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Newsline - June 4, 1997


President Boris Yeltsin has urged the State Duma to pass the new draft Tax Code in its first reading before the Duma's summer recess begins in late June, Interfax reported on 3 June, citing presidential spokesman Sergei Yastrzhembskii. First Deputy Prime Minister Anatolii Chubais told Kommersant-Daily the same day that Russia's economy will be set back by a year and a half and the draft 1998 budget ruined if deputies fail to pass the code. Although failure to pass the either the code or the 1998 budget would not in itself give Yeltsin grounds to disband the Duma, the comments by Yeltsin and Chubais have fueled speculation that the president may be seeking early parliamentary elections. Meanwhile, Duma Speaker Gennadii Seleznev said the Duma will consider legislation according to its own schedule. He added that "we're not the fire brigade," RFE/RL's Moscow bureau reported.


Although some Yeltsin supporters argue that new parliamentary elections would diminish the influence of the opposition, others say that, given Russia's current economic conditions, early elections would improve the opposition's standing in the lower house of parliament. Duma deputy Vladimir Ryzhkov of the pro-government Our Home Is Russia faction warned against dissolving the Duma, Russian news agencies reported on 3 June. He argued that the opposition Socialists in France soundly defeated the governing party after French President Jacques Chirac called early parliamentary elections. Ryzhkov also noted that Communist candidate Nikolai Kolomeitsev won twice as many votes as former Labor Minister Gennadii Melikyan in a 1 June by-election for a Duma seat in Rostov. Similarly, Duma Speaker Seleznev, a Communist, commented on 3 June that Yeltsin's advisers should consider Chirac's mistakes before moving to disband the Duma.


The government has submitted proposals for collecting some 34 trillion rubles ($5.9 billion) in additional revenues this year, Russian news agencies reported on 3 June. The measures include plans to bring in 4 trillion rubles by cutting aid to enterprises that owe taxes, 3.5 trillion rubles by limiting access to export pipelines to oil companies that owe no money to the federal budget, 5 trillion rubles by selling state-owned shares in some enterprises, and 8 trillion rubles through changing customs regulations. The government has proposed spending cuts of 108 trillion rubles from the 1997 budget, but the Duma postponed discussion of the proposed cuts pending government proposals on collecting more revenues. The Duma is scheduled to consider the budget reductions on 11 June.


Also on 3 June, the government submitted to the Duma a revised forecast for Russia's economic performance in 1997. The government now predicts that GDP will be between 2,550 trillion and 2,600 trillion rubles ($450 billion) in 1997--zero growth at best and a 2% decline from 1996 levels at worst. Earlier this year, the government had predicted GDP growth of up to 2% in 1997. Meanwhile, the Financial Times on 3 June cited a new forecast by analysts of the Chase Manhattan Bank, who predict that Russia's GDP will increase by up to 5.4% this year, mostly due to the growing "shadow economy."


President Boris Yeltsin has told Moscow Mayor Yurii Luzhkov not to "quarrel with the government," Russian news agencies reported on 3 June. During a meeting with Luzhkov, Yeltsin also expressed his disagreement with the mayor's statements on Sevastopol, where the Black Sea Fleet is based. Luzhkov has repeatedly claimed that the Crimean port is a Russian city. Luzhkov reportedly told Yeltsin that he has no fundamental objections to government policy, except over housing reform. The mayor recently accused the federal government of imposing an "economic blockade" on Moscow and of "spitting on" a festival planned to mark Moscow's 850th anniversary (see RFE/RL Newsline, 28 May 1997).


Moscow residents whose apartments are larger than limits defined by the city will have to pay more in rent and municipal services for the extra space beginning on 1 July. According to a reform program approved on 3 June by the Moscow city government, the higher charges will apply to Muscovites whose apartments are larger than 30 square meters per family member, ITAR-TASS reported. Under the reform plans, costs for rent and municipal services will be shifted to city residents in full by the year 2006, although subsidies will be provided if these costs amount to more than 25% of a family's income. Under the federal government's planned housing reform, costs for rent and municipal services would be fully shifted to the population by the year 2003.


In a partly-televised meeting with First Deputy Prime Minister Chubais, Yeltsin hailed the government's achievements during the first five months of the year, especially in foreign policy, Russian news agencies reported on 3 June. Yeltsin noted that in May, Russia signed agreements or treaties with Chechnya, Belarus, Ukraine and NATO. He told Chubais that the government's next important task is paying pension arrears and other debts to Russian citizens. Government officials have repeatedly pledged that all back pensions will be paid by 1 July.


A Chechen government delegation headed by First Deputy Prime Minister Movladi Udugov held talks in Moscow on 3 June with Russian First Deputy Premier Anatolii Chubais and Security Council Secretary Ivan Rybkin, Russian and Western agencies reported. The talks focused on implementing several points of a 12 May economic agreement that deal with a draft customs accord, banking, and the transit through Chechnya of Azerbaijan's Caspian oil. Interfax reported that Russia and Chechnya have not yet agreed on the tariff for transporting Caspian oil via Chechen territory, but NTV quoted Udugov as saying that the talks were "productive and successful."


Russian First Deputy Prime Minister Boris Nemtsov has said the issue of the Kuril Islands will not be on the agenda when he visits Japan on 9-11 June, Interfax reported on 3 June. Nemtsov said that talks will focus on economic cooperation, adding that the Kuril problem is "an issue for the Russian tsar," meaning Yeltsin. Russia's expected admission to the Group of Seven leading industrial nations is almost certain to be discussed. But Japanese Deputy Foreign Minister Kadzuo Ogura said on 4 June that Russia must show "not only a political but also an economic contribution to world affairs," ITAR-TASS reported. He commented that Russia places more emphasis on relations with Europe and the U.S. than with Asia. He added that if Russia is admitted to the G-7, Japan will propose China as a candidate for entry as China's foreign trade is twice that of Russia.


A Russian Security Council delegation led by the council's deputy secretary, Leonid Mayorov, has agreed to strengthen ties with Mongolia, ITAR-TASS reported. The Russian delegation is on a five-day visit to Mongolia to improve cooperation between the security structures and regular armies of the two countries. Mayorov said that although there is currently no apparent military threat against either country, it is prudent to reach agreement on cooperative action should the situation in the region change.


CIS Affairs Minister Aman Tuleev told Interfax on 3 June that a decree on his dismissal is on the president's desk, although he does not know whether Yeltsin has signed it. Tuleev did not accompany Yeltsin on his recent trip to Ukraine and criticized the agreement on dividing the Black Sea Fleet. Kazak President Nursultan Nazarbayev called for Tuleev's dismissal after Tuleev criticized the treatment of ethnic Russians in Kazakstan. Kommersant-Daily argued on 3 June that Tuleev has damaged Russia's relations with leaders of all CIS countries except Belarus. Appointed last August, Tuleev is the cabinet minister with the closest ties to the opposition. He supported Communist Party leader Gennadii Zyuganov's presidential bid last year and is a leading figure in the Communist-led Popular-Patriotic Union of Russia.


Vitalii Mukha says that while the proposed new Tax Code has many merits, its terms do not fully take into account regional interests, ITAR-TASS reported on 3 June. Mukha praised efforts to lower tax rates and simplify the tax system by reducing the overall number of taxes. However, he criticized a provision that would allow the federal government to collect all value-added tax revenues. Mukha said he and other Siberian leaders had expressed their concerns about the new Tax Code to First Deputy Prime Minister Chubais at a May meeting of the Siberian Accord association. Yeltsin spoke with Mukha by telephone on 3 June, but no details of their conversation were released. Presidential spokesman Sergei Yastrzhembskii said Yeltsin will have more frequent conversations with regional leaders in the future.


A Moscow municipal court ordered on 3 June that Petr Karpov, deputy director of the Federal Bankruptcy Administration, be released from pre-trial detention, RFE/RL's Moscow bureau reported. The charges against Karpov have not been dropped, and he had to sign a pledge not to leave Moscow. Karpov is accused of taking a 5 million ruble ($870) bribe in 1994, but many observers believe the case against him is driven by wider political or financial motives (see RFE/RL Newsline, 12 and 30 May 1997). In an interview with RFE/RL shortly after his release, Karpov said that he plans to return to work and denounced the charges against him as fabricated.


The editorial board of Izvestiya has signed a charter with the paper's two major shareholders, the oil company LUKoil and Oneksimbank. The document, published in Izvestiya on 4 June, promises readers that the paper's editorial policy will be determined by its journalists "without any outside influence." The journalists also promised to ensure that Izvestiya's objectivity is not tainted by any "conflict of interests" or "corporate goals." The editor-in-chief will be nominated by journalists but must be confirmed by the paper's board of directors. Journalists are outnumbered by representatives of the shareholders on that board. The charter is aimed at settling the acrimonious dispute between Izvestiya's editorial board and LUKoil (see RFE/RL Newsline, 15 and 23 April, 16 May 1997).


One Russian officer was killed and two servicemen injured on 2 June when their armored vehicle hit a mine in Georgia's Gali Raion, Russian and Western agencies reported. Abkhaz Security Minister Astamur Tarba blamed the incident on Georgian saboteurs. An unnamed Russian Defense Ministry official told Interfax on 3 June that his ministry is already making plans for the withdrawal of the peacekeeping force when its mandate expires on 31 July. The Georgian parliament has demanded its withdrawal after that date if the peacekeepers' mandate is not broadened to redeploy them throughout Gali Raion. Nezavisimaya gazeta on 4 June quoted Georgian Interior Minister Kakha Targamadze as saying that after the peacekeepers' withdrawal, Georgian and Abkhaz police could maintain order in Gali and protect ethnic Georgian repatriates from reprisals by Abkhaz militants.


The new plan for a settlement of the Karabakh conflict is based on several compromises, according to Asbarez-on-line of 3 June. Armenian forces must be withdrawn from seven Azerbaijani raions beyond the internal borders of Karabakh (including Lachin) and from the Karabakh town of Shusha. OSCE peacekeeping forces from the U.S., Russia, and Europe will be deployed in those raions, oversee the repatriation of displaced persons, and ensure road communications through the Lachin corridor, which links Karabakh with Armenia. Baku and Stepanakert will begin negotiations on the future status of Nagorno-Karabakh, which will be allowed to keep its well-trained armed forces until agreement is reached on its status. The Karabakh army will then be downsized to a military police force. However, an inventory will be made of Karabakh's armaments, which are to be considered part of Armenia's CFE quota.


The Russian State Duma's Committee on Nationality Affairs has recently held hearings on the plight of the Lezgins, Nezavisimaya gazeta reported on 3 June. The Lezgins are a Caucasian ethnic group whose traditional homeland straddles the frontier between the Russian Federation and Azerbaijan. Shamil Murtuzaliev, chairman of the Union of Muslims of South Dagestan, claims that the Azerbaijani leadership has launched a harsh campaign of repression against the 1.2 million Lezgins in Azerbaijan and other ethnic minorities, including the Avars and Kurds. He also claims that Baku has banned the Lezgin National Movement, Sadval. Azerbaijan's Lezgins are lobbying for the transfer of the raions where they live to Russia and for dual (Azerbaijani and Russian) citizenship to facilitate communication within families whose members live on either side of the frontier.


The signing of the final agreement between the Tajik government and United Tajik Opposition, scheduled to take place on 13 June in Moscow, has been postponed for "organizational and technical reasons," according to Interfax on 3 June. RFE/RL correspondents in Tajikistan say the reason for the delay is the opposition's insistence that prisoner exchanges begin prior to the signing ceremony. The official signing is to take place after 20 June.


Four people taking part in a demonstration in the central square of Bishkek were beaten in the early hours of 4 June by members of the Kyrgyz militia, according to RFE/RL correspondents in the capital city. One of the four had to be hospitalized. They had taken part in a demonstration outside the government building the previous day to protest a 23 May court decision to imprison two journalists and bar two others from practicing journalism for 18 months (see RFE/RL Newsline, 26 May and 3 June 1997). The four demonstrators had remained in the square after beginning a hunger strike. They were beaten by militiamen when they refused to leave.


Legislators have asked President Leonid Kuchma to explain the recently signed treaty with Russia and the deal dividing the Black Sea fleet. ITAR-TASS on 4 June quoted parliamentary chairman Olexander Moroz as saying lawmakers as well as all Ukrainians have differing views on the agreements. Moroz said legislators want further clarification on the Black Sea fleet deal. In particular, Kuchma has been asked to explain the leasing agreement under which Russia will pay for the use of port facilities in Sevastopol by writing off part of Ukraine's debt for gas deliveries.


The U.S. State Department on 3 June congratulated Romania and Ukraine on the signing of the bilateral treaty the previous day. Spokesman Nicholas Burns said the accord is an "important contribution to the construction of an undivided Europe rooted on the common values of democracy and cooperation." In Moscow, Foreign Ministry spokesman Gennadii Tarasov also welcomed the signing of the treaty and told journalists it is in line with efforts aimed at creating a new atmosphere in Europe. He said the document will in no way influence the still pending bilateral treaty between Russia and Romania. He added that Russia was prepared to sign the treaty "when the Romanian side is ready to do so," ITAR-TASS reported. Talks on the Russian- Romanian treaty have stalled mainly owing to Romanian insistence on including a denunciation of the Molotov-Ribbentrop pact in the document.


Kuchma on 3 June approved the dismissal of Crimean Prime Minister Arkadi Demidenko, ITAR-TASS reported. The Crimean parliament has voted three times to dismiss Demidenko. Meanwhile, RFE/RL's Kyiv correspondent reported on 3 June that Kuchma has agreed to appoint Anatoli Franchuk as prime minister of the autonomous Crimean Republic.


The parliament on 3 June approved a plan to privatize 4,222 large and medium-sized state enterprises in 1997, Interfax-Ukraine reported. The companies, some of which will be restructured before they are privatized, will be purchased either with cash or with the privatization or "compensation" vouchers. The vouchers given to citizens to make up for their financial losses during the years of hyper-inflation immediately following the country's independence from the Soviet Union in 1991.


Second Secretary at the Belarusian Embassy in Paris Vladimir Polupanov has asked the French government to grant him political asylum, ITAR-TASS reported on 3 June. Belarusian Foreign Ministry spokesman Igor Poluyan told the agency that Polupanov quit his post about a month before seeking asylum.


Suleyman Demirel met with President Lennart Meri in Tallinn on 3 June to discuss bilateral ties and Estonia's bid to join NATO and the EU, BNS and ETA reported. Demirel said his country supports Estonia's membership in both organizations. He also opened the Turkish-language faculty at the Tallinn Pedagogical University. The school is financed by the Turkish Embassy and is the only Turkish-language faculty in the Baltic States. The same day, the Estonian and Turkish economy ministers signed agreements on protection of investments and on free trade. Estonia, which currently has a trade surplus with Turkey, imports mostly fruits and textiles and exports timber. Demirel is due to arrive in Riga on 4 June on the last leg of his tour of the Baltic States.


The daily Diena reported in its 3 June issue that Guntis Ulmanis has also broken the anti-corruption law, which bars state officials from holding other posts, according to BNS. The report came one day after Ulmanis said on national radio that the country's image was suffering because of suspicions that some ministers are holding positions outside the government (see RFE/RL Newsline, 3 June 1997). The daily said that Ulmanis is still registered as director of a municipal public utility company and as president of another firm. Ulmanis has denied breaking the anti-corruption law. He says that he has not been active in either position and has informed the Prosecutor's Office about those appointments. He is also considering bringing libel charges against Diena unless it retracts the headline of the report, which read "Ulmanis Too Has Violated Anti-Corruption Law."


Pope John Paul II was joined by the presidents of Germany, the Czech Republic, Poland, Hungary, Slovakia, Lithuania, and Ukraine at a mass in Gniezno on 3 June honoring St. Adalbert, a 10th-century Christian martyr of Czech origin. St. Adalbert, a bishop and missionary, who was killed by a non-Christian tribe in 997, is remembered for spreading Christianity in Poland, Bohemia. and Hungary. At the mass, the pope warned that there is a new "invisible wall" of selfishness and prejudice in Europe. He said that the years of fighting in the former Yugoslavia and this year's crisis in Albania show an increased insensitivity to the value of human life. At a meeting with the presidents after the mass, the pontiff called on European organizations to admit all states wishing to join. He said that "no nation, not even the poorest, should be excluded."


Czech Foreign Minister Josef Zieleniec, who is also deputy chairman of Prime Minister Vaclav Klaus's Civic Democratic Party, told Czech Television on 3 June that Klaus never showed him a letter from Stanley Fisher, the deputy managing director of the International Monetary Fund. Zieleniec's statements come in the wake of Deputy Prime Minister and coalition Christian Democratic Union Chairman Josef Lux's comments on Czech TV two days earlier that Klaus had withheld from the government a letter from Fisher that was critical of the economic and currency situation in the Czech Republic. Both Zieleniec and Lux said they would have reacted differently to the growing economic problems, if they had known about the letter. Klaus rejected Lux's allegations on 3 June but refused to comment on Zieleniec's statement. The same day, Klaus met with Fisher to discuss the current economic problems in the Czech Republic.


Milos Zeman, chairman of the lower house of the Czech parliament, told journalists in Moscow on 3 June that Russia, as a democratic country, must respect other nations' bid to join NATO. Zeman is heading a Czech parliamentary delegation that recently visited Ukraine and is now in Moscow. Following his 4 June meeting with Russian Foreign Minister Yevgenii Primakov, Zeman said that the recent Russia-NATO accord eliminates Moscow's "justified security doubts." He stressed that nations wanting to join the alliance will "in no way threaten Russia," adding he understands Russia's fears of deploying nuclear weapons and foreign troops on the territory of new NATO members.


The Russian-born pianist Vladimir Ashkenazy has been named chief conductor of the Czech Philharmonic Orchestra, CTK reported on 4 June. His appointment comes some 18 months after the German conductor Gerd Albrecht resigned from that post under pressure from the Czech media and authorities. Ashkenazy will remain chief conductor of the German Symphony Orchestra in Berlin. His contract with the Czech Philharmonic runs until 2001.


Some 8,000 people demonstrated in Bratislava on 3 June to protest the government's interference in the 23-24 May referendum on NATO membership and direct presidential elections, RFE/RL's Bratislava Bureau reported. The government had refused to include the elections question on the referendum ballots, despite a Constitutional Court ruling that the question could be included. The demonstration was organized by eight opposition parties that agreed the same day on the text of a draft constitutional amendment on direct presidential elections. They also agreed to call a special session of the parliament at which they will attempt to remove Interior Minister Gustav Krajci, whom they accuse of obstructing the referendum. Meanwhile, the ruling coalition and the post-communist Party of the Democratic Left have announced they will submit their own draft constitutional amendments on direct presidential elections.


NATO Supreme Allied Commander Europe Gen. George A. Joulwan has received the top Hungarian state award for his role in IFOR/SFOR operations as well as for his support of Hungarian efforts to gain full NATO membership, Hungarian media reported on 4 June. Defense Minister Gyoergy Keleti handed Joulwan the Hungarian Middle Cross with a Star, while President Arpad Goencz thanked him in a congratulatory letter for the "breathtaking results" that the Partnership for Peace program achieved owing to Joulwan's commitment and initiative.


Bomb scares forced the closure of a high school, an elementary school, and a bar in Tirana on 3 June, Dita Informacion reported (see RFE/RL Newsline, 3 June 1997). Another bomb threat was directed toward the president's office, but police found no explosives there. Albanian Daily News added that a bomb exploded after curfew near the university on 2 June, but nobody was injured. An exchange of fire, however, reportedly followed the blast. Meanwhile, Rilindja Demokratike, the organ of President Sali Berisha's Democratic Party, on 4 June accused "left wing extremists" of planting the bombs. The London-based Independent, however, said that "Berisha is resorting to violence to remain in power." Lush Perpali, the Socialist owner of the restaurant that was blown up on 2 June, demanded the arrest of the journalist who wrote in the pro-Berisha Albania on 1 June that Perpali had received a bomb threat. Perpali concluded that the daily knew about the attack in advance and told its journalists on 3 June that they were working for a "terrorist newspaper."


Greek Foreign Minister Theodoros Pangalos said in Tirana on 3 June that Albanians will be committing "collective suicide" if the 29 June elections do not take place "in the best acceptable way." He also announced that the 300,000 Albanian immigrants in Greece will be able to go home to vote and return to Greece without applying for new visas. Pangalos urged the Albanian government and President Berisha to lift the state of emergency and pledged Greek support in organizing and monitoring the vote. Prime Minister Bashkim Fino asked Pangalos to support an extension of the multinational forces' mandate and to send a large number of observers.


Constitutional Court Judge Rustem Gjata on 3 June postponed a decision on the controversial election law. He did not, however, set another date for a final court session, Koha Jone reported. Justice Minister Spartak Ngjela had gone to court to challenge the process by which the 40 parliamentary seats will be allocated on the basis of proportional representation. According to the law, ten of the seats will be divided between the two largest parties, while the remaining 30 will go to the smaller parties. Many observers feel that granting the smaller parties more influence in the parliament is the only way to overcome the current nationwide polarization between the Democrats and the Socialists.


U.S. Secretary of State Madeleine Albright told ABC TV in Washington on 3 June that her recent tough talk had "some effect" on Croatian President Franjo Tudjman. She added, however, that Serbian President Slobodan Milosevic "is in denial" and "lives in a dream world." Albright said that Milosevic is taking his country "down a rat hole." Meanwhile, the Croatian state prosecutor's office in Petrinja brought charges against 12 Croats in connection with attacks on returning Serbian refugees last month. In Washington, State Department Spokesman Nicholas Burns praised the move as "a step in the right direction," an RFE/RL correspondent reported from the U.S. capital. Burns stressed that the State Department is "absolutely determined" that all refugees be able to go home. He warned both Serbia and the Bosnian Serbs that they will lose much international assistance unless they begin to implement all aspects of the Dayton peace accords. Burns rejected Republika Srpska President Biljana Plavsic's argument that the Bosnian Serb constitution prohibits the extradition of indicted war criminals. He said that the Dayton agreement "supersedes anything in the Bosnian Serb constitution."


UN experts on 2 and 3 June exhumed some 20 bodies from a mass grave that may eventually yield at least 60 corpses. The bodies are those of Croats from the village of Lovas, which the Serbs captured in June 1991, an RFE/RL correspondent reported from the area. The investigators have already removed another 200 bodies from a nearby site, and the Hague-based war crimes tribunal has indicted three Yugoslav army officers in conjunction with that massacre. In Backa Palanka, UN officials announced that the future border between Serbia and Croatia will follow the middle of the Danube River and run through the middle of the bridge connecting Backa Palanka in Serbia with Croatia's Ilok. In Vukovar, UN officials said that 4 June is the first day for motorists to begin the switch to Croatian license plates. And in Zagreb, U.S. and Croatian officials signed an agreement providing for $650,000 in assistance to repair railroad connections between Croatia's Vinkovci and Brcko in Bosnia.


Former German Foreign Minister Hans-Dietrich Genscher attended an election meeting in Zagreb on 3 June on behalf of Liberal presidential candidate Vlado Gotovac. Otto Graf Lambsdorff, who, like Genscher, is a prominent elder statesman in Germany's Free Democratic Party, also addressed the symposium. Asked whether he endorsed Gotovac, Genscher replied: "We are bonded by the same ideals." Lambsdorff wished Gotovac "all the best in the upcoming election." Genscher was foreign minister at the time of Croatian independence in 1991 and is easily one of the most widely admired foreigners in Croatia.


In Novo Mesto in Slovenia, union leaders at the Renault plant announced on 4 June that management has not agreed to a wage increase, despite the threat of a strike slated for the same day. The unions said that conditions at the plant have become "unbearable" since Renault recently announced the closure of another plant in Belgium. In Belgrade, doctors decided to continue their strike until the government pays their back wages. In Podgorica, Prime Minister Milo Djukanovic visited an area in the Sandzak region from which paramilitaries drove Muslims in 1992 and 1993, an RFE/RL correspondent reported. A government spokesman told the daily Pobjeda that those expulsions were the main topic of the discussions a Montenegrin delegation recently held with the Hague-based war crimes tribunal.


On 3 June, a motion of no confidence was officially moved by 141 legislators representing the three opposition parties in the parliament. The legislature is to vote on the motion on 6 June. In a separate development, Victor Ciorbea addressed a joint session of the parliament's two chambers about reforms introduced so far and the government's future reform plans, RFE/RL's Bucharest bureau reported. The procedure used for this purpose is known as "government assumption of responsibility" and is tantamount to a vote of confidence, unless the opposition moves a no-confidence vote within three days.


The World Bank on 3 June approved three loans agreed on in principle during bank president James Wolfensohn's recent visit to Bucharest (see RFE/RL Newsline, 13 May 1997). An RFE/RL Washington correspondent reported that the loans, totaling $550 million, are to support what bank officials call Romania's "bold reform initiatives." A $50 million loan is earmarked for a social protection program to increase child allowances and to expand food programs for the poor. A $350 million loan is aimed at helping agricultural reform and accelerating privatization. The third loan, worth $150 million, is to help improve road infrastructure.


Three former senior bank officials and a businessman were sentenced to prison on 3 June on charges of fraud and forgery, AFP reported. The former director of Credit Bank, Marcel Ivan, was sentenced to six years in prison. The bank's former economic director and chief accountant both received less severe sentences, while businessman Jirair Giulbenghian was jailed for four years. The Credit Bank's license was withdrawn by the National Bank in April.


Prime Minister Ivan Kostov on 3 June announced that the Bulgarian currency is to be pegged to the German mark at an exchange rate of 1,000 leva to DM1. Finance Minister Muravei Radev said the IMF has approved the plan, which must still be endorsed by the parliament and is due to take effect on 1 July, at the same time as the new currency board begins its work, RFE/RL's Sofia bureau reported. Meanwhile, Justice Minister Vasil Gotsev said a new law drafted by the government will provide for the confiscation of illegally obtained income and stiff sentences for those who fail to declare assets, Radio Sofia reported. Slavcho Bosilkov, the head of Bulgaria's police forces, said five officers from the U.S. Federal Bureau of Investigation will help with investigations into tax evasion and the misappropriation of funds.


Ivan Kostov, at the start of a three-day visit to Brussels, was told by the European Commissioner Hans van der Broek on 3 June that his country is taking the right steps "leading to EU membership." Van der Broek said both the EU and the Bulgarian people have been waiting for a government in Sofia to "seriously approach" economic reforms. Kostov said he was "gratified" by promises of EU support, which, he said, will allow Bulgaria "to leave no challenge unaddressed" during the reform process. This is Kostov's first visit abroad as premier.


Petru Lucinschi says that the breakaway Transdniester region will eventually "return to the fold" but that "patience is necessary" in view of the recent "difficult armed conflict." Lucinschi told a visiting delegation of Bucharest city councilors that the 1997 presidential poll has helped solve "many problems," Rompres reported on 3 June. Meanwhile, Dumitru Diacov, the leader of the pro-presidential Movement for a Democratic and Prosperous Moldova (MPMPD), says Lucinschi played no part in the party's initiative to promote early parliamentary elections (see RFE/RL Newsline, 28 and 30 May 1997). Diacov told Infotag on 3 June that the MPMPD has "only informed" Lucinschi of its initiative, "but he has not yet reacted to it."

The Revival of Fascism

by James Hooper

The revival of fascism is a greater threat than most observers realize. In its various guises--ultra-nationalism, neo-fascism, post-fascism, proto fascism, or some other form -- it now endangers democracy in many countries. Unless recognized and checked in time, the rise of fascism will undermine hopes for democratic expansion and improved security in the post-Cold War international order.

Extreme nationalist parties have scored unprecedented post-war success in Western Europe. Some have attracted broader constituencies through sophisticated propaganda that downplays their extreme nationalist roots and exploits mainstream concerns about immigration and corruption. But the goal shared by all European extreme nationalist leaders is political legitimization as responsible, democratic politicians. The public-policy issue for the U.S. is to determine the standard to be met by such leaders before deciding whether to accept them as legitimate democratic partners.

The Balkans provide a grim reminder that the hard-knuckled fascism of the 1990s can induce political psychosis in societies where it takes hold and historical amnesia in leaders who have the capacity and responsibility to resist it. Serbian President Milosevic used classic fascist means to define and pursue national aims: dictatorship, aggression, seizure of territory by force, destruction of pluralism and democracy, concentration camps, genocide, and reliance on diplomacy as bluff, gamble, and institutionalized duplicity. By modeling a violent and intolerant style of politics for a new generation of European political activists, he projects the power and discipline the fascist myth can invoke.

Russian ultra-nationalists benefit from Serbian fascism. While extreme nationalist groups have not gained executive power in Moscow, they have seized and distorted the democratic political agenda. If fascism moves from agenda setting to office holding, the U.S. and Europe will be faced with a threat more dangerous than Soviet communism. The issue for Western policy-makers is to determine whether concessions to self-professed Russian democrats on important matters of principle and policy contain or embolden the ultra-nationalists.

In Asia, Japanese ultra-nationalism is an incipient but containable threat. China is a different matter. As noted in Bernstein and Munro's book The Coming Conflict With China, "early twentieth-century fascism," rather than democracy, is one possible outcome of China's political transition. The inability of China's repressed democrats to play an active role in the transition significantly weakens the democratic cause there and shifts the burden of responsibility to advocates of democracy abroad who have a stake in influencing the outcome.

What is to be done? The first step is to recognize that democracy is imperiled when the aim of politics becomes the process of defining enemies, especially when the enemy is pluralism. For example, to forestall additional defections by their own supporters, some otherwise democratic parties have begun to advocate firmer measures to trim the numbers of and social services provided to immigrants and refugees. In this way, the agenda of fascists begins to shift the policies of democrats.

The irony of fascism is that its recognized hostility to multiculturalism gives it a genuinely cross-cultural appeal. Fascism is equally accessible to Chinese leaders seeking an integrative nationalist ideology in the waning days of communism, to Hutu leaders pursuing tribal dominance, to Russian and Hindu ultra-nationalists to Iraqi Baathists, to Austrian neo-fascists; and to U.S. militiamen, skinheads, and racists.

The most pressing need at the moment is to acknowledge the global nature of the problem and ensure that policy-makers are properly informed about it. This will stimulate debate that takes account of the regional diversity and differing implications of the challenges fascism poses. And from this will come a better perspective for framing practical public-policy decisions that reflect the U.S.'s strategic interests, democratic values, humanitarian concerns, and commercial goals. The author is director of the Program for the Study of Contemporary Fascism and Democracy at the Balkan Institute, Washington D.C.