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Newsline - September 29, 1997


The Russia-NATO Permanent Joint Council held its first ministerial-level meeting in New York on 26 September. The council, designed to give Russia "a voice but not a veto" in the western alliance, was created under the Founding Act signed by Russia and NATO in May. Russian Foreign Minister Yevgenii Primakov and NATO Secretary-General Javier Solana told journalists that the two-hour meeting had been a success, although Primakov noted that both Russia and NATO will have to adhere to principles such as "equality between the parties" if progress in Russia-NATO relations is to continue, Reuters reported. In her address to the meeting, U.S. Secretary of State Madeleine Albright said she did not expect Russians to "suddenly fall in love with NATO," but expressed hope that Russia will come to understand that the alliance does not threaten it, according to AFP. (See related item in Part 2 of today's "Newsline.")


Russian Foreign Minister Primakov hailed a package of arms control agreements signed by the U.S., Russia, Ukraine, Belarus and Kazakhstan on 26 September as a major success that "will determine the course of arms control for many years to come," Reuters and AFP reported. Among the documents signed in New York were statements clarifying the 1972 Anti-Ballistic Missile Treaty, although Primakov said the agreements did not resolve all disputes over the ABM Treaty. In addition, a protocol was signed to extend the period of implementation of the START-2 treaty for five years -- from the beginning of 2003 to the end of 2007. U.S. Secretary of State Madeleine Albright told reporters that the package of accords "should pave the way for Russian [State] Duma ratification of the START-2 treaty." There is strong opposition to ratifying START-2 in the Duma.


After his third meeting with French President Jacques Chirac in two days, President Russian President Boris Yeltsin told journalists on 26 September that he and Chirac have "no differences" on any international issues or on Russian-French bilateral relations, Russian and Western agencies reported. Chirac told reporters that Yeltsin was right to say recently that Europe should play a greater role in providing for its own security, according to Interfax. Chirac and Yeltsin issued a joint statement on several topics. The two presidents expressed concern over recent complications in the Middle East and in Bosnia, and also called for a settlement on Nagorno-Karabakh, "within the framework of the UN and the OSCE." Speaking to students at the Moscow State Institute of International Relations, Chirac announced that France's nuclear missiles are no longer targeted at Russia. Yeltsin announced in May that Russian missiles would no longer be targeted at NATO member states.


Yeltsin and Chirac agreed to set a goal of doubling the volume of bilateral trade turnover in the next two years, Interfax reported on 26 September. According to Russian presidential spokesman Sergei Yastrzhembskii, Russian-French trade turnover was $2.8 billion in 1996. The same day, Chirac discussed several joint business projects with Russian Prime Minister Viktor Chernomyrdin, including an oil refinery in the Republic of Bashkortostan, an offshore oil terminal, and cooperation between the automobile manufacturers Renault and Moskvich, AFP reported. At a dinner for French and Russian entrepreneurs the same day, Chirac called for increased French investment in Russia. Before leaving for St. Petersburg on 27 September, Chirac met with Communist Party leader Gennadii Zyuganov and Aleksandr Shokhin, leader of the Our Home Is Russia faction in the State Duma. Chirac returned to France on 28 September.


Russian Foreign Minister Primakov told his Turkish counterpart, Ismail Cem, in New York on 26 September that the optimum solution to Turkish apprehension over the planned sale by Russia to Greek Cyprus of S-300 anti-missile systems would be the total demilitarization of the island, AFP and Interfax reported. Cem told journalists on his return to Turkey that none of the 50 colleagues whom he had told in New York of Turkey's concern over the missiles had said he was wrong, according to the "Turkish Daily News" of 29 September. On 26 September, Rosvooruzhenie head Yevgenii Moskalenko said at an international arms exhibition in Ankara that the S-300s do not constitute a threat to Turkey, according to ITAR-TASS. "Striking ground targets in Turkey with S-300 missiles is as feasible as hammering in nails with a computer," according to Moskalenko.


On 26 September, the Russian State Duma and the Foreign Ministry both issued statements condemning the most recent incursion by Turkish armed forces on to Iraqi territory, ITAR-TASS reported. The Foreign Ministry argued that the need to eradicate terrorism by the outlawed Kurdistan Workers' Party (PKK) does not justify violating international law. The Duma accused Turkey of "perpetrating acts of genocide against the long-suffering Kurdish people."


"The Financial Times" on 26 September reported on a $100,000 payment to former State Property Committee Chairman Alfred Kokh by the obscure Swiss firm Servina. On his income declaration, submitted in June, Kokh listed the payment as royalties for a book on privatization. The "Financial Times" noted that not only has Kokh's book not yet been published, Servina is not known ever to have published a book before. (On 11 September, Procurator-General Yurii Skuratov announced that a criminal investigation concerning Kokh's royalty payment has been opened.) In addition, the paper noted, there appear to be links between Oneksimbank and Servina. Kokh and Oneksimbank president Vladimir Potanin admit to being close friends but say their friendship has never influenced their professional activities. Oneksimbank won controversial auctions for major stakes in Svyazinvest and Norilsk Nickel in July and August.


NTV on 28 September devoted substantial coverage to the "Financial Times" report on its influential weekly program "Itogi," RFE/RL's Moscow bureau reported the next day. In addition, "Segodnya" on 29 September and "Nezavisimaya gazeta" on 27 September published front-page accounts of the "Financial Times" report. "Nezavisimaya gazeta" commented that the weekly "Novaya gazeta" recently published its own investigative report on the "connections between Oneksimbank and Kokh's publishing activities." "Segodnya" and NTV belong to Vladimir Gusinskii's Media-Most holding company, also said to be a financial backer of "Novaya gazeta." "Nezavisimaya gazeta" is partly financed by the LogoVAZ group of Security Council Deputy Secretary Boris Berezovskii. Media influenced by Gusinskii and Berezovskii have repeatedly criticized Oneksimbank, Kokh, and other government officials since the Svyazinvest auction. Kokh joined a private investment firm shortly after being dismissed in August (see "RFE/RL Newsline," 4 September 1997).


The State Duma passed several non-binding resolutions on 26 September, including a statement expressing concern over military maneuvers involving NATO members held near Russian borders, Russian news agencies reported. That statement, proposed by the Duma's anti-NATO group, drew particular attention to the recent military exercises in Kazakhstan and Uzbekistan involving U.S. units. Deputies also passed a resolution asking Yeltsin to postpone implementing military reform plans until a law can be passed outlining the concept and goals of military reform. (Earlier in the day, the Duma voted down an attempt to remove Lev Rokhlin, a sharp critic of the administration's military reform plans, as chairman of the Duma Defense Committee. See "RFE/RL Newsline," 26 September 1997.) In addition, the Duma urged Yeltsin to take steps to restore the value of Sberbank savings accounts that were eroded by inflation beginning in 1992.


The fourth session of the Russian-Chechen joint commission charged with drafting a document regulating bilateral relations between Moscow and Grozny concluded on 27 September. Chechnya's future status within the Russian Federation was not even discussed as the Chechen delegation was not empowered to negotiate on that issue, deputy prime minister Akhmet Zakaev told ITAR-TASS. First Deputy Prime Minister Movladi Udugov told Interfax that he rejected Rybkin's proposal to hold a referendum on whether Chechnya should be independent. Rybkin suggested that a new meeting between Russian President Yeltsin and his Chechen counterpart Aslan Maskhadov might help to resolve the deadlock between the two sides' negotiating positions.


Yeltsin on 26 September dismissed Anatolii Malykhin, his representative in Kemerovo Oblast, Russian news agencies reported. Earlier that day, Malykhin had announced that a commission investigating Leninsk-Kuznetskii Mayor Gennadii Konyakhin had concluded that Konyakhin was elected in accordance with the law (see "RFE/RL Newsline," 24-25 September 1997). Aleksandr Zvyagintsev, an assistant to Procurator-General Yurii Skuratov, told Interfax that "no one had authorized" Malykhin to make such statements. Meanwhile, Prime Minister Viktor Chernomyrdin announced on 25 September that the government fully supports Kemerovo Governor Aman Tuleev in the upcoming gubernatorial election in Kemerovo. Tuleev was a sharp critic of Yeltsin and the government when he chaired the Kemerovo legislature. He ran for parliament in 1995 on the Communist Party ticket and supported Communist Party leader Gennadii Zyuganov in the July 1996 presidential election. He was appointed CIS affairs minister in August 1996 and governor of Kemerovo in July 1997.


Vladivostok Mayor Viktor Cherepkov has charged that the Primorskii Krai authorities tried to take advantage of his absence to carry out an "anti-constitutional coup" in the city, RFE/RL's correspondent in Vladivostok reported on 29 September. Upon his return from North Korea on 28 September, Cherepkov told journalists that he will not step down, despite the Primorskii Krai Duma's attempt to suspend him from office (see "RFE/RL Newsline," 26 September 1997). But Deputy Mayor Yurii Kopylov, appointed acting mayor by the krai legislature, has declared that he will execute the mayor's duties. He held a meeting on 29 September with various former city officials who were dismissed by Cherepkov during the last year. Meanwhile, a government commission headed by First Deputy Fuel and Energy Minister Sergei Kirienko arrived in Primore on 29 September to seek a solution for the region's protracted energy crisis.


The American space shuttle "Atlantis" successfully docked with Russia's "Mir" space station on 27 September, according to international media. The shuttle brought a new computer and other essential supplies for the station. That computer will begin functioning on 1 or 2 October, replacing the present computer which has failed three times in September. American astronaut David Wolf will take colleague Michael Foale's place on the station when Atlantis leaves the station on either 3 or 4 October.


The Tajik National Reconciliation Commission concluded its second session in Dushanbe on 26 September, ITAR-TASS and RFE/RL correspondents reported. A representative of the commission, Latifi Otakhon, said the commission would have a document with proposed changes to the constitution ready at the beginning of November. October will be spent discussing such changes at a "round table" where representatives of the Tajik government, United Tajik Opposition (UTO), the UN, OSCE and other international organizations will take part. The commission also released two addresses, one asking for nationwide support in returning and aiding Tajik refugees as they come back from Afghanistan. The other was a warning to armed groups to hand over their weapons by 16 November. Those who do not comply face forced disarmament by forces of the Tajik government and UTO.


Bakhtiyar Sharipov, the 31-year old son of Tajikistan's Procurator General Solomiddin Sharipov, was killed In Dushanbe in a drive-by shooting on 26 September, according to RFE/RL correspondents. The driver of Sharipov's car was wounded and is in the hospital. Authorities are investigating and have not said yet whether the attack was connected to the younger Sharipov's business or his father.


At his first press conference in five years, Levon Ter-Petrossyan said on 26 September that the co-chairmen of the Organization for Security and Cooperation in Europe's Minsk Group that is mediating a solution of the Karabakh conflict proposed on 21 September postponing a formal decision on Karabakh's future status until other issues, including the withdrawal of Armenian troops from occupied Azerbaijani territory and repatriation of refugees, have been resolved, RFE/RL's Yerevan bureau reported. Armenia has consistently espoused a "phased" resolution of the conflict but the Karabakh Armenians want all contentious issues resolved simultaneously. Ter-Petrossyan called for a compromise settlement, arguing that neither continuation of the conflict nor "forced capitulation" are realistic options for Armenia. He said that the conflict parties are to submit a written response to the Minsk Group's most recent proposals within 2-3 weeks.


Asked about Armenian-Turkish relations, Ter-Petrossyan said Turkey will be unable to influence the outcome of the Karabakh conflict unless it normalizes relations with Armenia. Ankara says it will not open a border gate with Armenia until Armenian forces withdraw from Azerbaijani territory. Ter-Petrossyan predicted that Turkey will fail in "its efforts to become a regional leader" because it has too many unsolved problems with neighboring states. Ter-Petrossyan also said that he would run for reelection in the year 2001 "if the people ask me to." He was first elected president in 1991, and reelected in 1996. The Constitution adopted in 1995 bars any one individual from serving more than two consecutive terms. In April 1997, Ter-Petrossyan said he would not seek a third term even if the constitution were amended to enable him to do so.


Kazakh Prime Minister Akezhan Kazhegeldin, in Switzerland while being treated for a blood clot in his lungs, said reforms in Kazakhstan will continue even "in the case of my resignation," Reuters reported on 28 September. Kazhegeldin's hasty departure to "Europe" for medical treatment on 22 September was announced after the Prime Minister had already departed Kazakhstan. That and a series of reports criticizing Kazhegeldin in Kazakh and international press led to speculation he would soon be sacked. One of the most vocal critics of Kazhegeldin, parliamentary deputy Zamanbek Nurkadilov, said "He's destroyed Kazakhstan. He's done this (privatization) for the West - not for Kazakhs." However, western businessmen in Kazakhstan are already expressing doubts about the future of reforms in Kazakhstan if Kazhegeldin should lose his office.


During his three-day state visit to Italy on 25-27 September, Azerbaijan's President Heidar Aliyev met with his Italian counterpart Oscar Luigi Scalfaro and with Prime Minister Romano Prodi. Talks focused on European and regional security, including the Karabakh conflict, economic cooperation and the oil sector. Aliyev and Scalfaro signed a joint declaration of political cooperation that notes Azerbaijan's role in promoting regional stability in the Caucasus; Aliyev and Prodi signed an agreement on economic cooperation and policy, according to ITAR-TASS. Further agreements on avoiding dual taxation and on the mutual protection of investments also were signed. On 26 September, Aliyev held talks with the energy concern ENI, which includes AGIP. The president of AGIP and the Azerbaijan state oil company SOCAR signed a protocol on cooperation whereby AGIP will participate in exploration and development in the Kyurdash sector of the Caspian.


In the 26 September "Byelarusskaya delovaya gazeta," Russian First Deputy Premier Boris Nemtsov said that he opposed unity between the two countries unless Minsk changed its policies. "Just as you cannot unite the economic systems of North and South Korea, just as you cannot unite the economies of Florida with nearby Cuba, you obviously cannot integrate the economies of the Russian Federation and Belarus, whose economic fundamentals differ."


India has welcomed a proposal by President Lukashenka for closer military ties between the two countries, AFP reported. Lukashenka said on 26 September in New Dehli that his country is ready to repair and maintain Soviet-made weapons in the Indian arsenal. India's acceptance of the proposal was conveyed by Indian Minister of State for Defense N.V.N. Somu to Belarusian Defense Minister Alyaksandr Chukakov during a closed-door meeting today in New Delhi. The former Soviet Union was India's main defense supplier and most of India's weapons today are of Soviet origin. Lukashenka said on 27 September that his current trip to India would help re-establish relations between the two countries following the break-up of the Soviet Union. Lukashenka's visit started on 26 September and ended on 28 September.


Russian Black Sea commander Admiral Viktor Kravchenko told Interfax 26 September that there was "no need for the presence of third countries on the Black Sea." He said that the only countries whose navies should be on that body of water were the coastal states. Kravchenko's comments come after the NATO-backed Sea Breeze exercises in which the U.S. participated and just before the joint Russian-Ukrainian exercises scheduled for later October.


Ukrainian Deputy Prime Minister Serhiy Tyhypko told journalists in Kyiv on 28 September he believes his country will not need funds from the International Monetary Fund and World Bank beyond the year 2000. But he also said Ukraine could still benefit from advice from the two international financial institutions even after that date. He said he expects Ukraine to reach a normal stage of economic reform in the next few years. Among the transition economies, Ukraine is seen to be lagging badly in the reform process. Tyhypko said the country should not abandon "clever things that have been offered to it" by the IMF, and that it can decide what is in its own interests. The IMF has delayed making available a $2.9 billion loan until Ukraine meets the required criteria, replacing it with a smaller, interim deal of $542 million.


Leonid Kuchma on 26 September welcomed the recent approval of a new, proportional representation-type of voting for elections to Ukraine's parliament. Kuchma, on an official visit to Mexico, was quoted by UNIAR news agency as saying he is satisfied that agreements reached with the parliamentary factions before he left on his trip were implemented. Under the new voting scheme, to replace the majority system, half the legislature's 450 seats will be decided on the basis of party lists, with the rest going to candidates elected on an individual basis. The number of seats allotted to the parties is proportional to the percentage of the votes they receive. Ukraine will hold its next parliamentary election in March 1998.


Former Ukrainian Prime Minister Pavlo Lazarenko was chosen on 27 September to head a new political movement in Ukraine that its leaders said will openly oppose the government of President Kuchma. Members of Hromada (Community) elected Lazarenko as their chairman at a congress of the movement. Lazarenko described his party as social-democratic and said its main task would be to win a majority in the new legislature to be elected next March. A Hromada spokeswoman, Yulia Timoshenko, said the group will be "in open opposition to the ruling regime." Kuchma dismissed Lazarenko in July amid accusations of corruption and a lack of dedication to reforms. On 28 September, 50 Muslims representing Islamic communities in 15 Ukrainian regions met in Donetsk to form a Ukrainian Muslim Party, Itar-Tass reported. The as-yet unregistered party will be headed by Rashit Bragin.


Estonian Foreign Ministry spokeswoman Ehtel Halliste told Interfax on 26 September that Estonia intends to conduct border talks with Russia in a constructive spirit and hopes to complete them this year. Halliste also refuted a statement by the Russian delegation leader, Vasily Svirin, that Estonia was going to renew its territorial claims to Russia. "We have no territorial claims on Russia whatsoever," she said. Russian Foreign Ministry spokesman Valerii Nesterushkin said in Moscow a day earlier that the Estonian side was showing a nonconstructive approach at bilateral border delimitation talks. At the Moscow negotiations on 23-24 September, he said, the Estonian side refused to examine Russian amendments to the draft of a state border delimitation treaty, although it had not been initialled by the delegation leaders. Nesterushkin said that such "an absurd approach may bring the negotiating process to a halt."


BNS reported on 26 September that the European Commission has promised the Latvian government that it will update its statistics on that Baltic state. Latvia had complained that the EC had used out of date numbers when it decided to invite Estonia but not Latvia and Lithuania for accession talks. Meanwhile, Lithuanian President Algirdas Brazauskas told a conference on "Lithuania in the European Union" that Vilnius does not understand why it has not been invited but will continue to press for EU membership.


Algirdas Brazauskas on 26 September criticized the Russian State Duma's resolution passed earlier the same day. In the resolution, Russian lawmakers warned against the "hasty" signing of a treaty on the state border between Russia and Lithuania, Interfax reported. The signing ceremony is due to take place in October. The lawmakers also asked President Boris Yeltsin to join forces with the legislature in order to work out a single position designed to protect "Russia's interests." Brazauskas told journalists that some Russian politicians repeatedly "call into question Lithuania's territorial rights over the Klapeida region." He said all border disputes have been resolved in official negotiations and that in October "we will sign a treaty on the state border with Russia."


Polish President Aleksandr Kwasniewski said he would meet with Marian Krzaklewski on 29 September to begin talks on the formation of a new government, PAP reported. In addition to meeting with the leader of the largest party in the new government, Kwasniewski has said he will meet with the leaders of other parties this week as well.


At its congress on 27-28 September, the Christian Democratic Union (KDU-CSL) of Deputy Prime Minister Josef Lux criticized its two coalition partners--the Civic Democratic Alliance (ODA) and the Civic Democratic Party (ODS) of Prime Minister Vaclav Klaus--for experimenting with economic transformation. Lux said that his party wants to pursue social market policies tried successfully in Western Europe. He said the government will lose the KDU-CSL's support unless its policies change. The executive committee of the ODS on 27 September criticized party leaders for a lack of leadership and demanded that they regularly present reports to the committee. The so-called "right-wing faction" within the ODA declared at a weekend meeting that the government must push through economic transformation or face losing the faction's support in the parliament.


Slovak Parliament Chairman Ivan Gasparovic told a meeting of the Movement for a Democratic Slovakia (HZDS) on 26 September that the party plans to take some steps by the end of November to change things criticized by the European Commission. The Commission in July failed to recommend Slovakia for talks on EU membership, owing to political problems in the country. Gasparovic said the next parliamentary session, which starts on 30 September, will discuss opposition representation on parliamentary committees with a monitoring function and a bill for a minority language law.


The leaders of the six Hungarian parliamentary parties consulted with Premier Gyula Horn on 26 September and agreed to set up a cross-party committee to examine Hungary's strategy for the talks with Slovakia on implementing the International Court of Justice ruling on the Gabcikovo power plant. Interior Minister Gabor Kuncze said future efforts should be geared at a "zero option" on mutual compensation claims and at the return of the Danube river bed to its original course, Hungarian media reported. In other news, the Foreign Ministry on 26 September confirmed that the third round of talks between Hungary and NATO has been postponed from 3 October to 13 October at the request of NATO officials. Hungarian ambassador to NATO Andras Simonyi confirmed that NATO will grant special status to Poland, Hungary and the Czech Republic as of January 1998, as an important step toward membership.


Romanian Defense Minister Victor Babiuc, who paid a visit to Hungary on 26-27 September, agreed with his Hungarian counterpart Gyoergy Keleti that the document providing for the establishment of a joint Hungarian-Romanian peacekeeping battalion will be signed in Bucharest later this year. The battalion will become operational in the second half of 1998, Hungarian and Romanian media reported. The original intention was to have the battalion set up this year, but plans had to be postponed due to financial difficulties in both countries. Babiuc also met with Premier Horn, with whom he discussed the latter's visit to Romania, planned for October. They agreed to "isolate extremist parties" which seek to undermine Hungarian-Romanian relations and democratization.


On 26 September, Newsline erroneously reported that Polish Premier Wlodzimierz Cimoszewicz had resigned Cimoszewicz had, at that time, submitted his resignation, but it has not yet been accepted.


NATO Secretary General Javier Solana and the 16 foreign ministers of the NATO member states agreed during a meeting with Russian Foreign Minister Yevgenii Primakov of the NATO Russia Permanent Joint Council at the United Nations in New York on 26 September to form a working group to elaborate principles and tasks in peacekeeping, including in Bosnia. Primakov reiterated Russia's position that the UN Security Council must be asked for advance approval for the use of force in peacekeeping operations. Moscow is concerned that NATO may try to detain indicted war criminals in Bosnia without prior approval from the Kremlin. The NATO-Russia Permanent Joint Council participants expressed satisfaction with the way municipal elections were carried out in Bosnia earlier this month and reiterated their determination to help bring peace and security to Bosnia through the Dayton peace accords.


Bosnian Serb President Biljana Plavsic said 27 September that parliamentary elections in Republika Srpska have been postponed eight days until 23 November due to what she called technical reasons. Elections for the presidency of the Serb republic and for the Serb representative in Bosnia's tripartite presidency are set for 7 December. In an interview on Bosnian Serb TV, Plavsic accused former Bosnian Serb president and indicted war crimes suspect Radovan Karadzic of having withdrawn DM 49 million from Banja Luka banks last year. Plavsic rejected suggestions that the international community is hostile toward Republika Srpska, saying the NATO-led Stabilization Force "is not an occupier, it protects our borders, repairs our houses and schools, and defends peace".


The ruling Serbian Democratic Party (SDS) in Pale has so far ignored Plavsic's comments on Karadzic. But it objected to other remarks in her interview as "misleading", "unfair" and "arbitrary". SDS dismissed her accusations of corruption in the Bosnian Serb Interior Ministry and denied her allegation that SDS had negotiated with the ruling Bosnian Croat party (HDZ) about exchanging territory between Republika Srpska and the Muslim-Croat Federation. SDS said "such statements are not naive insinuations but a criminal act of spreading untrue reports."


A nightime explosion on 27 September ripped through the offices of "Alternativa", the only opposition newspaper in the Bosnian Serb town of Doboj. The blast damaged several apartments and sparked a fire. There were no injuries. This was the second attack in recent weeks on the paper, which is owned and edited by retired Bosnian Serb army colonel Milovan Stankovic, an open supporter of Plavsic in her power struggle with pro-Kradzic hardliners.


More than 1,000 ethnic Albanian students and residents of the Kosovo towns of Pristina, Mitrovica, Pec, Prizren and Gnjilane demonstrated on 28 September to protest the intolerable situation in education in the province and demand the return of their school buildings. Serbian authorities shut down Albanian schools six years ago. Last year, Serbian President Slobodan Milosevic reached agreement with Kosovo Albanian leader Ibrahim Rugova to reopen the schools but the accord was never implemented. The Students Union of the University of Pristina plans to launch peaceful protests in seven towns 1 October to force the reopening of the university. But Rugova told reporters that the protests should be postponed to a later date and staged only in Pristina. He called on Belgrade to show good will and implement the education agreement.


Albanian Finance Minister Arben Malaj said on his return from the IMF-World Bank meeting in Hong Kong that the extent of western aid to Albania depends on the elimination of pyramid schemes. He says international bankers criticized Albania at the Hong Kong meeting for tardiness in closing down the pyramid schemes. He added that Albania can expect "all necessary funds" for the country's reconstruction and development once the schemes have been eliminated. Meanwhile, former Austrian chancellor Franz Vranitzky is to step down at the end of October as the Organization for Security and Cooperation in Europe's envoy for Albania. Vranitzky said 28. September he believed his task had been completed following elections in Albania in June and July.


Virgil Magureanu, the former director of the Romanian Intelligence Service, on 28 September said that "within two months" he will set up a "centrist" political party. In an interview with the private Pro FM radio, Magureanu said he hopes other centrist formations in the opposition will collaborate with his party with the purpose of taking over political power, the daily "Libertatea" reports on 29 September.


The leader of the Greater Romania Party (PRM), Corneliu Vadim Tudor, on 26 September called off the planned alliance of his party with the Party of Social Democracy in Romania (PDSR) (see "RFE/RL Newsline," 17 September 1997). In response to PDSR leader Ion Iliescu's statement on Romanian television one day earlier, who called on Tudor and Socialist Labor Party vice-chairman Adrian Paunescu to "temperate" their extreme nationalist postures, Tudor said the PRM rejected Iliescu's "attempt to use the unification of the opposition to return at the head of the state." The PRM leader said that a "genuine national opposition" can only be formed around himself, Paunescu and Cluj mayor Gheorghe Funar, Radio Bucharest reported. The PDSR on 28 September signed an agreement with the anti-Hungarian "Vatra romaneasca" organization and several other small parties and organizations for setting up an anti-government alliance.


Kenneth Lay, director of the World Bank's Southeastern Europe department, told a press conference in Bucharest on 26 September that the bank agrees with the "general line" of the policies pursued by the government, but "rigorous discussions" are going on concerning "detail implementation." He said that the pace of privatization in the banking and agricultural sectors is unsatisfactory and that corruption remains a serious problem. Lay also said there are doubts concerning the state budget's capability of supporting the costs arising from a draft law which grants foreign and local investors equal taxation cut benefits. The bank is to discuss the approval of two new installments of a $630 million loan, the RFE/RL Bucharest bureau reported. In other news, the government on 27 September approved a draft law extending the powers of local government to collect taxes for the purpose of self-administration.


World Bank officials and representatives of the Bulgarian government on 26 September initialled in Sofia an agreement for a $100 million loan to further support the country's economic reforms, RFE/RL's Sofia bureau reported. The agreement must be approved by the bank's board at its meeting on 30 October.


A draft law on public administration approved by the government on 27 September stipulates that former members of the communist nomenklatura will be prohibited from filling high positions in the civil service for a period of five years, an RFE/RL correspondent in Sofia reported. The interdiction will apply down to the level of former county party secretary. The draft also stipulates that one year after the law comes into effect, civil servants can no longer be dismissed following a change of government. In other news, a spokesman for the Ministry of Interior on 26 September said that files of the former East German Stasi recently handed over to Bulgaria appear to contain no evidence that Bulgaria's secret service was involved in the 1981 assassination attempt on Pope John Paul II, Reuters reported.


by John Helmer

The latest report from Russia's independent state auditor reveals the Kremlin has been busier selling gold abroad than it has told parliament. One reason for the sales also has been revealed. Kremlin officials have had urgent needs for holiday homes, German limousines, dishes to eat off, and potted plants for their offices.

According to details just released by the Accounting Chamber, Russian gold sales in 1995 and 1996 included sales of approximately 800,000 million rubles (160 million dollars) that were not covered by legislative authority.

The Chamber also has reported to the Duma that the state agency for trading precious metals, Almazjuvelirexport (Almaz), and the former State Committee for Precious Metals and Gemstones (Komdragmet), unlawfully retained 99.2 million dollars in commissions on foreign sales. The money should have been returned to the federal treasury, the Chamber's report claims.

According to this audit, one-third of the cash generated by unauthorized sales of state gold was spent on perquisites for high officials. Among the items of government spending from gold sales uncovered in the Account Chamber report were: imported tableware and porcelain services for the Kremlin and White House (4 million dollars); purchase of homes for senior government officials (2 million dollars); reconstruction of the Kremlin, Bolshoi Theater, the Duma dacha at the Moscow lakeside resort of Serebryany Bor, and a presidential dacha outside Moscow (30 million dollars); and decoration of the Kremlin's winter garden (550,000 dollars). In addition, there was renovation of the presidential aircraft (2 million dollars), purchase of two VIP cars from Germany (1 million dollars); and computer and communication technologies for the Ministry of Foreign Affairs (2 million dollars).

The Accounting Chamber audit also calls into question official claims about the size and movement of state gold reserves, apart from the so-called monetary reserves which are held by Russia's Central Bank, and their level regularly monitored by the International Monetary Fund.

According to the government version, in January 1995 the state gold reserve amounted to 300 tons. However, according to the latest audited figures, actual reserves at the time amounted to 78.4 tons of gold, including 14 tons of ingots. In 1994, it is now reported, 140 tons of gold ingots were sold out of state stocks, while another 120 tons were swapped for short-term loans from Swiss banks. By January 1, 1997, the state precious metals fund (Goskhran) held 84 tons of gold, including 75 tons delivered from the mines, and nine tons smelted from the other gold objects.

In response to criticism of laxness in the government's gold stocking and trading policies, President Boris Yeltsin signed a decree in March this year, ordering: "The money received for the sales of gold is to be used to finance the spending of the federal budget, first of all; to pay the gold-extracting organizations; and to pay for the precious metals and gemstones for the State fund of precious metals and gemstones."

Although not yet accounted for by the auditors, government spending this year has required an increase in planned gold sales. It is now reported -- without official confirmation -- that 45 tons of gold will be sold abroad by the end of 1997. Deputy Minister of Finance, Alexei Kudrin, has told a Moscow newspaper that 31 tons of gold have already been sold.

This compares with the government's original gold sale plan for the year, authorized in Yeltsin's March decree. That document authorized the sale of 31.2 tons of gold to the Bank for Foreign Trade to be sold for export. Another 54.8 tons of gold was ordered to the Central Bank for adding to monetary reserves.

John Helmer is a free-lance contributor to RFE/RL, based in Moscow.