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Baltic Report: June 7, 2000


7 June 2000, Volume 1, Number 20
ESTONIA
ESTONIAN CENTRAL BANK RENOMINATES FORMER HEAD.
The council of the Bank of Estonia renominated Vahur Kraft as governor of the central bank by a vote of five to three, ETA and BNS reported on 1 June. Kraft's first term as governor expired six weeks ago. This appears likely to end the struggle between Estonian President Lennart Meri and the council. Meri had rejected the council's nominee, Mart Opmann, and given the council until 19 June to propose a new candidate. Although the council members continued to back Opmann, he withdrew his name from consideration on 29 May rather than fight charges he had mishandled government funds during his tenure as finance minister. Opmann was nominated after Kraft's successor, Vello Vensel, a statistics professor, resigned from the post even before officially taking up his duties. Opposition parties, led by the Center Party, have charged that the election of Kraft to another five-year term raises doubts that the Bank of Estonia will answer questions concerning its involvement in the bankruptcy of several commercial Estonian banks, and claims that millions of dollars of assets are missing from the central bank, the daily "Eesti Paevaleht" reported 3 June. It is not yet known if Meri will accept Kraft's nomination as governor.

MERI SAYS ESTONIA MAY ENTER NATO ALONE.
President Lennart Meri said that Estonia did not insist on entering NATO along with the other Baltic countries, Lithuania and Latvia, AP and CTK reported 30 May. Meri made the remarks to journalists while on a three-day official visit to the Czech Republic. "It depends on each candidate how well prepared they are," Meri told a news conference after meeting with Czech President Vaclav Havel in Prague. When asked whether the three Baltic states should be admitted to NATO at once, Meri said, "NATO nowadays is mostly about principles, not arms...which eases us from the duty to remain in a convoy where the pace is set by the slowest ship." Reuters reported. Meri seemed to be rejecting the formula advocated earlier in May at a Vilnius conference of all nine candidates for NATO membership. The participants had sent a declaration to NATO urging the alliance to invite them all, including Estonia, to join in 2002. The participants also pledged to work together to ensure that invitation happens. Meri, in an address at Prague's Charles University on 31 May, said that the Vilnius declaration shows that the nine candidates "from Estonia in the North, to Bulgaria in the South, are not competitors, but partners" in the enlargement process.

THOUSANDS PROTEST UNEMPLOYMENT IN NORTHEAST.
Some 5,000 protestors formed a human chain between the cities of Narva and Johvi on 3 June to protest unemployment and further job cuts in the region, especially in sensitive sectors such as mining and energy, ETA reported. Participating trade unions urged the government to consider the social problems that may be caused by the privatization and restructuring of the energy sector, which analysts predict will be accompanied by massive job cuts. The head of the EAKL trade union, Kadi Parnits, has requested a meeting with Prime Minister Mart Laar to discuss ways to reduce unemployment in the northeast where the official jobless rate stands at 20 percent.

CRIMINAL CASE LAUNCHED AGAINST ESTONIAN STATISTICS DEPARTMENT.
Tallinn Police on 2 June launched an investigation into the Statistics Department over allegations of a secret database compiled from the findings of the 2000 census, BNS reported. A watchdog group claimed that the scanning of census forms into computers constitutes the creation of an illegal database. The Statistics Department, for its part, has denied any wrongdoing, saying it is only storing the documents. Interior Minister Tarmo Loodus on 1 June suggested the activities were illegal, while Statistics Department head Rein Veetousme responded that there is a misunderstanding about the situation. Veetousme told BNS that all activities involving data from the census are in strict compliance with the law. "Postimees" added that Finance Minister Siim Kallas is defending the Statistics Department against accusations by Loodus. Kallas is from the Reform Party, while Loodus belongs to the Pro Patria Union.

LUKIN IN ESTONIA TO PROMOTE TIES.
A delegation of the Russian Duma, led by Deputy speaker Vladimir Lukin, visited Estonia 29 May-2 June, BNS reported. Lukin said during his visit that issues involving the Russian-speaking community in Estonia remain the biggest problem in bilateral relations. He called particular attention to the problems of the Orthodox church there as well as to language and integration issues. Lukin expressed his hope that Estonia's membership in the European Union would not worsen economic relations and visa policy vis-a-vis Russia. Estonian deputy speaker Siiri Oviir asked her Russian counterpart to consider establishing a Russian information center in Tallinn and converting the Tallinn movie theater in Moscow into an Estonian cultural center which could be used by the Moscow-based Estonian Society and the 46,000 Estonians living in Russia.

* Police arrested a man on 2 June suspected of making a bomb threat against Stockmann's department store on 30 May. Police have already arrested three suspects in the explosion of two small bombs at the store on 19 May that slightly injured customers--one of those arrested is a security guard with ESS Security, which provides security to Stockmann's.


* The Estonian Parliament on 31 May ratified the European Social Charter, adopting all nine obligatory articles--seven of them in full and two with reservations, BNS and ETA reported. The vote was 51 to 0 with 1 abstention. The parliament adopted the article about equal pay for men and women as well as the article on the right of everyone to receive information and consultation. This latter clause allows employees to receive regular information about the financial condition of the firms they work for. The European Social Charter, approved by the Council of Europe on 3 May 1996 has been signed by 21 members. Estonia signed on 4 May 1998.


* The Riigikogu voted on 30 May to extend the stay of Estonian peacekeepers in Kosova for one year and increased the detachment's number from 10 to 30 soldiers. Estonian peacekeepers are part of a larger Italian unit.


* Hungarian Prime Minister Viktor Orban said in Tallinn that Hungary is strongly in favor of Estonia's NATO candidacy. Orban said "Hungary, as a member of NATO, feels solidarity with all other nations who lived under duress in the previous decades," and "We want to do everything within our power to help the countries who would like to join and are able to join NATO--to remove all obstacles and make sure of their eventual entry into NATO."


* An Estonian-Russian joint commission meeting in Tallinn decided on 30 May to abolish the 26 percent income tax imposed in February on Russian military pensioners, BNS reported. There are about 10,000 Russian ex-military and their family members living in Estonia, and the pension they receive from Russia for many of them is their only source of income. The Russian Embassy had protested the new tax as violating the bilateral agreement on social protection of military pensioners signed by Estonia and Russia in 1994.


* Estonian deputy Kristiina Ojuland, the head of Estonia's delegation to the Parliamentary Assembly of the Council of Europe (PACE), attended a two-day seminar in Vladikavkaz sponsored by PACE, the capital city of North Ossetia, on the protection of human rights in the North Caucasus, BNS reported 1 June. At the PACE meeting, Ojuland said that Russia, as a member of the Council of Europe, has an obligation to secure and observe human rights in Chechnya.


* Prime Minister Mart Laar said in an interview printed in "Postimees" on 2 June that he wants to start a discussion about moving Estonia's administrative capital from Tallinn to Tartu. The government has already ordered the Ministry of Education to move to the southern city, which is the home to a major university. Laar said that in evaluating Estonia's regional development "we must have the courage to discuss this matter seriously."


* Estonian farmers can apply for five different types of direct subsidies from the government this year, ETA reported 30 May. The Estonian government has allocated 236.4 million kroons ($14 million) for subsidies to ewe and goat breeders; grain, legume and seed growers; farmers adopting environmental friendly production methods, farmers who already use environmental protection methods; and cow breeders.


* The Estonian power monopoly Eesti Energia signed another three-month agreement with the Russian utility Lenslanets on 30 May, ETA reported. Eesti Energia will produce energy for the Russian company from 120,000 tons of Russian oil shale. The agreement is based on a barter arrangement. Eesti Energia will keep part of the electricity generated from the Russian oil shale, which is supplied by Lenslanets.


* The proposed imposition of an 18 percent value added tax (VAT) on heating threatens to disrupt the ruling three-party coalition. The policy-making board of the People's Union-Moderate Party decided unanimously on 3 June that the VAT on heating should be introduced gradually, starting at 5 percent, BNS and ETA reported. The Moderates fear that otherwise 12,000 additional families will seek welfare benefits, increasing the burden on the state budget, a spokesman for the Moderates told BNS. The government has promised the International Monetary Fund that the VAT on heating would be imposed by 1 July.


* A poll by EPL showed support for the leading opposition party--the Center Party--down to 21percent from 26 percent a month ago, while governing coalition member Pro Patria jumped to 19 percent from 17 percent. Following them is the Moderates--down to 12 percent from 16 percent, and the Reform Party, inching up to 11 percent from 10 percent.


* The International Conference of Liberal Parties turned down the Estonian Center Party's application to join the organization during a meeting in London on 21 May. The conference includes 80 parties from 73 countries, BNS reported 1 June. The organization said that the Center Party will have to carefully review its program. The only Estonian member, the Reform Party, opposed the Center Party's admission. Reformist MP Kristiina Ojuland told BNS in February that the Center Party is not a liberal party and that it is "at war against a liberal world outlook."


* The Tallinn City council on 1 June rejected a bill sponsored by opposition deputy Vilja Savisaar calling for the separation of the borough of Nomme from the capital, BNS reported. The bill was rejected by a vote of 25 to 21. Savisaar, former head of the Nomme borough and wife of Center Party leader Edgar Savisaar said that she would redraft the bill and present it again. Nomme, a prestigious suburb of mostly private homes in southwestern Tallinn, has a population of 35,350 covering an area of 28 square kilometers.


LATVIA
LOCAL VOTING FOR NON-CITIZENS SURFACING AS ISSUE.
On 30 May a group of non-citizens in Latvia launched a petition drive in support of their right to vote in local elections, ITAR-TASS reported. If the petition receives 134,000 valid signatures, the Latvian Central Commission must place the question on the ballot as a referendum. Prime Minister Andris Berzins said in an interview on Latvian State Radio on 1 June that the "proportion of non-citizens in the state should be comparatively small in order to allow them to participate in local elections." Last week, Berzins said that it was his personal opinion that non-citizens could be granted voting rights in the "elections after the next one," LETA reported. Latvian President Vaira Vike-Freiberga on 1 June told a channel 4-Studija television program that she does not support granting the right to vote to non-citizens in local elections because this "privilege applies only to citizens." Vike-Freiberga said she put the question of non-citizens voting in local elections to French government officials during her recent visit to France and "they responded it would be absurd." Latvia has over 500,000 residents without Latvian citizenship.

LATVIAN EXTREMISTS SENTENCED.
Six members of the radical Latvian organization Perkonkrusts (Fire Cross) were found guilty and sentenced by a Riga Regional Court on 29 May for several acts of terrorism and vandalism, LETA and AP reported. Three of the individuals were released for time served, while another received a suspended sentence. Two others were sentenced to three years in jail, and they were all ordered to pay restitution of 21,000 lats ($36,000) for damages caused by bombs planted by the group. In 1997, the leader of the group, Valdis Raups, was inadvertently killed when the bomb which was set at a Soviet-era monument in Riga exploded prematurely. The six members who were arrested in late 1998 were accused of also attempting to bomb the Riga headquarters of the state-owned utility Latvenergo, and the capital's central heating plant. Perkonkrusts had called for "ridding Latvia of the remnants of Soviet occupation."

RUSSIA SLAMS LATVIAN PRESIDENT'S INTERVIEW.
The Russian Foreign Ministry lashed out at President Vaira Vike-Freiberga's remarks about Russia, saying that her comments in an interview with "Der Spiegel," a German news magazine, published over the weekend were "aggressive in tone." Reuters, AP, LETA, and ITAR-TASS reported on the latest exchange, described by Reuters as a "war of words." In the interview, Vike-Frieberga noted that instability in Russia made her nervous. In answer to the question of whether she could imagine the Russian army occupying Latvia again, she said it is not impossible to imagine that. "Russia is extremely unpredictable. The country is not very stable. Its democratic base is questionable...We are not saying Russia will do this or do that. But the simple fact of its unpredictability makes me fearful." Earlier in May, Vike-Freiberga accused Russian officials of harking back to the Cold War by opposing Latvia's accession to NATO. The statement of the Russian Foreign Ministry called the content of the interview "unfriendly toward Russia" and "another example of the two-faced approach from the head of the Latvian government."

LATVIAN POPULATION CONTINUES TO DROP.
The latest data released by the Central Statistics Office show Latvia's population continues to decline, although the rate of decrease has slowed, BNS and AP reported on 31 May. In 1999, the 15,200 person decline represented a rate of 0.6 percent, while in 1998 it declined at a rate of 0.8 percent. The population at the end of 1999 stood at 2.424 million due to an increase in births. Some 19,400 children were born in 1999--the first rate increase since 1988 when 42,000 babies were born in Latvia. Gunta Robezniece of the Ministry of Welfare told AP that the rise in births "is the first hopeful sign we've seen in a long time, but the overall decline in population is still a cause for concern." In 1999, some 1,800 people arrived to live in Latvia, while twice as many emigrated to live abroad. Among the 13,400 residents who died in 1999, the leading cause of unnatural death was suicide--764 people, followed by car accidents--736, while 366 persons drowned.

* Branko Milanovic, the resident World Bank representative in Latvia, told a press conference in Riga on 31 May that 20 percent of Latvia's residents are poor. The WB defined 28 lats ($48) monthly per person as the poverty level--this is close to the amount of a minimum pension, and one-half of the government's calculated subsistence level. The World Bank has criticized Latvia because it has left the problem of fighting poverty to local governments, where the most indigent municipalities are not able to cope with the scale because of inadequate tax income.


* Minister of Welfare Andrejs Pozarnovs told a press conference in Riga on 31 May that Latvia will be forced to import doctors from abroad if physicians continue to quit the health care system because of low salaries, LETA reported. Pozarnovs said 342 physicians left the system in 1997 and 683 left in 1998, most of them young physicians. The ministry has requested an additional 35 million lats ($56 million) for health care, primarily to increase the salaries of medical personnel.


* The Central Statistical Bureau released first quarter figures for 2000 which show that the highest retirement pensions in the Baltic countries were in Latvia. The average monthly pension in Latvia was valued at $99.70, in Estonia $97.90, and Lithuania $78.08. However, during that same first quarter, the lowest average gross salary was for employees in Latvia, valued at $241.10 per month. In Lithuania the gross average monthly salary was $264.18, and in Estonia it was $284. Wages rose 11 percent in Estonia during the first quarter of 2000, and only 7.5 percent in Latvia, and 2.4 percent in Lithuania.


* The State Auditor's Office announced on 30 May that the State Chancellery should repay some 50,000 lats ($80,000) to the budget for careless use of funds, BNS reported. The report accused the deputy director of the chancellery, Talivaldis Zamozdiks, of corruption. Chancellery Director Gunta Veismane immediately fired Zamozdiks saying "he is guilty and has no place here anymore." The post-audit report also showed that funding allocation to the chancellery should be reduced by a further 70,000 lats.


* Prime Minister Andris Berzins believes that Latvia will become energy independent if the proposed merger between Latvia's Latvenergo and Estonia's Eesti Energia becomes a reality. Berzins told LETA 1 June that in the spring, when Latvia has enough water to produce hydroelectricity, Latvia sells electricity to Estonia, while later in the year, the Estonians fire their oil shale plants and sell excess electricity to Latvia.


* Whether there is a merger or not, privatization of Latvia's utilities remains unpopular. LETA reported on 31 May that a poll conducted in April by SKDS showed that 81.6 percent of Latvian residents believe that the state joint-stock utility Latvenergo must remain state property. Only 13.3 percent of those polled are against retaining Latvenergo as a state owned enterprise, and 5.1 percent have no opinion. This is an increase over last year, when 74.6 percent agreed that Latvenergo must remain a state-owned utility. On 1 June, a campaign began to collect signatures against the privatization of Latvenergo, which needs to collect 134,000 signatures by 30 June, Kristine Berzina, a Central Election Commission spokesperson, told LETA.


* Ventspils Mayor Aivars Lembergs told LETA on 1 June that LUKoil, Russia's largest oil company, could become a "strategic partner" for the Ventspils port in handling chemical products. Lembergs was hosting the visit of Alexei Smirnov, vice president of LUKoil's chemical products department. LUKoil has recently bought a 51 percent share of VARS, the Ventspils chemical freight terminal.


* The newspaper "Diena" on 31 May appealed the decision made by the Prosecutor-General's office not to initiate a criminal case against Ventspils Mayor Aivars Lembergs and Olegs Stepanovs, the council chairman of the joint-stock company Kalija Parks. Diena's editor-in-chief, Sarmite Elerte, told LETA that they are pursuing the case because the voting public has the right to know "whether a public figure--Ventspils Mayor Aivars Lembergs--has operated in his own interest or the national interest in the case of the off-shore company Multinord AG."


* About 300 farmers picketed near the site of an international agricultural conference being held in Riga on 30 May, LETA and ITAR-TASS reported. The farmers were protesting deteriorating living conditions in the countryside, and blamed Latvian authorities for "collusion" with the European Union. Seventeen percent of Latvia's population is employed in agriculture, while in EU countries it is an average of 27 percent. The chairman of the Latvian Farmers Union, August Brigmanis, told LETA that the farmers are demanding a price of no less than 70 lats per ton ($112 per ton) for grain, and subsidies for five years. If the government and Saeima do not take concrete steps to improve conditions for Latvia's farmers, Brigmanis said that the farmers will consider extensive strike action and other protests after 1 July.


* A delegation from the Michigan National Guard brought 27 influential, Michigan-based businessmen to Latvia, LETA reported on 30 May. The businessmen are interested in seeing the Latvian investment climate and establishing contacts with local enterprises. According to the U.S. Chamber of Commerce in Latvia, Meijer Thrift Acres CEO Fred Meijer is among the group. The company's chain includes 114 stores with a turnover exceeding $8.5 billion a year. The Michigan National Guard, with funding from the U.S. military, has been helping to train Latvian defense forces since 1993. Many of the guardsman are themselves businessmen.


* The May popularity poll from SKDS shows that Latvian President Vaira Vike-Freiberga retains first place with a 59.1 percent rating, followed by Einars Repse, governor of the Bank of Latvia, with 44.8 percent. Defense Minister Girts Valdis Kristovskis at 43.5 percent, Culture Minister Karina Petersone at 43.4 percent, and Prime Minister Andris Berzins at 43.2 percent are the most popular cabinet members. Most disliked is Finance Minister Gundars Berzins at -20.8 percent. And former Prime Minister Andris Skele has fallen to -46.6 percent, below even old soviet Communist Party chief Alfreds Rubiks who is at -45.8 percent.


* The First Latvian Children's Parliament opened on 1 June in Latvia's parliament building, LETA reported. President Vaira Vike-Freiberga wished the young delegates a serious and productive legislative session, and "to become responsible, bright and far-sighted politicians who deserve the admiration and respect of the people." The government-sponsored Children's Rights Protection Center, which sponsored the event, said that the Children's Parliament is aimed at creating cooperation between children from various social and ethnic groups in Latvia, and also giving children the opportunity to express their opinions on urgent problems in Latvia and worldwide.


LITHUANIA
LITHUANIA HOLDS CONFERENCE ON WWII CRIMES.
The fourth session of the International Commission for the Evaluation of Nazi and Soviet Crimes was held at the parliament on 1 June. Speaking at the session, Prime Minister Andrius Kubilius was unusually direct about the role of Lithuanians in the Holocaust, saying "we must clearly say to ourselves and our children that Lithuanians participated," adding that "it is the only way to live with one's conscience and the international democratic community," BNS and ELTA reported. Kubilius also warned about the resurgence of extremism in Europe "and sometimes even in Lithuania," alluding to the resurgence of a neo-Nazi group and the recent political success of radical organizations in local elections. Lithuanian MP Emanuelis Zingeris, chairman of the commission, discussed the extensive Holocaust education program Lithuania has developed and its implementation. Ambassadors of a number of Western countries who pledged their support were briefed on the Holocaust education program at the Foreign Ministry on 31 May.

SLAVE LABOR COMPENSATION ISSUE REOPENED WITH GERMANY.
The Lithuanian government on 29 May formally asked the German government to revise its law on compensation to persons who suffered under the Nazi occupation, ELTA and BNS reported. Vygaudas Usackas, vice minister of Lithuania's Foreign Ministry, met with German Ambassador to Lithuania Detlof von Berg and asked him to convey to his government a petition that compensation for forced labor during World War II be paid directly to Lithuanian victims rather than via any foundation or other offices in third countries. The draft law now before the Bundestag, Germany's lower house of parliament, directs that the Russian and Belarusian foundations for "Understanding and Reconciliation" should establish special offices of administration to accept complaints in the Baltic states. This action by the Lithuanian government rejects an agreement made by the previous government headed by President Algirdas Brazauskas and Prime Minister Adolfas Slezevicius in which Lithuanian victims gave up their claims to any future compensation in exchange for a payment to the state of DM 2 million to build nursing homes for Nazi victims. Russia has also claimed to be the legal agent for Nazi victims in the Baltic states before the Austrian government, which recently earmarked compensation for forced laborers from Central and Eastern Europe.

LITHUANIAN CARDINAL'S LEGACY.
An estimated 20,000 mourners in Kaunas crowded the city's 15th century cathedral and spilled into the City Hall Square attending the funeral of their beloved bishop emeritus, His Eminence Vincentas Cardinal Sladkevicius, on 1 June, ELTA reported. The funeral mass, which began at 11, was held by Pope John Paul II's personal emissary, Primate Cardinal of Poland Jozef Glemp and ten concelebrants, including the Vatican's apostolic nuncio for the Baltic states, Erwin Josef Ender; the Holy Father's representative to Lithuania's second Eucharistic Congress, Archbishop of Upper Bosnia Cardinal Vinco Puljic; the bishop to Lithuania's diaspora, Paulius Baltakis; and bishops from Lithuania, Latvia, Russia, Belarus, and Kazakhstan. Polish Primate Cardinal Glemp spoke both in Lithuanian and in Polish, remembering His Eminence for his "humility, obedience, goodness, and his belief that service to the Church was also service to the entire Lithuanian nation." Following the mass, young clergymen and students of the Kaunas seminary carried the coffin around the cathedral and to the crypt of the Holy Sacrament Chapel for burial. Farewell speeches were given by Seimas Speaker Vytautas Landsbergis, Kaunas Vice Mayor Gediminas Jankus, and Monsignor Kazimieras Vasiliauskas. The last rites were led by Bishop of Kaisiadorys Juozas Matulaitis. Kaisiadorys was the hometown of the late cardinal. With the conclusion of the cardinal's funeral, all the church bells of Kaunas rang out--declaring the start of the country's four-day Second Eucharistic Congress, which had been planned with the help of His Eminence. Over 10,000 Catholics and countless guests participated in events at 22 sites throughout Kaunas that were sponsored by 100 various church institutions--parishes, seminaries, convents, and lay organizations. The first congress was held in 1934.

OMBUDSMAN RULES SEX DISCRIMINATION IN CANCER TREATMENT.
The Office of the Ombudsman for Equal Opportunity ruled on 2 June that the national health service is discriminating against males in the funding of cancer treatment, and ordered the Ministry of Health to "adjust the list of medicines subject to compensation." The charge, made in April by a group of 400 prostate cancer patients, claims that the health service pays in full for drugs treating breast cancer while offering only partial payment for drugs fighting prostate cancer. However, Minister of Health Raimundas Alekna claimed there can be no comparison between the breast and prostate cancer treatments, adding that the prostate cancer drug was optional rather than an indispensable therapy, LETA reported.

* Having warned the government of Belarus that appointing a general indicted for participation in the attempted 13 January 1991 coup d'etat in Lithuania to the post of deputy defense minister may damage bilateral relations, Lithuania took steps this week to implement that threat, BNS reported 30 May. The Lithuanian Foreign Ministry suspended scheduled political consultations with the Belarusian Foreign Ministry. An official visit of a high-ranking Lithuanian diplomat to Minsk scheduled for June was also cancelled. The Lithuanian Foreign Ministry reprimanded the Vilnius City Council for allowing a visit by a delegation of Minsk city officials to proceed. The Lithuanian Defense Ministry announced that the appointment of General Uskhopchik "has become a serious obstacle for dialogue between the Lithuanian and Belarusian defense ministries." This action effectively isolates the Belarusian military attache accredited in Vilnius.


* The Defense Council of Lithuania on 29 May voted to increase troop levels to 13,000 from the current level of 11,500, BNS reported. This means that 4,700 persons will be drafted this year rather than the 3,900 in 1999. The council also approved the establishment of an Air Defense Battalion which will be deployed outside the city of Siauliai in northern Lithuania. Defense Minister Ceslovas Stankevicius said that these are realistic targets for this year even though the defense sector is receiving only 70 percent of its budget allocation planned for the first six months of 2000.


* The United States officially closed its foreign aid mission in Lithuania and cut off most aid on 31 May, AP and ELTA reported. The US Agency for International Development (USAID), which had provided $89 million since 1992, said that Lithuania's economic and democratic structures were now strong enough to stand on their own and there is no need for further technical assistance. Some special projects--such as money to help upgrade safety at the Ignalina nuclear power plant and advisors to the Finance Ministry--will continue. USAID in neighboring Poland, which began its work in 1989, will close its office in July. The U.S. government leaves behind the Baltic American Partnership Foundation and the Baltic American Enterprise Fund to continue a program of grants and loans in Lithuania, Latvia, and Estonia over the next few years.


* The Lithuanian government approved the appointment of Aidas Pikiotas to head the state-run social insurance fund, SoDra, ELTA, and BNS reported 31 May. SoDra has been racked by financial problems and has been running an official deficit since 1996. It's deficit has widened to 170 million litas ($42.5 million) as of 25 May, and is covered by a series of government-guaranteed bank loans. Pikiotas, age 29, has a degree in economics and was deputy head of the Asset Valuation and Management Unit of the state-owned Zemes Ukio Bankas (Agriculture Bank) before his nomination as SoDra director.


* The State Property Fund on 30 May announced the winner of the privatization tender for Zemes Ukio Bankas (Agriculture Bank) as a consortium of Poland's Pekao and Italy's UniCredito Italiano, ELTA reported. The government is selling 76 percent of the third largest bank in the country--which experts believe should bring in over 100 million litas ($25 million). The Polish-Italian consortium entered the only bid for the privatization. UniCredito, along with Germany's Allianz, owns a majority stake in Pekao.


* Stephen Smith, founder and head of the Beth Shalom Holocaust Memorial Center of Great Britain, told BNS on 30 May at the end of a five-day visit to Lithuania that the country "is starting to understand what happened during the war, and realize that the history of Lithuanian Jews is an inseparable part of Lithuanian history." Smith has visited Lithuania nine times over the past three years and credits the change in public attitudes to a group of historians working in Lithuania who have studied the archival documents, made them public and "made a weighty utterance, " he added.


* President Valdas Adamkus signed a decree on 30 May to fire Klaipeda's seaport District Court Judge Ona Gailiuviene "for disgracing the judicial office by her conduct." Gailiuviene was caught accepting a $2,000 bribe on 11 May. Prosecutor-General Kazys Pednycia has begun legal proceedings against Gailiuviene.


* The Kaunas City Council on 2 June voted an increase in the heating tariff charged by debt-ridden Kauno Energija. The utility will now be able to charge 12.48 centai per 1 kWh instead of the former 11.98 centai per 1 kWh. Two weeks ago, the Swedish power company Vattenfall withdrew its offer to lease the utility in part because Kaunas officials had insisted they would not allow a rate increase.


* Lietuvos Energija plans to resume selling electricity to Belarus on 1 July despite the country's debt of $80 million to the utility. ELTA reported on 2 June that 19 Lithuanian and foreign firms have applied for the utility's tender offer to assume the right to extract $56 million of the Belarusian government's debt.


* ELTA reports that pressure is building for Algirdas Balcytis, mayor of the western Silute district, to resign because of corruption charges. Arturas Paulauskas, leader of the New Alliance (Social Liberals), formally suspended Balcytis from the party on 26 May. Balcytis is accused of funneling municipal funds designated for relief from the damage of Hurricane Anatoli into two companies he controls, estimated at 84,500 litas ($21,125). He was elected mayor in the March municipal elections. Reports suggest that Balcytis has reneged on an agreement with Paulauskas to resign as mayor.


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