Baltic Report: March 14, 2001

MERGER OF SWEDISH BANKS TO AFFECT BALTIC BANKS.
Plans to merge Sweden's second and third-largest banks, Swedbank and Skandinavska Enskilda Banken (SEB), will seriously influence the banking systems of Estonia, Latvia, and Lithuania, BNS and ETA reported on 22 February. SEB controls Uhispank in Estonia, Unibanka in Latvia, and Vilniaus Bankas in Lithuania, all of which are among the largest banks in these countries. Swedbank-controlled Hansapank in Estonia owns Hansabanka in Latvia and Hansabankas in Lithuania. Estonian Finance Minister Siim Kallas and Bank of Estonia officials reacted immediately by saying that Hansapank and Uhispank, which control more than 80 percent of the state's total banking market, will not be allowed to merge. The Lithuanian State Property Fund suspended ongoing negotiations with the Estonian bank Hansapank for the sale of the Lithuanian Savings Bank (LTB), since Vilnius Bankas and LTB would have more than a 70 percent share of Lithuania's banking market. In Latvia, the merger of Unibanka and Hansabanka will not be opposed because they are only the second and third largest banks in the country and even after a merger would control only 31 percent of banking assets, 43 percent of loans, and 29 percent of deposits in Latvia.

EU ASSOCIATION COUNCIL MEETS WITH BALTIC FOREIGN MINISTERS.
Swedish Foreign Minister Anna Lindh and EU Enlargement Commissioner Guenter Verheugen met separately in Brussels on 27 February with foreign ministers Toomas Hendrik Ilves (Estonia), Indulis Berzins (Latvia), and Antanas Valionis (Lithuania) and discussed their countries' progress towards EU membership, BNS reported. Praising its progress, Verheugen noted that "Estonia is approaching the end game of the negotiations." He also named Latvia among the best second-group candidates likely to catch up with the so-called fast-track candidates. Berzins mentioned that the problem areas remained the same: administrative capacity, ability to perform as a member state, too slow implementation of adopted laws. Verheugen said that Lithuania's progress is "tangible" and it should be able to catch up with the candidate countries that began negotiations earlier if it continues its reforms successfully.

* Russian President Vladimir Putin told visiting NATO Secretary-General George Robertson on 20 February that Moscow continued to view NATO's eastward expansion as a clear danger, BNS reported. While welcoming the statement that the alliance does not view Russia as an adversary, he said that NATO expansion to its borders could not be explained as anything other than a threat.

* Speaking on "Ekho Moskvy" on 28 February, former Soviet President Mikhail Gorbachev said that if NATO takes in the three Baltic countries without the participation of Russia, Moscow "is sure to retaliate." But he added that if the inclusion of the three took place with Russia having a role in the discussions, then the situation would be very different.

LAAR AND THE SHOOTING SCANDAL.
Armed Forces Commander Rear Admiral Tarmo Kouts told the parliament's Defense Commission that the investigation ordered by President Lennart Meri has revealed that Mart Laar participated in the shooting at a photograph of Center Party Chairman Edgar Savisaar at the Nursi military base in May 1999, ETA reported on 21 February. After regular target practice with an assault rifle and a machine gun, supervised by defense forces officers and during which no violations of regulations were observed, the premier's party used a handgun and a pump-action shotgun to shoot at Savisaar's photograph. Commenting that the report showed Laar in an extremely unfavorable light, Commission Chairman Tiit Tammsaar called on the prime minister to resign.

COALITION PARTY CALLS ON GOVERNMENT TO STEP DOWN.
Coalition Party Chairman Mart Kubo on 1 March urged Prime Minister Mart Laar to resign because of the confusion over the privatization of Estonian Railway, BNS reported. Kubo said that Laar's statement that the decisions by Transport and Communications Minister Toivo Jurgenson are backed by the will of the whole government showed that it and not only the minister was responsible for the abortive privatization of the state-owned railroad. A recent popularity poll indicated that Jurgenson had the worst rating of all the cabinet members. His performance was judged poor or very poor by 61 percent of respondents while only 18 said that it was good or very good.

NEW LEGAL CHANCELLOR APPROVED.
By a vote of 72 to 13 with four abstentions, the parliament on 20 February approved Allar Joks as the country's new legal chancellor, ETA reported. The 35-year-old Joks has been the chairman of the Central Council of Judges Association since 1995. The legal chancellor is Estonia's highest independent authority and determines whether laws passed by the parliament or local municipalities conform with the constitution. The post has been vacant since June 2000 when Eerik-Juhan Truuvali's seven-year term expired. The parliament rejected a series of candidates proposed by President Lennart Meri.

FINNISH, ESTONIAN STOCK EXCHANGES COOPERATE.
Helsinki Exchanges Group (HEX), the operator of the Helsinki Stock Exchange, and the Tallinn Stock Exchange (TSE) announced on 27 February that they are entering into strategic cooperation which will include ownership as well as operational aspects, ETA reported. The cooperation will be based on HEX's offer to acquire over 50 percent ownership in TSE by purchasing existing shares as well as subscriptions to new shares in a directed offering. The aim of the cooperation is to build a well-functioning securities market in Estonia and to significantly increase the visibility of Estonian companies and liquidity in the trading of their shares. HEX supports strong Estonian ownership in TSE in the future and wants to develop the Estonian equity markets in cooperation with local participants. Trading in the TSE will continue to be regulated by Estonian laws and clearing and settlement will take place at the Estonian Central Depository for Securities. Trading with Estonian securities in the HEX trading system is expected to start this year.

PRESIDENT'S INDEPENDENCE DAY SPEECH.
In his 24 February address on the 83rd anniversary of Estonia's declaration of independence, Lennart Meri urged military and state officials to do everything in their power to ready Estonian defense forces for NATO membership, ETA reported the next day. He specifically called on the parliament to increase defense expenditures in the 2002 budget to 2 percent of GDP. Meri criticized the parliament for not passing a national defense act as provided in the constitution. He also expressed concern about growing unemployment, "accompanied by an equally rapid decrease in the size of the workforce."

PRESIDENT VISITS CHINA.
Accompanied by a delegation of government officials, Lennart Meri departed on a ten-day working visit to China on 28 February, BNS reported. On 1 March in Beijing he discussed trade relations and possible Chinese help in the extraction and better use of oil shale with Chairman of the National People's Congress Li Peng and expressed the hope that Beijing would succeed in becoming the host of the 2008 Olympic Games. President Jiang Zemin held a dinner in his honor also marking the 10th anniversary of the establishment of diplomatic relations between their countries.

TALKS BEGUN WITH SECOND BIDDER FOR RAILROAD.
The council of the Estonian Privatization Agency (EPA) decided on 28 February to open negotiations with the Baltic Rail Service (BRS) on the privatization of the 66 percent share of Eesti Raudtee (Estonian Railroad), ETA reported. The EPA ruled that the initial winning bidder, Rail Estonia, had failed to present a strategic investor by the deadline of 28 February and that its faxed request for extending the negotiations was not acceptable. Trust in ER was also lowered by the revelations that Tony Massei, who claimed to be its project manager, is actually Antonio Angotti, an individual wanted in the U.S. for money laundering and financial fraud. The third-place bidder, the Railway Privatization People's Company (RER), which had begun a court action against the initial privatization decision, informed the EPA that it would not oppose its negotiations with BRS.

NO-CONFIDENCE VOTE AGAINST TALLINN MAYOR FAILS.
The efforts of the Center Party to oust Tallinn Mayor Juri Mois failed on 22 February when the no-confidence motion against him in the Tallinn city council received only 26 votes with one abstention, BNS reported. To pass the motion required a minimum of 33 votes in the 64-member council. An earlier no-confidence vote on 2 November had gathered only 23 votes. Even before the vote, 17 members of the council signed another no-confidence measure against Mois accusing him of making scandalous ethnic remarks in Finland. RFE/RL and the tabloid "SL Ohtuleht" reported that Mois had drawn a comparison between Russians and black Americans when speaking at a meeting of the Tuglas Society in Finland.

AIR SURVEILLANCE RADAR TO BE BOUGHT FROM LOCKHEED-MARTIN.
The Estonian government on 2 March decided to purchase air surveillance radar for Baltnet, the Baltic airspace surveillance project, from the U.S. firm Lockheed-Martin, BNS and ETA reported. The radar, which will cost about 200 million kroons ($12 million), will be able to detect flying objects at a distance of 300 kilometers and be used for the air force and civilian air traffic control. The radar will be set up in the village of Laekvere in Laane-Virumaa. The French firm Thales, Italy's Alenia Marconi, and Great Britain's British Aerospace also submitted bids for the tender, which lasted more than a year.

* The U.S. Department of State Report on Human Rights Practices in 2000, released on 26 February, asserted that the "mistreatment of prisoners and detainees and the use of excessive force by the police" continued to be the major human rights abuses in Estonia, BNS reported the next day. It claimed that although there were some improvements, prison conditions remained poor and there was overcrowding in all but one of the major prisons. The prison population was a record 4,800 in the middle of the year. There were also credible reports that the police used excessive force and verbal abuse during the arrest and questioning of suspects.

* During a two-day visit to Tallinn EU Budget Commissioner Michaela Schreyer met with Finance Minister Siim Kallas, State Auditor Juhan Parts, Foreign Ministry Deputy Chancellor Alar Streimann, and other top officials on 22 February, BNS reported. She told reporters that corruption is not a major problem in Estonia and the management of EU aid funding was successful.

* Foreign Minister Toomas Hendrik Ilves and parliament Foreign Affairs Committee Chairman Andres Tarand on a one-day working visit to Helsinki on 19 February discussed their country's efforts to join the European Union with Finnish Prime Minister Paavo Lipponen, BNS reported the next day.

* The government appointed former central criminal police chief Kalev Prillop as police attach� to Russia, BNS reported on 19 February. Prillop was issued a diplomatic passport for three years and will establish an office in St. Petersburg.

* The Customs Board announced that the trade deficit in January was 2.27 billion kroons ($134 million) with imports worth 8.314 billion kroons and exports 6.045 billion kroons, BNS reported on 23 February. The deficit is significantly higher than the 1.2 billion kroons and 1.84 billion kroons deficits in January and December 2000, respectively.

* Provisional data issued by the Statistical Office indicates that the Gross Domestic Product in the 4th quarter of 2000 was 5.9 percent greater than in the corresponding period in 1999, BNS reported on 2 March. The GDP for the whole year grew by 6.4 percent.

* The privatization of Edelaraudtee (Southwest Railway) by GB Railways caused a minor international quarrel when the commercial director of the second-best bidder, the French railway company Connex, wrote a letter that noted that the market value of GB Railways had declined almost four times between 1998 and 2000. GB Railways may not fulfill the requirement to deposit 50 million kroons ($2.9 million) in Estonian banks, ETA reported on 26 February.

* The government on 27 February decided to wind up the business of the Estonian Privatization Agency by 1 October in connection with the ending of the privatization process, BNS reported. The Finance Ministry and county governments will be its legal successors in matters regarding privatization of property and of land, respectively.

GOVERNMENT APPROVES IMF MEMORANDUM.
The Latvian Cabinet on 20 February approved the draft text of the memorandum on economic policy between Latvia and the International Monetary Fund (IMF), LETA reported. The draft memorandum stipulates that Latvia's national budget deficit should not exceed 1.75 percent of gross domestic product (GDP) this year. It predicts that in 2001, GDP will increase by 5.5 percent, the annual inflation rate will be less than 3 percent, and the current account deficit will fall to 7 percent of GDP. The memorandum obliges Latvia to sell a 68 percent share of the state-owned shipping company Latvijas kugnieciba to a strategic investor. It must also sell its 43 percent share of Ventspils nafta and 8 percent share in Latvijas gaze by the end of June.

PRIME MINISTER INVITES RUSSIAN COUNTERPART TO RIGA.
In talks on 21 February with departing Russian Ambassador to Riga Aleksandr Udaltsov, Andris Berzins noted recent positive tendencies in bilateral ties and reiterated the invitation to his Russian counterpart Mikhail Kasyanov to visit Latvia, BNS reported. Latvian Foreign Minister Indulis Berzins during a visit to Moscow in January had invited leading Russian officials to visit Riga. Transportation Minister Anatolijs Gorbunovs is expected to hand the written invitation to Russian government representative Aleksandr Blokhin, his co-chairman in the Latvian-Russian bilateral intergovernmental commission, at their scheduled meeting at the end of March. No exact date for the meeting of the prime ministers has been set.

U.S. REPRESENTATIVE TO NATO PREFERS JOINT BALTIC ENTRY INTO NATO.
During talks in Riga on 27 February, U.S. military representative in NATO, David S. Weisman praised defense cooperation and joint projects between the Baltic states, BNS reported. He said the militaries regard simultaneous admission of the Baltic states to NATO as a better option than their separate entry. He told Foreign Ministry State Secretary Maris Riekstins that the admission of the Baltic states to the alliance will be on the agenda of the NATO summit in 2002. The aim of Weisman's two-day visit to Latvia was to examine Latvia's achievements as a candidate country in order to allow for good and timely preparation of the summit resolutions. He confirmed that no country outside NATO, including Russia, will have the right to veto the organization's enlargement.

LATVIAN EXPORTS AND IMPORTS GREW 12.2 PERCENT IN 2000.
The Central Statistics Office announced on 17 February that last year both imports and exports rose by 12.2 percent over 1999, BNS reported. Exports increased by 123 million lats ($198 million) to 1.131 billion lats and imports by 210 million lats to 1.934 billion lats. The leading export products were timber and timber products (37.4 percent), textiles (14 percent), metals and metalwork (13.4 percent), and chemical products (6.4 percent). The major import products were machinery and electric equipment (20.7 percent), mineral products (12.9 percent), chemical industry products (10.6 percent), and metals and metalwork (8.4 percent). Exports of food and agricultural products rose by 1.4 million lats or 2.1 percent, while imports fell by 0.5 million lats or 0.4 percent.

CELLULOSE PLANT TO BE BUILT IN JEKABPILS.
Minister of Agriculture Atis Slakteris supports the decision by the board of the joint stock company Baltic Pulp to construct a cellulose plant in the Jekabpils district, LETA reported on 23 February. Baltic Pulp, which was founded last year by the Finnish company Metsaliitto, the Swedish firm Sodra, and the state of Latvia, selected Jekabpils as the ideal site after evaluating economic conditions, transportation, logistics, and infrastructure, but the final decision will be made at the end of the year after evaluating the project's influence on the environment. The planned investment is estimated to be 900 million euro ($814 million) and the plant is projected to produce about 600,000 tons of paper a year and employ about 350 persons.

PAREX BANK READY TO FINANCE BUILDING TUNNEL UNDER RIVER IN RIGA.
Parex Bank President Valerijs Kargins declared on 1 March that the bank is prepared to take part in the financing of the construction of a tunnel under the Dauguva River in Riga, BNS reported. He said that the costs of the project -- that foresees three lanes of traffic in each direction -- are estimated at 150 million euros ($139 million), but could reach even 200 million euros. Kargins noted that no single Latvian credit organization could grant such a loan and that Parex is ready to take a leading role in setting up a consortium of Latvian and foreign financial institutions. The tunnel is expected to be completed by 2005 and no fees are foreseen for its use.

STEPS TAKEN TO KEEP FOOT-AND-MOUTH DISEASE AWAY.
National Veterinary Service Director Vinets Veldre announced on 2 February that all passengers arriving at Riga International Airport from London's Heathrow will have the soles of their footwear disinfected in order to prevent foot- and-mouth disease from spreading to Latvia, BNS reported the next day. Passengers will be required to walk across special mats saturated with disinfectant that were installed at the airport.

* The U.S. Department of State Report on Human Rights Practices in 2000, released on 26 February, emphasized that in Latvia, discrimination against women at workplace, domestic violence, and prostitution remain serious problems, BNS reported the next day. It also repeated criticism in earlier reports of excessive force against prisoners, poor conditions in prison, weak judicial system, widespread corruption, and lengthy pre-trial detention. .

* The EU rejected the Latvian requests for transition periods to introduce the necessary requirements in six areas dealing with the environment: fuel quality, protection of underground waters, protection of birds and biotopes, hazardous waste dumping, and industrial pollution and will continue to require that EU requirements in these spheres be introduced in 2003, BNS reported on 20 February.

* The parliament on 1 March upheld in the second reading the bill setting defense expenditures in the 2002 budget at 1.75 percent of gross domestic product (GDP), BNS reported. The expenditures in the 2003 budget are foreseen to rise to 2.0 percent of GDP in compliance with a NATO recommendation for admission. Defense Minister Girts Valdis Kristovskis and the parliament's legal office head Gunars Kusins said that the bill was declarative, but was needed as an "unmistakable signal" indicating Latvia's commitment to join NATO.

* A delegation from the German parliament's Internal Affairs Committee, headed by Gunter Graff, discussed EU eastward enlargement and the improvement of Latvia's eastern border with Interior Minister Mareks Seglins in Riga on 19 February, BNS reported. Graff said that he would report on the situation in Latvia to his committee and the German government would decide what assistance could be provided. The delegation also had meetings with the Latvian parliament's Defense and Interior Affairs Committee.

* Foreign Minister Indulis Berzins during an official visit to Croatia on 22-24 February held talks with President Stipe Mesic, parliament speaker Zlatko Tomcic and House of Representatives Speaker Katica Ivanisevic, Deputy Prime Minister Goran Granic, and Foreign Minister Tonino Picula, BNS reported. He also signed cooperation agreements in combating terrorism, drug trafficking, and organized crime as well as increasing cooperation in science, technology, and higher education. Tomcic, in turn, traveled to Riga where in addition to meeting his counterpart also held talks with President Vaira Vike-Freiberga, Premier Andris Berzins, and parliament speaker Janis Straume on 28 February and addressed the parliament on 1 March.

* The Central Statistics Office announced on 26 February that railroad and port cargo turnovers increased in 2000 compared to 1999 while cargoes by truck decreased, BNS reported. Cargo transported by rail increased by 3.2 million tons or 9.7 percent from 1999 to 36.4 million tons. Total cargo turnover in the ports increased by 2.8 million tons or 5.7 percent from 1999 to reach 51.8 million tons. The turnover increased in all Latvian ports with the smallest increase (1.8 percent) in the largest port of Ventspils which handled 34.8 million tons of cargo. The amount of cargo carried by the trucking sector fell by 0.5 million tons or 1.5 percent from 1999 to 32.9 million tons.

* A no-confidence vote proposed by the Social Democrats against Economics Minister Aigars Kalvitis failed on 22 February when it gained the support of only 30 deputies, BNS reported. The main charges against Kalvitis were breaches in the privatization of the Latvian Shipping Co.

* The European Court of Human Rights accepted for review its first case from Latvia, the complaint by Ingrida Podkolzina about discrimination by language, BNS reported on 26 February. Podkolzina, a representative of the left-wing alliance For Human Rights in Integrated Latvia, had been the only person deleted from the list of candidates in the 1998 parliamentary elections in Latvia due to inadequate language proficiency.

PRESIDENT VISITS UNITED ARAB EMIRATES AND INDIA.
Accompanied by Foreign Minister Antanas Valionis and a delegation of businessmen, Valdas Adamkus arrived in Dubai on 18 February and met with United Arab Emirates (UAE) Finance and Industry Minister Sheik Hamdan bin Rashid Maktoum, ELTA reported the next day. They discussed bilateral relations and opportunities to boost the transit of UAE goods to Europe through Russia and Klaipeda. On 19 February, Adamkus met with the director-general of the Dubai Chamber of Industry and Commerce, Abdul Rahman al Mutaiwee, but a scheduled meeting between Lithuanian businessmen and UAE entrepreneurs failed because the latter did not appear for the scheduled meeting. Adamkus then flew to India where on 20 February he began his official visit with a red carpet ceremony at the presidential palace in New Dehli hosted by his Indian counterpart Kocheril Raman Narayanan, ELTA reported. Later Adamkus discussed prospects for increasing trade and cultural cooperation with Premier Atal Behari Vajpayee and participated in the signing of inter-governmental treaties dealing with economic and technical cooperation, air transport, and cultural relations. He also attended a meeting of Lithuanian and Indian businessmen at a conference held by the Indian Confederation of Industrialists. On 21 February Adamkus toured the city of Agra and discussed with opposition leader Sonia Gandhi bilateral relations and Lithuania's progress in EU integration as well as Adamkus's experience in environmental work in the U.S. Adamkus departed India on 23 February after visiting the city of Mumbay (formerly Bombay) where at a business seminar he called for greater cooperation and trade.

PRIME MINISTER ON FIRST 100 DAYS.
Rolandas Paksas gave a report to the parliament on 20 February about what his cabinet has accomplished in its first 100 days and outlined its future plans, ELTA reported. He noted that the cabinet had inherited a total debt of 7 billion litas ($1.75 billion) in state guarantees, uncompleted construction projects worth 3 billion litas, and other state liabilities whose total might even exceed 21 billion litas. He mentioned as some of his government's major accomplishments reducing the value added tax on home heating from 18 to 9 percent, abolishing taxation on capital gains, providing 50 million litas to reimburse housing loans interest to eligible families, and balancing beer and wine excise duties. Paksas expressed regret that he cannot see any way to reduce quickly the growing unemployment rate, which is now 13 percent. The government has tightened the administration of foreign loans, is completing a simplification of the tax system, and plans partial reimbursement of diesel fuel costs to farmers.

ANTI-CRIME TREATY WITH GERMANY SIGNED.
Interior ministers Vytautas Markevicius and Otto Schily signed an inter-governmental treaty in Vilnius on 23 February on cooperation in combating organized crime, terrorism, and other serious crimes, ELTA reported. The treaty will allow Lithuania's Police Department, Tax Inspectorate, and Border Police to cooperate directly with their counterparts in Germany on topical issues. Previously, such requests had to be channeled through the Lithuanian Foreign Ministry. The two officials also discussed the possibility of Germany providing training and technical assistance to Lithuanian officials, as well as the appointment of a police communications officer to Germany. Markevicius noted that the agreement will help to fight more effectively trafficking in people and ensure the safety in Germany of Lithuanian victims of such trafficking.

CROATIAN PARLIAMENTARY DELEGATION VISIT.
A delegation of deputies from the Croatian House of Representatives, headed by its speaker, Zlatko Tomcic, was received by President Valdas Adamkus on 26 February, ELTA reported. Tomcic agreed that the two countries share the priority goals of future membership in the European Union and NATO. They discussed the expansion of business links and the signing of an agreement on cooperation in tourism. Foreign Minister Antanas Valionis noted that Lithuania is willing to share its Euro-integration experience with Croatian officials. Defense Minister Linas Linkevicius informed the delegation about Lithuania's efforts to gain NATO membership and the apparently decreasing Russian opposition to that bid.

CZECH REPUBLIC HOSTS LITHUANIAN FOREIGN MINISTER.
On 2 March, President Havel discussed NATO enlargement, the plans for the organization's Prague summit of 2002, and European security with visiting Foreign Minister Antanas Valionis, CTK reported. Valionis said he hopes the summit will decide to invite his country to join NATO. According to presidential spokesman Ladislav Spacek, Havel said he considers NATO enlargement to be "the guarantee for European security." During his two-day visit to Prague, Valionis also met with Prime Minister Milos Zeman, Foreign Minister Jan Kavan, the chairman of the Chamber of Deputies, opposition leader Vaclav Klaus, and other officials.

IAEA TO GRANT $1.4 MILLION FOR COOPERATION PROJECTS.
International Atomic Energy Agency (IAEA) Director-General Mohammed El Baradei told Lithuanian Deputy Foreign Minister Oskaras Jusys in Vienna on 28 February that the IAEA plans to allocate about $1.4 million for technical cooperation projects with Lithuania during the next four years, BNS reported. Lithuania has made a commitment to take out of operation the first unit of its nuclear power plant in Ignalina by 2005. A joint group of IAEA and Lithuanian experts recently completed a mission, which produced preliminary recommendations regarding the strategy for closing the unit. El Baradei described IAEA cooperation with Lithuania as successful, noting good results in the improvement of nuclear safety and the completion of basic stages in the development of radiation-monitoring infrastructure in the country.

KLAIPEDA ELECTS MAYOR.
In a secret ballot on 1 March the Klaipeda City Council elected Center Union member Rimantas Taraskevicius as the city's sixth mayor since Lithuania regained independence, ELTA reported. Taraskevicius received 22 votes, Liberal Union candidate Vytautas Grubliauskas got seven, and two ballots were spoiled. The 51-year-old Taraskevicius, who has been a member of the council for 11 years, was the director of the construction department at the Western Lithuanian Industrial and Finance Corporation. Liberal Union Deputy Chairman Eugenijus Gentvilas resigned as mayor to assume the duties of economy minister. While discussing whether to accept the minister office post, Gentvilas had initially set the condition that his successor in Klaipeda should be from the Liberal Union, but later withdrew it. The Liberal Union has 10 members in the council so that three of them did not support their party's candidate.

ONLY RUSSIAN-LANGUAGE DAILY CEASES PUBLISHING.
"Ekho Litvy," which celebrated its 60th anniversary last year, was not published on 2 March due to financial problems, BNS reported. The paper, which has a press run of 5,000-8,000, had been the Russian-language publication of the Lithuanian Communist Party until it was privatized by its staff in the early 1990s. The paper's director-general, Raisa Stankeviciene, said the financial difficulties were caused by the ongoing simultaneous negotiations between three shareholders with potential buyers, whose identities were revealed. The paper's staff believe the publication had stopped only temporarily and would resume in "maybe 20-30 days."

KAUNAS TO BECOME SISTER CITY WITH CHINA'S XIAMEN.
Kaunas Mayor Erikas Tamasauskas met with the Chinese Ambassador to Lithuania Guan Hengguan on 22 February and discussed the plans by a Kaunas city delegation to visit China in March, BNS reported. The head of the delegation, Kaunas Deputy Mayor Pranas Paskevicius, will sign a sister city agreement with the southeastern China port city of Xiamen providing for cooperating in setting up economic zones and encouraging investment, tourism, sports, education, and culture.

* The U.S. Department of State Report on Human Rights Practices in 2000, released on 26 February, noted that in Lithuania prison conditions remained poor, police on occasion beat detainees and misused detention laws, violence and discrimination against women and child abuse are serious problems, and there is trafficking in women and girls forced into prostitution, BNS reported the next day. The Justice Ministry responded by asserting that the report incorrectly claimed that there were 16 murders in the country's detention facilities in the first nine months of 2000 while in fact there were only two during the whole year.

* A poll, conducted in January by the joint Lithuanian-British company Baltic Surveys, released on 19 February indicated significantly greater support for EU and NATO membership, BNS reported. In January, 53 percent of those polled would vote "yes" if a referendum were held on EU membership, 28 percent "no" with 19 percent undecided. The results in a similar poll in July had been 40, 41, and 19 percent, respectively. The vote for NATO membership in January was 46 percent in favor, 35 percent against with 19 percent undecided while in July it had been 35, 47, and 18 percent, respectively.

* The Vilnius Region 2nd Court on 19 February issued an arrest warrant for Antanas Gecas (Gecevicius), currently living in Scotland, for having committed war crimes in Lithuania and Belarus in 1942-1943, ELTA reported. A case against the now 85-year-old Gecas had been begun in 1987, but was dismissed due to a lack of evidence. It was, however, renewed in 2000 when new evidence was discovered.

* President Valdas Adamkus signed the decree appointing career diplomat Vygaudas Usackas as ambassador to the United States and Mexico on 28 February, BNS reported. Usackas will on 5 March officially assume his duties replacing current ambassador Stasys Sakalauskas, who is returning to work in the Internal Affairs Ministry. Usackas presented to Adamkus his activity plan for three years, whose primary objective for which additional funding has been assigned is to obtain NATO membership in 2002.

* The parliament on 2 March ended the extraordinary session it had begun on 20 February, ELTA reported. The session passed amendments to the Guarantee Fund, pension funds, and deposit insurance laws and began debates on bills dealing with company bankruptcy, restructuring, and gambling,. It also heard the report by Premier Rolandas Paksas on the first 100 days of his Cabinet, appointed writer Romas Gudaitis as journalist ethics inspector, and accepted the oath of newly designated Economy Minister Eugenijus Gentvilas.

* Chief Euro-negotiator Petras Austrevicius announced on 23 February that the negotiations for EU membership will be speeded up because the republic, accepting the recommendations of the EU delegation, decided to withdraw or curtail transition periods it had been asking for the chapters dealing with free movement of capital, freedom to provide services, transport policy, and environment protection, BNS reported. Lithuania has now reached preliminary agreement with the EU on seven chapters, with another -- culture and audio-visual policy -- just awaiting certain formalities. Current negotiations are centering on eight other chapters and there are hopes to reach preliminary agreement on several in March.

* The 7th Lithuanian-Polish parliamentary assembly, Citizens' Security in a Democratic Country, approved in Vilnius on 23 February the proposal by parliament chairman Arturas Paulauskas to send an address to the NATO Parliament Assembly encouraging its member states to invite Lithuania to join the alliance in 2002, BNS reported. The Assembly adopted a resolution on the safety of citizens, expressing concern over organized crime, as well as money laundering, corruption, and growing delinquency.

* Prime Minister Rolandas Paksas on 23 February sent to the parliament proposals to amend the 36th, 47th, and 119th articles of the constitution, BNS reported. The amendments to the first two articles are necessary for EU entry. Clauses stating that authority and functions in certain matters are delegated to the EU, and that EU law has higher authority than Lithuanian law will be added to Article 36. Article 47 will be changed to permit corporations registered in Lithuania, municipal bodies, foreign citizens and corporations to buy agricultural land. The terms of municipal governments will be increased from the current three to four years in Article 119 which will also grant EU citizens residing permanently in Lithuania the right to vote and contest seats in municipal elections.

* Deputy Foreign Minister Dalia Grybauskaite and Dutch Ambassador to Vilnius Nicolaas Beets signed an agreement on technical aid for 2001-2002 on 2 March, BNS reported. The Netherlands agreed to allocate about 1.8 million guilders ($759,000) in 2001 to Lithuania for programs aimed at strengthening the economic and social welfare sectors and thus helping it to adopt and implement EU laws. The programs include assistance to three World Bank projects: reconstruction of the port of Klaipeda, reform of health care, and a program for implementing energy conservation measures in municipalities.

* Pope John Paul II on 21 February in the Vatican officially installed 44 new cardinals, one of whom was Archbishop of Vilnius Audrius Juozas Backis, Reuters reported.

* Farmers and workers of the Marijampole Sugar factory protesting against the government's decision not to set minimum prices for purchasing raw sugar on 1 March blocked the segment of the Via Baltic highway to the town to Suwalki, Poland before the Kalvarija customs post, BNS reported. Marijampole Sugar is engaged in a struggle with the sugar factories in Panevezys and Kedainiai owned by the Danish Danisco Sugar Company which were granted higher production quotas and are able to sell their products at lower prices.

* The Statistics Department announced on 19 February that at the beginning of the month there were 235,100 registered unemployed in Lithuania, an increase of 9,300 from the first day of the year, ELTA reported. The unemployment rate in January was 13.1 percent compared to 10.8 percent in January 2000.

* Baltic Beverages Holding (BBH) President Cristian Ramm-Schmidt announced on 21 February the decision to sell the Kanapilis brewery in Panevezys and to merge the Svyturys brewery in Klaipeda and the Utenos Alus brewery in Utena, ELTA reported. The three breweries are the largest in the country and in order to prevent a too great monopoly the authorities ordered BBH to dispose of at least one of them. The merged company will be based in Vilnius and be headed by Svyturys head Tomas Kucinskas.

* Akmene Cement, which had halted production from 8 January not being able to compete with cheap imported cement from Belarus, resumed operations on 27 February, BNS reported. The Competition Council in mid-January imposed temporary anti-dumping duties on cement imports from Belarus, Ukraine, and Russia for a six-month period. In 1999 the company had a net profit of 3.46 million litas ($865,000), but unaudited losses of 11.3 million litas in 2000 and 3.4 million litas in the first two months of this year.

* After almost a year of investigation, the European Commission officially ruled that the nitric fertilizer company Achema had not exported its products at dumping prices and could resume exporting ammonium nitrate to the EU without any restrictions, "Verslo zinios" reported on 19 February.

* The State Tourism Department announced on 27 February that some 4.1 million foreigners visited the country in 2000 or 400,000 less than in 1999, BNS reported. Although more visitors arrived from Poland, Germany, and Scandinavia, the total number declined due to fewer travelers from the CIS countries. The greatest number of visitors were from Latvia (1.38 million) and Russia (1.14 million). The number of Lithuanians going abroad in 2000, on the other hand, increased by 4.2 percent compared to 1999.

* The State Property Fund announced on 22 February that the planned auction of Lithuania's pavilion at the World Exhibition 2000 in Hanover failed as there were no bids, BNS reported. Another auction for the pavilion, whose total costs were 19 million litas ($4.75 million), including 10.1 million litas for construction, will be held in about a month, retaining the initial price unchanged at 100,000 litas.