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Baltic Report: September 6, 2001


6 September 2001, Volume 2, Number 22

NOTE TO READERS:
This issue covers events in the Baltic states from 10-23 August 2001.
REGIONAL
BALTIC DEFENSE MINISTERS SIGN NEW AGREEMENT ON BALTBAT HEADQUARTERS.
Defense ministers Juri Luik (Estonia), Girts Valdis Kristovskis (Latvia), and Linas Linkevicius (Lithuania) signed a new agreement on 23 August in Riga on the activities, financing, and control of the Baltic Battalion (BALTBAT) headquarters, BNS reported. The agreement with several supplements specifies definitions, structures and personnel, language usage, support in procurement, financial rules, cooperation between partners, and other issues. BALTBAT, launched seven years ago, was the first joint Baltic military project. The successful work of BALTBAT soldiers in various peacekeeping missions in former Yugoslavia have shown that the Baltic armed forces can contribute to NATO operations and not only be a recipient of NATO aid.

ESTONIA
GERMAN FINANCE MINISTER SAYS MONETARY SYSTEM OK FOR MERGE WITH EURO.
Hans Eichel told his Estonian counterpart Siim Kallas in Tallinn on 16 August that the Estonian monetary system is already qualified for accession to the euro-zone and no changes are needed during the compulsory two-year transition period for all candidate countries, BNS reported. Estonia will be able to join the European monetary system immediately once it fully meets the Maastricht criteria. Eichel said that Estonia has the potential to catch up with the economic level of such EU states as Portugal and Ireland. Eichel also met with Prime Minister Mart Laar, Foreign Minister Toomas Hendrik Ilves, and Bank of Estonia President Vahur Kraft.

ARMY CHIEF SACKS SIX PEACEKEEPERS OVER PALDISKI INCIDENT.
Defense forces commander Rear Admiral Tarmo Kouts on 10 August discharged six soldiers who were involved in a conflict with local residents in Paldiski, BNS reported. Twelve other soldiers were reprimanded and nine were demoted. On the night of 23-24 July some 30 off-duty soldiers, many of them drunk, training at the Peace Operations Center, angered that local youths had robbed their colleagues in Paldiski, stopped and beat up several residents who were not able to speak Estonian well enough. The Russian Foreign Ministry issued a strongly worded statement on 31 July calling the actions of the soldiers racist and indicative of Estonia's nationalistic policy toward non-Estonians. Recognizing the need to improve relations with the local population, the Peace Operations Center will launch a long-term cooperation program in Paldiski including participation in the city's social and education programs.

BELGIAN FINANCE MINISTER SEES NO PROBLEMS WITH ESTONIA'S DEVELOPMENT.
Didier Reynders during a one-day visit to Tallinn on 22 August held talks with Finance Minister Siim Kallas, Bank of Estonia President Vahur Kraft, and Prime Minister Mart Laar, ETA reported. Reynders told a press conference that structural reforms in Estonia have proceeded successfully and that, in comparison with other EU candidates, Estonia is at the forefront in transition to a free-market economy. The finance ministers agreed that Estonia will not have any problems meeting the Maastricht criteria, as the country has a stable monetary system and balanced budget. Kallas said that Estonia's greatest difficulties in the EU membership negotiations will be the implementation of EU customs and taxation methods. He said that Estonia must also overcome high inflation and unemployment rates, and problems in the agricultural sector.

INTERIOR MINISTER ORDERS EXTRA CONTROL OVER POLICE.
Tarmo Loodus signed a decree on 15 August establishing greater supervision of police officers, BNS reported. It grants officials of the Police Board and the Interior Ministry the right to conduct unannounced inspections of police institutions to evaluate their performance. The previous day a Tallinn police officer had been found drunk on duty at 8 am and seven officers were fined for arriving late to work. More supervision will be placed on constables, who often maintain rather weak links with police precincts. More attention will also be paid to the use of police vehicles, as drunk police officers have recently been involved in three road accidents, one of which claimed the life of a young man.

BRS WILL PAY FOR ESTONIAN RAILWAYS ON ITS OWN.
Baltic Rail Service (BRS), a consortium of American, British, and Estonian firms that signed an agreement in April to purchase 66 percent of Estonian Railways, confirmed on 14 August that it will pay the 1 billion kroons ($57 million) purchase price by the due date of 31 August, ETA reported. Its earlier plans to finance part of the purchase with loans from an international syndicate of banks fell apart in July after the State Audit Office declared that the agreement was invalid and asked that a criminal case be launched against the state officials who had concluded the deal. However, Chief State Prosecutor Raivo Sepp announced on 14 August that there were no grounds for criminal charges to be filed, as the privatization had been concluded in accordance with parliamentary and governmental decisions.

CONTROVERSY OVER SALE OF POWER PLANTS CONTINUES...
Reacting to a statement made by President Lennart Meri on 17 August opposing the sale of AS Narva Elektrijaamad (Narva Power Plants Ltd.) shares to U.S. company NRG, U.S. Ambassador to Estonia Melissa Wells declared in an interview in the 21 August edition of "Eesti Paevaleht" that the cancellation of the sale would send a negative signal in regard to doing business with Estonia. The NRG investments, Wells argued, will lessen unemployment in the socially disadvantaged region of northeastern Estonia. The opposition parties have called a special parliamentary session on 23 August to discuss the privatization of the plants. Meri is urging all parliament deputies to attend the session. The president has criticized the secrecy of the privatization terms and even called on Estonian officials directly connected with the privatization deal to resign.

...AS PRIME MINISTER DEFENDS PRIVATIZATION OF POWER PLANTS.
Speaking at the special Estonian parliament session on 23 August devoted to the privatization of Narva Power Plants Ltd. to U.S. company NRG Energy, Mart Laar declared that the deal is important from economic, social, environmental, and security aspects, ETA reported. He claimed that its rejection might undermine U.S. support for Estonia's admission to NATO. While agreeing that energy prices will increase slightly after the privatization, Laar said that the price hike would be even greater if the company were to remain state-owned. Moreover, power generated from oil shale, as is the case with the plants, is cheaper than other alternatives, BNS reported. Members of the ruling coalition left the session claiming the discussion was void of content. Because of the walkout the session ended abruptly lacking the 51 members necessary for a quorum.

CABINET OK'S FORMATION OF NATIONAL BROADCASTING COMPANY.
The cabinet on 20 August endorsed a bill under which state-owned Estonian Television and Estonian Radio would be combined into Eesti Rahvusringhaaling (Estonian National Broadcasting Company), BNS reported. The proposed merger is expected to reduce expenses as there will be a single management and more flexible utilization of funds. The law would not allow advertisements to be broadcast on the public television station, which would be financed in part by charging fees for broadcast permits issued to private television stations. The law must still be approved by parliament.

LIBERAL INTERNATIONAL NOT TO ADMIT CENTER PARTY.
The secretary-general of Liberal International, Jan Weijers, told a press conference in Tallinn on 13 August that his organization will not accept Estonia's Center Party as a member, BNS reported. Weijers noted that although the party has applied for membership more than once, "There are problems with Center Party Chairman Edgar Savisaar, whose activity does not always conform to liberal principles." Estonia's Reform Party and Coalition Party are among the 88 political parties throughout the world belonging to Liberal International. Reform Party Secretary for Foreign Relations Kristiina Ojuland had told Weijers that the Center Party is not a liberal party and actually opposes a liberal world view. Savisaar, however, declared that his party observes the principles of Liberal International and that Estonia's recognized liberal parties have distorted the liberal world view by making it equivalent to "extreme predatory capitalism -- on the principle that the smaller the role of the state the better."
* President Lennart Meri declared on 13 August at a seminar in Helsinki University devoted to the 10th anniversary of the reestablishment of Estonia's independence that Estonia had learned from its mistakes in 1939-1940 and would resist any attempt to occupy the country, BNS reported. He emphasized that membership in the EU and NATO had been the foreign policy priority of all Estonian governments in the last 10 years.
* The Social Democratic Labor Party and five small parties which have no deputies in the parliament, the Democratic, Independence, Christian People's, and Russian Unity parties as well as the Russian Party in Estonia, adopted a joint statement on 15 August opposing Estonia's speedy entry into the European Union, BNS reported the next day. The six parties also pledged to support a presidential candidate who promises to try to help solve the citizenship problems of holders of the alien's passport.
* Taking into account the expected cooling of the world economy and the economies of Estonia's main trading partners, the Finance Ministry on 13 August reduced its forecast for this year's growth in GDP from the 5.5 percent predicted in March to 4.8 percent and for next year's growth from 5.7 to 5.0 percent, BNS reported. The ministry also increased its estimate of this year's inflation from 4.8 to 5.8 percent.
* The government on 14 August issued a decree, which bans commercial Internet service at the radio frequency of 2.4 GHz from 2003, ETA reported. The decision will result in at least 20,000 computers in rural areas losing convenient low-cost access to the Internet. Noting that the use of this frequency is free in all other countries, the service providers of the radio link are protesting the government's action.
* Central Trade Unions Association leader Kadi Parnits stated at tripartite talks between government, employer, and employee officials on 23 August that the monthly tax-free income allowance should be increased by 200 kroons to 1,200 kroons ($70) from next year, BNS reported. He said that this would increase employees' net wages by 52 kroons a month and offset the inevitable cost of living increases and the planned new taxes of three percent of wages for unemployment insurance and pensions.
* Finance Minister Siim Kallas yielded to the pleas of other ministers at a cabinet meeting on 14 August and promised to try to find nearly 2 billion additional kroons ($114 million) for next year's budget and not increase the budget deficit by that amount, BNS reported the next day. The additional funds will be spent on higher pensions as well as higher wages for teachers, rescue officials, police, judges, tax and customs officials.
* Efraim Zuroff, the head of the Jerusalem office of the Simon Wiesenthal Center, presented to Prime Minister Mart Laar in Tallinn on 22 August additional evidence about the participation of businessman Harry Mannil in the persecution of Jews in Estonia during World War II, BNS reported. He said that the meeting proceeded in a much more positive mood than during his last visit to Estonia in 1992. After examining the evidence, Estonian officials noted that copies of Zuroff's documents were already available in Estonia and contained no proof of Mannil's alleged crimes.
* The extended board of the Pro Patria Union on 18 August elected by more than a two-thirds majority Leho Karjus, a car dealer from the northern rural municipality of Kadrina, as the party's new general secretary, BNS reported..
* According to customs statistics, the trade deficit in July was 1.97 billion kroons ($116 million) or significantly lower than the 2.34 billion kroons in June, BNS reported on 22 August. Exports totaled 6.55 billion kroons and imports 8.52 billion kroons.


LATVIA
RIGA CITY COUNCIL RESHUFFLED AFTER TB/LNNK QUITS COALITION.
The Riga City Council voted 34 to zero on 23 August to remove For the Fatherland and Freedom/LNNK (TB/LNNK) deputy Inese Vaidere from the post of deputy mayor, LETA reported. Deputies from the TB/LNNK and other rightist parties did not participate in the vote, asserting that the draft motion was illegal since no valid reasons were given to justify her removal. The move was prompted by the decision made by the TB/LNNK board in Riga on 20 August to end cooperation with the Latvian Social Democratic Workers Party (LSDSP) in the Riga City Council and withdraw from the council's coalition. TB/LNNK accused the LSDSP of breaking existing agreements by exhibiting a monument to Russian Tsar Peter the Great during the city's 800th anniversary celebrations on 17-19 August without informing them. The statue, which had been undergoing restoration, was moved to Riga's port on orders of Riga Mayor Gundars Boyars to welcome the Russian delegation from St. Petersburg. Although no formal coalition has yet been formed, deputies from the LSDSP, For Human Rights In a United Latvia, and the Center bloc of small parties supported Vaidere's ouster and the election of Aivars Kreituss, the leader of the Labor Party, as her replacement.

MOSCOW DELEGATION CANCELS VISIT TO RIGA'S CELEBRATIONS TO PROTEST VISA REFUSAL.
Despite a special request by the Riga City Council on 13 August to the Interior and Foreign ministries, the Foreign Ministry announced that it would not grant a visa to Aleksandr Perelygin, an adviser to Moscow Mayor Yurii Luzhkov, to attend the celebrations of Riga's 800th anniversary as part of a Moscow city delegation. Perelygin had been declared persona non grata by Latvia last November, allegedly for having masterminded an anti-Latvia campaign in 1998, and was refused visas to both Latvia and Estonia in 2000. Perelygin was among 17 Moscow City Council and Russian Duma members of a delegation headed by Moscow Deputy Mayor Vladimir Shantsev that planned to attend the main celebrations of Riga's 800th anniversary on 17-19 August. Riga Mayor Gundars Bojars said that Luzhkov had appointed Perelygin to head the working group for cooperation between Moscow and Riga, which planned to sign a cooperation agreement during the visit. In response, the Moscow delegation officially canceled the visit and urged Latvian officials to reconsider their decision. Russian Foreign Ministry press department Deputy Director Boris Malahov on 16 August called the visa rejection a "purposeful unfriendly gesture" that damages cooperation projects between the two capitals, BNS reported. He said that Latvia "had shown obvious contempt against the Moscow city's official delegation" and "responsive steps will be taken."

FINANCE MINISTER EVALUATES PROGRESS IN CURBING CONTRABAND.
After a meeting of the Contraband Prevention Center's supervisory council, Finance Minister Gundars Berzins told reporters on 15 August that funds spent to help stop contraband have paid off "excellently," LETA reported. He mentioned as an example the discovery of contraband tobacco among imported radio-engineering equipment. In addition, the Financial Police in the first half of the year opened as many cases as in all of last year. Berzins declared, however, that the work of the customs service was unsatisfactory and warned Customs Headquarters Director Aivars Krastins and his deputy, Aivars Gulbis, that they might be fired if the performance of the service does not improve. He mentioned that the Agriculture Ministry requested an analysis of poultry, butter, cheese, and cottage cheese transiting to Russia and Belarus in June, but thus far has only received formal replies and no effective actions on the part of customs officials. Both Krastins and Gulbis submitted resignations the next day.

BANK OF LATVIA PRESIDENT AFFIRMS INTENTION TO FORM NEW PARTY.
Einars Repse officially announced on 21 August his intention to form a new center-right political party, naming several influential businessmen and the leader of Latvia's Jewish society as supporters, BNS reported. He did not deny that former Riga Mayor Andris Argalis and former Latvian President Guntis Ulmanis might join the party, but stressed that the party will try to attract people who were not previously politically active. Repse affirmed that the party will be center-right, and based on the principles of honesty, professionalism, and openness while espousing the values of freedom and social welfare. A statement declared, "The state will be working for the people, and not the other way around. Taxes will be reduced, but properly collected. State money will not be missing. Smugglers and tax evaders will no longer be in a privileged position. Bureaucracy and corruption will be eradicated, starting from the top. Laws and various regulations will be simplified and put in order." Latvia's Way Chairman and Prime Minister Andris Berzins welcomed Repse's formal return to political life and expressed hope that the new party will boost competition among the center-right parties and facilitate their development, LETA reported.

LAW ON BROADCASTING IN FOREIGN LANGUAGES PROTESTED.
Bizness & Baltija media-group owner Vladimir Gurov has submitted an appeal to the Constitutional Court against the Radio and Television Law provision that limits the use of languages other than Latvian to 25 percent of total daily broadcasting time, BNS reported on 10 August. He claims that the law contradicts the constitution's articles on human rights, freedom of speech, and ethnic minorities' right to preserve and develop their language and culture, as well as the European Convention of Human Rights and Basic Freedoms and the Covenant on Civic and Political Rights. Ojars Rubenis, the chairman of the National Radio and Television Council, asserted that Latvia's audio/visual laws were approved by the European Union and that the European Commission did not object to the restrictions on the use of foreign languages. The Constitutional Court's acting chairman, Romans Apsitis, said that the court panel will review Gurov's claim in the next few weeks and will decide whether a case should be opened.

KEGUMS HYDROELECTRIC POWER PLANT REOPENS AFTER UPGRADE.
Prime Minister Andris Berzins, Economy Minister Aigars Kalvitis, and representatives of the European Bank for Reconstruction and Development attended ceremonies on 22 August to reopen the Kegums hydroelectric power plant on the Dauguva River after extensive reconstruction, LETA reported. The reconstruction of the plant, which was originally built in 1939, took three years and cost more than 13 million lats ($20.8 million). It is intended to extend the service life of the plant by 40 years. Inspection of the reconstructed units show that their efficiency increased from 82 percent to 91.4 percent, which should result in the plant producing an additional 25 million kWh of energy each year.

MOSCOW ACCUSES RIGA OF TORTURING SOVIET VETERAN.
The Russian Foreign Ministry on 21 August accused the Latvian authorities of torturing Mikhail Farbtukh, an 84-year-old Soviet army veteran from World War II who has been convicted of war crimes, Interfax reported. The ministry statement said that Latvian authorities had acted improperly in not releasing Farbtukh because of his health.
* While attending the celebrations of Riga's 800th anniversary, German President Johannes Rau told President Vaira Vike-Freiberga on 18 August that Germany is doing all it can to help create the preconditions for Latvia's accession to the European Union and NATO, BNS reported. Rau stated that he personally "would be very delighted if Latvia managed to implement all the criteria for NATO accession and was invited to join in 2002."
* German Finance Minister Hans Eichel held talks with Prime Minister Andris Berzins, Finance Minister Gundars Berzins, Foreign Minister Indulis Berzins, Bank of Latvia President Einars Repse, and German business representatives in Riga on 15-16 August, BNS reported. Eichel praised Latvia's high GDP growth and stated that the state had good opportunities to become a member of NATO and the EU.
* Foreign Minister Indulis Berzins told German Bundestag German-Baltic cooperation group leader Dr. Wolfgang von Stetten in Riga on 17 August that Latvia wanted to be higher on Germany's list of foreign-policy priorities, BNS reported. They exchanged opinions on security issues and expressed support for faster membership of the Baltic states in NATO. Von Stetten also met with parliament chairman Janis Straume.
* The international rating agency Moody's upgraded the long-term deposit rating of Latvia's largest bank, Parex Bank, from Ba2 to Ba1, BNS reported on 14 August. It said that the upgrade reflects the bank's success in strengthening its corporate governance, its improving financial figures, as well as its sound asset quality. Moody's noted, however, that around 76 percent of the bank's deposits belong to non-Latvian residents. The fact that the outflow of deposits during the Russian crisis of 1998 was limited is evidence that the bank emerged from a major "stress-test" relatively unscathed. Moody's retained the bank's financial strength rating at D and the short-term deposit rating of "Not Prime."
* Interior Minister Mareks Seglins informed Fritz Behrens, the Interior Minister of Germany's North Rhine-Westphalia, on 16 August in Riga about construction on the Latvia's eastern border and the problems on border demarcation with Russia caused by the lack of a border treaty, BNS reported. Behrens inquired about how Latvia was dealing with illegal immigration, refugees and illegal border crossing.
* Foreign Minister Indulis Berzins and Pskov regional administration head Yevgenii Mikhailov on 17 August in Riga discussed economic development in both countries and ways to increase regional cooperation in trans-border cooperation projects organized by the EU, BNS reported. Mikhailov favors Latvia's EU membership since it would give an additional impetus for development in the Pskov region.
* The Statistics Office announced on 10 August that a total of 573,600 foreign travelers visited Latvia in the second quarter of the year, an increase of 15 percent compared to the same period last year, BNS reported. Their average length of stay in the republic was 1.4 days with 69 percent of the visitors staying less than 24 hours; most of them were from neighboring countries -- 32 percent from Lithuania, 27 percent from Estonia, 10 percent from Finland and 7 percent from Russia.
* President Vaira Vike-Freiberga welcomed participants of the 2nd World Latvian Scientists' Congress at the Riga Latvian Society House on 14 August, LETA reported. She noted that enormous and radical changes have taken place in the sciences since the 1st World Latvian Scientists' Congress 10 years ago, but expressed regret that Latvia had the lowest financing of the sciences(0.21 percent of GDP last year) among the EU candidate countries.
* Representatives from the republic's seven largest cities -- Riga, Liepaja, Jelgava, Jurmala, Valmiera, Ventspils, and Daugavpils -- signed a protocol on 23 August founding the Latvian Large Cities Association, BNS reported. The association's executive director will be Janis Kalvins, an adviser to the special ministry for state reforms, while the association's presidency will rotate annually between the mayors of the member cities in the alphabetical order of their surnames with Riga Mayor Gundars Bojars the first to assume the duties.


LITHUANIA
GERMAN FINANCE MINISTER ADVISES CONTINUATION OF REFORMS.
During his 14 August visit to Vilnius, Hans Eichel praised Lithuania's economic progress in recent years, but urged it to continue reforms in order to avoid the shocks that East Germany experienced during its integration into a united Germany, ELTA reported. He predicted that the repegging of the national currency, the litas, from the U.S. dollar to the euro will not cause any problems, but saw greater difficulties in reducing the state budget deficit and suggested reforms to attract increased investments from private capital. Prime Minister Algirdas Brazauskas requested German support in obtaining greater EU funding for the shutdown of the nuclear power plant in Ignalina, but noted that this aid should not be included in the general financing program for Lithuania. President Valdas Adamkus thanked Eichel for Germany's support in seeking EU membership and stressed that Lithuania will benefit from German experience in improving the state administration.

U.S. CONGRESS ADVISERS OPTIMISTIC ON LITHUANIA'S NATO PROSPECTS.
Visiting U.S. House of Representatives and Senate advisers during talks with Lithuanian parliament deputies on 17 August stated that there is practically no opposition in Congress to Lithuania's membership in NATO, BNS reported. Philip Petersen, the head of the U.S. Potomac Fund that organized the visit of the advisers to Vilnius, said one or all three of the Baltic states should be admitted into the alliance. Speaking about possible obstacles to Lithuania's joining the Atlantic alliance, delegation members mentioned possible changes in Lithuania's political climate and the meeting of commitments, especially those relating to defense spending. The advisers that day also met President Valdas Adamkus, Prime Minister Algirdas Brazauskas, Foreign Minister Antanas Valionis, and Army Commander Jonas Kronkaitis as well as representatives of the U.S. company Williams International. The following day the advisers visited the military training center in Rukla and the Holocaust Museum.

BELGIUM TO BACK EFFORTS TO SPEED UP EU TALKS.
Finance Minister Dalia Grybauskaite told Belgian Finance Minister Didier Reynders in Vilnius on 21 August that Lithuania intends to conclude the negotiations on the chapters over customs duties, financial control, and taxes in the second half of the year while Belgium is heading the European Union, ELTA reported. She noted that Lithuania will ask for transition periods for the introduction of minimal EU excise duties on cigarettes and diesel fuel. Reynders said that Belgium will back the development of Lithuania's economy and the greater liberalization of trade with the EU. He noted that the greatest problems are in the energy field, and expressed the hope that Lithuania and the European Commission can find a suitable compromise on financing the closure of the Ignalina nuclear power plant. Reynders discussed monetary policy, the shifting of the pegging of the litas from the U.S. dollar to the euro, and Lithuanian banking development with Bank of Lithuania Chairman Reinoldijus Sarkinas. He also held talks with Prime Minister Algirdas Brazauskas.

HEAD OF LAND FORCES APPOINTED.
President Valdas Adamkus on 13 August appointed Colonel Valdas Tutkus, Lithuania's military envoy to NATO and the Western European Union since 1999, to head the country's ground forces, BNS reported. The post of commander of ground forces was created by a law on the organization of the country's national defense system adopted in 1998, but had remained unfilled. He is the deputy commander of the military and, in the event of hostilities, is in charge of military operations. Defense Minister Linas Linkevicius proposed two candidates for the post: Defense Headquarters head Colonel Antanas Jurgaitis and Tutkus. After a second meeting with the two candidates also attended by Linkevicius and armed forces commander Brigadier General Jonas Kronkaitis, Adamkus announced that he was appointing the 40-year old Tutkus, who speaks Russian, English, French, and Italian. He studied at the Tashkent School of Infantry Commanders, Moscow's M. Frunze Military Academy, and the NATO Defense College in Rome. Adamkus later the same day also announced the promotion of the 66-year-old Kronkaitis to the rank of major general.

LITHUANIAN PRESIDENT EXPRESSES CONCERN FOR BALTIC SEA POLLUTION.
At the symposium of the Stockholm International Water Institute on 16 August, Valdas Adamkus delivered a report about the differences in water policy between Western and transition-economy countries, ELTA reported. He voiced concern that the Baltic Sea is among the most heavily polluted seas and called on states along its borders to fight for its purification and protection. Adamkus said that this task will be more difficult than the work he did in the U.S. Great Lakes because the Baltic Sea is surrounded by nine states with varying priorities and vastly different levels of social and economic development. Adamkus also held talks with Swedish Trade Minister Leif Pagrotsky, who noted that Sweden has allocated 1 billion Swedish kronas ($100 million) for Baltic projects since 1991 and is ready to contribute more. The two officials agreed that some of the future funds should go for environmental projects for which Sweden is awaiting proposals regarding their most efficient use and on the implementation of specific projects.

GOVERNMENT OK'S NATIONAL ANTI-CORRUPTION STRATEGY.
The cabinet on 22 August approved a national strategy for fighting corruption, the goals of which are the improvement of economic, democratic, and social development by reducing corruption levels, ELTA reported. The strategy calls for increased transparency in the funding of political parties as well as improving the current system of land acquisition. It supports simplifying tax collection procedures and reducing personal income taxes in order to eradicate widespread tax evasion, and expanding internal and external audit services for state and local authorities. The adoption of an anti-corruption program is on the list of Lithuania's commitments for the European integration process and it must yet be approved by parliament.

BISHOPS ASK PREMIER TO ACCELERATE COOPERATION WITH CHURCH.
The Lithuanian Conference of Bishops, represented by its head, Archbishop of Kaunas Sigitas Tamkevicius, Cardinal Audrys Backis, and Bishop Jonas Boruta, asked Algirdas Brazauskas on 23 August to speed up the formation of the joint commission that was agreed upon last year between the Vatican and Lithuania, BNS reported the next day. The commission is expected to help resolve matters that require the approval of both church and state, such as the management of church archives and the problems of Catholic schools. The bishops also expressed regret that there has not been an adviser for religious affairs in the government since Petras Plumpa resigned in March. The bishops have suggested a candidate for the post, but refused to disclose his name. Brazauskas said that he will appoint someone to the post in the near future, noting that the official will remain in office regardless of changes in the government.

UNEMPLOYMENT INCREASES.
An unemployment survey conducted in line with EU norms by the Statistics Department indicated worse results in May than the rates previously announced by the Lithuanian Labor Exchange, ELTA and BNS reported on 14 August. The survey revealed that the unemployment level in May was 16.6 percent -- 1.1 percent higher than in May 2000 -- with the number of unemployed persons increasing from 280,100 to 284,000. The Labor Exchange had reported that the May unemployment rate was 12.3 percent, an increase of 1.2 percent compared to same period last year. The Statistics Department survey is broader since it was based on a survey of 7,300 persons above the age of 15 and included not only persons registering as unemployed at labor offices, but also those who had applied to private employment agencies. The unemployment rate for men (19.3 percent) was higher than for women (13.9 percent).

LITHUANIA HAS LOWEST HIV RATE IN REGION.
According to the Lithuanian AIDS Center, there are 316 HIV-positive persons -- 266 men and 50 women -- registered in the country, BNS reported on 11 August. Most of the HIV-positive persons reside in Klaipeda (142) and Vilnius (104). They contracted the disease by sharing needles when using intravenous drugs (197) and during unsafe sex (102). Lithuania's HIV rate of 6.8 per 100,000 people is significantly lower than the rates recorded last year of 33.08 per 100,000 in Latvia, 26.1 in Estonia, 350.1 in the Kaliningrad region, 16.95 in Poland, 26.79 in Belarus, 19.89 in Russia, and 45.72 in Ukraine.
* An extraordinary meeting of the shareholders of Mazeikiai Nafta (Mazeikiai Oil) on 21 August approved the changes needed to allow the completion of an agreement between the Russian oil company YUKOS and Williams International that will result in both companies controlling a 26.85 percent stake in Mazeikiai Oil, ELTA reported. YUKOS will pay $150 million in investments and loans for the shares and supply the Mazeikiai refinery with 4.8 million tons of crude oil per year (slightly more than one-third of total plant capacity), for the next 10 years.
* Reinhard Schweppe, the head of the German Foreign Ministry's European Union Department, told Lithuania's chief EU negotiator, Petras Austrevicius, in Vilnius on 20 August that Lithuania should keep up its rapid pace in EU accession talks, ELTA reported. Schweppe noted that although each country is evaluated according to its individual achievements, the three Baltic states' positions combined would have more weight than each of them separately. Austrevicius said that Lithuania expects understanding and a flexible approach on the part of the EU relating to the energy chapter, especially in regard to closing down the Ignalina nuclear power plant. Lithuania has agreed to close the plant's first reactor by 2005 and to make a decision on closing the second in 2004, but the EU is pressing for closing the second by 2009.
* The Central Electoral Commission has received an official report from the Russian Internal Ministry's Chief Information Center stating that in 1973 a court in Vyborg had sentenced Freedom Union Chairman Vytautas Sustauskas to a 2-year jail term on charges of deliberate hooliganism, BNS reported on 17 August. Sustauskas did not mention the conviction in filling out his form as a candidate to parliament which asked whether he had ever been convicted of a serious crime. The commission could strip Sustauskas of his parliament seat, but has decided not to make any decision until it receives the official Vyborg court ruling it has requested.
* Lithuanian envoy to UNESCO Ugne Karvelis gave Culture Minister Roma Dovydeniene on 21 August the UNESCO certificate confirming that the Lithuanian folk art of carving wayside crosses was on the list of 18 world heritage masterpieces, ELTA reported. Karvelis emphasized that the list does not identify Lithuanian crosses but cross-making as a process with a vital continuation of tradition. The crosses are regarded as unique constructions combining architecture forms, sculpture, iron details and sometimes primitive painting which differ from similar crosses in neighboring Catholic countries as a developed artistic form.
* The head of the Clinical and Social Psychology Department of Vilnius University, Danute Gailiene, told a news conference on 16 August that Lithuania had the highest suicide rate in Europe last year, BNS reported. The rate of 44 per 100,000 inhabitants was more than double the average rate of 20 per 100,000 in EU countries and higher than the rates of 39 and 33 in Russia and Estonia. She noted that residents of large cities accounted for 53 percent of Lithuania's suicides and that the suicide rate of men was five times higher than that among women.
* The government on 14 August decided to establish embassies in Buenos Aires, Argentina and Cairo, Egypt from 1 October, thus replacing embassies in Venezuela and the United Arab Emirates that will be closed by 1 November, BNS reported.
* The annual meeting of the World Lithuanian Community, attended by the chairmen of Lithuanian emigre communities in 32 countries, adopted a statement on 14 August in Sejny, Poland expressing support for Lithuania's membership in NATO, BNS reported. The statement, which was addressed to U.S. President George W. Bush, Polish President Aleksander Kwasniewski and Lithuanian President Valdas Adamkus, noted that NATO membership for the Baltic states would finally restore historical justice and ensure the restoration of a single, indivisible, safe, and stable Europe.
* The Statistics Department announced on 10 August that in the first half of this year compared to the same period in 2000 exports increased by 24 percent to 9.04 billion litas ($2.26 billion) while imports grew by 15.2 percent to 11.86 billion litas, BNS reported. The foreign trade deficit declined by 6.2 million litas compared to last year.
* The volume of freight going through the port of Klaipeda in the first seven months of the year compared to the same period last year decreased from 12.61 million tons to 10.44 million tons, a drop of 17.2 percent, BNS reported on 13 August. The number of ships serviced in Klaipeda declined by 12.1 percent to a total of 3,485.


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