained five more votes than Siim Kallas received to be elected prime minister. Peeter Kreitzberg of the Center Party and Tunne Kelam of the Pro Patria Union were re-elected deputy chairmen with 46 and 38 votes, respectively.

CENTER PARTY LEADERS APPROVE ACCORD WITH RUSSIAN PARTY.
The extended board of the Center Party approved a cooperation agreement on 2 March with the Russian-dominated United People's Party, BNS reported. The agreement stipulates coordinated action in the handling of legislation, and that the parties will not support votes of no-confidence against members of the cabinet or the chairmen and deputy chairmen of parliamentary committees. The two parties agreed to consider state support for small and medium-size businesses, to maintain state control over key infrastructure, and to develop state programs for reducing poverty and alleviating social problems. They pledged to make efforts to settle the ongoing conflict between the two Estonian Orthodox churches with different canonical subordination. The Center Party board also endorsed the coalition agreement with the Reform Party.

REFORM PARTY AND RUSSIAN BALTIC PARTY IN ESTONIA TO MERGE.
Chairmen of the Reform Party and Russian Baltic Party in Estonia (RBPE) Siim Kallas and Sergei Ivanov signed a preliminary agreement in Tallinn on 4 March on forming a union of the two parties, ETA reported. According to the agreement, RBPE deputies in the parliament and Tallinn City Council will participate as full members of the respective Reform Party factions beginning on 11 March. If the two parties are not fully merged to the local councils by the fall elections, they will have a common list of candidates under the Reform Party. Kallas said: "Political division based on nationality will inevitably disappear and be replaced by positions based on one's world view." Ivanov said that efforts to unite the various Russian parties in Estonia have failed, and that those parties have been unable to defend the interests of the Russian-speaking population. The Reform Party's partner in the ruling coalition, the Center Party, recently approved a cooperation agreement with another Russian party, the Estonian United People's Party.

FITCH ASSIGNS ESTONIA'S HANSAPANK AN A- RATING.
The international financial ratings agency Fitch Ratings assigned a long-term foreign currency rating of A- to Estonia's Hansapank on 28 February, the highest given to any commercial bank in Central and Eastern Europe, ETA reported. The rating is a reflection of the backing that the bank can expect from its majority shareholder Swedbank, which is rated A+. Fitch also assigned Hansapank a short-term foreign-currency rating of F2, an individual rating (financial strength rating) of C, and a long-term rating outlook of stable.
* Danish Prime Minister Anders Fogh Rasmussen met in Tallinn on 28 February with his Estonian counterpart Siim Kallas and President Arnold Ruutel, ETA reported. He affirmed that he expects Estonia not to have any major problems in completing the membership negotiations with the EU and that Denmark will support membership in NATO for the Baltic states at the November summit in Prague.
* George Krivicky, the Baltic states director of the European Bank for Reconstruction and Development, told Finance Minister Harri Ounapuu on 5 March that the bank's priorities in Estonia in the next few years include transport and environmental investments, ETA reported. During their three-day visit Krivicky and economic analyst Vanessa Mitchell-Thomson also met with Economy Minister Liina Tonisson, Bank of Estonia President Vahur Kraft, and other government officials.
* Tallinn and Riga Mayors Edgar Savisaar and Gundars Bojars signed on 25 February in Tallinn an agreement on cooperation between the capitals of the three Baltic countries, ETA reported. The agreement calls for joint projects in city planning, transport, tourism, heritage, and social spheres. It is expected that Vilnius Mayor Arturas Zuokas will sign the document later.
* The Finnish Ministry of Trade and Industry has given permission to lay an undersea power cable between Estonia and Finland, known as the EST link project, BNS reported on 28 February. The undersea cable will be built as a 315 megawatt, direct current, high voltage connection that will permit transmission in both directions.
* The parliament with 80 votes on 26 February overrode President Arnold Ruutel's veto of amendments to the law on foreign loans, BNS reported. The government will be able to issue bonds worth 1.57 billion kroons ($87 million) this year to refinance 1.15 billion kroons in earlier loans, buy a long-range radar system costing 239 million kroons, acquire a monitoring center for 50 million kroons, and buy sea monitoring radar for 130 million kroons.
* The parliament decided on 27 February that only party lists and individual candidates may run in local elections, and ruled out parties' and citizens' electoral blocs, BNS reported. It rejected a proposal to forbid parliament deputies from being simultaneously deputies of local councils. The parliament also gave citizens of EU countries residing in Estonia the right to run for local councils.
* The Estonian Unity Party (EUP), a new predominantly Russian political force, held its first congress in Tallinn on 23 February, electing Igor Pissarev as its chairman, BNS reported on 25 February. The new party is a center-right political force whose goal is the creation of a middle class and increasing the number of jobs. Founded in August 2001 and registered in October, the EUP currently has 1,350 members.
* The director general of the Tallink shipping group, Kalev Jarvelill, declared on 7 March that the abolition of the tax-free trade aboard ferries between Tallinn and Helsinki will probably result in the end of large passenger ferry service between the two ports, leaving only fast vessels and a cargo ferry, ETA reported on 7 March. He said that state aid would be necessary for his company to compete with Finnish ferries.
* Customs statistics indicate that imports increased from 7.65 ($425 million) billion kroons in December to 8.07 billion kroons in January while exports in the same period declined from 5.74 to 4.88 billion kroons, ETA reported.
* The Statistical Office announced on 7 March that in February the consumer price index increased by 0.5 percent compared to January and by 4.4 percent compared to February 2001, ETA reported. The price of goods and service rose by 0.4 and 0.7 percent, respectively.
* Security police have taken to court Yuri Karpov, a former senior KGB agent, on charges of deporting to Siberia 41 residents of the Harjumaa region in March 1949, BNS reported on 1 March.


LATVIA
OSCE COMMISSIONER PRAISES INTEGRATION EFFORTS.
OSCE High Commissioner on National Minorities Rolf Ekeus told President Vaira Vike-Freiberga on 5 March that he supports Latvia's efforts to abolish Latvian-language requirements for candidates to the parliament and local councils, LETA reported. He praised the progress made in integrating minorities in Latvia, singling out the campaign for informing potential citizens how to acquire citizenship. When asked at a later press conference whether Latvia should grant non-citizens the right to vote in local council elections, Ekeus said this is an internal matter for Latvia, but that most Western countries do not currently allow this. He told the State Language Committee, headed by Mara Zalite, he understands the importance of strengthening the role of the Latvian language for the internal stability and social integration of the state. The previous day, Education and Science Minister Karlis Greiskalns informed Ekeus about plans to make Latvian the primary language of instruction in all schools as of 2004.

PRIME MINISTER ASSERTS ELECTION LAWS WILL BE AMENDED BEFORE NATO SUMMIT.
Andris Berzins assured U.S. Ambassador to NATO Nicholas Burns in Riga on 26 February that the laws requiring candidates for parliament and local councils to be fluent in the Latvian language will be amended before the NATO summit meeting in Prague in November, LETA reported. At a meeting with President Vaira Vike-Freiberga -- also attended by Heather Conley, the deputy undersecretary of state for Eastern Europe -- Burns praised the progress Latvia has made since his last visit five years ago. British Defense Secretary Geoffrey Hoon told Vike-Freiberga the same day that amendments to the election law are a matter of Latvia's internal affairs, but that it is nevertheless very important to NATO that Latvia comply with the requirements for democratic countries.

PROSECUTOR-GENERAL WORRIED ABOUT CORRUPTION IN COURT SYSTEM.
In an interview in the daily "Neatkariga Rita Avize" of 6 March, Janis Maizitis said that the prosecution of policemen and prosecutors who have been found guilty of accepting bribes is an indication that the court system is "not totally corrupted." Nevertheless, he said that if even one prosecutor takes a bribe he is harming fellow prosecutors, because people will stereotype all of them as corrupt. Maizitis claimed that the development of the court system has been hampered by a lack of political support, and that the government should make reform of the judicial system a top priority. He also noted that the investigation of complicated crimes carried out by officials in Latvia is marred by the lack of knowledgeable specialists in the intelligence services. He also said Latvia's internal security will improve after the privatization process is completed.

SPANISH PRIME MINISTER MEETS COUNTERPART.
Jose Maria Aznar made a short official trip to Riga in the evening of 4 March for talks with Andris Berzins, LETA reported. Aznar's earlier planned visit to Latvia was called off in mid-flight due to the terrorist attacks on 11 September in New York and Washington. As Spain is presiding over the EU during the first half of the year, the meeting of the premiers primarily focused on EU expansion. Aznar expressed his hope that the decision on whether to admit new members to the union will be made by the end of the year, and said that new member states would be allowed to participate in the European Parliament's election in 2004. Considerable attention was devoted to the recent European Commission proposals for agricultural subsidies, which have been criticized by EU candidate countries. Aznar said that the agricultural production quotas proposed by the EC "comply with financial options" and are rational and good, but that the size of the quotas must be agreed through negotiations.

RIGA, MOSCOW CITY COUNCILS SIGN COOPERATION PROTOCOL.
Riga Mayor Gundars Bojars and Moscow City Council chairman Vladimir Platonov signed a protocol in Riga on 22 February on cooperation and mutual contacts, LETA reported. It seeks to facilitate the development of Latvian-Russian relations, and calls for greater partnership between the two capitals based on the principles of equality and mutual admiration. The cooperation will focus on the expansion of contacts in education, science, environment, sports, and tourism. The protocol was signed for a period of five years and will be extended automatically for another five years if neither party announces its intention to end it. On 23 February, commemorated in Russia as Defenders of the Fatherland Day, the Moscow delegation placed flowers at the monument to Soviet soldiers forced to leave Riga during World War II, and met with Jurmala Mayor Dainis Urbanovics. The delegation departed the next day after visiting the open-air Ethnographic Museum near Riga as well as the medieval town of Sigulda.

SLOVENIA, LATVIA EXPECT TO JOIN EU, NATO TOGETHER.
Slovenian Foreign Minister Dimitrij Rupel said during an official visit to Riga on 22 February that his country and Latvia "belong to the same class," and are likely to join both NATO and the European Union on similar schedules, dpa reported. Both countries will finish accession talks with the EU this year and receive NATO invitations in November if all goes as planned, he said. "The year 2002 will be a good one," Rupel added. During a swing through the Baltics, Rupel has reiterated support for the "Vilnius 10" group of NATO applicants while saying he believes five to seven countries will be invited into the defense alliance. Rupel had separate meetings with President Vaira Vike-Freiberga, Prime Minister Andris Berzins, and Foreign Minister Indulis Berzins, LETA reported.

PRESIDENT URGES PARLIAMENT TO CLAMP DOWN ON DRUG DEALERS.
Vaira Vike-Freiberga has sent a letter to parliament Chairman Janis Straume suggesting that the parliament amend the criminal law to distinguish between drug users and drug dealers so that the latter will receive adequate punishment for their crimes, BNS reported on 7 March. She urged lawmakers to separate criminal liability for production, purchase, possession, and transportation of drugs with the intent to sell, from that of simple drug use. Vike-Freiberga expressed regret that last year's criminal statistics indicated that suspended sentences were handed down in 90 of the 200 cases heard on drug dealing, and in another 92 cases the accused received light jail sentences of between one and three years. She wrote that she may propose amendments that would bar the courts from passing sentences any lighter than the minimum statutory punishment for drug dealing. Supreme Court Chairman Andris Gulans, however, criticized the use of mandatory minimum sentences, saying that they may bring about "unforeseeable consequences."

CHRISTIAN PARTIES WANT REFERENDUM TO AMEND REPRODUCTIVE HEALTH BILL.
The New Christian Party and the Union of Christian Democrats announced on 25 February that they will run together in the fall parliament elections and begin a signature drive next week for a referendum on amending the law on sexual and reproductive health, LETA reported. They did not specifically disclose what they want to change in the law, passed by the parliament on 31 January, but its members earlier expressed their desire to ban abortions. It appears likely that the parties will succeed in gathering the 10,000 signatures needed to submit their proposed amendments to the parliament. However, if the parliament does not adopt the bill to hold a referendum, the parties will have to gather, within two months, signatures equal to at least one-tenth of the number of people who voted in the previous elections.

CONSULTANT CHOSEN FOR PRIVATIZATION OF LATVIAN SHIPPING COMPANY.
The board of the Latvian Privatization Agency approved on 27 February the choice of the Riga Stock Exchange to select the international investment company Williams de Broe as its consultant for selling a 51 percent stake in Latvijas kugnieciba (Latvian Shipping Company), LETA reported. These shares will be sold for cash on the Riga Stock Exchange, while another 32 percent of the company's shares will be sold for privatization vouchers.
* Danish Prime Minister Anders Fogh Rasmussen began a two-day official visit to Latvia on 27 February with a meeting with Prime Minister Andris Berzins, LETA reported. He urged Latvia to amend its parliament and local council election laws by deleting the high Latvian language requirements. The next day he discussed EU enlargement with parliament Chairman Janis Straume and promised Denmark's support in the process. President Vaira Vike-Freiberga received him at her Jurmala residence and was told that Denmark fully supports the membership of the Baltic states in NATO.
* Prime Ministers Algirdas Brazauskas (Lithuania) and Andris Berzins (Latvia) signed an agreement on naming special border commissioners at Lithuania's Neringa seaside resort on 1 March, ELTA reported. The commissioners will exercise broad powers in dealing effectively with border issues, possible incidents, and misunderstandings arising in border crossings.
* A delegation of officials from the defense and foreign ministries visited Turkey from 27 February to 1 March and held bilateral talks with Turkish officials on NATO enlargement and Latvia's accomplishments in implementing its NATO Membership Action Plan, BNS reported.
* The U.S. State Department's annual report on human rights in Latvia noted that last year the Latvian government had, in general, respected the rights of its citizens, but noted various deficiencies, BNS reported on 5 March. The mentioned failings included incidents of excessive use of force by police and other interior personnel, poor prison conditions, prolonged pretrial detentions, violence against women, human trafficking, and child prostitution.
* The Constitutional Court passed a verdict on 22 February stating that parliamentary regulations granting various forms of compensation "on demand" to members of the parliament are contrary to the constitution and a number of other laws, BNS reported. Parliament deputies were able to receive stationary expenses up to 55 lats ($88) a month, transportation compensation up to 167 lats a month, as well as 200 lats a month for apartment rental without having to provide documentary proof of the expenses, which were also tax free.
* The For Human Rights in a United Latvia faction in the parliament declared on 7 March that the draft amendments to the constitution proposed by the ruling coalition aimed at strengthening the status of Latvian as the official state language "threaten to isolate Latvia from the EU," LETA reported. The amendments stipulate that Latvian is the working language of the parliament and local councils, and that every person has the right to refer to local governments and receive a reply in the Latvian language.
* The parliament on 7 March passed a new law on asylum seekers, which implements some EU requirements for refugee asylum, BNS reported. The law specifies the competence of responsible institutions and sets regulations for requesting asylum or refugee status. In order to gain asylum, the person should submit an application to border guards before entering the country. The Interior Minister is responsible for deciding whether refugee status will be granted.
* The government appointed Admiral Gaidis Zeibots as the deputy commander of the National Armed Forces on 5 March, BNS reported. One of his major tasks will be to establish a United Operational Force, which he will command. In this post he will be immediately responsible for planning and conducting military operations in case of war.
* Stephen Nash will be replaced as the British ambassador to Latvia by Andrew Tesoriere, LETA reported on 26 February. Tesoriere has been preparing for his new appointment for six months, particularly by studying the Latvian language. He entered the British Foreign and Commonwealth Office in 1974 working as the office's oriental secretary and heading the Counter-Terrorism Department. He has been the British ambassador to Albania and the head of the UN's Special Mission to Afghanistan.
* Daugavpils City Council Legal Office head Dzintra Nikolajenko announced on 4 March that the State Treasury had given permission for the city to take out a 2.3 million lats ($3.7 million) loan from Hansabanka to pay the city's 1.8 million lats debt to Latvian Gas and to refurbish the heating system in the city's Krizi residential area to the gas heating system, BNS reported. The debt will have an interest rate of 5.74 percent a year while the State Treasury interest rate is 8.28 percent.


LITHUANIA
NATO SECRETARY-GENERAL ENCOURAGES BUT GIVES NO GUARANTEES.
Lord George Robertson began a one-day visit to Vilnius on 22 February in talks with President Valdas Adamkus, ELTA reported. He said: "Lithuania is on the right road, but you are not at the destination yet. No decisions have been taken and nobody can take for granted an invitation to join NATO." He said that Lithuania's key tasks for membership are the modernization of its armed forces, antiterrorist activities, and maintaining democratic standards. Premier Algirdas Brazauskas assured him that all political parties in Lithuania support NATO membership and will not reduce the 2 percent of GDP devoted to defense spending. Robertson told Defense Minister Linas Linkevicius that Lithuania should have mobile and well-trained armed forces that are able to participate with alliance forces in collective defense and peacekeeping operations.

RUSSIAN FOREIGN MINISTER OPPOSES 'MECHANICAL' NATO EXPANSION, BUT ACCEPTS LITHUANIA'S PRIORITIES.
After a meeting with his Lithuanian counterpart Antanas Valionis, Igor Ivanov told a press conference in Vilnius on 7 March that Lithuania has the right to set its own foreign policy priorities, but he reiterated Russia's objection to what he called the "mechanical" expansion of NATO, BNS reported. He praised Lithuania's efforts to find constructive solutions to the problems residents of Russia's Kaliningrad Oblast could face if Poland and Lithuania join the EU. Ivanov noted that the Russian government has sent the Lithuanian-Russian border agreement to the State Duma for ratification, and that the countries' parliaments have to develop a favorable atmosphere for ratification. President Valdas Adamkus repeated to Ivanov his invitation to Russian President Vladimir Putin to visit Lithuania. In later talks with parliament Chairman Arturas Paulauskas, he stressed the need to change the stereotypes about Lithuania formed in the Russian Duma to allow the two countries' parliaments to cooperate more closely in solving urgent and sensitive issues. His visit to Vilnius ended with a meeting with Prime Minister Algirdas Brazauskas.

FINNISH PRESIDENT SAYS LITHUANIA NEEDS AID TO CLOSE NUCLEAR POWER PLANT.
Tarja Halonen began a two-day visit to Lithuania on 6 March with a meeting with President Valdas Adamkus, ELTA reported. Having visited Lithuania 11 years ago, she said she beheld "the same beauty [Lithuania] wearing a new dress, with nicely done hair, but with the same heart." She expressed support for Lithuania's efforts to join the EU and NATO, and noted that the Baltic region needs a common energy strategy since no state there possesses large natural resources for energy production. Halonen told a later press conference that Lithuania needs considerable financial aid to close the nuclear power plant at Ignalina, but it has the sovereign right to have a nuclear industry. Halonen met parliament Chairman Arturas Paulauskas and Prime Minister Algirdas Brazauskas on 7 March.

GREEK FOREIGN MINISTER SUPPORTS LITHUANIA'S EU, NATO BIDS.
At a dinner hosted by President Valdas Adamkus on 24 February, George Papandreou affirmed that Greece strongly supports Lithuania's efforts to join the EU and NATO, ELTA reported the next day. Polish Foreign Minister Wlodzimierz Cimosziewicz, who was on an informal visit to Lithuania, also attended the dinner. Earlier that day, Papandreou visited the grave of his great-grandfather, Zigmantas Godzava Mineika, and received from Foreign Minister Antanas Valionis family documents stored in the Lithuanian State Archives and the coat of arms of the Mineika family. On 25 February, he discussed Greece's experience in opening its real estate market to foreigners with Prime Minister Algirdas Brazauskas.

EU REITERATES PRECONDITION FOR MEMBERSHIP.
Danish Prime Minister Anders Fogh Rasmussen told his Lithuanian counterpart Algirdas Brazauskas on 27 February that the country must make a firm pledge to close both reactors of the nuclear power plant at Ignalina by 2009 if it wants to join the EU, ELTA reported. During his one-day visit to Vilnius, which is part of his plan to visit all EU candidate countries before Denmark takes over the EU presidency from Spain in July, he also met with President Valdas Adamkus and parliament Chairman Arturas Paulauskas. Rasmussen noted that Lithuanian farmers who have expressed dissatisfaction over the EC recommendations to provide new EU member countries with only 25 percent of agricultural subsidies given to current EU members should remember that there will be no subsidies if Lithuania is not admitted to the EU. He affirmed Denmark's firm support for the three Baltic states' NATO candidacy at the Prague summit in November.

LITHUANIA ADVISED NOT TO DISPUTE CLOSING DATES FOR NUCLEAR PLANT.
Spanish Prime Minister Jose Maria Aznar advised his Lithuanian counterpart Algirdas Brazauskas in Vilnius on 5 March that Lithuania should comply with the EU's wishes to close the first unit of the nuclear power plant in Ignalina in 2005, and the second unit in 2009, ELTA reported. While not mentioning any specific sums, Aznar told a following press conference that if Lithuania does this "the EU will help Lithuania as much as it will be able to." Brazauskas mentioned that his country will end the no-visa requirements for Kaliningrad residents in mid-2003 to comply with the EU border requirements in the Schengen Treaty, but will try to work out a favorable visa policy for them. The premiers also discussed proposed EU agricultural subsidies to new member countries, and expressed support for NATO enlargement.

PRESIDENT RESISTS EU PRESSURE TO CLOSE NUCLEAR POWER PLANT.
Valdas Adamkus told a press conference on 26 February that the government should not yield to EU pressure and close the second reactor of the nuclear power plant at Ignalina by 2009, "Lietuvos rytas" reported the next day. Lithuania has agreed to close the first reactor by 2005. Adamkus said: "We have the right, based on Lithuania's needs, to decide what source of energy we need." He denied that the plant is a danger to the environment, and noted that believes nuclear energy is the clean energy source of the future. The previous day, parliament deputy Kazimiera Prunskiene said it would be impossible to close the second reactor before 2013-2015. Prime Minister Algirdas Brazauskas later that day asserted that all Lithuanian state institutions -- the president, the parliament, and the government -- should make the decision on closing the plant together before July, because the European Union is demanding a clear decision by then.

PARLIAMENT PASSES CONSTITUTIONAL AMENDMENT ON LAND SALES TO FOREIGNERS.
By a vote of 119 to four with three abstentions, the parliament approved on 7 March an amendment to Article 47 of the constitution permitting the sale of agricultural land to Lithuanian legal entities and foreigners, ELTA reported. To be adopted the amendment must gain the approval of at least 94 deputies in a second vote following an interval of at least three months. The second vote may be more difficult, as the parliament has postponed voting on the laws that will implement the amendment. There is a sharp difference of opinion as to whether the sale of land should be allowed immediately or after a transition period of at least seven years, which has been demanded by some farmers groups.

POLISH SENATE HEAD OFFERS SUPPORT OF U.S. POLISH COMMUNITY FOR LITHUANIA'S NATO BID.
Polish Senate Chairman Longin Pastusiak began a two-day visit to Lithuania on 28 February in talks with parliament Chairman Arturas Paulauskas, ELTA and BNS reported. He expressed satisfaction with the successful coordination of Lithuanian and Polish positions on EU membership and mentioned the possibility of utilizing the influence of the Polish community in the United States to support Lithuania's entry into NATO. Pastusiak then addressed a special session of the parliament, noting: "You also began [EU] negotiations later than Poland but are today closer to Brussels than we are." He said he chose Lithuania for his first foreign visit to emphasize "our big interest in the successful development of Lithuania and good neighborly ties." In later talks he agreed with the suggestion of Prime Minister Algirdas Brazauskas that their two countries ask the European Council for a mandate to hold talks with Belarusian President Alyaksandr Lukashenka, as the international isolation of Belarus is not beneficial to Belarus. President Valdas Adamkus and Polish Senate Chairman Longin Pastusiak, in talks in Vilnius on 1 March, pledged to pay particular attention to building the Vilnius-Warsaw highway and to modernize the Kaunas-Warsaw railroad, ELTA reported.

BELARUSIAN OPPOSITION LEADERS SUBJECTED TO SIX-HOUR BORDER CHECK.
Belarusian customs officers held a dozen Belarusian opposition figures and journalists for more than six hours on 1 March at the border with Lithuania, Belapan reported. The group was heading for Druskininkai to take part in an international conference on the prospects of cooperation with Belarus, which was organized by the Institute of International Relations and Political Sciences of Vilnius University. Belapan added that Anatol Lyabedzka, the chairman of the United Civic Party; Valyantsina Palevikova, the head of the Belarusian women's party "Nadzeya"; Tatsyana Protska, the chairwoman of the Belarusian Helsinki Committee; Uladzimir Nistsyuk, the deputy chairman of the Social Democratic Party; Leanid Zaika, the president of the Strategiya analytical center; and others had to undergo a humiliating search at the checking point. Two women in the group were subject to a strip-search, AP reported, quoting Lyabedzka. Customs officials found nothing, and the group crossed the border after 10 p.m. The Belarusians participated in the second day of the conference on 2 March.
* British Defense Secretary Geoffrey Hoon held talks with President Valdas Adamkus and Defense Minister Linas Linkevicius during a one-day visit to Vilnius on 27 February, BNS reported. He praised the great progress that Lithuania had made in seeking NATO membership and affirmed that Britain wants Lithuania to be in NATO.
* A group of 78 Lithuanian soldiers, including troops from the Iron Wolf Motorized Infantry Brigade, military doctors, and officers from defense headquarters, took part in the opening of the international NATO-led military exercises "Strong Resolve" in Poland on 1 March, BNS reported. Around 30,000 troops from NATO member states and countries in the Partnership for Peace program will participate in the exercises that end on 15 March.
* The president of Russia's Kalmykia Republic, Kirsan Ilumzhinov, met Prime Minister Algirdas Brazauskas on 25 February to discuss a project for trade between the Caspian Sea and Western Europe through the port of Klaipeda, BNS reported. He said that the budget of the project would be about $1.8 billion.
* The State Border Protection Service announced on 28 February that drivers of all vehicles entering Lithuania from 1 March will be required to have a valid third-party motor liability insurance policy, BNS reported. The insurance policies which have a minimum period of 15 days can be purchased at many border crossings.
* The Finance Ministry signed three financial memorandums with the European Commission on 27 February to clear the way for receiving 24.27 million euro ($21.3 million) in financial assistance for environmental projects under the European Union's Instrument for Structural Policies for pre-Accession (ISPA) program, ELTA reported the next day. Lithuania will contribute 20.5 million euros for co-financing the projects.
* By a vote of 67 to five with 16 abstentions, the parliament passed a new value-added tax (VAT) bill on 5 March which will go into effect from 1 July, ELTA reported. The publishing of books, magazines, and newspapers and the sale of medicines and medical equipment which had been exempt from VAT will have to pay a 5 percent VAT fee from 2004 instead of the normal 18 percent.
* The parliament approved on 5 March the nominations of lawyers Kestutis Lapinskas, Armanas Abramavicius, and Zenonas Namavicius to nine-year terms as judges of the Constitutional Court. Lapinskas, who had been one of the main authors of the constitution while serving as a parliament deputy, had earlier served a six-year term as a Constitutional Court judge. Abramavicius and Namavicius will give up their posts as legal adviser to President Valdas Adamkus and Lithuania's ambassador to Russia, respectively.
* Ukraine's new ambassador to Lithuania, Mykola Derkach, presented his credentials to President Valdas Adamkus on 4 March, ELTA reported. This is the first diplomatic post for the 52-year old ambassador, who had been first deputy to the governor of the Dniepropetrovsk regional administration. That day Adamkus also accepted the credentials of the new apostolic nuncio to the Baltic countries, Archbishop Peter Stephan Zurbringgen, who had last served as the apostolic nuncio to Georgia, Armenia, and Azerbaijan.
* The international rating agencies Fitch and Moody's raised the outlook for Lithuania's bonds and bank deposits from "stable" to "positive" on 28 February and 1 March, respectively, BNS reported.


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