Baltic Report: July 24, 2002

NOTE TO READERS:
This issue covers events in the Baltic states from 12 to 18 July 2002.
RUSSIAN DEFENSE MINISTER LASHES OUT AGAINST NATO ENLARGEMENT.
During a visit to Helsinki for talks with Finnish counterpart Jan-Erik Enestam, Russian Defense Minister Sergei Ivanov told the Finnish daily "Hufvudstadsbladet" on 17 July that Moscow will review its military posture if the Baltic states join NATO, ITAR-TASS reported on 18 July. "Russia will then be forced to review not only its own military positions, but also the entire spectrum of international relations, both with the alliance as a whole and with the mentioned Baltic states," Ivanov was quoted as saying. He added that NATO enlargement "could also be a factor that essentially destabilizes the situation in the Baltic region and in the whole of Europe." In the same interview, Ivanov also lamented the possible influence of NATO enlargement on the status of Kaliningrad Oblast, strana.ru reported on 18 July. "At present, Russia has no guarantees that the development of the situation along the lines of this scenario will have a beneficial effect on the situation around the westernmost part of Russia, Kaliningrad Oblast," Ivanov said. He added, though, that the Baltic region presently has every opportunity to become "an effective model, visibly demonstrating the goodwill of countries trying to realize effective and mutually beneficial cooperation."

BALTIC BORDER GUARDS AGREE ON BETTER BORDER PROTECTION.
Lithuanian State Border Control Service chief Algimantas Songaila hosted a two-day meeting in Alytus with his Latvian and Estonian counterparts Ivars Zalitis and Harry Hein, respectively, on 11-12 July, BNS reported. The chiefs decided to draft and submit to their prime ministers a memorandum outlining unified standards for control of their borders with Russia and Belarus. They also approved their border-control action plan for 2002-2003 and visited the border post with Belarus at Varena, Lithuania.

SUPREME COURT RULES BAN ON ELECTORAL ALLIANCES UNCONSTITUTIONAL.
On 15 July, the Supreme Court declared unconstitutional the prohibition of electoral alliances for the local-council elections on 20 October that was passed by the parliament in March (see "RFE/RL Newsline," 28 March 2002), ETA reported. The opposition Pro Patria Union and the Moderates, as well as President Arnold Ruutel, expressed their support for calling a special parliamentary session later this month or in early August to amend the local-elections law, as the formal registration of candidates for the elections is scheduled for 21 August to 10 September. Justice Minister Mart Rask noted that the court did not rule that the ban on electoral alliances was illegal, but that it was established too soon before the local elections. In his opinion, the simplest solution would be for parliament to vote that the ban should not go into effect until 2005, thus allowing electoral alliances this fall. The government later decided that the parliament would hold the special session on 30-31 July.

GOVERNMENT APPROVES EMPLOYMENT PLAN FOR 2003.
The cabinet endorsed on 17 July the employment program for 2003, a document that describes the current situation in the Estonian labor market and outlines the policies required to improve the situation, BNS reported. The program drawn up by the Social Affairs Ministry includes measures to help the young and long-term unemployed find jobs, to maintain the competitiveness of the aging labor market, and to develop vocational education, as well as measures to increase the efficiency of state labor markets and to employ more disabled people. The plan envisions using funds from the European Social Foundation to finance some of the program. Estonia had 577,700 employed, and 83,100 unemployed, people in 2001. The unemployment rate, which reached a peak of 14.6 percent in 2000, dropped to 11.2 percent in the first quarter of 2002.

RES PUBLICA PROPOSES EASIER CITIZENSHIP FOR RUSSIANS.
In an effort to convince Russian residents in Estonia to become naturalized citizens, the Res Publica party has proposed that noncitizens who have been living in the country since August 1991 be granted Estonian citizenship if they complete civics courses, ETA reported on 15 July. The current Estonian-language examinations that are required to demonstrate sufficient fluency for citizenship would be abolished. Chairman Rein Taagepera said that expectations 10 years ago that foreigners who did not receive citizenship would leave Estonia have not been realized and today no one believes they will be. Pro Patria Union parliamentary deputy Mart Nutt noted that there are 400,000 ethnic Russians in Estonia, of whom 150,000 are citizens of Estonia, and 120,000-130,000 are citizens of Russia. He said, "Most of them have had a chance to learn Estonian during the past 10 years and [a chance to] apply for citizenship, yet they haven't done so." One of the People's Union leaders, Tiit Tammsaar, called the proposal a pre-election propaganda trick that the parliament is unlikely to approve.

MEDCEUR 2002 EXERCISES LAUNCHED IN PALDISKI.
MEDCEUR 2002, the third stage of the largest international military exercises in the Baltic states this year, was opened in Paldiski on 17 July by Estonian armed-forces commander Vice Admiral Tarmo Kouts, BNS reported. Other stages, RESCUER 2002 and SAREX, were opened earlier in the week in Klaipeda and Riga, respectively. The exercises, involving 3,500 troops from 12 countries and lasting through 29 July, are part of NATO's Partnership for Peace. The exercise in Estonia simulates an emergency situation in which the country is hit by a flood that destroys the entire infrastructure. Troops will be required to evacuate civilian victims to the U.S. hospital ship "Comfort" for medical treatment. The medical staff of the 1,000-bed "Comfort" will provide free medical treatment and surgery to local residents.

ESTONIAN ENERGY DECIDES IN FAVOR OF BOND ISSUE.
Eesti Energia (Estonian Energy) financial director Sandor Liive announced on 18 July that the company will arrange a 200 million-euro ($199 million) bond issue with a term of seven years, BNS reported. He said the issuing of bonds, which are needed to finance the renovation of the shale-oil-driven Narva Power Plants, will be arranged by SchrodersSalomonSmithBarney and pay a fixed interest rate of 6 percent. Although financial markets are very unstable at the moment, interest in the bond issue is high and offers amounting to 300 million euros have been received. The investors will come from Great Britain (35 percent), Germany (25 percent), Scandinavian states (11 percent), Ireland (10 percent), and other European countries.

* U.S. Assistant Secretary of State for European and Eurasian Affairs Elizabeth Jones held talks on NATO enlargement and regional cooperation in Tallinn on 16 July with Defense Minister Sven Mikser and parliamentary deputies and Foreign Ministry Deputy Chancellors Harri Tiido, Vaino Reinart, and Tonis Nirk, ETA reported.

* The government allocated 1.16 million kroons ($75,000) on 16 July from the reserve to the Rescue Department to send an explosives-detection team including five men and three dogs on a three-month mission to Afghanistan, ETA reported. The team's task is to ensure the safety of U.S. military personnel at an air base during the Enduring Freedom operation.

* During a visit to Estonia on 14-16 July, Belgium's French Community and Walloon Region Prime Ministers Herve Hasquin and Jean-Claude van Cauwenberghe, respectively, had meetings with President Ruutel, Culture Minister Signe Kivi, Chairwoman of the Tallinn City Council Maret Maripuu, and the heads of several parliament committees, BNS reported. The main focus of their visit was cultural and educational issues, as well as developing greater cooperation between the two countries' parliaments.

* Chief of the Belarusian Criminal Police Boris Tarletski headed a delegation of officials from the Belarusian Interior Ministry visiting Estonia on 15-17 July, BNS reported. During talks with Estonian Interior Ministry Chancellor Mart Kraft on 16 July, the text of an intergovernmental agreement on cooperation in combating crime was approved, which will be formally initialed toward the end of the year in Minsk. On 17 July, Tarletski visited the Police Department for meetings with Deputy Director Juri Merits and the head of the Central Criminal Police, Andres Anvelt.

* From the 246 applications presented in the first half of the year to receive financial support from SAPARD (Special Accession Program for Agriculture and Rural Development), 158 were approved, ETA reported on 18 July. The total cost of the projects is 288 million kroons ($18.7 million), of which SAPARD will provide 123 million kroons. Most of the projects were connected with the dairy industry, but the largest project was for 20.5 million kroons to build an addition to a meat-processing plant.

* Three wind generators are being built on the Estonian island of Saaremaa, and should start providing electricity in October, ETA reported on 18 July. Two of the generators belong to the Saaremaa company Roheline Ring, and the third one belongs to Eesti Energia. The lifespan of the generators is 20 years, and their total yearly output should be 1.8 megawatts of energy. Renewable energy resources provide just 0.1 percent of all electricity in Estonia, while in the European Union, 13.9 percent of electricity is generated by renewable sources such as wind generators.

* Deputy Chairman of parliament Tunne Kelam said on 17 July that Estonia should follow the example of Latvia and establish a permanent parliamentary office at the European Parliament, BNS reported. He said that, "There is [an] objective need for such a bureau," but he added that he was not sure whether the necessary funding of more than a million kroons a year was available.

* The supervisory board of the Estonian Sick Fund on 11 July unanimously elected Social Affairs Ministry Chancellor Hannes Danilov as its new head, ETA reported. He will replace Maris Jesse, whose five-year term in office ends on 1 August. Jesse did not compete as a candidate because she plans to go to London to study for a year. Danilov said that he favored a higher social tax, but does not believe it will come before the parliamentary elections in March 2003.

* A group of residents of privatized former workers' dormitories in Tallinn began to spend nights in the city government building on 8 July, complaining that they had not been given the right to privatize their apartments and at the same time the new owners are threatening to evict them. Economy Minister Liina Tonisson asked the Finance Ministry to appropriate 6.5 million kroons ($420,000) from the government reserve fund to supply substitute housing for them, BNS reported on 16 July. The residents also presented a written appeal to Mayor Edgar Savisaar the next day.

* The Statistics Office announced on 18 July that the share of television advertising doubled last year, although the total volume of television programs of nationwide distribution decreased by 20 percent as a result of the closure of one television channel, ETA reported. The share of advertising per television channel was 5.2 percent of the transmission time, or 54 minutes per day. The total transmission time of the three national television channels was 19,000 hours or, on average, 17.3 hours per day.

* The beaches around Tallinn were closed on 17 July due to the presence in the water of Cyanophycae, a toxic algae that causes skin rashes and damage to the eyes, ETA reported on 18 July. The beaches were later opened, but swimming is not recommended. By the end of the week, the algae had spread all across the coastline of northern Estonia. The Health Protection Service is concerned that the algae could spread to Lake Ulemiste and Narva's reservoir, which are the main sources of drinking water for the capital Tallinn and Narva, the third-largest city in Estonia.

* According to statistics presented during the international AIDS conference held in Barcelona, Spain, Estonia has surpassed Russia in the number of HIV-positive cases per 100,000 residents, and is approaching infection rates in African countries, ETA reported on 17 July. According to Juri Kalikova, an Estonian delegate to the conference, the official number of infected people is 2,421, but the actual number may reach 5,000-7,000. Estonia is second in the world after Russia in the percentage of intravenous drug addicts among virus carriers, with 85 percent of the HIV-positive cases.

* The Tallinn Administrative Court ruled that a Russian citizen who was recently released from prison could be granted an Estonian residence permit, ETA reported on 16 July. The man and his wife are both Russian citizens, but their two children were born in Estonia. This was the first time that a residence permit has been granted to an ex-convict.

* According to the yearbook of the Citizenship and Migration Board, 172,325 stateless individuals lived in the country at the start of this year, BNS reported on 17 July. There were also 97,164 citizens of other countries, including 88,378 Russians. There were also 269,489 foreigners with residence permits and 5,399 with work permits.

U.S. OFFICIAL DISCUSSES ARMY DEVELOPMENT.
U.S. Assistant Secretary of State for European and Eurasian Affairs Elizabeth Jones completed her tour of the Baltic states in Riga on 17 July, BNS reported. In talks with Defense Ministry State Secretary Edgars Rinkevics, she discussed the development of Latvia's armed forces and its future in NATO. Jones praised the successful cooperation of the Baltic states in BALTBAT and other joint Baltic military units and noted that NATO's management structure will have to be changed after the upcoming enlargement to ensure there is no division between old and new member states. She congratulated Foreign Minister Indulis Berzins on the organization of the recent meeting in Riga of prime ministers of NATO candidates, the "Vilnius 10" (see "RFE/RL Newsline," 8 July 2002), and spoke about preparations for the NATO Prague summit in November, U.S.-Latvian bilateral relations, and the 5 October Latvian parliamentary elections.

IMF RANKS LATVIA AMONG TOP EU CANDIDATES.
The Latvian Finance Ministry announced that in its recent report on Latvia, the International Monetary Fund (IMF) recognized the country as one of the top candidates for European Union accession, BNS reported on 15 July. The report noted Latvia's progress in macroeconomic development while maintaining low inflation and achieving a budget surplus in the first half of the year. The IMF praised the strengthening of the country's anticorruption system and the meaningful steps taken in creating a legal structure to combat money laundering. However, the report also mentioned that Latvia's current-account deficit is too large and that greater supervision is needed regarding loans by local governments.

COOPERATION AGREEMENT SIGNED WITH BELGIUM'S FRENCH COMMUNITY AND WALLOON REGION.
Prime Minister Andris Berzins signed a trilateral cooperation agreement in Riga on 12 July with his counterparts from Belgium's French Community and Walloon Region, Herve Hasquin and Jean-Claude van Cauwenberghe, respectively. According to LETA, the agreement envisages cooperation in education, culture, economy, health care, environmental policy, social issues, tourism, and sports. Latvia signed a similar agreement with Belgium's Flanders Region earlier this year. Van Cauwenberghe also officially opened the Walloon Region's Economy and Commerce Bureau in Riga after the completion of a conference on economic relations between the region and Latvia. On 14 July, President Vaira Vike-Freiberga held talks with the visiting premiers at her residence in Jurmala, focusing mostly on trade and education issues.

MEDICAL WORKERS STAGE SECOND STRIKE.
About 4,200 health-care workers in hospitals throughout Latvia participated in an eight-hour strike on 18 July, LETA reported. Latvian Health- and Social-Care Employees Union Chairwoman Ruta Viksna admitted that the number of participants was about 1,000 fewer than in the first strike on 20 June because many medical workers are on vacation. She said the union has not received any document from the government affirming that its demands will be met. The government's decision earlier in the month (see "RFE/RL Newsline," 7 July 2002) to increase medical workers' salaries by 3.2 million lats ($5.3 million) beginning on 1 October is not set in stone because the source of the funding has not been determined. Welfare Minister Viktors Jaksons spoke with about 750 medical workers and supporters who rallied in front of the Cabinet of Ministers building for two hours and admitted that salaries for medical professionals are "totally insufficient."

STATE SUSPENDS RESTRICTION ON RIGA LIQUOR SALES.
Janis Krumins, minister without portfolio in charge of state reform, suspended Riga City Council regulations seeking to restrict the retail sale of liquor in the city, according to a 14 July LETA report. Krumins said he took the step "with a heavy heart," citing contradictions between the City Council's action and the state law on alcohol sales, which contains specific regulations on when and where liquor can be sold. According to the Latvian Merchants Association, if the restrictions on liquor sales had been allowed to come into force, stores in the capital city would have needed to increase prices for bread and dairy products by 10 percent and fruit and vegetable prices by 20 percent to make up for lost income.

FARMERS DEMAND OPTIONS FOR SELLING GRAIN.
About 100 farmers staged a protest in front of the Cabinet of Ministers building in Riga on 17 July, demanding that they be guaranteed options for selling this year's grain harvest, LETA reported. Indulis Jansons, the director of the Vidzeme Agricultural-Economic Cooperative Society, noted that farmers growing rye are concerned that Riga Bestsprit Ltd., the operator of the Kalsnava alcohol plant, has suspended its operations due to a tax dispute with the State Revenue Service. The plant had in the past agreed to purchase rye even if it was not properly dried as is required with grain for other products. Agriculture Minister Atis Slakteris talked to the protesters and pledged to find a way for farmers to sell their rye.

* Russian Foreign Ministry spokesman Aleksandr Yakovenko told reporters on 12 July that the refusal of Latvia's Constitutional Court to consider the petition by former Soviet KGB veteran Nikolai Tess indicates that the court continues to hold trials for political reasons, BNS reported. He said that Latvian laws have introduced a broader definition of genocide than the one set out in international law. Latvian Foreign Ministry State Secretary Maris Riekstins called the Russian accusations a regular attempt by Russia to "press upon the world its twisted opinion" and to interfere in Latvia's domestic affairs. He stated that "Latvia's judiciary is not politicized and all judgments are based only on evidence and facts."

* Latvia's Foreign Ministry rejected on 16 July the protest note submitted by its Lithuanian counterpart the previous day that the State Domestic-Market Protection Bureau had violated international legal norms by starting dumping probes into the import of Lithuanian milk and butter without first informing Lithuanian authorities, BNS reported. The bureau's head, Astrida Tjusa, noted that the World Trade Organization agreement did not require Latvia to inform Lithuania beforehand about the probe because it was launched on its own initiative and not on that of some other organization

* Defense Ministry State Secretary Edgars Rinkevics held talks on bilateral military cooperation, NATO enlargement issues, and European security policy with a visiting delegation from the French Defense Ministry in Riga on 17 July, LETA reported.

* The Riga Stock Exchange (RSE) is considering suing Fernadero Ltd., the Cyprus-based affiliate of Beacon Shipping that is contesting the outcome of the auction of Latvijas kugnieciba (Latvian Shipping Company, LASCO) shares, to recover legal expenses incurred as a result of the dispute, LETA reported on 16 July. RSE President Guntars Kokorevics said that a final decision to sue for damages was complicated, however, because it was not clear whether Fernadero had any assets that could be seized. Meanwhile, "Diena" reported on 18 July that a second anonymous foreign bidder was disqualified from the LASCO auction for missing the pre-auction deadline to provide surety money, but that this bidder was not disputing the results of the auction.

* Finance Ministry press secretary Baiba Melnace said on 17 July that the implementation of the consolidated state budget in the first half of the year was much better than expected, LETA reported. The deficit was projected at 46 million lats, but turned out to be only 3.82 million lats. He noted that the state's main budget had a surplus of 2.25 million lats, but this was offset by municipal budgets, especially that of Riga, which had a deficit of 13 million lats.

* The Union of Social Democrats (SDS) and For Fatherland and Freedom/LNNK (TB/LNNK) submitted their lists of candidates for the October parliamentary elections to the Central Election Commission on 17 July, LETA reported. SDS Chairman Egils Baldzens is the party's first candidate in all five regions. The TB/LNNK list in Riga and Latgale is headed by parliamentary deputy Guntars Krasts, in Zemgale by parliament Chairman Janis Straume, in Kurzeme by Defense Minister Girts Valdis Kristovskis, and in Vidzeme by International Financial Affairs Minister Roberts Zile.

* The Latvian Hockey Federation (LIHF) board decided on 15 July to postpone until 31 August the selection of an investor to build the new ice-hockey arena necessary for the planned 2006 World Ice Hockey Championship in Riga, LETA reported. Four companies -- SCI Stadium Consultants International Inc., IMS Studio 6, Metala buvju sistemas, and Multihalle -- have submitted proposals. LIHF President Kirovs Lipmans said that the postponement will not make any difference because the decision will still be made before the next meeting of the International Ice Hockey Federation in September.

* The Naturalization Board announced on 15 July that 3,932 people were naturalized in the first half of the year and a total of 53,327 people since February 1995 when naturalization applications were first accepted, BNS reported. Some 69 percent of the new citizens are women. More than 90 percent of the new citizens are Slavs: 66.7 percent ethnic Russians, 10.2 percent Belarusians, 8.3 percent Ukrainians, and 4.9 percent Poles.

* The Public Health Agency announced on 16 July that Latvia is still ranked first in Europe in the number of diphtheria cases, with 30 new patients registered during the first five months of this year, LETA reported. In 2001, 91 cases were registered in Latvia, though 52 percent of adults were vaccinated or revaccinated against diphtheria between 1995 and 2001. There have not been any registered cases of diphtheria in the European Union for about 20 years.

* The Statistics Office announced on 12 July that in the first five months of the year, exports increased by 4.8 percent compared to the same period last year to 554.8 million lats ($890 million), while imports rose by 9.9 percent to 938.6 million lats, BNS reported. The share of the trade with EU countries was 60.1 percent for exports and 53.7 percent for imports with comparable figures for CIS countries being 10.1 and 12.7 percent, respectively.

* The Eleventh Latvian-American Song Festival began in Chicago on 18 July, LETA reported, with the rock-and-roll band BrainStorm, the youth choir Kamer, and soprano Arnita Eglite from Latvia as special featured performers. The four-day festival includes a wide range of musical groups, soloists, choirs. and a folk-dance concert with hundreds of folk dancers. Performers came from Australia, Canada, Great Britain, Latvia, and the United States.

TALKS BEGIN ON EU ASSISTANCE FOR CLOSURE OF NUCLEAR-POWER PLANT.
Lithuanian negotiators opened formal discussions in Brussels on 12 July on specific European Union commitments concerning financial assistance for the closure of the Ignalina nuclear-power plant, ELTA reported. Deputy Economy Minister Arturas Dainius, dubbed "Mr. Ignalina" because he is in charge of the plant's closure program, said the day's talks centered on Lithuania's estimate that the closure will cost 2.4 billion euros ($2.39 billion). He said Vilnius will provide additional, more-detailed information for the next round of consultations in September. In Luxembourg in June, Lithuania agreed to close the plant's second reactor by 2009 in return for sufficient financial support from the EU and is seeking to obtain more specific EU commitments that could be included in the EU accession agreement the country hopes to finalize by the end of the year.

ITALIAN GOVERNMENT WILL SEEK EMBASSY SOLUTION.
President Valdas Adamkus completed a series of meetings with his Italian counterpart Carlo Azeglio Ciampi in Rome on 17 July, "Lietuvos rytas" reported the next day. Italian Prime Minister Silvio Berlusconi promised earlier in the day that he will personally take responsibility for the issue of Lithuania's pre-World War II embassy building that was handed over to the USSR and that Russia currently uses as its consulate. Berlusconi also called for increasing bilateral economic relations, and stressed the need for Italian banks to open offices in Lithuania. Senate Chairman Marcello Pera told Adamkus that Lithuania is among the best-prepared candidates for NATO, noting that the Italian Alpine brigade has trained in Lithuania for the past three years. The president also awarded the Cross of the Grand Duke Gediminas Order to Italian Chamber of Deputies Chairman Pier Ferdinando Casini for his efforts in furthering bilateral relations.

U.S. OFFICIAL PRAISES LITHUANIA'S COOPERATION IN ANTITERRORISM COALITION.
U.S. Assistant Secretary of State for European and Eurasian Affairs Elizabeth Jones told President Adamkus in Vilnius on 15 July that Lithuania is making a contribution to the fight against international terrorism and good progress in preparing for NATO membership, ELTA reported. Adamkus inquired why the U.S. Commerce Department has not yet granted Lithuania the status of a country with a functioning market economy. Jones responded that granting such status is a long process involving both the U.S. government and the opinion of foreign investors. Parliament Chairman Arturas Paulauskas said Jones suggested to him that if Lithuania is accepted into NATO it could take a leading role in ensuring security in the Baltic region.

RUSSIA CONTINUES TO INSIST ON VISA-FREE PASSAGE FOR KALININGRADERS.
In an interview with the daily "Izvestiya" on 16 July, Dmitrii Rogozin, the new presidential envoy for Kaliningrad, said that he does not exclude the possibility of a gradual easing of the entry regime to the EU for all Russian citizens and not just those who reside in Kaliningrad. He said he considers it "necessary to set a deadline by which we will create a single, visa-free European area with Russia a part of that area." He added that he believes the Kaliningrad problem "goes beyond the competence of the Foreign Ministry." Also on 16 July, Russian State Duma Chairman Gennadii Seleznev suggested in Kaliningrad that rather than issuing visas, Lithuanian border guards could simply stamp passports of those Russians traveling in either direction across the territory of Lithuania, RosBalt reported. Otherwise, he said, Lithuanian consular services "might be overwhelmed by visa applications from residents of Kaliningrad and other parts of Russia," by receiving up to 1,200 visa applications a day. However, the EU published a report on Kaliningrad on 15 July, which, according to polit.ru, rules out any solution other than the issuance of visas.

PREMIER PLEDGES LIBERAL VISA REGIME FOR KALININGRAD RESIDENTS.
Lithuanian Prime Minister Brazauskas held talks with Kaliningrad Oblast Governor Vladimir Yegorov in the oblast town of Chistie Prudy on 18 July, BNS reported. Brazauskas noted that Lithuania has completed the Justice and Home Affairs Chapter of its EU membership negotiations and will end the visa-free travel regime for Kaliningrad residents on 1 July 2003. However, he said that Lithuania wants to be liberal in issuing visas to Kaliningrad residents, but warned that decisions on the matter are subject to EU approval. Yegorov said he will personally look into why Lithuania has not yet received a response to its November request to open a Lithuanian consulate in the oblast town of Sovetsk. Brazauskas expressed dissatisfaction that the cellulose factories in Sovetsk and Neman discharge unprocessed waste into the Nemunas River that borders both Lithuania and Kaliningrad, and repeated Lithuania's offer to sponsor a feasibility study on constructing waste-processing facilities.

RUSSIAN FOREIGN MINISTER URGES RATIFICATION OF LITHUANIAN BORDER TREATY.
Speaking to reporters in New York on 16 July, Igor Ivanov said the Duma should ratify the pending border treaty between Russia and Lithuania as soon as possible, ITAR-TASS reported. Some lawmakers have been urging delaying the treaty, which was signed in 1997, until the dispute over access to Kaliningrad following expected EU expansion in 2004 is settled. "With the European Union, we are building relations of strategic partnership for the long term in the widest areas of cooperation. It would be very inappropriate to return to Cold War rhetoric," Ivanov was quoted as saying. He added that talks between Russia and the European Union on Kaliningrad will open in Brussels on 23 July, to be followed by four-party talks including Poland and Lithuania.

GAZPROM SOLE BIDDER FOR STAKE IN LITHUANIAN GAS.
Russian gas giant Gazprom, together with its local strategic partner Dujotekana Co., submitted on 17 July the only application to the State Property Fund for purchasing the 34 percent share in the natural-gas utility Lietuvos Dujos (Lithuanian Gas) earmarked for a gas supplier, ELTA reported. Gazprom intends to purchase 25 percent of the shares and Dujotekana 9 percent. In June, the German energy companies Ruhrgas and E.ON Energie purchased a similar 34 percent share of the utility as a strategic investor by paying 116 million litas ($32.5 million) to the Lithuanian Privatization Fund and 34 million litas to an escrow account with Vereins-und Westbank AG. The price of the gas supplier's stake has not yet been decided, but Aleksandr Ryazanov, deputy chairman of Gazprom's executive board, said last week that the new purchaser, which will have to guarantee natural-gas supplies for at least 10 years, will seek to pay only 81 million litas, or 70 percent of what the German companies actually paid for the strategic-investor stake.

* During a visit to Klaipeda on 16 July, parliament Chairman Arturas Paulauskas attended the opening of the two-week-long humanitarian-aid and disaster-relief exercise RESCUER 2002 and held talks with the deputy commander of the U.S. Navy in Europe, Rear Admiral David Hart, and American Ambassador to Vilnius John Tefft, ELTA reported. They discussed the possible use of the airport in Siauliai for NATO needs, with Hart noting the size and good technical condition of its runway.

* Belarusians of the Baltic region along with representatives from Australia, Belgium, Canada, the Czech Republic, Germany, Great Britain, France, and the U.S., held a conference in Vilnius on 13-14 July, BNS reported on 15 July. It passed a resolution that condemned the authoritarian regime of Belarusian President Alyaksandr Lukashenka and expressed support for the membership of the Baltic states in the EU and NATO as this "will bring the borders of the united Europe closer to Belarus."

* Moscow will extradite to Lithuania Larisa Serebryannikova, a former official with the Russian presidential administration who is charged with financial fraud in Lithuania, ITAR-TASS reported on 19 July. Serebryannikova, a 51-year-old Russian-born Lithuanian citizen, was arrested on 19 June (see "RFE/RL Newsline," 20 June 2002) under an international warrant that was issued in 1999. She is accused of creating the DiLar company in the early 1990s, which evolved into a pyramid-type financial scheme that defrauded thousands of investors. She worked for a time in the press office of President Vladimir Putin's administration, but was dismissed earlier this year.

* Resident representative of the United Nations Development Program in Lithuania Cihan Sultanoglu told Social-Security and Labor Minister Vilija Blinkeviciute on 12 July that Lithuania is one of the most advanced EU candidate countries in terms of poverty eradication, ELTA reported. Sultanoglu suggested holding a conference on poverty eradication in Lithuania this year.

* After visits to numerous health-care institutions in Lithuania, European Commission experts Maarit Kokki and Richard Gair announced positive conclusions on 16 July about the prevention and control of infectious diseases in the country, ELTA reported. They recommended that the training system for epidemiology specialists should be streamlined, but concluded that Lithuania is ready to join the EU in terms of infectious-disease prevention.

* The cabinet authorized the Finance Ministry on 16 July to file an application to join the Organization for Economic Cooperation and Development (OECD), which was established in 1961 uniting the 30 most developed countries in the world, ELTA reported. OECD membership would be important both economically and politically, since the country would have access to analytical material and information on innovative technologies. According to preliminary calculations, Lithuania's annual membership contribution would be about 175,970 euros ($174,000).

* Israeli Justice Minister Meir Shitrit has sent a letter to Lithuanian Prosecutor-General Antanas Klimavicius stating that Israel would not extradite former KGB officer Nachman Dushanski who is suspected of genocide against Lithuanian citizens during and after World War II, "Lietuvos rytas" reported on 18 July. Lithuania has filed formal charges against Dushanski, who emigrated to Israel in 1989, but Israel has refused numerous requests even to question him, arguing that according to Israeli laws, the statute of limitations applies to the charges against Dushanski.

* The Kaunas Region Administrative Court ruled on 17 July that the Kaunas City Council had not violated any laws in conducting a no-confidence vote against Kaunas Mayor Erikas Tamasauskas on 30 May, though he could not attend the session because he was hospitalized, ELTA reported. The council ousted Tamasauskas as mayor in the vote and on 10 June, elected Social Democrat Giedrius Asmys as his replacement.

* Eight political parties, including the ruling coalition -- Social Democrats, Social Liberals, Christian Democrats, Liberal Democrats, Moderate Conservatives, Peasant and New Democracy Union, National Progress Party, and the Russian Union of Lithuania -- signed an agreement on the prevention of crime and corruption on 17 July, ELTA reported. It calls for greater funding of law-enforcement bodies, the depoliticizing of law-enforcement institutions, and passage of better anticrime legislation. Arguing that the agreement was merely rhetorical and had as its primary purpose boosting the presidential candidacy of parliament Chairman Arturas Paulauskas, five parties -- Liberal Union, Homeland Union, Center Union, Modern Christian Democratic Union,. and Lithuanian Political Prisoners and Deportees Union --decided not to sign the agreement.

* The Bank of Lithuania announced on 12 July that the country's current-account deficit in the first five months of the year was 1.2 billion litas ($315 million), or 22.4 percent greater than in the same period last year, ELTA reported. The deficit in May of 374.8 million litas was, however, 48 million litas less than in April due to a decline in the foreign-trade deficit and increases in the services and current-transfers balances. While the current-account deficit last year was 2.29 billion litas, or around 4.8 percent of the state's gross domestic product (GDP), this year's deficit is likely to rise to about 6.6 percent of the GDP.

* The Statistics Department announced on 12 July that in the first five months of the year, exports amounted to 7.75 billion litas ($2 billion), or 6.5 percent more than in the same period last year, while imports rose by 4.1 percent to 11.1 billion litas, BNS reported. EU countries accounted for 50.7 percent of Lithuania's exports and 46 percent of imports, while similar figures for CIS countries were 21.2 and 25.5 percent, respectively.

* The Finance Ministry announced on 12 July that the collection of revenues to the state budget in the first half of the year was 4.43 billion litas ($1.1 billion), 113 million litas or 2.6 percent more than projected, ELTA reported. The greater revenues were primarily due to the budget's receiving 1.84 billion litas in VAT payments, or 12 percent more than in the same period last year. The cabinet on 17 July decided to allocate an additional 48.62 million litas from the state budget with the greatest sums going for education (14.4 million litas), public administration (8.9 million litas), and public safety (4.8 million litas).