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Baltic Report: December 5, 2001


5 December 2001, Volume 2, Number 28
REGIONAL
BALTIC STATES SATISFIED WITH EUROPEAN COMMISSION'S REPORTS.
Estonian Foreign Minister Toomas Hendrik Ilves praised the report released on 13 November assessing the progress made by EU candidates, ETA reported. Ilves said the report provides "an opportunity to compare our progress with that of other candidates." The report called for Estonia to continue public administration reforms, the improvement of court efficiency, and an acceleration of the restructuring of the oil-shale industry. Latvian President Vaira Vike-Freiberga noted on 14 November that Latvia has been working on the areas most criticized in the report: its judicial system, public administration reform, curbing corruption, and improving the situation with ethnic minorities, LETA reported. Lithuanian Foreign Minister Antanas Valionis on 13 November expressed satisfaction that this year's report is more favorable than last year's, BNS reported. Among the areas highlighted for further work are: reinforcing administrative and judicial capacity, combating corruption, stimulating internal and foreign direct investment, reducing the unemployment rate, and meeting the obligations to shut down its nuclear power plant.

U.S. HOUSE OF REPRESENTATIVES APPROVES AID FOR NATO CANDIDATES.
By a vote of 372 to four the House on 7 November passed the Freedom Consolidation Act, which grants $55.5 million in security assistance to seven NATO candidate countries, AP reported. The bill earmarks Estonia, $6.5 million; Latvia, $7 million; Lithuania, $7.5 million; Slovakia, $8.5 million; Slovenia, $4.5 million; Bulgaria, $10 million, and Romania, $11.5 million. The bill still has to be approved by the Senate and signed by the president.

ROMANIANS ARE MOST SUPPORTIVE OF EU AMONG ALL CANDIDATES.
A public opinion survey conducted in the EU candidate countries by the Czech TNS Factum polling institute shows that support for joining the EU is highest among Romanians, Mediafax reported. More than four Romanians in five (81 percent) would vote for joining the EU in a referendum. Second-placed are Bulgarians (70 percent), followed by Slovaks (65), Slovenes (63), Turks (61), Hungarians (60), Latvians (53), Poles (49), Lithuanians (48), Czechs (47), and Estonians (38 percent).
* The justice ministers of the Baltic and Nordic states meeting in Tallinn on 2 November adopted a resolution condemning terrorism, ETA reported. They stressed the need for good cooperation in the antiterrorism fight, and the importance of information exchange. The next meeting of the ministers is scheduled in two years in Sweden.
* The Baltic transport ministries signed a cooperation agreement on 7 November in Parnu on launching the railway development program Rail Baltica connecting the three countries with Europe, BNS reported the next day. They also discussed the construction of the Via Baltica highway.


ESTONIA
GERMANY PROMISES FURTHER DEFENSE AID.
After a meeting with his Estonian counterpart Juri Luik in Tallinn on 2 November, German Defense Minister Rudolf Scharping said Estonia has implemented its NATO membership plan well and Germany will continue providing military support to that country, BNS reported. He noted that NATO enlargement is not directed against Russia, whose membership in NATO is very unlikely in the next 20 years, according to Scharping. He also told Prime Minister Mart Laar that Germany views the Baltic states as a single group regarding NATO enlargement. In addition, Scharping held talks with President Arnold Ruutel, former President Lennart Meri, and Foreign Minister Toomas Hendrik Ilves.

PRINCE CHARLES BEGINS BALTIC TOUR IN TALLINN.
Britain's Prince Charles began a five-day official visit to the Baltic states in Tallinn on 5 November by meeting Prime Minister Laar, ETA reported. President Ruutel held a dinner in his honor in the evening. "The Daily Telegraph" reported that Prince Charles called the Baltic states "thriving parliamentary democracies, determined to join the main Western institutions," and said, "My visit will help to symbolize Britain's wholehearted support of their preparations for doing this." He unveiled a plaque at the British Embassy in Tallinn on 6 November marking the 10th anniversary of restored diplomatic relations between the U.K. and Estonia and traveled to Tartu where he visited the Old Town accompanied by Mayor Andrus Ansip, spoke with students of journalism at Tartu University, and listened to a lecture on Estonian organic farming at the Tartu Development Center.

FINLAND REGARDS ESTONIA DEFENSE FORCES AS EQUAL PARTNER.
Commander of the Finnish defense forces Admiral Juhani Kaskeala told President Ruutel in Tallinn on 14 November that he regards the Estonian defense forces as an equal partner to the Finnish armed forces, BNS reported. Finland has been one of the main countries supporting the creation of the Estonian armed forces since 1992, supplying military equipment and training. The Finnish armed forces have given Estonia used communication equipment, rescue equipment, clothing, and maps as well as two destroyers. More than 100 Estonian officers have received training in Finland and Finnish volunteer reservists, some of them high-ranking officers, have worked as advisers in Estonia. In earlier talks with Prime Minister Laar, Kaskeala expressed the hope that Estonia will be invited at the Prague summit next fall to join NATO. He said such an invitation would be a positive development and a security guarantee for the whole region.

FOREIGN MINISTER VISITS LATVIA.
During an official trip to Riga on 12-13 November, Toomas Hendrik Ilves met with President Vike-Freiberga, Prime Minister Andris Berzins, Foreign Minister Indulis Berzins, Defense Minister Girts Kristovskis, and parliament Chairman Janis Straume, LETA reported. The talks mostly focused on bilateral relations and ongoing efforts to gain EU and NATO membership. At a joint press conference, the two foreign ministers stressed that their countries have very friendly relations and cooperation even extends to the joint purchase of some military equipment. They mentioned the need to improve and optimize the border crossing for residents of the Latvian and Estonian twin-towns of Valka and Valga and to step up work, together with Lithuania, on completing the Via Baltica highway project. They also identified as a shared goal the closure by the end of this year of the OSCE missions to Estonia and Latvia.

MOSCOW DENOUNCES ESTONIA FOR 'COLD WAR RHETORIC.'
A Russian Foreign Ministry spokesman on 14 November condemned what he called "crude attacks on Russia" by Estonian Prime Minister Laar and said that Laar's statements represent "a return to Cold War rhetoric," Russian and Western agencies reported. Laar said over the weekend in Tallinn that "Estonia next year will be pelted with provocative propaganda attacks by Russia, which is struggling for the survival of the empire." The Estonian leader added that the inclusion of Estonia and her two Baltic neighbors in NATO will "complete the unification of Europe and serve as an obstacle to Russia, which will then have to learn to knock politely on the door instead of hacking a window on Europe with an ax."

PARLIAMENT DISCUSSES ABOLITION OF LANGUAGE REQUIREMENTS.
The parliament discussed and passed on 7 November the first reading of the bill proposed in October that would abolish the Estonian-language requirement for candidates to the parliament and local councils, BNS reported. Foreign Minister Ilves spoke in favor of the bill, noting that it would help convince the OSCE to end its 10-year mission to Estonia. Complaints by the opposition Center Party that the bill would endanger the position of Estonian as the state language were countered by noting that the Pro Patria faction has submitted bills that would officially establish Estonian as the working language of parliament and all state councils. On 15 November, the parliament's Constitution Commission by a narrow vote of five to four with one abstention expressed its support for the bill to abolish the language requirement.

GOVERNMENT EXTENDS PRIVATIZATION PROCESS DEADLINE.
The cabinet decided on 6 November to extend the deadline for using privatization vouchers to the end of 2005 instead of the previously announced deadline of July 2002, ETA reported. Moreover, the use of vouchers in cases regulated in the Land Reform Act and the Housing Privatization Act will continue until 1 July 2006. The deadline had to be extended because land privatization has been delayed and the final stages of land reform were being mapped. Reports from local governments indicate that 330,000 hectares of land still need to be returned to their owners. The land can be purchased with vouchers that were issued to all Estonians at the beginning of 1990s, which have primarily been used up to this point to privatize homes and apartments. The total volume of privatization vouchers issued by 10 October was worth 7.99 billion kroons ($460 million).

PARLIAMENT RAISES SUPPORT FOR SECOND CHILD.
The parliament adopted a law on 15 November which increases the monthly support for the second child born in a family from the current 225 ($12.60) to 300 kroons, ETA reported. The 300-kroon allowance will also be applied to the third and further children, while the allowance for the first child will remain at the 150-kroon level. Social Minister Eiki Nestor said that the increased benefits will be paid for approximately 89,300 children and will cost about 70 million kroons per year. The law will go into effect on 1 January 2002.

FOURTH PLACE REACHED IN INDEX OF ECONOMIC FREEDOM.
Estonia rose to fourth place among 155 countries in the Index of Economic Freedom compiled by the U.S.-based Heritage Foundation and "The Wall Street Journal," BNS reported on 12 November. Hong Kong, Singapore, and New Zealand hold the three top positions, respectively. Fourth place was shared with Ireland, Luxembourg, the Netherlands, and the U.S. Estonia was ranked 22nd in 1999 and 14th in 2000. The other Baltic states also improved their ratings from last year: Lithuania from 42nd to 29th and Latvia from 46th to 38th. The index ranks countries according to the level of trade restrictions, tax policies, government intervention in the economy, monetary and banking policies, capital flows and foreign investment, price and wage regulation, real estate, and the size of the black market.

BROADCASTING COMMITTEE: THREE TV STATIONS ENOUGH.
Peeter Sookruus, the head of the Culture Ministry Media and Copyright Department, announced on 6 November that the Broadcasting Licenses Committee had decided that three nationwide TV stations are enough for Estonia, BNS reported the next day. Taking into account the realistic volume of the Estonian TV advertising market, the television channels' practices thus far, and the need to create the necessary conditions for the development of digital broadcasting, the committee urged the Culture Ministry not to issue another nationwide television broadcasting license earlier than 2005. The three stations are the state-owned Eesti Television (ETV), and the foreign-owned commercial stations TV-3 and Kanal 2. The license of another commercial station, TV-1, was revoked in October because it failed to pay transmission fees.
* In his first foreign visit as president, Arnold Ruutel flew to Warsaw on 6 November to attend the Central and East European leaders antiterrorism conference. In his speech he stressed the need for resoluteness in fighting drug trafficking, illegal migration, money laundering, corruption, and organized crime, noting that the Baltic states have also jointly mapped out measures to prevent possible terrorist attacks, BNS reported on 7 November.
* The Estonian Independence Congress -- organized by the Independence Party, the movement No to the European Union, the movement Free Estonia, Youth Forum, and other associations -- adopted a manifesto in Tallinn on 3 November demanding Estonia's neutrality between the European Union and Russia, BNS reported on 5 November. It criticized Estonia as being a typical colonized state and expressed opposition to Estonia joining NATO and the EU because they are unable to guarantee Estonia's economic development and security.
* Estonia's Culture Ministry signed a program of cultural cooperation in 2001-2003 with its Russian counterpart in Moscow on 5 November, BNS reported. Culture Ministry Chancellor Margus Allikmaa, who signed on behalf of Estonia, said that such cooperation programs are renewed every couple of years and "it's a declaration of mutual support and willingness to arrange cultural exchanges."
* Defense forces commander Rear Admiral Tarmo Kouts flew to Kosovo on 6 November to visit Estonian peacekeeping units serving in former Yugoslavia, BNS reported. He had a meeting in Pristina the next day with the military police platoon ESTPATROL-4 serving with Italian carabinieri and on 8 November traveled to Bosnia-Herzegovina to meet with the Estonian soldiers participating in a six-month mission in a joint Nordic-Polish combat group under Danish command.
* Finance Minister Siim Kallas signed on 8 November a financing project of the European Union's structural fund ISPA pertaining to the upgrading of the Ikla-Tallinn-Narva highway which is part of the Via Baltica regional roadway project, BNS reported. The EU will provide almost $19 million or 75 percent of the costs.
* A poll carried out in 27 countries by Emor and its partner firms showed that in terms of public-sector Internet services, Estonia is the most developed country in Central and Eastern Europe, BNS reported on 13 November. The poll revealed that one in four residents of Estonia aged 15 to 74 had used the services of state and/or government institutions via the Internet.
* President Ruutel appointed Toivo Tasa ambassador to Hungary on 13 November, BNS reported. He had been Estonia's ambassador to the Czech Republic, Austria, Slovakia, Hungary, Switzerland, and Slovenia in 1994-98 and served as the general director of the Foreign Ministry protocol department since 1998.
* The board of directors of the International Finance Corporation, the World Bank's financing arm, on 12 November approved a $50 million loan to Eesti Raudtee (Estonian Railway), BNS reported. Eesti Raudtee Board Chairman Earl Currie said that the total costs of the railroad's project amount to $226.8 million, including the $58 million which Baltic Rail Services paid for a 66 percent share of the company.
* Tallinn Deputy Mayor Leivi Sher handed his resignation to Mayor Tonis Palts on 14 November, BNS reported. He plans to leave the post on 1 December because he still has to complete work on three projects of the Security and Integration Board. Sher also suspended his membership in the Estonian United People's Party and urged its board to call an extraordinary congress.
* The Estonian Central Trade Unions Association sent a letter to the Estonian Central Employers Association on 15 November with a proposal to raise the wages of all employees in Estonia by at least 10 percent from next year, BNS reported.
* The Statistical Office announced on 7 November that the consumer price index (CPI) for October remained unchanged from September but increased by 4.8 percent year-on-year, BNS reported. In October the prices of food items decreased by 0.3 percent while those of non-food items and services increased by 0.1 and 0.3 percent, respectively.


LATVIA
PRIVATIZATION HEAD DISMISSED.
By a vote of nine to four with one abstention, the government on 13 November dismissed Latvian Privatization Agency Director Janis Naglis for procedural violations, LETA reported. Ministers from the People's Party and For the Fatherland and Freedom (TB/LNNK) voted for Naglis's dismissal, while Premier Andris Berzins and other members of Latvia's Way voted against. Naglis, who will remain in office until 14 December, does not admit to any wrongdoing and is considering filing a court appeal against the decision. He said that he can respond to the charges only in general terms since he was not allowed to examine the materials which Economy Minister Aigars Kalvitis used to justify his ouster.

NATO PRAISES MEMBERSHIP ACTION PLAN...
A delegation headed by Foreign Ministry State Secretary Maris Riekstins presented Latvia's Membership Action Plan (MAP) for 2002 at NATO headquarters in Brussels on 15 November, BNS reported. NATO officials praised the MAP, but pointed out the need for Latvia to work towards increasing its ability to host Alliance forces in case of need. Defense Ministry State Secretary Edgars Rinkevics explained that no candidate country has worked toward improving the host-country support ability because NATO has previously not pushed this requirement. He noted that it would take several years and "very serious work together with NATO experts" to accomplish this, adding that it is fortunate that NATO is not demanding that it should be done before the summit meeting in Prague next fall at which Latvia hopes to be invited to join the alliance.

...SUPPORTS LATVIA'S NEW STRUCTURE OF MILITARY FORCES.
NATO officials voiced support for the planned new structure of Latvia's National Armed Forces that was presented in Brussels on 7 November, BNS reported. They praised the realistic nature of the changes, which should raise military capacity by increasing the number of units, improving antitank and air-defense weaponry, and channeling more funds toward modernizing communications equipment. The plans call for liquidating the headquarters of the land and marine forces, whose functions will be taken over by a combined central headquarters as well as four regional headquarters. The plan also groups units by their readiness categories, as required by NATO, with less prepared units focusing on regional protection using cheaper and simpler equipment, and better prepared units focusing on more complicated operations. The next meeting to assess the development of Latvia's armed forces as part of its NATO membership action plan is scheduled for the spring of 2002.

CONFERENCE ON BALTIC MEMBERSHIP IN NATO.
Foreign Minister Indulis Berzins and Defense Minister Girts Valdis Kristovskis spoke at a conference on "Baltic Membership in NATO -- Strengthened Stability and Security in Europe" held in Riga on 9 November, BNS reported. Berzins said that the 11 September terrorist attacks in the U.S. once again emphasized the meaning of NATO's existence, and that by seeking to join NATO Latvia "is not looking for protection," but wants "to stand together, facing and countering challenges." Kristovskis noted that Russia "has a different interpretation of NATO enlargement and NATO values," and that NATO membership for Latvia will "put an end to all speculations over the past, history, and geopolitical issues." The conference was organized by the Latvian Trans-Atlantic Organization in cooperation with the Latvian Defense and Foreign ministries and the American Latvians' Association.

GREATER ECONOMIC COOPERATION WITH ARMENIA.
Foreign Minister Berzins held talks in Yerevan on 5 and 6 November with Armenian leaders including President Robert Kocharian, parliament speaker Armen Khachatrian, and Foreign Minister Vartan Oskanian, Noyan Tapan and Mediamax reported. Noting the absence of any problems overshadowing bilateral relations, the two sides assessed the potential for expanding cooperation, which the Armenian side said is needed especially in the economic sphere. Kocharian specifically thanked Berzins for Latvia's support for Armenia's accession to the Council of Europe, adding that Armenia could benefit from Latvia's experience in implementing economic reform and integration into European structures.

AGREEMENT ON MILITARY COOPERATION WITH ROMANIA SIGNED.
Defense Minister Kristovskis and his Romanian counterpart Ioan Mircea Pascu signed an agreement on military cooperation in Bucharest on 6 November, RFE/RL's Bucharest bureau reported. They agreed that the current international situation calls for an enlargement of NATO that would embrace all candidate countries. During his visit which began on 4 November Kristovskis also met with Chamber of Deputies speaker Valer Dorneanu, Foreign Ministry Secretary-General Ion Diaconu and visited the 21st Battalion of the Romanian Armed Forces, LETA reported on 7 November.

DEFENSE MINISTER IN PRAGUE.
Defense Minister Kristovskis on 8 November discussed with his Czech counterpart Jaroslav Tvrdik the process of NATO enlargement, and told his host about ongoing reforms in the Latvian army, CTK reported. Tvrdik told journalists the Czech Republic "unambiguously" supports Latvia's quest to join NATO. Kristovskis also met with Chamber of Deputies Defense and Security Committee Chairman Petr Necas.

OSCE OFFICIAL SAYS CLOSURE OF ITS MISSION LIKELY.
The head of the OSCE mission to Latvia, Peter Semneby, told parliament Deputy Chairman Rihards Piks that he expects his mission to be closed at the end of the year, BNS reported on 14 November. While praising Latvia's accomplishments concerning citizenship and naturalization as well as the successful implementation of the state language-teaching program, Semneby noted that the Latvian election law setting language requirements for candidates to the parliament and local councils might prove an obstacle to EU and NATO accession. Semneby suggested as a compromise the abolition of the state language-proficiency requirement for candidates who obtained Latvian citizenship after 1991, and not setting a higher proficiency standard for candidates than the one needed to pass the language test for naturalization.

ITALIAN SENATE DEFENSE COMMISSION CHAIRMAN VISITS.
Domenico Contestabile discussed with parliament Chairman Janis Straume mutual relations between their countries as well as Latvia's efforts to join NATO and its relations with Belarus and Russia on 5 November in Riga, LETA reported. Straume stressed that Latvia hopes to be invited to join NATO in Prague next fall, while Contestabile reaffirmed Italy's favorable position on NATO expansion. Contestabile also informed Straume and parliament Defense and Interior Affairs Committee Chairman Dzintars Kudums about his recent trip to Belarus, where he found the Belarusians to be more tolerant toward NATO expansion. Kudums noted that recently in Moscow he found officials more willing to conduct dialogue, but unfortunately received only indirect replies to several specific proposals, such as the adjustment of Latvia's eastern border.

GOVERNMENT ACCEPTS CHANGES IN LANGUAGE REGULATIONS REQUIRED BY UN COMMITTEE.
On 6 November, the government amended the state language-proficiency regulations that were criticized by the UN Human Rights Committee, LETA reported. The committee ruled in August that the decision by the Riga Election Commission in 1997 to remove Antonina Ignatane, a Latvian citizen, from the list of candidates to the Riga City Council elections because she was deemed not to be fluent in Latvian was illegal. The amendments provide that the State Language Board will have the right to check only the authenticity of the language-proficiency certificate and not the actual proficiency of its holder.

NAZI WAR CRIMES SUSPECT KALEJS DIES IN AUSTRALIA.
Konrads Kalejs, a Latvian-born Australian citizen accused of being a Nazi war criminal, died in a Melbourne hospital on 7 November, BNS reported the next day. The Latvian Prosecutor-General's Office requested on 12 December 2000 that the Australian authorities extradite him and a Melbourne court granted its approval for the action in May. Appeals and the poor health of the 88-year-old suspect had delayed his return. He would have been the first Nazi war crimes suspect tried in Latvia since the country regained independence in 1991.

SOCIAL DEMOCRATS DO NOT DISCUSS COOPERATION OFFER FROM OTHER LEFTIST PARTY.
The new council of the Latvian Social Democratic Workers Party (LSDSP) at its first meeting in Riga on 3 November decided not to discuss the draft agreement on cooperation in the parliament proposed by For Human Rights In a United Latvia on 16 October, LETA reported. LSDSP Chairman Juris Bojars said it is not an urgent matter since elections to the parliament will not be held soon. The council decided to hear regular reports from the party's factions in the parliament and the Riga City Council, as such reports may be useful for campaign purposes. The next council session will be on 20 December in Jurmala.
* Polish President Aleksander Kwasniewski told President Vike-Freiberga in Warsaw on 5 November that Poland supports Latvia's membership in NATO, LETA reported the next day. He noted that he had mentioned this to Russian President Vladimir Putin during their recent meeting. Kwasniewski also urged Latvia to participate more actively in international forums to acquire more "advocates" for its integration into the European Union and NATO. Vike-Freiberga also spoke at the Central and East European leaders antiterrorism conference on 6 November.
* The attempt by 16-year-old ethnic Russian Alina Lebedeva from Daugavpils to slap Prince Charles in the face with a red carnation while he was visiting the Freedom Monument in Riga on 8 November received great attention in the media, BNS reported. While denying that she was a member of the National Bolsheviks, Lebedeva expressed support for its views and said that she was protesting Latvia's bid to join NATO and the war in Afghanistan. The next day accompanied by President Vike-Freiberga, Charles flew to Daugavpils where he visited a children's home, the Boris Gleb Cathedral, purchased honey at the city market, and attended a reception hosted by the Daugavpils municipality.
* The government decided on 6 November that the state-owned 3 percent share of the gas company "Latvijas gaze" would be sold at public offer for privatization vouchers, LETA reported. It also decided that no more than 200 shares could be obtained by any participant of the public offer, thus restricting the purchase opportunities by owners of large amounts of vouchers.
* President Vike-Freiberga discussed the latest developments regarding NATO expansion with U.S. Committee on NATO Chairman Bruce Jackson in Riga on 8 November, BNS reported.
* Privatization Agency Director General Janis Naglis told a press conference on 14 November that the European Bank for Reconstruction and Development (EBRD) wishes to participate in the privatization of the state-owned Ventspils nafta (Ventspils Oil), LETA reported. Ventspils Mayor Aivars Lembergs declared that a Russian financial company would be a more desirable partner for privatization.
* According to the Latvian statistics almanac for 2001, the country, with 43 higher education students per 1,000 residents, is tied with Spain for fourth place among the world's countries, BNS reported on 15 November. Only Canada (58), the U.S. (52), and Finland (47) have a greater per capita share of such students.
* National Fishing Board head Normunds Riekstins asserted on 15 November that next year Latvia will be allowed to haul 1,450 tons of cod in European waters, a decline of 27.5 percent from this year's quota, BNS reported. The EU quotas for fishing in Latvian waters were established at 950 tons of cod, down by 26.9 percent year-on-year.
* The consumer price index rose by 0.1 percent in October compared to September and by 3.3 percent compared to October 2000, LETA reported. Prices of goods rose by 0.2 percent while those of services remained steady.


LITHUANIA
LITHUANIA TAKES OVER LEADERSHIP OF COUNCIL OF EUROPE.
Foreign Minister Antanas Valionis officially took over the chair of the Council of Europe's Committee of Ministers at its 109th session in Strasbourg on 8 November, BNS reported. Valionis outlined priorities for the six-month term and noted that Lithuania is actively participating in European processes, and that the country's experience with democracy, regional cooperation, and good relations with neighboring states will be used to seek solutions to problems affecting all of Europe. Among the most important issues the council will deliberate during Lithuania's leadership are whether to accept Bosnia-Herzegovina as a member state; setting conditions for Yugoslavia's entry; and whether to return observer status in the council to Belarus, which was suspended in 1997. Lithuania will hand over the rotating chairmanship of the council to Luxembourg at the 110th session of the Committee of Ministers in Vilnius on 15-16 May 2002.

PRINCE CHARLES INTRODUCED TO MANY ASPECTS OF LITHUANIA.
Britain's Prince Charles began a three-day visit to Lithuania on 6 November with talks with President Valdas Adamkus that focused on bilateral political and economic relations as well as cultural exchanges. The next day the prince went to the parliament to open an exhibition on organic farming in Lithuania in which agricultural products grown on his Cornwall Estate farm and sold with the label "Duchy Originals" were included, BNS reported. Charles was welcomed there by parliament Chairman Arturas Paulauskas and Prime Minister Algirdas Brazauskas. Afterward, he listened to a short concert at the Academy of Music, toured the city's Old Town, and visited the University of Vilnius. Charles then traveled to the Pabrade army base near the eastern border to observe a U.K.-sponsored military exercise and to meet with Defense Minister Linas Linkevicius and armed forces commander Major General Jonas Kronkaitis. Prior to a formal dinner at the presidential palace, he also visited the St. Peter and Paul Church and met with Cardinal Audrys Backis at the Vilnius Archdiocese-sponsored Crafts Center.

CZECH DEFENSE MINISTER OFFER TO JOIN FORCES IN AFGHAN OPERATIONS.
Defense Minister Jaroslav Tvrdik on 13 November suggested to his visiting Lithuanian counterpart Linas Linkevicius that Lithuanian soldiers should join forces with the Czech antichemical unit in possible operations in Afghanistan, CTK reported. He said he has already agreed with Linkevicius that Lithuanian units will reinforce the joint Czech-Slovak peacekeeping unit in Kosovo. Tvrdik said that after Slovakia, Lithuania is "the closest" country in military cooperation with the Czechs and that the experience of this cooperation so far has been "excellent."

AGREEMENT ON SUPPLEMENTARY MEMORANDUM WITH IMF REACHED.
The IMF mission to Lithuania announced on 15 November that it has reached a preliminary agreement with the Lithuanian authorities on a supplementary memorandum of economic policies for the remainder of 2001 and for 2002, BNS reported. The agreement still has to be approved by the IMF's Executive Board, probably in January. The mission, headed by Patricia Alonso-Gamo, gave a positive assessment of Lithuania's macroeconomic policies, reform efforts, and economic prospects. It noted Lithuania's pledge to keep the budget deficit under 1.5 percent of GDP in 2002 and expressed support for the government's efforts to strengthen municipal finances and the finances of the health insurance fund, as well as for the planned privatization of the gas and power utilities Lietuvos Dujos (Lithuanian Gas) and Lietuvos Energija (Lithuanian Energy).

PARLIAMENT ADOPTS BILL ON IDENTIFICATION CARDS...
The parliament by a vote of 61 to 23, with 13 abstentions, adopted a law on 6 November that will make an ID card the principal personal identification document for Lithuanian citizens beginning on 1 January 2003, "Lietuvos rytas" reported on 7 November. The cards, which all citizens over the age of 16 will be required to obtain, will be used within the country, but will also be valid in foreign states with which appropriate agreements will be signed. The cards are expected to cost about 5-10 litas ($1.25-$2.50).

...APPROVES SALE OF ALCOHOL AT GAS STATIONS.
The parliament passed on 13 November amendments to the law on alcohol regulation, BNS reported. Those amendments abolish the ban on the sale of hard alcohol at gasoline stations and in sport establishments and health care facilities, and allow such sales outside houses of prayer at a distance to be determined by local governments. The measure was supported by the ruling coalition of Social Democrats and New Union/Social Liberals as well as the Liberal Union, but opposed by the Conservatives and Christian Democrats. The parliament also overrode by a vote of 77 to 36 with one abstention President Adamkus's veto of the law on the establishment of new private health care institutions. Adamkus had objected to the provision that local governments be required to approve the founding of such private clinics, arguing that this "would add up to bureaucracy and corruption, prevent competition among doctors, and limit access to quality medical care." The parliament also amended the law on excise duties by setting rules on reimbursing fuel costs to farmers and fishermen. The amount of compensation will be based on the actual volume of fuel purchased, but not exceeding 120 liters per hectare of agricultural land and 275 liters per ton of fish caught.

GOVERNMENT APPROVES PROGRAM FOR GAS UTILITY PRIVATIZATION.
The government approved on 14 November a program for the privatization of Lietuvos Dujos (Lithuanian Gas) which bars companies supplying natural gas to Lithuania, or local companies controlled by them, from becoming strategic investors in the utility, BNS reported. It had decided in October that equal 34 percent shares would be offered to the strategic investor and gas supplier. The clear goal of the program is to prevent the Russian gas companies Itera and Gazprom, which are the probable gas suppliers, from acquiring full control of the utility. Germany's Ruhrgas and EON Energie, as well as the French group Gaz de France, have already announced plans to participate in the privatization tender.

SHAREHOLDERS APPROVE REORGANIZATION PLAN FOR LITHUANIAN ENERGY.
The general shareholders meeting of the state-owned utility Lietuvos Energija (Lithuanian Energy) on 5 November approved the decision to reorganize the company by splitting it into five separate economic entities, ELTA reported. Lietuvos Energija would remain responsible only for the transmission of energy, while its other functions would be given to two newly formed electricity distribution companies, Western Distribution System and Eastern Distribution System, as well as to two power-generating facilities in Elektrenai and Ignalina. The meeting also voted to cut the utility's authorized capital of 1.81 billion litas ($452.5 million) by 40.4 million litas by spinning off five non-core business units, mostly construction companies and a hotel. Preliminary data released that day indicated that the utility had a profit of 83 million litas in the first nine months of the year.

CONSERVATIVES AND LIBERALS HOLD PARTY VOTES.
About 70 percent of the 17,000 registered members of the Homeland Union (Conservatives) participated in the party's primary to choose their candidate for president, which concluded on 11 November, ELTA reported the next day. Former Prime Minister Andrius Kubilius was the winner, receiving an overwhelming 90 percent of the votes. Parliament deputy Rasa Jukneviciene received 6.2 percent and former Social Affairs and Labor Minister Irena Degutiene 3.7 percent. The parliament deputies of the Liberal Union by a vote of 26 to five elected parliament Deputy Chairman Gintaras Steponavicius as the leader of their faction, replacing Rolandas Paksas, who resigned after losing the elections for the party's chairman to Eugenijus Gentvilas. Since the Liberal Union is the largest opposition party in the parliament, Steponavicius will also assume the post of leader of the opposition in the parliament.

U.S. REPORT ON RELIGIOUS FREEDOM IN LITHUANIA RELEASED.
A report on religious freedom by the U.S. State Department declared that Lithuania's Constitution guarantees religious freedom, except in cases when religious practices contradict laws, and that Lithuanian authorities respect this, "Lietuvos rytas" reported on 3 November. According to the report, there are 923 traditional and 176 nontraditional religious communities registered in the country, but 18.7 percent of the population does not practice any religion. About 70 percent of the 3.5 million population consider themselves to be Roman Catholics, and the other major religions are Russian Orthodox (about 180,000 members), Old Believers (50,000), and Lutherans (30,000). Jewish and Muslim communities have about 5,000 members each. The report notes that although the activities of foreign missionary groups are not prohibited, their representatives sometimes find it difficult to obtain work permits and encounter many other bureaucratic difficulties when seeking permanent residence permits. The Catholic Church has had the greatest success in recovering property that was nationalized under Soviet rule, and the main obstacles hindering other religions are a lack of funds and the bureaucracy.
* President Adamkus told Central and East European leaders at the antiterrorism conference in Warsaw on 6 November that their area is first of all a region of transit and greater efforts have to be made to combat illegal migration and drug trafficking as well as money laundering and corruption, BNS reported.
* Deputy Foreign Minister Giedrius Cekuolis during a three-day visit to London on 5-7 November delivered a speech at the conference "Finding a Place in Europe: Estonia, Latvia and Lithuania" at the University of London on 6 November, BNS reported. He also discussed the international war on terrorism and security policy issues with representatives of the prime minister's cabinet and the Foreign Affairs and Defense ministries the next day.
* U.S. Committee on NATO Chairman Bruce Jackson held talks on 12 November with President Adamkus, Prime Minister Brazauskas, Foreign Minister Valionis, Defense Minister Linkevicius, and members of the parliament's NATO Commission, and gave a lecture on NATO enlargement scenarios at Vilnius University, ELTA reported. He predicted that the NATO summit in Prague next fall would probably admit five to seven new members, including the Baltic states.
* China's Deputy Foreign Minister Lu Guchang in Beijing on 7 November told visiting Lithuanian journalists who were completing a week-long visit of the country that China supports Lithuania's efforts to join the European Union, BNS reported. He affirmed China's support for the fight against international terrorism in Afghanistan, but called for greater attention to reducing civilian casualties.
* President Adamkus declared on 7 November that he would be willing to sign the proposed government budget for 2002 if additional funds would be assigned for school computerization and the transportation of children by rural school buses, ELTA reported.
* Although 33 parliament deputies signed an appeal expressing a lack of confidence in Health Minister Konstantinas Dobrovolskis, only 15 votes were cast in favor of his removal on 8 November, ELTA reported. Even before the vote it was clear that he would remain in office, since the ruling coalition had decided not to participate in the vote, making it impossible to gain the 71 votes needed for his removal.
* On 15 November Norddeutsche Landesbank Girozentrale (Nord/LB) won the tender to purchase a 76.01 percent share of the last state-owned bank, the Agricultural Bank (LZUB), ELTA reported. The purchase price was not announced, but unofficial sources indicate that Nord/LB agreed to pay about 70 million litas ($17.5 million) and to invest double that amount.
* U.S. Ambassador to Lithuania John Tefft spoke at the opening of a Military Cartographic Center in Domeikava just outside Kaunas on 7 November, ELTA reported the next day. The U.S. Defense Department's National Imagery and Mapping Agency provided $2.6 million of the $4 million cost of the center, which is now the most modern facility of its type in Eastern Europe.
* The U.S. Trade Representative released a report evaluating Lithuania's progress in the protection of intellectual property, ELTA reported on 8 November. It noted that laws have been passed providing for imprisonment or fines for the use and distribution of illegal software, video and music records, but ineffective border control has resulted in widespread sales of pirate CDs, DVDs, and other related products.
* The parliament by a vote of 61 to one, with five abstentions, on 15 November gave initial approval to a draft amendment to Article 47 of the constitution, which would allow foreigners and corporate entities to purchase farmland, ELTA reported.
* Specialists of the Vilnius public health center on 5 November decontaminated the U.S. Embassy building in Vilnius, which might have been infected with anthrax spores from a contaminated mailbag, ELTA reported.
* The consumer price index in October rose by 0.3 percent compared to September and 2.3 percent compared to October 2000, ELTA reported on 12 November.


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