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Baltic Report: March 23, 2001


23 March 2001, Volume 2, Number 7
REGIONAL
DENMARK WANTS BALTIC STATES TO ENTER EU IN FIRST ROUND.
Prime Minister Poul Nyrup Rasmussen said at a 14 March conference in parliament -- held to discuss Denmark's goals for its EU presidency in the second half of 2002 -- that it is crucial that the first group of new EU entrants be as large as possible, Reuters reported. He asserted that "The Danish government will take the initiative to ensure that the three Baltic states, along with as many countries as possible, be admitted to the EU in the first round." Earlier, Estonia was the only Baltic state mentioned as a first-round candidate, along with the Czech Republic, Poland, Hungary, Slovenia, and Cyprus, with which the EU officially began membership negotiations in 1997. Latvia and Lithuania, which began formal EU negotiations two years later, were described as countries that must make great efforts in order to catch up with the front-runners.
* After a working meeting in Riga on 7 March, justice ministers Ingrida Labucka (Latvia), and Mart Rask (Estonia) and Gintautas Bartkus (Lithuania) declared that mutual cooperation in judicial affairs would allow the Baltic states to take over each other's experience in solving specific problems, BNS reported. The ministers discussed the plan of joint measures for 2002, including cooperation in training of judges, which should begin without delay to avoid reproaches by international organizations about insufficient training, and the administration of prison facilities.


ESTONIA
PARLIAMENT ELECTS LEADERSHIP.
Parliament re-elected Toomas Savi of the Reform Party to his seventh consecutive term as chairman on 8 March by a narrow vote of 51 to nine, with 38 ballots declared invalid, BNS and ETA reported. Tunne Kelam of the Pro Patria Union and Peeter Kreitzberg of the opposition Center Party were elected deputy chairmen, receiving 44 and 36 votes respectively, with 18 ballots declared invalid. Since Kelam gathered more votes, he became first deputy chairman, a post he has held since 1992. The Center Party supported Kreitzberg instead of the incumbent Siiri Oviir because the party's council on 3 March had chosen Kreitzberg over Oviir by a vote of 68 to 34 as the party's official candidate for Estonia's presidency. Savi and Kelam are also likely presidential contestants, but the three promised that this would not interfere with their parliament work.

PARLIAMENT ADOPTS SECURITY CONCEPT.
The parliament approved on 6 March a document setting out Estonia's official security concept by a vote of 64 to four (all against from the opposition United People's Party), thus putting an end to discussions begun at the end of January, BNS reported. Foreign Minister Toomas Hendrik Ilves said that amendments proposed by the National Defense Committee -- placing greater emphasis on social topics such as patriotic education, freedom of the media, and achieving positive population growth -- had been included. He noted that the document correctly sets out the wish to increase defense spending to 2 percent of GDP, and offers a more comprehensive account of the different forms of Baltic cooperation. The document asserts that the main risks to Estonia's security are possible instability and politically uncontrollable situations in the international environment, as well as international crises, but no direct military threat to Estonia is foreseen now or in the immediate future. NATO representatives had urged Estonia to adopt a security policy concept.

NO-CONFIDENCE VOTE AGAINST MINISTER FAILS.
A no- confidence motion against Transport and Communications Minister Toivo Jurgenson in the parliament on 12 March failed when it gathered only 40 votes in favor against 48 votes opposed, ETA reported. The main charges against Jurgenson, just as in a similar unsuccessful no-confidence vote (42 to 53) on 16 January, were the unsuccessful privatization of two railroad firms -- the state-owned Eesti Raudtee, and the passenger transport firm Edelaraudtee. Toomas Varek, the head of the opposition Center Party faction, was not discouraged by the failure and declared that no-confidence motions would be proposed against other ministers, with Prime Minister Mart Laar likely being the next choice. The motions, however, will probably be defeated if the ruling coalition comprised of the Pro Patria, Reform Party, and Moderates remains firm. The Center Party has also unsuccessfully tried to oust Tallinn Mayor Juri Mois three times.

PRESIDENT CONCLUDES CHINA VISIT.
Lennart Meri on 5 and 6 March visited the special economic zone of Hainan and discussed with the leaders of the province ways to tighten mutual relations. The next day he became the first foreign head of state to visit Macao after its union with China. He held talks on cooperation in the fields of tourism, trade, information technology, and telecommunications with Macao's leader Edward Ho, who accepted his invitation to visit Estonia. On 8 December Meri traveled to Hong Kong where the next day he and the region's leader Tung Chee Hwa agreed that their lands have many things in common, such as a liberal economic policy and tax system as well as being centers of larger regions. Tung briefed the president on Hong Kong's business opportunities and expressed the hope that Estonia would grant visa-free access to Hong Kong passport holders. Meri also visited the Hutchinson port, one of the largest ports in the world, before returning home on 10 March. BNS and ETA reported on the president's trip on 5-10 March.

PART OF ALIENS ACT DECLARED UNCONSTITUTIONAL.
The court declared on 5 March that the article of the Aliens Act that limits the granting of residence permits to former KGB officials is unconstitutional, BNS reported. The Supreme Court pointed out that the convention on the protection of human rights and fundamental freedoms bans collective forced expulsion of foreigners. Refusal to issue a residence permit, which results in an obligation to leave the country, may infringe on some of the fundamental rights and freedoms that the constitution protects. The amendments to the Aliens Act, which went into force on 1 October 1999, deprived the executive power of the possibility to take into account individual cases. The court noted the 13 September 2000 recommendations of the Council of Europe's Ministers Committee that decisions on expelling an immigrant should take into account an evaluation of their danger to the state, the duration of their stay in the country, and the effects of the expulsion on their family members.

TALLINN PROMOTES INTERNET.
The executives of seven major enterprises, including Hansapank, Uhispank, Estonian Telephone, and Estonian Mobile Telephone, signed an agreement in Tallinn on 7 March pledging to donate 250 million kroons ($14.8 million) over three years for the "Look at the World" project, ETA reported. The goal of the project is to make Estonia the world's No. 1 country in using the Internet by 2003. Finland currently boasts the highest Internet penetration in the world, with 54 percent of its population aged 15-74 having used it during the last six months. Estonia was the leading country in Eastern Europe, with Internet penetration of 31 percent in December. The project will finance public Internet access facilities, the training of the public, and more favorable terms for purchasing computers. It aims to increase the population's access to the Internet and enhance its user-friendliness, make public sector services more readily available online, and to help the private sector promote Internet use for obtaining information and services. The enterprises will also donate the specialized skills of approximately 1,000 volunteers.

PUBLISHER OF ESTONIA'S TOP RUSSIAN DAILY MURDERED.
Vitali Haitov, the publisher and main owner of the Russian-language daily "Estoniya" and weekly "Vesti Nedelya Plus," was found dead in his car in a western suburb of Tallinn on 10 March, apparently the victim of a professional assassination, BNS reported. Haitov, a 56-year-old retired Soviet naval officer who allegedly had connections with the underworld, suffered two shots to the head, and police suspect business rather than political motives for the murder. Haitov had been personally investigating the as-yet-unexplained shooting murder last April of his son Marian, who was co-owner and board member of Estonia's largest Russian-language media publisher AS Rukon-Info, and had recently asked for police protection, ETA reported on 12 March.

ESTONIANS POLLED ON DEFENSE ISSUES.
The results of a poll of 988 individuals, selected on the principle of proportional representation carried out by ES Market Research from 1-9 February, indicate that 58 percent of respondents are willing to resist foreign aggression, BNS reported on 15 March. While 16 percent have no opinion, 11 percent said they would definitely not offer armed resistance, and 15 said they would probably not resist. The number willing to resist increased by 20 percent compared to a similar poll held one year ago. The poll also indicates that support for NATO membership among ethnic Estonians is 63 percent, an increase of 7 percent since October. Opinions are more divided on the question of defense spending: 31 percent are in favor of increasing spending; 16 percent for decreasing spending; 34 percent for maintaining the current level; and 19 percent have no opinion.
* Noting that the government's rating is low and that of its head Mart Laar is lower than ever before, former Prime Minister Mart Siimann from the Coalition Party called on him to resign, BNS reported on 13 March. He suggested that someone from the Moderates Party should take over the post of prime minister. Prime Minister Mart Laar, however, declared on 14 March that the government had no plans to resign and there were also no plans to reshuffle it, BNS reported. When asked to comment on the very low ratings of certain ministers, he pointed out that the ratings of several other ministers had increased over the past year. He called on opposition candidates to draw up programs that could be compared to the coalition agreement, which sets out its goals until the next elections in March 2003.
* Director of the NATO Policy Department at the U.S. Defense Department, Lisa Bronson, informed Defense Minister Juri Luik on 8 March that the NATO Membership Action Plan was a good program to enhance Estonia's defense capacity and defense cooperation capability and praised Estonia as a model for other countries in economic reforms. On 9 March he discussed with U.S. Deputy Defense Secretary Paul Wolfowitz NATO enlargement and bilateral defense cooperation between Estonia and the U.S. At the closing session of the Joint Baltic American National Committee conference, held in Washington on 9-11 March, Luik asserted that the Baltic states are defendable and that the small defense forces assisted by the nationwide voluntary defense organizations and international support would make any aggression a hugely expensive affair. BNS reported on his visit on 8-12 March.
* Last year the U.S. granted Estonia aid worth more than 206 million kroons ($12.2 million), of which some 168 million kroons were for defense and military projects, ETA reported. In the framework of the Northern European Initiative 9.6 million kroons were allocated for language projects, various workshops, curbing tuberculosis, and protecting the environment. The FBI supported police training in Estonia with 4.2 million kroons.
* Commander of the official paramilitary organization Kaitseliit Benno Leesik signed an order allowing the organization to issue gun licenses to its members, BNS reported on 7 March. To obtain a gun license, a Kaitseliit member has to pass a firearms exam, have a safe place at home for keeping the weapon and ammunition, and not have a criminal record. Gun licenses issued by Kaitseliit are significantly cheaper than those issued to ordinary citizens and thus should contribute to increasing Kaitseliit membership.
* The Statistical Office announced on 9 March that in 2000 exports grew by 52 percent compared to 1999 to 53.9 billion kroons and imports by 43 percent to 72.2 billion kroons, resulting in the trade deficit climbing from 15.1 billion kroons to 18.3 billion kroons, BNS and ETA reported. The share of total exports going to EU countries grew from 73 to 77 percent while those to CIS countries were only four percent. The EU share of imports, however, fell from 65 to 63 percent of total, but imports from Russia increased 1.5 times.
* The Education Ministry plans to cut the number of free student places in most universities by 15-23 percent, ETA reported on 12 March. The six state universities this fall should admit 660 students less than last year. The ministry's intent is to economize and to support technological disciplines that are deemed to be nationally more important than the humanities.
* Rail Estonia, which had won the contest for the privatization of Estonian Railway, but failed to fulfill the requirement to have a strategic investor by the end of February, on 13 March filed an appeal against the court ruling which allowed talks to be started with the second best bidder, Baltic Rail Service, BNS reported.
* The consumer price index rose by 0.3 percent in February and by 6.7 percent compared to February 2000, BNS reported on 8 March. The drop in the price of fuel, clothing, and communication services, did not offset the rise in the cost of food and housing utility fees.
* The government on 6 March decided to impose an 18 percent value-added tax on previously tax-free concert and theater tickets, despite protests of event organizers. The tax is five percent for state-owned theaters and concert organizations.


LATVIA
LEFTIST PARTIES GAIN IN MUNICIPAL ELECTIONS.
About 62 percent (828,522) of the 1.3 million eligible voters cast ballots in the municipal elections on 11 March. In many districts the incumbent rightist Latvia's Way (LC) and For Fatherland and Freedom/LNNK (TB/LNNK) won fewer seats than the leftist Social Democratic Workers Party (LSDSP) and For Human Rights in a United Latvia (PCTVL). Unofficial results from Riga indicate that the LSDSP won 14 of the 65 seats; PCTVL -- 13; TB/LNNK -- 11; the People's Party -- six; LC -- five; Latvian Green Party, Latvian Democratic Party and Prosperity Party two seats each, and Russian Party, Latvian Farmers Union, Labor Party, Christian Democratic Union, New Christian Party -- one seat each. In Jurmala the LSDSP won three of the 15 seats; PCTVL and TB/LNNK two each; and eight other parties took one seat. In Daugavpils, the party "Latgales gaisma" (Light of Latgale) won seven seats; the joint ticket of the Daugavpils City Party and Latvia's Way -- five; PCTVL -- two; and LSDSP took one seat. In Ventspils, Mayor Aivars Lembergs' party "Latvijai un Ventspilij" (For Latvia and Ventspils) won 86 percent of the vote and 10 of the 11 seats with the LSDSP gaining the other seat. In Rezekne, PCTVL won 36.9 percent of the vote; LSDSP -- 20.8 percent; and the joint ticket of LC and the Latvian Democratic Party won 14.6 percent of the total vote.

DISCUSSIONS ON RIGA CITY COUNCIL COALITIONS.
The Latvian Social Democratic Workers' Party (LSDSP) (14 seats) and For Fatherland and Freedom/LNNK (TB/LNNK) (11 seats) are holding talks on forming a ruling coalition in the 60-member Riga City Council, LETA reported on 13 March. TB/LNNK reached an agreement with its partners in the ruling government coalition, the People's Party (six seats) and Latvia's Way (five seats), to act in unison in Riga. LSDSP Chairman Juris Bojars, however, would prefer to split the coalition by having only the TB/LNNK as its partner in Riga. A TB/LNNK and LSDSP partnership could then join forces with the newly formed Center Union (five seats), which consists of the Latvian Democratic Party, Latvia's Farmers Union, Labor Party, and the Russian Party, as well as deputies from other smaller parties to form a majority in the council.

PRESIDENT VISITS LITHUANIA.
Accompanied by a delegation of businessmen as well as the environmental protection, economy, and defense ministers, Vaira Vike-Freiberga on 14 March began her first state visit to Lithuania, which lasted three days. Vike-Freiberga and Lithuanian President Valdas Adamkus awarded nearly 50 state orders to worthy individuals of the other country, BNS and ELTA reported. The presidents agreed that the three Baltic presidents should send a joint appeal to U.S. President George W. Bush declaring their countries' resolve to continue working for NATO membership, but Adamkus the next day convinced Vike-Freiberga that an appeal by all nine candidate countries would be more effective. They concurred that there are no issues between the countries that cannot be resolved and that cooperation should be increased. Vike-Freiberga attended the presentation of the documentary CD-ROM, "Latvia and Lithuania Between Two Wars in 1920-1940," in the National Martynas Mazvydas Library and participated in other formal events. During a talk show she declared that the three Baltic states should be admitted to NATO at the same time and that the admission of Lithuania alone would be a mistake. The next day Prime Minister Rolandas Paksas told Vike-Freiberga that the ratification of a sea border treaty between their countries signed in 1999 should not be linked to other economic agreements, such as Latvian requests for a new fishing treaty, ELTA reported. The parliament greeted with particular applause the beginning and end of the Latvian president's speech, in which she spoke Lithuanian and not Latvian. Vike-Freiberga stressed that the two countries share the common goals of membership in the EU and NATO, but still need to improve bilateral relations, as the reaction to the recent oil spill at the Butinge oil terminal revealed.

BELARUSIAN PRIME MINISTER VISITS.
Vladimir Yermoshin discussed economic issues as well as the upcoming presidential elections in Belarus with his Latvian counterpart Andris Berzins in Riga on 7 March, BNS reported. Berzins said Latvia is willing to sign the agreement on the readmission of illegal immigrants prepared in 1993 and called on Belarus to work more actively in marking the border with Latvia. While Belarus officials described his visit as a "working visit," Latvia viewed it as a "private" one in accordance with the practice of EU countries to not recognize the regime of Belarus President Alyaksandr Lukashenka following the illegal dismissal of the republic's parliament in 1996. The official purpose of Yermoshin's visit was to open the Belarus EXPO-2001 fair in Riga. He began his visit to Latvia on 6 March in Daugavpils, where he met with Mayor Aleksejs Vidavskis and businessmen.

GOVERNMENT RAISES MINIMUM WAGE.
The Cabinet of Ministers passed on 6 March regulations raising the minimum monthly wage by 20 percent from the current 50 lats ($81) to 60 lats as of 1 July, LETA reported. The minimum hourly wage will also be raised to 0.35 lats. However, the minimum rate for youths aged 16 to 18, working 35 hours per week, will be 0.405 lats per hour. Finance Minister Gundars Berzins noted that the higher wages would increase government expenditures by 58 million lats, but that this will not cause problems as the sum had already been calculated in this year's national budget.

NURSES RALLY FOR HIGHER PAY.
Some 1,000 nurses gathered outside the federal building in Riga on 8 March demanding higher pay, BNS reported. Prime Minister Andris Berzins appeared and spoke briefly with representatives of the protesters. He later told reporters that he believes that nurses' wages are too low, but since their pay is determined by individual hospitals it is not correct to speak about a unified remuneration system and average salaries. Finance Minister Gundars Berzins also held talks with the protesters and declared that it is impossible to find the 14 million lats ($23 million) in the national budget for immediately increasing the nurses' salaries, LETA reported. About 300 local nurses also rallied for higher wages in Daugavpils and similar protests were planned in Aluksne, Cesis, Saldus, Liepaja, Rezekne, and other cities. The nurses are also considering a strike, whose scale and duration may be determined on 29 March.

INDUSTRIAL OUTPUT UP 9 PERCENT OVER LAST YEAR.
The Central Statistics Office announced on 12 March that industrial output in January was 145.2 million lats ($234.95 million), or 9 percent more in constant prices than over the same period in 2000, BNS reported. The production of non-mineral goods (such as ceramic, cement, and concrete items) grew by 49.3 percent; textiles by 30.7 percent; paper by 24.5 percent; and rubber and plastic items by 21.9 percent. The growth in fish processing, 41.5 percent, greatly exceeded the general 10 percent growth in the food industry. On the other hand, the production of automobiles, trailers, and semi trailers declined by 35.6 percent; of chemicals by 23.5 percent; and of radio, television, and communications equipment by 20.4 percent.
* The parliament rejected on 15 March the request that Interior Minister Mareks Seglins resign because he had been unable to halt the increasing crime rate, BNS reported. The request was soundly defeated, gaining only 25 votes in favor with 56 opposed, and five abstentions. Votes for the minister's ouster were cast by deputies from the opposition Social Democratic Workers Party, For Human Rights in a United Latvia, and the New Faction.
* The parliament on 8 March decided not to send to the standing committees a draft law on the ratification of the convention on the protection of national minorities, BNS reported. The leftist union For Human Rights in United Latvia Chairman Janis Jurkans called the bill's rejection a sign of the hypocritical domestic and foreign policy pursued by the ruling coalition. Latvia signed the convention in 1995, but did not ratify it, arguing that it lacked the funds for its implementation.
* The British Embassy in Riga announced on 13 March the donation of 50,000 pounds sterling ($72,500) to the state language-teaching program to assist the integration of the Russian-speaking population and support greater publicity for the naturalization program, BNS reported. Great Britain had earlier donated 150,000 pounds sterling for the Latvian language-teaching program.
* The March issue of "High Life," the British Airlines flight magazine, included an article, which claimed that the woman on top of the Freedom Monument in Riga was "Mother Russia" and the three stars in her hands represented the three Baltic states, BNS reported on 8 March. The Freedom Monument Restoration Fund protested, stating that the bronze-cast woman symbolizes the Latvian state, and the three stars stand for Latvia's three regions. The airline rejected the demand that the issue be withdrawn from all flights, but removed it from planes flying to Riga. It agreed to carry a correction in the April issue and pledged to publish an article promoting Latvia as an interesting place for tourists to visit.
* The Central Statistics Office announced on 8 March that the consumer price index fell by 0.2 percent in February compared to January, but increased by 0.7 percent compared to February 2000, BNS reported. The price of goods decreased by 0.3 percent, but services cost 0.2 percent compared to January and on a year-to-year basis the prices of goods remained steady, but the costs of services increased by 2.9 percent.
* Privatization Agency Director-General Janis Naglis told a press conference on 7 March that the privatization process had been completed at 540 state-owned sites, LETA reported. Their total purchase price was 163.7 million lats, of which 138.06 million lats was in privatization vouchers and 25.64 million lats in lats.
* Latvijas Dzelzcels (Latvian Railway) carried 6.139 million tons of cargo in the first two months of 2001 or 4.7 percent more than in same period last year, BNS reported. Most of it (5.28 million tons) was transit cargo, which increased 9.6 percent year-on-year. Other types of cargo, however, declined; import cargo by 13.3 percent, export cargo by 33.5 percent, and domestic cargo by 10.4 percent.
* The National Veterinary Service on 6 March imposed a ban on imports of hoofed animals, their meat, milk, dairy products, grain, and animal feed from 59 countries in which cases of foot-and-mouth disease had been discovered, BNS reported. On 8 March the ban was lifted from 28 mostly European countries which were considered to be risk areas for the disease, but which were still officially free from foot-and-mouth disease. The ban remains on 31 countries in which cases of the disease had been registered.
* The European Bank for Reconstruction and Development signed an agreement on 9 March to invest $700,000 in the Latvian airline, RAF Avia, by acquiring 25.1 percent of its ordinary shares, BNS reported. The funds will be used to construct a new airplane maintenance hangar at Riga's international airport needed to meet EU requirements. RAF Avia airline carries cargoes and makes chartered flights.


LITHUANIA
EU DEMANDS DATE FOR CLOSING NUCLEAR POWER PLANT.
Chairman of the Lithuanian Social Democratic Party and former President Algirdas Brazauskas told a press conference in Vilnius on 7 March about his talks with EU Enlargement Commissioner Guenter Verheugen the previous day in Brussels, BNS and ELTA reported. He said that "in a very direct manner and with no reservations" Verheugen informed him that Lithuania will have no chance of being among the first wave of new EU entrants if it does not set a date in 2002 for closing the second reactor at the nuclear power plant in Ignalina. Lithuania has promised to close the first reactor by 2005 and planned to determine the fate of the second in 2004, when it will draft a new national energy strategy. Brazauskas also claimed that Verheugen has not given a straight answer to Brazauskas's comment that the $220 million accumulated in the decommissioning fund was too small to solve the foreseen technical, social, and energy problems. Visiting European Commission delegation leader Michael Graham also told Economy Minister Eugenijus Gentvilas on 12 March that Lithuania's anticipated plan to decide the fate of the plant in 2004 was too late.

OIL SPILLS AT BUTINGE TERMINAL.
While loading the Norwegian tanker "North Pacific" during a storm on the evening of 6 March, the lines harnessing the ship to the Butinge oil platform broke away and some oil was spilled before the filling hose was automatically closed, BNS reported the next day. Mazeikiai Oil officials initially announced that about 5 tons of oil were spilled, but later reduced the estimate to 300 kilograms. Special ships were sent out to collect the oil, but were only partially successful and some oil entered Latvian waters. "Lietuvos rytas" on 9 March reported that three new oil slicks were created the previous morning when oil was again spilled from the platform. The Mazeikiai Oil company announced on 10 March that the operations for collecting and cleaning up the spilled oil had been completed, BNS reported. About 161 gallons (610 liters) of oil and seawater were collected in three days of operations and aircraft sprayed a chemical solution known as "Simple Green," which effectively dissolved the oil. A press release claimed that no signs of oil were found in a 50-kilometer area around the terminal during an investigative flight. Mazeikiai Oil General Director Jim Scheel announced on 14 March that the accident at the Butinge terminal the previous week occurred when frayed hawser lines, which tied the tanker to the terminal, snapped, ELTA reported. He claimed investigations revealed that computer programs had incorrectly calculated the usable life of the hawser lines and that a new policy of changing them every six, instead of 14, months has been established. Joint working teams from Mazeikiai Oil and the Environment Ministry determined that a total of 3,427 liters (2.94 tons or 21.5 barrels) of oil had been spilled -- over 10 times more than the 300 kilograms reported earlier. The terminal resumed operations on 14 March.

PARLIAMENT AMENDS BANK OF LITHUANIA LAW.
The parliament on 13 March amended the Bank of Lithuania Law to bring it in line with EU and European Central Bank standards, ELTA reported. The amendments more clearly define the principle of the Bank of Lithuania's independence and its relations with other state institutions by explicitly banning the bank from lending money to the government. Bank President Reinoldijus Sarkinas refuted as unfounded a complaint by Lithuanian Free Market Institute President Elena Leontjeva that the new amendments open the possibility of switching to an arbitrary regulated litas exchange rate because the bank's stated main objective was changed from the stability of the currency to the stability of prices. Sarkinas said the amendments clearly state that the Bank of Lithuania puts money into circulation or withdraws it in accordance with Lithuanian laws, and that the only law regulating this is the Law on the Credibility of the Litas, which has not been changed.

U.S. SENATOR TARGETS LUKOIL.
Senator Jesse Helms, chairman of the United States Senate's Committee on Foreign Relations, in a letter sent on 12 March to Arthur Levitt, chairman of the U.S. Securities and Exchange Commission (SEC), asked the SEC to scrutinize closely the application of the Russian energy company LUKoil which is seeking to sell shares in the form of ADRs (American Deposit Receipts) on the New York Stock Exchange. Helms voiced his concern over "reports of inappropriate and roguish conduct by LUKoil in Russia and other markets that have adversely and unjustly affected the interests of American firms." As an example, Helms letter cites LUKoil's conduct in Lithuania, where an oil refinery operated by the U.S.-based Williams International has suffered massive losses because of cut-offs in Russian crude oil supplies. The letter says, "In short, LUKoil is using its control over the pipeline to essentially blackmail the refinery and Lithuania itself."

BELARUS URGED TO MARK ITS BORDER.
Deputy Foreign Minister Oskaras Jusys told his Belarusian counterpart Aleksandr Sychiov on 6 March in Vilnius that Belarus should speed up the process of marking its border with Lithuania, BNS reported. The two countries had agreed to split the work of clearly marking their 650-kilometer border. Lithuania has already finished fixing its segment, but Belarus has only completed about 30 kilometers, or less than one-tenth of its share. Jusys noted that Lithuania has eased procedures this year for the issuance of visas and lowered the costs for Belarusian citizens to $10, while Belarus still requires Lithuanians to pay $20 for a visa. He also mentioned that in seeking to meet European Union requirements, Lithuania will have to review agreements on travel by Lithuanian and Belarusian citizens, and on simplified border-crossing procedures.

ARMY COMMANDER PRESENTS DEFENSE CONCEPT TO NATO.
Brigade General Jonas Kronkaitis told the NATO Political-Military Steering Committee in Brussels on 5 March that Lithuania's defense policy objective is to prepare the public for universal defense and to integrate the country with Western security and defense structures, BNS reported. He declared that if dangers arose, Lithuania would defend itself "with or without the help of our friends." Kronkaitis asserted that Lithuania will allocate the funds required to become a member of NATO, pledging that its defense spending will be increased to 2 percent of GDP in 2002, and will share in the Alliance's responsibilities and obligations in the future. The commander reviewed the country's self-defense capabilities, contribution to NATO's collective security, the strength of national volunteer forces and the active reserves, as well as national defense priorities. He also noted that a defense infrastructure is being created, the living conditions of the soldiers have been improved greatly, and the armaments modernized.

GREATER BUDGET REVENUES REFLECT RECOVERY OF ECONOMY.
Finance Ministry adviser Paulius Tamulionis declared that the national budget collected 1.401 billion litas ($350.25 million) in January and February, which is 192.9 million litas, or 16 percent, more than over the same period last year, ELTA reported on 12 March. Municipal budget revenues grew by 9.5 million litas, or 3.8 percent, to 428.9 million litas. While the revenue from real estate taxes increased by 21.6 percent, personal income tax collections increased by only 2.4 percent. The tax revenues were greater than the ministry had forecast, and it is now expected that the higher revenues, which indicate a recovering economy, will continue in March.

TREATIES WITH SLOVAKIA SIGNED.
Foreign ministers Antanas Valionis and Eduard Kukan signed in Vilnius on 15 March treaties on avoiding double taxation and on visa-free travel, BNS reported. The countries' citizens had been visiting on a visa-free basis under an order established in the 1992 treaty between Lithuania and Czechoslovakia, which split later that year into the Czech Republic and Slovakia. The ministers exchanged opinions on their common goals to acquire EU and NATO membership and discussed five other treaties that are still being prepared. Kukan also met with President Valdas Adamkus, who offered an invitation to his Slovak counterpart Rudolf Schuster to visit Lithuania.
* As head of a delegation to Brussels, Finance Deputy Minister Mindaugas Jonikas and a representative of the European Commission (EC) on 6 March signed agreements for financial support according to the special agricultural and rural development SAPARD program, ELTA reported. The agreement should provide technical, legal, and administrative grounds for the implementation of long-term SAPARD programs in the country. Lithuania, however, will have to establish a National Payment Agency to administer the funds. So far the EC has not officially accredited the agency of any of the aspirant countries.
* Interior Minister Vytautas Markevicius accepted on 8 March the resignation by his deputy Juozas Galginaitis for personal reasons, BNS reported. The media had reported that he had overindulged in alcohol during a visit to Brussels and was unable to head the ministry's delegation during a session of negotiations with the European Commission, BNS reported.
* Deputy Foreign Minister Dalia Grybauskaite on 12 March in Brussels discussed with Belgian Foreign Ministry official Jan Grauls bilateral links and fields for cooperation, ETA reported. Grauls assured her that Belgium would soon ratify the treaty on avoiding double taxation, which Lithuania had ratified a long time ago. She also addressed the seminar entitled "Lithuania: Your Business Partner," organized by the Lithuanian Economic Development Agency and the Belgian Foreign Trade Council. On 13 March Grybauskaite held talks with various EU officials involved with the organization's expansion before traveling to Holland where the next day she told Dutch Foreign Ministry Secretary of State Dirk Annie Benschop that Lithuania needed greater foreign support to close the nuclear power plant at Ignalina, BNS reported on 15 March.
* The cabinet on 14 March revised the national position in talks with the EU by giving up earlier requested transition periods in the chapters on the free movement of goods and environment protection, ELTA reported. The deadline for stopping the sales of medicines that do not meet EU requirements was moved up three years to 1 January 2004. Lithuania has reached preliminary agreements on seven chapters, the Culture and Audio-visual Policy chapter is practically completed, and negotiations are currently centered on eight other chapters.
* After a meeting with members of the parliament National Security and Defense Committee on 7 March in Vilnius, Europol Director Jurgen Storbeck said that if the parliament passed required amendments for safeguarding the confidentiality of personal data, Europol and Lithuania could conclude a cooperation agreement this year, BNS reported.
* The Statistics Department announced that the consumer price index in February rose by 0.2 percent compared to January, but decreased by 0.2 percent compared to February 2000, BNS reported on 8 March. The price of food and soft drinks increased by 1.2 percent during the month, but the price of clothing and footwear fell by 2.1 and 4.2 percent, respectively.
* The Finance Ministry on 12 March successfully sold seven-year Treasury bonds worth 20 million litas ($5 million) at an average yield of 8.699 percent, BNS reported. This was the longest maturity of a Lithuanian domestic bond issue on record. The bonds were vastly oversubscribed as 46 bids with a total of more than 85.8 million litas were placed. Another issue of seven-year bonds appears likely.
* In order to speed up integration into global economic structures and promote domestic exports and investments in the country's economy, the government on 14 March decided to open commercial attach� offices in Poland, Sweden, the United Kingdom, and Russia this year, BNS reported on 14 March. These are the first of eleven commercial attach� offices, which the government last year decided to set up in the years 2001-2003.
* Lietuvos Gelezinkeliai (Lithuanian Railways) Director Jonas Birziskis announced on 13 March that in order to save money the number of train routes in the country would be reduced from the current 194 to 167 by the end of the month, BNS reported. Last year the company had a profit of 95 million litas ($23.75 million) from freight services, but lost 86.9 million litas from passenger transportation.


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