Baltic Report: August 16, 2000

OPPOSITION CHALLENGES NRG DEAL IN THE COURTS.
A Tallinn administrative court on 2 August dismissed a suit filed by the parliamentary opposition to stop the proposed sale of a minority stake of the country's power plants to U.S. company NRG Energy, BNS reported. The court used a technicality to dismiss the case ruling that it was too early to challenge the government's ongoing negotiations with the U.S.-based company. Center Party chairman Edgar Savisaar and the Estonian People's Union leader Villu Reiljan filed the action on 31 July, arguing that the NRG agreement violates the constitution and various laws on energy and competition, BNS reported. The two called NRG an "illegal third party" and stressed that the parliament and not the government has the powers to deal with this issue. The opposition parties said they will appeal.

STRUGGLE OVER NRG DEAL CONTINUES.
At an extraordinary session of parliament on 14 August, the government, the supervisory council of Eesti Energia (Estonian Energy), and U.S.-based NRG Energy made public the latest terms being negotiated by the parties for the sale of the state-owned Narva power plants, ETA and BNS reported. NRG has agreed to increase its purchase price for 49 percent of the shares in the two electricity-generating plants and their oil shale mines to $70.5 million while the investment in upgrading the mining operation and plants will remain at $440 million. NRG will also set up a regional social fund of $5 million to help Narva residents. The Estonian government will not provide any financial guarantees to Eesti Energia or NRG. At present the terms of sale specify that the Narva plants will provide 6.2 terawatt-hours of electricity to Eesti Energia annually at a weighted average price of 41.35 cents per kilowatt-hour, excluding inflation. On 11 August, the chairman of the Eesti Energia council, Juri Kao, told ETA that he could not support the current terms of the proposed sale, but he expressed hope that NRG will continue to meet the council's concerns. Economics Minister Mihkel Parnoja, on behalf of the government, has struggled to conclude the negotiations over the last few weeks, including threatening to issue a directive to the government-appointed Eesti Energia council on 11 August. President Lennart Meri, who earlier had expressed doubts about the proposed sale, on 9 August welcomed Prime Minister Mart Laar's promise to support Estonia's energy integration with the West. ETA reported that Meri said: "This is a big step towards fortifying the economic security of the Republic of Estonia."

PRIVATIZATION OPPONENTS SHIFT TACTICS.
A second opposition-sponsored extra session of parliament failed on 7 August due to a lack of quorum as the ruling coalition boycotted the session. The session was called to deliberate both the privatization of the nation's railways, Eesti Raudtee, and the audit of the central bank, but less than the 51-member quorum appeared, BNS reported. An earlier opposition-sponsored session on 25 July called to discuss the privatization of the country's main power plant failed for lack of a quorum, but the session called for August 14 succeeded. The opposition has threatened to paralyze the next regular session of parliament scheduled to start on 11 September. The opposition parties continue to collect signatures for holding a referendum on the privatization of the state-owned power plants and railway. On 11 August, BNS reported that 110,000 of the 150,000 needed signatures had been collected. Demonstrations organized by the opposition Center Party and People's Union protesting the government's privatization plans for the Narva power plants and railways took place in front of the parliament building the week of 7 August.

* A poll conducted by EMOR published on 4 August indicated that public support in Estonia was higher for NATO than for the EU, ETA reported. Some 61 percent of respondents supported Estonia's membership in NATO, while only 40 percent supported entry into the EU. Another 26 percent voiced objection to joining NATO, while 35 percent were against EU membership. NATO support is stronger among ethnic Estonians at 63 percent, while among non-ethnic Estonians the NATO support rate is only at 23 percent. On the other hand, non-ethnic Estonians showed higher support for EU membership, at 58 percent, while 43 percent of ethnic Estonians supported EU entry.

* Officers of the British territorial army will be training instructors and volunteers of the Estonian home guard, the Kaitseliit (Defense League), in the second half of August. Officers and non-commissioned officers will train the Kaitseliit companies in patrolling and related matters at the Peacekeeping Operations Center in Paldiski, BNS reported on 11 August.

* Tiit Tammsaar, chairman of the parliament's defense committee, said that the orders and legal acts issued by the acting commander of the Estonian Defense Forces, Lieutenant-Colonel Aare Ermus, are illegal because he is not acting commander of the defense forces, the daily "Eesti Paevaleht" reported on 8 August. Tammsaar said: "According to the constitution, the president has no right to dismiss the commander of the defense forces or appoint an acting commander." On 30 June, President Lennart Meri dismissed Lieutenant-General Johannes Kert and appointed Ermus in his place. The parliament's national defense committee will meet on 14 August to discuss what Tammsaar calls a security crisis, but neither the defense minister nor the president have commented on Tammsaar's accusations, ETA reported.

* More than 500 Estonia's residents have been deported from foreign countries for visa violations in the first six months of this year, BNS reported on 9 August. This includes Estonian citizens, non-citizen residents and those transiting through Estonia. The largest number of people were turned back by Finland, followed by Great Britain and then the other Nordic countries.

* A joint Estonian and European Union committee has distributed 200,000 kroons ($11,600) to three Euroskeptic organizations in Estonia to finance their projects, BNS and ETA reported on 8 August. The association "Eurodesintegrator" headed by former Estonian MP Kalle Kulbok received 20,000 kroons to maintain its web site and 50,000 kroons to print leaflets and fund a speakers' bureau. The movement "No to the European Union" was provided 70,000 kroons to organize TV talk shows on the EU membership question and the Estonian Green Movement was given 60,000 kroons to pay for surveys critical of the EU's environmental policies. Funding the Euroskeptics is part of Estonia's preparations for EU membership.

* The Estonian cabinet meeting on 8 August was the first session using a new computerized system, replacing all paper documents. For each cabinet member, a computer terminal replaced stacks of papers usually present at each session. By next year, additional equipment for video-conferencing will allow ministers traveling abroad to participate in cabinet meetings. The government's chancellery said that savings from photocopying documents alone should total 3 million kroons ($173,000) annually, BNS reported. This was also the first session in the government's new facility several blocks away from Toompea Castle, its former offices and still home to the parliament.

* The Estonian government on 8 August approved a draft law on the study of human genes which will serve as the basis for the creation of a nationwide genetic data bank, BNS and ETA reported. The draft legislation has been sent to the parliament for consideration. The law, once adopted, will allow the Estonian Genetic Reserve to collect genetic data over the next seven years similar to the genetic data bank created in Iceland. Participation in the genetic studies is strictly voluntary and the law also prohibits discrimination on the basis of genetic information. An earlier survey showed over 90 percent of the Estonian population was willing to participate in a genetic data bank. Preliminary cost estimates of the gene reserve project is 1.5 billion kroons ($205.5 million) of which one third will be provided by the Estonian government and the rest by Estonian and foreign private capital.

* Both Finance Minister Siim Kallas and Prime Minister Mart Laar admitted that the 2001 state budget talks are proceeding with difficulty because of major disputes among ministers over the fate of 2 billion kroons of allocations, ETA reported on 8 August. The government is trying to keep the proposed budget around the same level as 2000, but state revenues will be lower since the parliament adopted a number of tax concessions. Kallas estimated the revenue shortfall will be around 819 million kroons ($48 million) for 2001. Laar said that "The previous Riigikogu has taken too many obligations burdening the state budget," adding that "the results of those decisions will haunt us for several years to come."

* Leaders of Estonia's local government association are angry at the government of Prime Minister Mart Laar for failing to attend a meeting to discuss local government budgets for 2001, BNS reported on 9 August. The local governments are asking for 1.69 billion kroons ($96.8 million) for next year�a 30 percent increase over budget allocations for the year 2000. The local governments have agreed in principle to finance municipal schools--including teachers' salaries--from their local budgets.

* The government is delaying a pay increase to Estonia's teachers because of budget shortfalls, BNS and ETA reported on 8 August. The Education Ministry has scaled back its request for additional funds from 400 million kroons ($23.2 million) to 269 million kroons to provide for an 8 percent pay raise to teachers in January 2001 and 30 percent in September 2001. The Estonian Education Workers Union has threatened to strike before the new school year begins this September if teachers' minimum monthly salaries are not increased from 4,000 to 5,200 kroons. On 9 August, ETA reported that 20 schools will be closed in Estonia because of a shortage of students. The number of children who will attend school this September has dropped by more than 5,000, so only 210,648 pupils are expected to attend primary and secondary schools this coming year.

* Estonian Interior Minister Tarmo Loodus told BNS on 7 August that he wants to avoid new layoffs of police at all costs despite budget shortfalls, and may consider narrowing police duties. According to the police department, nearly 200 officers may lose their jobs by Christmas and two or three rural police stations may be closed. Estonia currently has 3,800 policemen--400 fewer than in 1999--with about one-third of them in Tallinn.

* Feuding Russian politicians in Tallinn are suggesting the possible return to politics of a former leader of the radical International Front, Yevgeni Kogan, which could mean the collapse of the ruling coalition in the Tallinn City Council, BNS reported on 7 August. Tallinn Mayor Juri Mois, of the Pro Patria Union, told BNS that Gennadi Ever of the city council's People's Trust faction had charged that deputy chairman of the city council, Sergei Ivanov, had been holding talks with Kogan, but that Ivanov had denied the charge. Mois said, "I have no reason to suspect Ivanov," adding that both ethnic Russian council members had contacts with Kogan. After local elections last fall, Kogan agreed to suspend his membership in the city council to allow a coalition to be formed between the People's Trust, on the one hand, and the Pro Patria Union, the Reform Party, and the Moderate Party, on the other.

* Tanu Vare, spokesperson for the Estonian Trade Union Confederation, told ETA on 3 August that unemployment in Estonia is higher than the European Union average. The trade unions estimate an unemployment rate of 13-14 percent in Estonia compared to the EU's 10 percent. Vare said that although the number of jobless fell in the second quarter, this does not mean the situation has improved because much of this is due to seasonal employment which traditionally increases in the second quarter of the year.

* The Baltic American Enterprise Fund, capitalized with $50 million through the U.S. Agency for International Development, has issued 18.7 million kroons ($1.2 million) worth of residential mortgage loans in Estonia this year, ETA reported on 8 August. The loan program was launched in Estonia last October and has been operating in Latvia and Lithuania since 1997. The total amount of mortgage loans issued by the fund in the Baltic states is 301 million kroons ($6 million). The loans are granted for a term of 15-20 years and the interest rate since June has been 4.5 percent.

* Estonians borrowed 600 million kroons ($35.3 million) in housing loans from Hansapank alone in 1999, ETA reported on 2 August. The Estonian commercial bank predicted that the amount of housing loans will be double that in 2000. Hansapank's Kersti Arro said: "People have regained confidence as the economy has been improving." Other commercial banks also report increased volumes in housing loans this year.

* A Tallinn City Court on 8 August convicted a man for promoting anti-social acts over his website, "Eesti Paevaleht" reported. The 20-year-old IT student, Aleksandr Linkov, was forced to pay nearly 4,600 kroons ($265) in fines and restitution for the website "Protiv" ("Against" in Russian), which called for a struggle against the Estonian state. Linkov, detained in July, placed his site on a Russian server, thus Estonian officials have no way of removing it without the assistance of the Russian government. Linkov, who repented, avoided a prison sentence.

* The Polish TV company Polsat has purchased the remaining 51 percent of shares in Estonian TV1 from the investment firm Lahmus Haavel & Viiseman (LHV), and now owns 100 percent of the channel, ETA reported on 11 August. The Estonian Tax Board on 31 July had demanded the payment of 12 million kroons in taxes and fines from the independent station for undeclared wages paid to employees by the station two years ago. The station has 30 days to contest the demand. Polsat owns television channels in all three Baltic countries. In Lithuania it controls BTV and in Latvia LNT.

* The Ninth International Congress of Finno-Ugric scholars took place at Tartu University in Estonia from 7-13 August, BNS reported. Representatives of the ministries of culture and education in Estonia, Finland, and Hungary also attended the conference and signed a protocol on cooperation on 9 August that calls on the three countries to assist "kindred peoples" in the East as well as improve the study of those peoples' languages in all three countries.

LATVIAN PRIVATIZATION OFFICIAL ARRESTED.
Attorneys for Didzis Azanda, a former member of the Latvian Privatization Agency (LPA) board of directors, have appealed a Riga district court's decision to extend Azanda's detention in jail until 9 September, LETA reported on 11 August. Azanda was arrested the evening of 28 July at the moment he accepted 3,000 lats ($4,800) from Peteris Elsts, one of the bidders in an LPA auction of a building in Jurmala. Prosecutors charged him with abuse of his position and illegal property transactions. The prosecutors were granted a "measure of precaution" order from a Riga district court on 31 July to keep him in jail, BNS reported. The Azanda case developed as the Latvian State Revenue Service on 28 July fined seven members of the LPA for violations of the anti-corruption act, LETA added. The seven--including members of the powerful board of electricity utility Latvenergo--were fined for holding more than one paying position simultaneously. Attempting to shore up its credibility, the LPA council voted Azanda off the board in an emergency session on 31 July.

EX-LATVIAN MINISTERS CLEARED WHILE ACCUSER MAY BE CHARGED.
Three officials accused of being involved in a pedophilia scandal in Latvia were cleared of all charges on 1 August, BNS and LETA reported. Prosecutors announced that the case against ex-Prime Minister Andris Skele was closed because nothing criminal was discovered in the investigation. Similar cases were closed on former Justice Minister Valdis Birkavs and the head of the taxation department, Andrejs Sonciks. The Prosecutor-General's Office released a statement calling allegations against the three "invented and not corresponding with the truth." Latvian Prosecutor-General Janis Maizitis on 8 August asked the parliament to revoke the parliamentary immunity of deputy Janis Adamsons for defamation, BNS reported. Maizitis' office said that it believes Adamsons deliberately disseminated offensive and defamatory information about several high-ranking officials in the so-called "pedophilia scandal." Adamsons made his accusations against the three men on 17 February in parliament, in his capacity as chairman of an investigating committee. The parliament will examine the topic on 4 September, LETA added. The charges could bring Adamsons up to eight years in jail if charged and convicted.

PRIVATIZATION DEALT BLOW BY LATVIAN PARLIAMENT.
By a 50 to 22 vote, the Latvian parliament on 3 August approved the draft bill submitted by public initiative to stop the privatization of power utility Latvenergo, LETA reported. The draft bill, supported by over 20 percent of Latvian voters in a petition drive, bans the privatization of the company and any possible affiliates or spin-offs from any restructuring. The bill was approved with support from the parliamentary opposition and two of the four parties which make up the ruling coalition--the New Party and For Fatherland and Freedom. Latvia's government played down the impact of the coalition split, but the vote marked a setback for Prime Minister Andris Berzins, a member of the People's Party, who had promised to speed up privatization in Latvia when he took office in May, AP reported. The decision to block privatizing the state-owned utility also threatens Latvia's relations with the World Bank, which set December 2001 as a deadline for restructuring Latvenergo as one of the conditions for a three-year, $120 million loan package signed in March. The ruling coalition's two biggest parties had argued the partial sell-off of Latvenergo shares was necessary to complete the badly-needed restructuring of the utility.

* The fourth international training exercise for military engineers from the Baltic states took place in Latvia from 7-14 August, BNS reported on 5 August. The exercise, called Baltic Hope, involved 350 military engineers from Estonia, Latvia, and Lithuania. The training exercises rotate yearly among the three countries. The aim of Baltic Hope is to develop military cooperation under NATO's Partnership for Peace program.

* The Latvian Ministry of Defense opened a new website on 9 August, LETA reported. The address is http://www.mod.lv Information on Latvian security and defense policy, as well as NATO integration issues and international cooperation is available at the site both in Latvian and English. The new site also includes information about the rights and duties of conscripts, military training, the ministry's "White Book," and updated daily news, press releases, and information on foreign visits and visiting foreign officials in Latvia.

* Minister of Foreign Affairs Indulis Berzins met with U.S. Congressman Herbert Bateman (R-VA), who is chairman of the House Armed Services subcommittee on Military Readiness, LETA reported on 11 August. Bateman traveled to Riga to discuss issues of Latvian-American cooperation. He also met with Latvian Defense Minister Girts Valdis Kristovskis, National Armed Forces Commander Colonel Raimonds Graube, and the defense ministry's NATO Integration executive secretary, Admiral Gaidis Andrejs Zeibots. Bateman told a press conference at the Ministry of Defense in Riga that the Baltic countries should join NATO simultaneously to prevent any grievances from developing, LETA reported. Bateman was in Estonia earlier in the week and had no plans to visit Lithuania.

* The Latvian government committee on 7 August accepted the draft agreement between Latvia and the Holy See on the legal status of the Catholic Church in Latvia, BNS reported. The agreement must be voted on by the government as well as the parliament. Several religious denominations have criticized the proposed agreement on the grounds that if adopted, the agreement would give the Catholic Church in Latvia more privileges than other churches. Olafs Bruvers, head of the State Human Rights Bureau, also thinks this agreement will cause "inequality among the Catholic Church and the other denominations in Latvia." Estonia concluded the agreement with the Holy See two years ago, and Lithuania signed three agreements, including one on the status of the Catholic Church, in May 2000.

* On 31 July, Latvian President Vaira Vike-Freiberga addressed the graduates of the Fund for American Studies at Charles University in Prague, BNS reported. Vike-Freiberga spoke of the achievements made by the countries of the Baltic region in such a short period with few resources. This year the graduates included three students from Latvia; in previous years a total of 30 persons from Latvia have graduated from the American Studies program at the university, including Bank of Latvia Vice President Ilmars Rimsevics.

* At a monthly press conference on 10 August, Latvian Prime Minister Andris Berzins evaluated the first 100 days of the government he heads, BNS reported. Berzins said that he felt the work of the government has been stable and predictable and added that the priorities of his government remain Latvia's accession to the European Union and NATO, education, and the elimination of the gap between the public and government authorities. Berzins said, "When getting up in the morning and reading a newspaper, nobody has to tremble with horror that the government has done something which was not known to anybody."

* The Latvian Finance Ministry reported that in July the revenues of the social insurance special budget exceeded expenditures for the first time this year, LETA reported on 4 August. The ministry credits the improving economic situation in Latvia and better performance by the State Revenue Service for the positive balance sheet. The financial surplus in the social insurance fund was 855,000 lats ($1,368,000) thereby decreasing the funds total deficit to 26.25 million lats ($42 million). The Finance Ministry spokesperson noted that in all preceding months this year, the monthly financial deficit was between 1.24 million lats and 5 million lats.

* Interior Minister Mareks Seglins called on the government to provide more financing to the criminal police which "fight criminality every day," rather than to the army that is "for years getting ready for joining an international organization or preparing for a mythical conflict," BNS reported on 10 August. Seglins expressed the opinion in a press conference reporting on police work over the last seven months. The minister said the state police are short 5.7 million lats ($9.3 million) in order to perform its functions as required by law this year. When told of Seglins comments, Defense Minister Girts Valdis Kristovskis described Seglins's appeal as "politically incompetent," BNS reported the same day. Kristovskis said: "If he has said it, let him carry the responsibility for his words."

* A Latvian business magazine published an anti-Semitic article entitled "Jews Rule the World." The article was condemned by a host of officials, including President Vaira Vike-Freiberga, LETA reported on 4 August. The editor of the magazine, Guntis Rozenbergs, apologized for the article a day before and submitted his resignation due to "moral responsibility," BNS added. The Jewish community condemned the article and asked prosecutors to investigate if the article violated laws against inciting ethnic discord. On 7 August the Prosecutor General's office sent a request to the Constitution Protection Office to determine whether the article constitutes a criminal offense under Latvian law.

* Guntis Rozenbergs, who resigned from the magazine "Kapitals" for publishing an article deemed anti-Semitic by the press, was removed from his non-staff post with Radio Free Europe's Latvian Service, LETA reported. Peteris Zvagulis, head of the Latvian service, said that the termination of the cooperation agreement with Rozenbergs was due to the questionable publication of the article "Jews Rule the World."

* The Justice Ministry announced on 9 August that they have completed a draft set of regulations to implement the state language law and include recommendations made by OSCE High Commissioner for Minorities Max van der Stoel, BNS reported. The drafting of the regulations has sparked controversy in Latvia, but the process is moving forward with the draft being sent to government committees as well as the OSCE. Olafs Bruvers, head of the State Human Rights Office, said that all of van der Stoel's recommendations were incorporated either in part or in full, particularly those dealing with language use in the private sphere and the transliteration of non-Latvian names into Latvian. The law and its regulations will come into effect 1 September. OSCE experts arrived in Riga on 11 August to provide consultations to the Latvian government as the government review process proceeds.

* Aimss McGuiness, an expert with the Organization for Cooperation and Security in Europe, said that Latvia had taken important steps in the education sector to comply with OSCE recommendations, LETA reported on 11 August. He noted that Latvia is "blessed with several thousand hard-working teachers" and urged the Latvian government to address the issue of teachers' salaries and improving teachers' colleges in the country.

* Most written complaints to the National Human Rights Office in July were about the right to a fair and open trial, LETA reported on 8 August. Ten of 60 petitions registered in July dealt with fairness of trials. Seven petitions were on an individual's right to security, freedom, and inviolability; three more were on the granting of pensions and benefits; four were on providing of social guarantees. The rest of the case represented a variety of issues including legalization of non-citizens, property rights, and children's rights.

* Prosecutor-General Janis Maizitis has sent a letter to the Latvian newspaper "Diena" notifying the daily that the material they provided to his office is insufficient to open a criminal proceeding against Ventspils Mayor Aivars Lembergs for his rumored affiliation with an offshore company called "Multinord AG," LETA reported on 8 August. The letter notes that the prosecutor's own probe showed there were no records of the Ventspils City Council paying for Lembergs' personal trips to Switzerland in 1994, nor did Swiss documents confirm an accusation that Lembergs had used city funds to pay Swiss lawyers to consult on an investment project . An article in "Diena" on 8 August said that the prosecutor-general had taken "a narrow interpretation of the law and a formal attitude towards establishing the truth."

* The Latvian Prosecutor-General's office has called another meeting of international experts on the Konrad Kalejs case for 14-15 September, LETA reported on 11 August. Invitations will be sent to all countries which already participated in an earlier meeting in February. Kalejs is accused of participating in war crimes in Nazi-occupied Latvia during World War II.

* The Prosecutor-General's Office reported on 4 August that the investigation of criminal cases related to the Logos Centrs Model Agency has so far documented 214 criminal episodes involving sexual abuse of 67 persons, 61 of whom were under age, BNS reported. The youngest victim was 13 years old. Charges have been brought against seven persons, four of them employees of the modeling agency including the agency's head, Yury Kutirev.

* The AIDS Prevention Center of Latvia announced that 46 new HIV cases were registered in July, LETA reported on 8 August. Two persons contracted AIDS and two persons died of HIV/AIDS last month as well. Iveta Skripste, of the center, said that it was alarming that seven of the new HIV cases were teenagers between the ages of 15 and 17. All were from Riga or the resort town of Jurmala. Since 1987, when the registration of HIV/AIDS patients began in Latvia, there have been 738 people infected with HIV, 63 persons have AIDS, and 20 have died, BNS reported.

* The Central Statistics Bureau announced on 9 August that in the first half of this year, the number of registered marriages continued to decline, LETA reported. 3,458 marriages were registered in the first half of 2000, down from 3,681 in the first half-year of 1999--which is 1.4 marriages per 1,000 residents, down from 1.5 marriages per 1,000 residents. There was a small increase in the number of registered marriages in the capital city of Riga.

* All five former Latvian aviators recently released from an Indian prison have requested residency permits, BNS reported on 9 August. All five hold Russian citizenship but most have family members residing in Latvia. Their applications are being processed under an accelerated procedure which should be finished within 10 days. The five were convicted by an Indian court for attempting to smuggle in guns and ammunition and spent nearly five years in Indian prisons. All five have maintained their innocence. They were released after Russian President Vladimir Putin joined human rights groups in appealing to the Indian government.

* Controversial Latvian politician Joachim Siegerist, head of the People's Movement "For Latvia," plans on visiting Turkmenistan to restore the burial place of former Latvian President Karlis Ulmanis, LETA reported on 7 August. Ulmanis was deported in 1940 by Soviet security officials after the occupation of the country by USSR troops during World War II. He is presumed to have died and been buried in Turkmenistan. Siegerist blamed Latvia's government for not attending to this earlier.

LITHUANIANS ACKNOWLEDGE KGB LINKS.
About 1,500 Lithuanians met the deadline and registered themselves as former collaborators with Soviet secret services during the 50-year occupation of Lithuania, ELTA reported on 5 August. The six-month registration period--created under a lustration law passed in 1999--ended on 4 August. Officials say that 600 of the declarations have been checked so far. The law required all former collaborators to register, while such declarations, including the names of the collaborators, would be kept secret. Those failing to register could face penalties which include a ban on all government employment and certain private-sector professions. The law also allows the government to publicly name collaborators who failed to register.

LITHUANIAN PARTY ACCUSED OF PROMOTING FASCISTS.
Parliament member Rasa Jukneviciene of the ruling Conservatives accused the center-left opposition, New Union (Social Liberals), of being a "mediator of fascist forces," ELTA reported on 9 August. Jukneviciene called the party a "menace to Lithuania" for bringing "fascist forces" and urged President Valdas Adamkus to distance himself from the party--a party which he appears ready to support in the October general elections. She cited specifically a recent rally in the town of Siauliai by the unregistered radical Lithuanian National Social Union, in which city mayor and party member Vida Stasiunaite participated, as well as the party's cooperation to elect Vytautas Sustauskas, who is known for radical protests and anti-Semitic statements, as mayor of Kaunas. The New Union recently polled at 16.5 percent, more than double any other party. The deputy speaker of the Lithuanian parliament, Rimantas Dagys, a member of the Social Democrats 2000 party, told journalists that the populist actions of some political parties and any toleration of pro-fascist organizations will scare off western investment in Lithuania, BNS reported on 11 August. Dagys said that during his latest visit to the United States he had heard skepticism expressed concerning foreign investment in Lithuania because of the recent political developments in the country.

KAUNAS CITY COUNCIL DOOMS DALKIA DEAL.
The Kaunas City Council on 3 August voted to end talks with French concern Dalkia over a deal to lease the city's heating utility, Kauno Energija (Kaunas Energy), for a 15-year period, ELTA reported. A nearly unanimous vote supported the decision by the city government to not begin official negotiations with Dalkia over the heating utility. Kaunas negotiators said the French company's $123 million investment plan was inadequate, and claimed that Kaunas will receive more offers for the heating utility in the near future, BNS added. The city's negotiators had been demanding that Dalkia make a $200,000 good faith payment to the city to continue the talks. A negotiated offer by Swedish firm Vattenfall to lease Kauno Energija fell apart earlier this year when control of the city council changed after the March local elections.

* The Lithuanian Ministry of Foreign Affairs has denied reports in the local media that NATO allegedly insists on reducing the number of former Soviet army officers currently serving in military forces of countries seeking NATO membership, BNS reported on 8 August. The MFA statement was in response to the daily "Kauno Diena," which reported--quoting unofficial sources--that NATO has drawn up a classified memorandum which warns NATO candidates that only those countries which have reduced the numbers of former Soviet officers serving in their military forces could expect to join the alliance. According to the daily, during the last two years, 54 high-ranking officers have been dismissed from the Lithuanian army for various reasons and only five did not have Soviet military training or had not been Soviet Red Army officers. The commander of the Lithuanian Defense Forces, Brigadier-General Jonas Kronkaitis, has denied allegations that former Soviet officers are being "cleansed" from the Lithuanian military.

* The Association of Lithuanian Military Officers in Reserve became a member of a similar organization uniting military officers of NATO states during the multinational annual congress in Berlin, ELTA reported on 7 August. Following the charter of the association of reserve military officers from NATO countries, the Lithuanian chapter is a public, non-partisan organization which seeks to maintain the physical and mental preparedness of officers who have served their terms, promoting the Lithuanian army and homeland defense ideas, and keeping its members informed on the latest developments within the military area.

* Computer specialist Pavel Ilyin, accused earlier this year by Russia of spying for Lithuania, reportedly has asked Sweden for political asylum, BNS quoted "Respublika." Ilyin, a Lithuanian citizen, reportedly traveled from Poland to Sweden last week and is housed in a refugee center near Malmo. "Respublika" reported that Ilyin is claiming that his human rights were violated in Lithuania following the spy scandal in June.

* The number of Lithuanian citizens deported from foreign countries for violating tourist visas has topped 2,000 so far this year as of 6 August, BNS reported on 7 August. The Border Guard Department said that alone last weekend some 26 Lithuanians were deported back for such violations. In 1999, there were 1,928 total Lithuanian citizens deported for violating visa terms.

* Supporters of Chechnya in Lithuania have appealed to the Australian government and international organizations to ban Russia's participation in Sydney's Summer Olympic games, BNS reported on 7 August. Leonas Kerosierius, chairman of the Vilnius city Sajudis branch, Labora, told journalists that "the genocide of the Chechen people carried out by Russia" should be sufficient reason to ban the Russians from the games. The appeal says that Russia's participation would "defile our common values."

* The Economy Ministry forwarded the preliminary estimate of damages suffered by Lithuania during the 50 years of illegal occupation by the Soviet Union to the special governmental commission established by the Lithuanian parliament earlier this year, ELTA reported on 8 August. The commission must finalize the estimate of damages by 1 October and within that month initiate talks with the Russian Federation as the legal heir of the rights of the USSR for negotiations over compensation for Lithuania's damage claims.

* The Lithuanian Statistics Department on 28 July announced that the country's GDP in the second quarter of 2000 grew by only 0.2 percent compared to the same period in 1999, ELTA reported. In the first half of 2000, the GDP grew by a total of 2 percent. This disappointing figure comes after the central bank upped their forecast for 2000 to 3.1 percent the previous week. In the second quarter of 1999, the GDP dropped by 1.4 percent.

* Protesting Lithuanian farmers agreed to move their heavy agricultural machinery away from border crossing points with Poland and stop blocking highways, BNS reported on 4 August. Farmers in Lithuania's southern region of Suvalkija began the protest action on 31 July to support farmers in the Joniskis region who began a demonstration the previous week on the Latvian border. The farmers are demanding that they be paid for last year's sugar beet crop by 1 September and that a procedure to deal with this year's payments be agreed to by 1 October. Lilija Sermuksniene, a spokeswoman for the Joniskis region Farmers Union said, "At last we have reached some sort of compromise with the authorities." She regretted that the government has been "blind and deaf to the problems of farmers."

* Lithuanian Minister of Agriculture Edvardas Makelis and Vitaly Morozov, director of the food department under Moscow Mayor Yuri Luzhkov, have signed an agreement on the export of Lithuanian foodstuffs to Moscow, ELTA reported on 11 August. The Moscow government will purchase 5,000 tons of beef and butter, 4,000 tons of cheese, 2,000 tons of milk powder, and 20,000 tons of grain this year. The agreement will be finalized at the end of August or beginning of September. Makelis said that Lithuania is willing to sell to the City of Moscow because the city is solvent and can pay Lithuania for the products.

* A public opinion survey by the Vilmorus polling agency showed that 51.8 percent of Lithuanians support the sale of agricultural land to foreigners, ELTA reported on 1 August. Some 36.6 percent opposed the sale of land to foreigners. Nearly 60 percent of the respondents feel that the legalization of land sales to foreigners would promote foreign investment, and 61.3 percent said it would create more rural jobs.

* More than half of Lithuania's city and rural local governments are planning to take the central government to court for unfunded mandates, BNS and ELTA reported on 8 August. The president of the Association of Lithuania's Local Governments, Bronius Rope, said that 37 of 60 local governments have joined the lawsuit, which claims damages and violations of local government rights. The joint claim against the central government is 80 million litas ($20 million).

* The expenditures of the Lithuanian social insurance and pension fund, SoDra, exceeded revenues by 175 million litas ($43.75 million) in the first seven months of this year, ELTA reported on 1 August. The total deficit of SoDra as of 1 August stood at 459 million litas ($114.75 million) with 284 million litas ($71 million) comprising last year's SoDra deficit. The SoDra debt to banks totals 177 million litas ($44.25 million) taken in credits with state guarantees and 76 million litas ($19 million) in short-term credit lines or overdrafts as of 1 August. The board of SoDra has appealed to the government to re-loan it 100 million litas ($25 million) for five years from the eurobonds the government sold in July, ELTA reported on 11 August. Borrowing from the government would be twice as cheap for SoDra than borrowing from commercial banks both at home and abroad would be.

* The state-owned Lithuanian Savings Bank started granting long-term housing loans or mortgages for local residents on 1 August, ELTA reported. The maximum term of the loan can be 20 years, and the amount of the loan cannot exceed 70 percent of the assessed value of the purchased house. The savings bank joins private commercial banks in Lithuania which began offering mortgages earlier this summer when the government established a mortgage insurance fund.

* The Central Election Commission on 4 August started to register and verify candidates for the upcoming parliamentary elections scheduled for 8 October, BNS and ELTA reported. Parties will not be allowed to register their single-district candidates until the commission and the Justice Ministry examine the documents of all 39 parties eligible for nominating candidates. The registration period ends on 4 September. All parties will have to leave a security deposit. The fee for every candidate in a single-seat district is one average monthly wage--1,101 litas ($275), and the deposit for a list of candidates for the multiseat districts is set at 10 average monthly wages--22,000 litas ($5,500). Winning candidates and parties will receive back their deposits. The Central Election Commission will announce on 8 September all parties running for the parliament and all candidates nominated both by political parties and independently.

* Lithuanian Foreign Affairs Minister Algirdas Saudargas met with representatives of the Organization for Security and Cooperation in Europe as it was visiting Lithuania, BNS reported on 10 August. The OSCE mission from the organization's bureau for democratic institutions and human rights have to come survey the political situation in Lithuania before the parliamentary elections scheduled for 8 October. During the four-day visit, the mission met with leaders of the most influential political parties, government officials, and foreign diplomats. The chairman of Lithuania's Chief Election Commission, Zenonas Vaigauskas, told BNS that interest in Lithuania's elections may have been provoked by the election of some "curious characters" at the local level, such as Vytautas Sustauskas, the new mayor of Kaunas, Lithuania's second largest city. Sustauskas, the leader of the radical Lithuanian Freedom Union, has been condemned for his anti-Semitic public statements.

* According to a new public opinion poll by the Baltijos Tyrimai agency (Baltic Surveys), the centrist coalition of four parties are in the strongest position two months before the general elections, BNS reported on 8 August. The left of center New Alliance (Social Liberals), headed by former presidential candidate Arturas Paulauskas, topped the survey with 16.5 percent. Together with coalition partners the Liberal Union (6.9 percent) and the Center Union (5.6 percent), the coalition--which also includes the marginal Modern Christian Democrats--is supported by 29 percent of the potential electorate. A leftist coalition, which includes the Labor Democrats (LDDP, 6.8 percent) and Social Democrats (4.2 percent), holds 12.3 percent. The ruling Conservatives are at 3.6 percent, under the minimum threshold for party-allocated seats.

* Simonas Alperavicius, chairman of the Lithuanian Jewish community, has written to Vilnius Mayor Rolandas Paksas asking that the city suspend any festivities on 23 September, Holocaust Memorial Day, a day set aside by the Lithuanian parliament to memorialize the genocide of Lithuania's Jews. The capital city intends to celebrate its own "Vilnius Festival Capital City Days 2000" during the entire month of September. Many concerts, exhibits, marches, festivals, and fairs will be organized in Vilnius throughout the month. Alperavicius noted that "One can hardly imagine the municipality calling people and guests of the Lithuanian capital to have celebrations on 14 June," a day which commemorates the victims of the Soviet occupation and deportations to Siberia. However, a privately organized concert of American rock star veteran Alice Cooper did take place in Vilnius on 14 June this year, BNS reported. The ceremonies honoring the victims of the Holocaust will be held at Paneriai, the 9th Fort in Kaunas, and other sites of mass killings, and by law--and tradition--all national flags are flown draped in mourning that day as they are for other memorial days in the country.

* On 3 August, a court in Siauliai, the fourth largest city in Lithuania, found Mindaugas Murza, head of the unregistered National Socialist Party, guilty of staging an unsanctioned rally outside the municipal building four days earlier and ordered him to pay a fine of 500 litas ($125), BNS and ELTA reported. Murza, who is unemployed, admitted his guilt, saying that the rally was organized spontaneously after a meeting of unemployed persons who were complaining about the non-payment of unemployment support. The mayor of Siauliai, Vida Stasiunaite, a high-ranking member of the New Union (Social Liberal party), spoke at the rally in support of the protest action.

* Four security guards of the Senukai shopping center were found shot to death in Lithuania's second largest city, Kaunas, BNS and ELTA reported on 11 August. The four men had been guarding the company's warehouses overnight. Senukai is a large chain of shopping centers selling construction materials and household equipment throughout Lithuania. The murder near the Senukai warehouses is the third shooting in a series of killings in Kaunas over the past week.

* Oslo dock workers refused for a third day to unload a Russian-Lithuanian cargo ship, the Sea Trader, whose 18 crew members have not been paid for six months, the International Transport Workers' Federation (ITF) announced on 9 August, BNS reported. The Sea Trader flies the Maltese flag but belongs to the Russian-Lithuanian firm Mekhanikis Gerasimovs Shipping Company. ITF inspector Steiner Garber said he had not been able to contact the sailors on board because "They are afraid...They are afraid to speak and lose their jobs."

* Four Lithuanian board members and majority stockholders in a Lithuanian cement plant, Akmenes Cementas, on 4 August won an international commercial arbitration case initiated by Norwegian businessman Ole Gunnar Selvaag, the owner of a 33 percent stake in the cement plant, ELTA reported on 8 August. Selvaag appealed to the Paris-based International Arbitration Court in mid-1998 over the management's decision to reinvest the companies profits. Ramune Duleviciene, chief lawyer for the defendants said that the ruling in the case demonstrates that Lithuanian businessmen have consolidated their position on the international market and are capable of defending their legal interests in international court.

* The volume of crude oil processed at the Mazeikiu Nafta refinery inched up by 3 percent in July month-on-month, ELTA reported on 8 August. The oil refinery has processed 2.9 million tons of crude and other raw material in the first seven months of this year. Of the 4.3 million tons of Russian crude transported to Mazeikiai this year, 1.9 million tons was exported through the Butinge terminal. The Birzai oil pipeline transported 8.2 million tons of crude for export and 2.1 million tons of diesel fuel went through the pipeline to the Latvian port of Ventspils.

* The Economy Minister Valentinas Milaknis told ELTA on 9 August that the government could not pay workers at the bankrupt Inkaras plant in Kaunas back wages from a special fund set up for such a purpose because the government had already loaned the Inkaras company money for payment of wages to the workers. The loan was issued against mortgaged assets of the Kaunas rubber boot manufacturer and the company has no further property to guarantee more loans. The 210 workers who have not been paid in a year have been blocking the gates of the plant for three weeks. A group of the workers are hunger-strikers hoping to put pressure on the government to pay the back wages. Kazimieras Ruzevskis, head of the local trade union, said the workers are appealing to the government because they hold it responsible. Ruzevskis said, "If the company's leaders managed to steal the money under the government approved laws, then the government should be so kind as to return the money to the workers," BNS reported on 10 August.

* Lithuanian police and other law enforcement institutions arrested three men in a drug bust seizing heroin, cocaine, and amphetamines with an estimated street value of 500,000 litas ($125,000). The amphetamines were brought to Lithuania from four different labs in Poland, while the heroin came from Belarus for transshipment to other European countries. The leader of the group, named "Rimas," is believed to be hiding abroad for some time. If convicted, the drug smugglers face up to 16 years in prison.