Baltic Report: November 29, 2000

EUROPEAN COMMISSION RATES BALTIC STATES EU BIDS.
In its annual report on the progress of candidate countries toward EU membership, the European Commission praised the three Baltic countries while also noting areas where each needs to make progress, BNS reported on 8 November. The EU recognized Estonia as having made the most progress, but it urged Tallinn to improve public administration and its regional policy. It also called on Estonia to reinforce efforts to protect its minorities, integrate non-citizens, and improve the judicial system. The report praised Latvia for its efforts to improve the integration of non-citizens but said that Riga should accelerate efforts to bring the nation's laws into line with EU ones, to strengthen the judiciary, and to step up the fight against corruption. The report criticized Latvia's delay in privatization and agricultural sector reform. The EU described Lithuania for the first time as having a functioning market economy capable of withstanding competition within the EU, but the report noted that Vilnius had been slow in dealing with company bankruptcy cases. It also said that negotiations with some of the front-running candidates can be concluded during 2002, thus allowing the EU to invite new members at the end of 2002, Reuters reported, even though the ratification process would make the entry date no earlier than mid-2004.

EU REPORT MATCHES COUNTRIES' EXPECTATIONS.
Estonia's chief negotiator for EU membership, Alar Streimann, said on 9 November that this year's EU annual report on the progress of candidates shows that the EU's executive arm is differentiating among the candidates, BNS reported. But he expressed concern that the EU is considering three categories for appraising candidate countries' applications for transition periods: acceptable, negotiable, and unacceptable. Streiman added that "I hope this proposal does not mean we'll have to wait for someone else to catch up." Estonian President Lennart Meri says that Estonia will be ready to join the EU in 2002. Prime Minister Mart Laar said that the European Commission's report shows that Estonia is "clearly one of the three front-runners" for EU membership. Guenther Weiss, head of the European Commission's delegation in Latvia, said that if one judges by economic criteria, Latvia is the leader among what is now called the second group of EU candidate countries, BNS said. But Latvian political leaders appeared united in the view that the progress report correctly expressed concern for Latvia's weak state administration and high level of corruption. Lithuania's chief EU negotiator, Vygaudas Usackas, described the progress report on Lithuania as "fair, comprehensive, and useful," and drew attention to the EU's Enlargement Paper. That document, which was issued at the same time, raises the issue of the Russia's Kaliningrad region within the framework of EU enlargement for the first time and recommends that the EU jointly with Russia, Poland, and Lithuania work out a strategy to ensure increased living standards in Kaliningrad as that region's neighbors become EU members, BNS reported.

* Residents of the Baltic states are the most skeptical of European Union candidates, the Estonian daily "Postimees" reported on 8 November. The poll was conducted by Emor and 10 other public opinion research firms throughout Eastern Europe during September. In answer to the question: "Would you vote for or against accession to the EU?" 45.8 percent of Estonians said "yes," while 44.2 percent of Latvians and 39.4 percent of Lithuanians answered in the affirmative. Romania was the most supportive of EU membership with 71.9 percent of respondents saying "yes," while only 4.1 percent said "no."

* During its Reykjavik meeting from 6 to 8 November, the conservative parliamentary group within the Nordic Council introduced a proposal to admit the parliamentary members of Estonia, Latvia, and Lithuania into the body as full members, BNS reported on 9 November. The proposal could be considered at a joint session of the Baltic Assembly and Nordic Council to be held in Riga from 31 May to 1 June 2001.

* Basing its conclusions on a report by Erik Hammarskjoeld, the director of the Swedish government's foreign assistance program to Estonia, Latvia, Lithuania, Poland and Northwest Russia, the Swedish daily "Dagens Nyheter" charged that the Swedish government has spent the resources of the fund "carelessly and unprofessionally," BNS reported on 6 November. The fund, set up in 1996, has received over 2 billion kronor ($197 million) from the Swedish parliament.

* The police chiefs of Estonia, Latvia, and Lithuania, meeting in Tallinn, signed a protocol on three-way cooperation to step up joint efforts against organized crime, drug smuggling, money laundering, and car theft, BNS reported on 10 November.

PRESIDENT CALLS FOR EXPANDED GERMAN INVESTMENT.
During a five-day state visit to the Federal Republic of Germany, President Lennart Meri repeatedly said that Estonia expects to join the European Union by 2003 and called on Brussels to set a firm timetable for EU enlargement, dpa and BNS reported on 8 November. German Chancellor Gerhard Schroeder told reporters at a joint press conference with Meri that the EU would be ready to accept new members by the end of 2002 and "I have no reason to doubt the Estonians will meet these ambitious goals." He also said that Meri's fear that the "process will be governed by political criteria is not justified," but he declined to tell reporters if this meant that Estonia could become a member before Poland. Speaking in Stuttgart on 6 November, Meri had complained that only 3 percent of foreign direct investment in Estonia was from Germany despite the fact that "Estonia already had a more liberal economy than Germany." Schroeder, for his part, urged Western companies, particularly German small- and medium-sized firms, to invest more in Estonia, BNS reported on 8 November. Meri began his visit in the state of Baden-Wuerttenberg, went on to Berlin, and ended it in the state of Mecklenburg-Vorpommern. In Berlin, he visited the school he attended as a boy and dedicated a memorial plaque to the 32 former Estonian embassy employees who were either killed or deported during World War II, among them Meri's father, Georg Meri.

COURT ORDERS RESIDENCY PERMIT FOR FORMER KGB AGENT.
An Estonian court ruled that the residency permit of former KGB agent Sergei Buchilovsky must be extended by the Estonian Interior Ministry, BNS and ITAR-TASS reported on 9 November. The Tallinn Administrative Court found the Interior Minister's earlier order denying Buchilovsky and his family the right to live in Estonia to be unlawful. The court cited the 18 December 1991 agreement signed by Estonia's then-Minister of State Raivo Vare and Russia's special representative of the USSR, KGB head General Vyacheslav Shironin. In exchange for a pledge not to restrict the rights and freedoms of the former KGB officers and their families, Edgar Savisaar's government received arms, special equipment, and several thousand KGB files, the Russian news agency reported. The court in Tallinn questioned the authority of the Savisaar government to sign the document, which was largely unknown in Estonia before the plaintiff submitted it as evidence in his case, ETA reported. The court also found that the document, as an international agreement, took primacy over Estonian domestic legislation. The Russian embassy in Tallinn has been complaining to Estonian authorities for some time over its refusal to automatically grant or renew residence permits to former KGB personnel, Reuters reported on 7 November.

NEW RULING COALITION AGREEMENT SIGNED IN TALLINN.
The ruling majority in the Tallinn City Council, having survived a no-confidence vote, expanded its alliance and concluded a new coalition agreement on 10 November, BNS and ETA reported. The new agreement calls for the appointment of municipal officials who speak several languages and requires city officials to make a better effort to inform non-ethnic Estonians about the city's affairs. It was signed by the members of the original coalition made up of the Pro-Patria Union, the Reform Party, the Moderate Party, and the new coalition partners from the small Estonian Democratic Party and the ethnic-Russian faction People's Trust -- which draws deputies from both the Estonian United People's Party (EURP) and the Russian Party in Estonia. The EURP intends to pressure the new coalition to maintain majority control in the city's water and heating utilities to prevent increased prices to consumers. Earlier in the week, the ruling coalition in the council initiated two extraordinary measures: It suspended the powers of four of its own council members because they had backed the no-confidence measure against Tallinn Mayor Juri Mois, and it began dismissal proceedings against three borough governors for disloyalty to their employer, Mois, BNS reported on 6 November. This latter action requires the approval of the borough councils. The new coalition was able to adopt the city's budget for 2001, which calls for nearly 3 billion kroons ($189 million) in expenditures, ETA reported on 8 November.

* NATO's political committee on 6 November found Estonia's 2001 national plan for meeting NATO membership criteria realistic, well-considered, and constructive, BNS and ETA reported. But the NATO body called on Estonia to raise its defense spending to 2 percent of GDP in 2002 and to adopt necessary defense-related legislation.

* Estonian Defense Minister Juri Luik met with his German counterpart, Rudolf Scharping, to discuss expanding bilateral cooperation, BNS reported. Luik accompanied President Lennart Meri during his state visit to Germany from 6-10 November. German officials -- including Chancellor Gerhard Schroeder -- told the Estonian delegation that the door to NATO membership remained open but Germany wanted to "preserve regional stability" and there would have to be very careful talks about any timetable for possible NATO membership, dpa reported on 8 November.

* The National Defense Committee of the Estonian parliament on 6 November unanimously rejected a bill on national defense in peacetime submitted by the Defense Ministry, BNS reported. The committee, chaired by deputy Tiit Tammsaar, maintained that the draft bill was unconstitutional and would give too much power to the defense minister over the commander of the military. Defense Minister Juri Luik denied the claim but said he was willing to amend the draft. Luik said that it was essential for Estonia to adopt the law since it was needed to regulate civilian and military relations. The parliamentary Defense Committee also decided at the same session to shift 20 million kroons ($1.2 million) in the 2001 budget plan for the repair of army barracks, ETA reported on 7 November.

* Departing Russian Ambassador Aleksei Glukhov told Prime Minister Mart Laar during a farewell visit that Russia supports Estonia's accession to the European Union, BNS reported on 9 November. Glukhov congratulated Estonia for it progress in meeting EU criteria as reported in this year's EU progress report. The ambassador also offered help from Russian archives in finding information concerning Estonian politicians and other public figures from the pre-war period of independence whose fate is unknown.

* Prime Minister Mart Laar announced that his government will ignore criticism in the recent European Commission report that Tallinn is not keeping its pledge to raise the fuel tax on 1 December, BNS reported on 9 November. Laar said that the government's primary consideration is to boost economic growth. The tax increase, he said, "would have been insurmountably hard for the people to bear."

* The Statistics Office reported on 7 November that inflation in Estonia rose by 0.9 percent in October compared with September, and that year-on-year growth was 5.4 percent, BNS reported. The increase was largely due to higher telephone tariffs and higher prices for gasoline, meat, and dairy products.

* The business daily "Aripaev" reported on 6 November that the holders of bonds issued by the pre-war Republic of Estonia in 1927 are forming a committee to take the state to court to redeem up to 250 million kroons ($13.9 million) in bonds. Bondholder William T. Hardison from the United States claimed in a paid advertisement in a recent issue of the "Economist" that the claims are currently being consolidated. In 1927, Estonia issued $4 million worth of bonds to carry out monetary reform, and the nominal value of the bonds at present exchange rates is 91.4 million kroons, ETA reported. The interest rate of the bonds, which matured in 1967, was 7 percent.

* The Estonian parliament established punishments for hindering the trade union movement on 8 November, BNS reported. Under the new law, if a person is found guilty of preventing the formation of a trade union or hindering its legal activity, that person can be fined up to 200 average daily wages, or 9,200 kroons ($505).

* The state-owned railroad Eesti Raudtee, which is to be privatized, reported that over the first 10 months of 2000 freight transport increased 9.3 percent to 33.1 tons and that the concern earned 1.13 billion kroons ($63 million), ETA reported on 6 November. But transport of Russian oil products recently has declined, and Aadu Luukas, chairman of Estonia's leading oil terminal, AS Pakterminal, says that Estonia will have to look to other transport opportunities if the oil transit decline continues, ETA reported on 9 November. The "Wall Street Journal Europe" (WSJE) reported on 9 November that oil product transport accounted for nearly 10 percent of Estonia's gross domestic product. Tallinn was a grain port when the Soviet Union fell a decade ago but well-timed investments turned it into the leading export channel for Russian refined oil products. The port is now finishing a $20 million dedicated container port which, starting in January, will be able to handle 140,000 20-foot containers per year. Advisors to RailEstonia, one of three bidders for Eesti Raudtee, told WSJE that there is a huge potential for Estonian railways and ports to carry exports from China to the European Union, cutting the current 33-day journey by ship to 17-24 days.

* The total revenues of national fixed-line telephone monopoly Eesti Telefon are up 13 percent in the first nine months of this year, ETA reported on 9 November. The main factor is the growth of Internet dial-ups, which in September accounted for 41 percent of all local call minutes. Eesti Telefon has continued with its plan to totally digitize Tallinn's telephone service. Digitalization is expected to reach 70 percent of all of Estonia also by the end of 2000.

* Nelli Kalikova, head of the AIDS prevention center in Estonia, said that the government will have to open new HIV treatment centers in Narva and Tartu within the next two years, the daily "Eesti Paevaleht" reported on 6 November. She said that currently only the Merimetsa hospital in Tallinn is equipped to treat HIV and AIDs patients and that this lone facility will be unable to keep up with the HIV epidemic that has broken out in the northeastern city of Narva. For now, doctors from the Merimetsa hospital have been visiting Narva to instruct local physicians and medical personnel. At present there are 238 persons with HIV in Estonia, 178 of them are residents of Narva.

* Justice Minister Mart Rask said that Estonia may privatize its prisons by the end of 2001, ETA and dpa reported on 10 November. In an interview with the business weekly "Aripaev," Rask said that the reason for the initiative was to save state money. Rask says he will soon present the plan to the cabinet for approval. Estonia currently has 4,740 prisoners in nine prisons, two of which will be merged during 2001. The cost of running the penal system was 250 million kroons ($13.6 million) in 1999. The Estonian government on 7 November approved regulations which allow many of the 793 prison officials who are not Estonian citizens to continue working in the prison system until 2004. The 21 high-ranking officials can continue working after 1 January only if they have submitted an application to become Estonian citizens.

* The Estonian Migration Foundation, created in 1992, has assisted 23,579 people to migrate from Estonia, spending 121 million kroons ($7 million), ETA reported on 7 November. The largest number of non-Estonians left in 1995 when 2,013 Russian army officers with their families, a total of 5,737 persons, went back to Russia. Over the last eight years a total of 5,155 Russian officers have left Estonia as a result of this resettlement program.

* According to a recent survey of non-citizens in Estonia conducted by Saar Poll, 18 percent of non-citizens regard the former Soviet Union as their homeland, 26 percent identify with Russia, and 43 percent see Estonia as their home, BNS reported on 7 November. Almost 46 percent of all those interviewed want to improve their knowledge of the Estonian language, but 44 percent said they had no intention to even start learning Estonian in the next five years. The responses on the desire to attain Estonian citizenship vary widely by category of existing passport holders. While 38 percent of all respondents want Estonian citizenship, only 15 percent of those with Russian passports want Estonian citizenship. Some 51 percent of stateless persons want Estonian citizenship. ETA reported that 7 percent of non-Estonians still wish to leave Estonia to resettle elsewhere, according to the Saar survey.

* The same Saar Poll of 656 non-citizens commissioned by the Estonian Migration Fund found economic problems as the main reason for discontent among non-citizens in Estonia, BNS and ETA reported 7 November. Twenty-six percent named general economic problems and 24 percent named employment as the reason for their dissatisfaction with life in Estonia. Low wages or pensions were cited by 11 percent, the cost of services by 10 percent and climbing prices by five percent. Only 4 percent named problems with language as the main reason for their dissatisfaction, 3 percent said the lack of free higher education, 2 percent cited the lack of citizenship and an additional 2 percent named discrimination on the grounds of nationality as the main reason for discontent.

* Youth of Uighur origin will hold the Third World Uighur Youth Congress in Tallinn from 13-15 November, BNS reported on 10 November. The conferees will discuss the violations of human rights of Uighurs in China, repression against Uighur political and religious leaders, possible solutions of the conflict between the Chinese government and the Uighur people, and the plight of Uighurs in Eastern Turkestan.

LATVIA ASSUMES COUNCIL OF EUROPE PRESIDENCY.
Latvia took over the rotating presidency of the Council of Europe from Italy on 9 November, LETA and BNS reported. Latvia's foreign minister will serve as the chairman of the council's Committee of Ministers. During its presidency, Latvia plans to work to strengthen the council's political role, find solutions to cultural issues, and improve the council's efficiency, especially in its work on human rights. Latvian Foreign Minister Indulis Berzins said he will soon visit Azerbaijan in his capacity as chairman of the CE because Latvia wants to promote the accession of Azerbaijan and Armenia to the organization, BNS reported on 10 November. Berzins told a press conference in Riga that "it would be a great satisfaction if during Latvia's presidency the flags of two new member countries would be raised." Since the CE has declared the year 2001 as the "Year of Language," Latvia will organize an international conference on small European languages and related problems in Riga in April, and, in early May, Latvia will organize a congress for local governments titled, "Democracy in Municipalities in the 21st Century." Latvia has also agreed with Liechtenstein, Lithuania, and Luxembourg, the countries that will hold the chairmanship in successive order after Latvia, to hold a series of academic conferences to make recommendations to the CE concerning European identity. The CE -- which was established in 1948 -- currently has 41 members. Latvia was admitted to the organization in 1995.

FEARS OF RENEWED TERRORISM.
A bombing in Latgale and a Russian security service report have sparked renewed concerns about terrorism in Latvia. A bomb exploded on the evening of 7 November at the editorial offices of the regional Russian-language magazine "Kapital Latgalii," which is based in Daugavpils, BNS and LETA reported on 8 November. No one was injured, and the magazine expects to put out its next issue on time. Kapital Latgalii editor Tatjana Margevica views the explosion as an attempt to scare the press so it will stop informing the community about the truth. Meanwhile, the Latvian daily "Neatkariga Rita Avize" quoted a report by the Russian Federal Security Service (FSB) that Russian radical left organizations plan to carry out extremist activities in Latvia during November, BNS reported on 13 November. The FSB report reached Latvian authorities on 6 November, a holiday in Russia, when an official on duty at the Russian Foreign Ministry called the Latvian embassy in Moscow warning that extremists were preparing some disruptive action in Latvia. LETA reported on 12 November that police view Russian extremists as possibly responsible for the explosion at "Kapital Latgalii" along with earlier suspects such as economic interest groups and vandals.

* Latvian Justice Minister Ingrida Labucka and Apostolic Nuncio Erwin Josef Ender signed a Latvian-Vatican agreement in Riga on 8 November which replaces the pre-World War II Concordat that was not implemented after the restoration of independence in 1991, BNS and LETA reported. In the new agreement, Latvia guaranteed the inviolability of places of worship and respect for the secrecy of confession. The most controversial part of the document is the guarantee of restitution of property formerly owned by the Catholic Church. To avoid criticism that the Catholic Church has been given special privileges, the law on religious organizations has been amended to permit Churches to sign agreements similar to the one between the state and the Latvian Conference of Bishops.

* Latvian President Vaira Vike-Freiberga told the BBC on 6 November that Riga has evidence of crimes committed by Latvian-born Konrads Kalejs during World War II and will prosecute him. A Latvian court has granted an arrest warrant for Kalejs, who is residing in Australia, and the Prosecutor-General's Office has started working on the extradition request. In the same interview, Vike-Freiberga said that Russian "nostalgia for the Soviet empire" was still troubling Latvia's relations with Moscow nine years after the Baltic state regained its independence, Reuters reported. Vike-Freiberga also said that in her view, Latvia could expect help from NATO if Russia threatened her country even before it became a member because NATO intervened to help Kosovo, which also is not a member of the alliance.

* Latvians marked Lacplesis Day, the holiday to honor Latvia's soldiers who died in the defense of the country, with a wreath-laying ceremony at the Fraternal Cemetery in Riga, BNS reported on 11 November. President Vaira Vike-Freiberga called for reconciliation to bring peace and harmony to Latvia. National Armed Forces Commander Raimonds Graube said that "the army is strong only when supported by the people," and called for a moment of silence in memory of all of Latvia's fallen soldiers.

* Latvian Defense Minister Girts Valdis Kristovskis along with the British and French ambassadors on 10 November lowered wreaths into the Baltic Sea near Bolderaja on the outskirts of Riga at a memorial for the nine British sailors who died in 1919 during the fight for Latvia's independence, LETA and BNS reported. On 12 November, the British ambassador to Latvia, Stephen Nash, took part in a service in the Nikolajs Cemetery in the central Latvian town of Jelgava and the Anglican Church in Riga to honor the memory of soldiers killed during both world wars, BNS reported.

* Following a meeting with Latvian Foreign Minister Indulis Berzins, Swedish Foreign Minister Anna Lindh said in Riga on 10 November that during Sweden's presidency of the European Union she hopes that Latvia will open negotiations on all of the remaining chapters for EU membership, BNS reported. Sweden will chair the EU for six months starting in January.

* Hans-Otto Brautigam, a representative of Germany's fund "Memory, Responsibility, and the Future," met with Latvian officials in Riga to discuss issues related to the compensation of Latvian residents who were Nazi slave laborers during World War II, BNS and LETA reported 9 November. Latvia wants a mechanism ensuring speedy and efficient payment of compensation to the estimated 6,000 eligible Latvian residents. Brautigam expressed understanding of Latvia's position but acknowledged that the fund had not completely settled all issues related to the payment of the compensation. Under the agreement signed this summer between the U.S., Poland, the Czech Republic, Russia, Ukraine, Belarus, Germany, and German industrialists, some 10 billion German marks will be paid in compensation to former Nazi slave laborers from Eastern Europe.

* Egils Levits, a Latvian judge serving on the European Court of Human Rights, said that there are about 150 cases filed with the court against Latvia, BNS reported on 12 November. About 30 cases have been rejected by the court without review because they were without foundaton. Levits said the number of complaints against Latvia is comparatively small and "if taken against the population size is below the average level." In comparison, there are thousands of cases against Russia, Poland, and Ukraine.

* Preliminary census data released by the Central Statistics Office on 7 November indicate that Latvia's population on 31 March 2000 was 2.375 million, a decrease of 291,000 or 10.9 percent from the 1989 census, BNS reported. Women number 1.282 million and men 1.093 million. The number of people over 60 increased by 39,000 to 502,300 (21 percent of the population), while the number of residents below age 14 decreased by 146,000 to 424,000 (17.9 percent of the population). The urban population has decreased by 13.5 percent with the largest declines in the cities of Liepaja (22 percent) and Riga (16 percent). The rural population fell by only 5.1 percent. Earlier this year, the Central Statistics Office reported an increase in the birthrate in 1999, reversing a multiyear trend of decreases. The next population census is planned for 2010.

* According to preliminary results of the census, 62 percent of Latvia's residents said that Latvian is their native language, while only 57.6 percent of the population are ethnic Latvians, LETA reported on 7 November. Russian registered as the native language of 36.1 percent of the population although only 29.6 percent of the population are ethnic Russians.

* State Controller Raits Cernajs told a press conference that only 120 of Latvia's 581 municipalities have complied with the law in drafting their financial reports "so that expenditures are comprehensible," LETA reported on 10 November. Cernajs said that his office cannot determine how the funding was actually spent by the municipalities which failed to apply the new accounting standards. Cernajs called these invalid reports "a very serious violation" that create "grounds for a suspicion of corruption" in those municipalities.

* The Latvian Cabinet of Ministers approved the new charter for the state-owned electricity monopoly Latvenergo, LETA reported on 7 November. The government agreed on keeping the former structure of Latvenergo's management with three state proxies and nine council members. Latvenergo's council chairman Ojars Kehris is the only former state proxy who has again applied for one of the vacant proxy seats, LETA reported on 8 November. Latvenergo is being reorganized after a public referendum this summer voted that the state energy monopoly not be privatized.

* The Latvian Privatization Agency's (LPA) council approved the sale of 2 percent of the remaining 10 percent of government-owned shares in the gas monopoly Latvijas gaze (Latvian Gas), LETA reported on 10 November. LPA Director-General Janis Naglis said at the council's meeting that the latest World Bank mission had recommended that the state sell all of its remaining shares in LG, but LG shareholders from Germany recommended that LPA retain a 5 percent stake in the company on behalf of the state. LG shareholders are Ruhrgas Energie Beteiligungs AG, which owns 25.59 percent of the shares, Gazprom (25 percent), Preussen Elektra AG (17.06 percent), Itera Latvija Ltd. (14.7 percent), and Fortum Gas and Oil OY (1.9 percent). LG registered share capital is valued at 39.9 million lats ($64 million).

* Latvia's unemployment rate declined by 0.1 percent from the end of September to 7.8 percent, LETA reported on 10 November. This continues a downward trend for the year. The lowest unemployment rates were in the city of Riga (3.7 percent) and the Ogre district (5.2 percent) -- which is immediately south of the capital -- while the highest rates continue to be in the eastern Latvian rural districts of Rezekne (25.4 percent), Kraslava (22.1 percent), and Balvi (21.3 percent).

* The State Veterinary Service is ready to suspend the license of the meat processing enterprise MVA since it has determined that several products made by the company are hazardous to the public's health, the daily "Diena" reported on 10 November. MVA will have to recall its products from retailers, according to LETA.

* Speaking at a conference in Riga on the commercial sexual exploitation of children, criminal police chief Valdis Pumpurs reported that his office had initiated 177 criminal cases on sexual abuse of children this year, LETA reported on 9 November. Last year there were 198 reports of sexual abuse of children.

* A Latvian court handed down jail terms to four organizers of a 1999 road rally that left eight spectators dead and 25 persons injured in the country's worst sporting tragedy, Reuters reported on 6 November.

* The Latvian National Environmental Health Center announced the conclusions by the World Health Organization and U.S. specialists from the Disease Control and Prevention Center that Latvia ranks first among former Soviet repubics in diphtheria cases, LETA reported on 10 November. Latvia is followed by Ukraine, Russia, Georgia, Turkmenistan, Kazakhstan, and Moldova in the number of reported cases in 2000.

* HIV continues to spread at an increased rate in Latvia, BNS reported on 6 November. In the first 10 months of the year, 362 new HIV cases have been registered -- 115 more cases than during the whole of 1999. The total number of HIV cases in Latvia is currently 854, of which 69 have developed into AIDS. Twenty-one people have died from AIDS in Latvia in the last decade. The AIDS Prevention Center of Latvia reports that 75 percent of the HIV carriers are men, 64 percent are intravenous drug users, and some 10 percent have become infected through homosexual relations.

PARLIAMENT APPROVES NEW GOVERNMENT'S PROGRAM.
By a vote of 72 to 48 with 16 abstentions, the parliament approved the program of the new coalition government headed by Prime Minister Rolandas Paksas on 9 November, ELTA and Western news agencies reported. The new 13-member cabinet is Lithuania's 11th government since the restoration of independence on 11 March 1990. The program was supported by deputies from the Liberal Union, the New Union/Social Liberals, and several small parties. The leftist opposition, the Social Democratic Coalition, voted against the program, while the Conservative and Peasant parties abstained. Paksas has promised gradual tax cuts, deficit reduction, and plans to pursue Lithuania's bid to finish EU accession negotiations in 2002 and win an invitation to join NATO at the alliance's next summit in 2002. The program promises to increase social welfare spending by making deep cuts in the bureaucracy, and "not the imitation of reforms, but the real thing," dpa reported. After the new government was sworn into office, Paksas told reporters at a press conference that the budget allocation for national defense may be cut and the law pledging to increase defense spending to 2 percent of GDP revised, although he emphasized that there has been no final decision, BNS reported. Paksas heads a minority coalition with the left of center New Union/Social Liberals, which holds 67 of 141 seats in parliament with "little room to maneuver," Reuters reported. Analysts believe the new government will face serious internal differences over policy, "with the New Union already showing less enthusiasm for tax cuts," AP reported.

MAFIJA HITS RESUME AS CRIME SURGES.
The bodies of the deputy chief prosecutor of Panevezys, Vida Kazlauskaite, and Pasvalys District Police Inspector Sergejus Piskunovas were found on 6 November with gunshot wounds to the head, ELTA and BNS reported. Last year, the city's chief prosecutor for organized crime and corruption, Gintaras Sereika, was gunned down outside of his home in a still unsolved murder. Prosecutor-General Kazys Pednycia and Police Chief Commissioner Visvaldas Rackauskas went to Panevezys to investigate the murders and later that same day reported back to President Valdas Adamkus. The parliament on 10 November formed a temporary commission to investigate the causes of the high crime rate in Panevezys and evaluate the activities of the city's law enforcement institutions, BNS reported. The commission will present its conclusions on 19 December. The national office of the country's police department announced that the number of reported crimes in Lithuania in the first 10 months of the year had increased by 6 percent over the same period last year, ELTA reported on 10 November. Of the 67,411 crimes reported, 324 were murders, 367 incidences of grievous bodily harm, 43,819 thefts, 3,384 armed robberies, and 4,198 stolen cars. Law enforcement officials had warned the government earlier this year that crime would increase because of the poor economic situation in the country and the drastic reductions in funds for police enforcement. There are police districts where the telephones are cut off for non-payment of service and the police are patrolling on horseback because they lack funds for gasoline for police vehicles.

* The Lithuanian parliament's new chairman, Arturas Paulauskas, met with Belarusian ambassador Vladimir Garkun on 10 November, BNS and ELTA reported. Garkun told reporters afterwards that he had urged Paulauskas to start parliamentary relations with the new Belarusian National Assembly. Lithuanian Foreign Minister Antanas Valionis told reporters later that Lithuania's position towards the "undemocratic elections in Belarus" has not changed, and that "we will strive to make sure that reckless steps are not taken," the daily "Lietuvos Rytas" reported on 11 November. Deputy Vytenis Andriukaitis, leader of the left-wing opposition, told BNS on 10 November that he supported the Belarusian ambassador's proposal to set up a parliamentary liaison group for the solution of specific economic problems and not for strengthening "ties of friendship."

* Lithuanian Foreign Minister Antanas Valionis has promised to take up the issue of compensation for damage resulting from the Soviet occupation at the next meeting of the Russian-Lithuanian bilateral cooperation commission, BNS reported on 10 November.

* Lithuania is eligible for an estimated 500 million euro aid package from the European Union over the next two years, ELTA reported on 8 November. The European Commission cited this amount in its annual progress report about Lithuania. According to the report, the financial support to Lithuanian reforms under the EU's PHARE program will be 126 million euros, under the SAPARD agricultural program -- 90 million euros, and the ISPA program making investments in transportation and environmental infrastructure will be between 120-180 million euros.

* Outgoing Defense Minister Ceslovas Stankevicius praised his successor and described his own four-year term as fruitful and successful, BNS reported on 6 November. Among the Defense Ministry's successes he cited were the passage of legislation establishing the framework for the country's defense structures and the relationships within and among governmental institutions; a steady increase in defense spending that has allowed the country to establish a defense force grounded in Western, democratic principles; joint projects with the other Baltic states; the creation of the joint Lithuanian-Polish Battalion (LITPOLBAT); and Lithuania's active participation in programs and projects organized by NATO. He said he was convinced that "the development of the armed forces and the ministry would not stop under the new minister." Stankevicius also voiced satisfaction over the public's confidence in the defense forces. The latest public opinion poll found that 48 percent of the Lithuanians have confidence in the Lithuanian army, which continues an upward trend over the last two years.

* Officials of Equatorial Guinea have detained a freighter belonging to the Baltic Atlantic Shipping Company and sailing under a Lithuanian flag, BNS reported on 12 November. The Russian captain and two crew members were arrested and taken off the ship. The rest of the 34-man crew is banned from leaving the ship. The government of Equatorial Guinea charges that the vessel was illegally fishing in its territorial waters. Owners of the vessel have said that it has no equipment for fishing, and was only transporting a load of frozen fish and fish powder from Mauritania to Cameroon on the Gulf of Guinea.

* Outgoing Prime Minister Andrius Kubilius told reporters after his government's final cabinet meeting on 9 November that he was "leaving with a clear conscience. We did our best and we have carried out tasks, which the country needed. Popularity and other earthly matters are of no significance to me," BNS reported. Kubilius became prime minister last November when the government's budget was hemorrhaging. His government implemented drastic budget cuts which were unpopular domestically but which won strong support from the International Monetary Fund and other international financial institutions.

* The leftist opposition, the Social Democratic Coalition, has filed a request with the parliament's ethics committee for a ruling on whether the parliament's decision to not even consider voting on a draft bill maintaining state control in strategic sectors of the economy violated the Seimas' statute and other relevant legislation, ELTA reported on 6 November. The draft law was supported by a citizens' initiative that collected the required number of signatures this fall to put it on the parliament's agenda. The Social Democratic Coalition has also filed a formal request with the Constitutional Court to make a ruling as to the constitutionality of the parliament's move.

* The daily "Lietuvos Rytas" reported that the presidium of the New Union/Social Liberals party on 11 November approved the list of its candidates for vice minister in the new government as well as its candidates for regional governors, but will not disclose the list yet. Under the coalition agreement, the New Union may fill 16 vice minister posts and 4 of the 10 regional governor posts. The New Union was publicly embarrassed when its partner, the Liberal Union, would not support their candidate for agriculture minister, Gintautas Kniuksta, because he had failed to return a private loan to former Prime Minister Adolfas Slezevicius.

* Final reports on campaign finance filed with the Chief Electoral Commission show that the New Union/Social Liberals raised the most money and spent the most on the recent parliamentary campaign, BNS reported on 10 November. The New Union listed 118 donors who contributed 1.2 million litas ($300,000), and it spent 1.1 million litas. Their coalition partners, the Liberal Union, raised 1.07 million litas ($267,500) from 60 donors and spent 1.8 million litas leaving their campaign in debt by 730,000 litas ($182,500). The Center Union, also a coalition member, raised 699,300 litas ($174,825) from 116 donors and spent only 493,700 litas.

* A Free Market Institute (LLRI) survey of some 50 market experts forecast minimal economic growth in Lithuania until mid-2001, ELTA reported on 7 November. The panel noted that Lithuania's GDP had declined by 1.8 percent last year but said that it will increase by 1.8 percent in 2000, and year-on-year growth of GDP by mid-2001 will reach 2.3 percent. The experts agreed that the GDP share of the shadow economy had stabilized at some 23 percent, while unaccounted imports equaled some 20 percent of all imports, and unaccounted exports were 12 percent of all exports for the country. Inflation should be 2 percent for this year and may reach 3.4 percent by mid-2001.

* The director-general of the Lithuanian State Property Fund, Stasys Vaitkevicius, resigned from his post on 2 November, BNS and ELTA reported on 6 November. The head of the outgoing government, Prime Minister Andrius Kubilius, accepted the resignation. Vaitkevicius and the fund have been under public criticism for the contract it negotiated with the Dutch-registered B.B.Bredo. B.V. for the privatization of the state-owned Lithuanian Shipping Company. The newly-elected parliament adopted a resolution recently expressing concern over the deal, and the State Controller announced that the Dutch firm fell short in its commitments to partners in the privatization agreement. In explaining his resignation, Vaitkevicius said, "The new prime minister did not want to work with me, and I also do not want to--not a single day, not a single hour."

* The state-owned Kaunas Energija (Kaunas Energy) has signed an agreement with a private firm, Baltijos Realizacijos Centras, to collect a total of 9 million litas ($2.5 million) in payments due from residential consumers of its electricity and heating in the city, ELTA reported on 10 November. Any money received will be used to pay debts to Lithuania's major gas distributor, Lietuvos Dujos.

* Workers at the bankrupt sanatorium in the southern resort town of Druskininkai picketed the parliament on 10 November, ELTA reported. The health clinics in Druskininkai are the biggest in the country and are facing immediate bankruptcy proceedings. The medical personnel were demanding that the Liberals and New Union live up to their campaign promises of reducing unemployment and "taking care of every person in Lithuania." The unemployment rate in the city is already 23.5 percent among its 20,000 residents.

* The Italian textile firm Linificio e Canapificio Nazionale, which already runs a linen yarn factory in Lithuania named Liteksas, is planning to expand its operations in Kaunas at the beginning of 2001, ELTA reported on 10 November. The firm is renovating a bankrupt facility, to be called Lietlinen, to produce a new line of yarn. Manufacturing operations should begin by the end of 2001.

* The majority of respondents to a survey conducted by the New Union/Social Liberals party claimed that "selfish and malicious" activities of government officials had affected the agricultural sector and rural residents the most, ELTA reported on 13 November. An absolute majority of the 27,600 people who filled out the questionnaires blamed former parliament chairman and leader of the Conservative Party Vytautas Landsbergis for the collapse of Lithuania's economy. Some 91.3 percent of the respondents agreed with the statement on the questionnaire that the New Union/Social Liberals should hold specific individuals responsible for the "ruination" of the Lithuanian economy. Meanwhile, 92 percent blamed Landsbergis and 69 percent of the respondents put the blame on former Prime Minister and fellow Conservative Party leader Gediminas Vagnorius. Some 38 percent said former Minister of Economy Vincas Babilius -- who negotiated most of the Williams oil refinery deal -- was responsible, but only 17.5 percent blamed former Premier Adolfas Slezevicius of the Democratic Labor Party.