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Newsline - June 22, 1998


Prime Minister Sergei Kirienko on 22 June promised that the government's economic program for overcoming the latest financial crisis "will not be carried out at the expense of the least well-off layers of the population," ITAR-TASS reported. Speaking to journalists after a Kremlin meeting with President Boris Yeltsin, Kirienko said the "anti-crisis" program will include unspecified mechanisms to protect the poorest citizens. In an interview with Russian Television the previous evening, Kirienko said the program will involve "quick, tough, and often unpopular measures." Adopting it will require "colossal political courage," he added, and implementing it will require "colossal consolidation of all the forces and resources of the authorities and society." On 22 June, Yeltsin is to chair a discussion of the program at an expanded session of the government, which will include a large number of Federation Council and State Duma deputies. LB


An IMF delegation headed by the fund's First Deputy Managing Director Stanley Fischer are to arrive in Moscow on 22 June for talks with Russian officials on the disbursement of a $670 million loan tranche and a possible new multibillion- dollar loan to help calm Russian financial markets (see "RFE/RL Newsline," 19 June 1998). Unified Energy System chief executive Anatolii Chubais, Yeltsin's envoy to international financial institutions, said Russia will negotiate a $10 billion to $15 billion loan under the IMF's Supplemental Reserve Facility program. But speaking to reporters in Konakovo (Tver Oblast), Chubais said "my impression is that we will not need to spend most of these funds," Reuters reported. The same day, Yeltsin told journalists in Kostroma that Russia needs "trust," not cash, from foreign leaders and international financial institutions. LB


The Duma on 19 June passed a statement saying Russia's foreign debt "has gone beyond reasonable limits, exceeding $135 billion, and has become a direct threat to the state's economic and political sovereignty," Russian news agencies reported. Before the vote, Duma Budget Committee Deputy Chairman Vladimir Nikitin of the Popular Power faction told deputies that Russia "has almost exhausted" its limit on foreign borrowing for 1998 and that "further borrowing will require legislative approval." But an unnamed Finance Ministry official told Interfax that the Duma does not have the right to limit the government's foreign borrowing. The official said a bailout package from the IMF would not necessarily increase Russia's foreign debt since the stabilization funds might never be spent. Russian officials hope the psychological impact from additional IMF support would calm the markets. LB


An unnamed high-ranking official in the presidential administration on 20 June said Yeltsin has not yet made a final decision on whether to run for re-election again in 2000, Interfax reported. The source said the president will determine his future plans only after the Constitutional Court rules on whether he is legally entitled to seek another term. The Kremlin official also argued that the media "too categorically" interpreted Yeltsin's recent comments in which he ruled out another presidential bid (see "RFE/RL Newsline," 19 June 1998). Last fall, the Duma asked the Constitutional Court to rule on whether Yeltsin may run for president again. The court is expected to consider the case in late 1998. LB


An unnamed source in the presidential admnistration told Russian news agencies on 20 June that Yeltsin has yet to approve the formation of a so-called Council of Mutual Economic Assistance, on which leading businessmen will advise the government. The source said such a council could be formed in July at the earliest. On 19 June, ITAR-TASS quoted an unnamed source who attended the previous day's meeting between Prime Minister Kirienko and the "oligarchs" as saying that the government and business leaders have already agreed to form an advisory council. The next day, Kirienko told journalists that the government welcomes efforts by financial and industrial groups to advance "constructive cooperation" with the cabinet," Russian news agencies reported. Speaking to Russian Television on 21 June, Kirienko said the government will not accept all the businessmen's policy proposals. LB


The Duma on 19 June voted to set up a commission to study criminal allegations against Yeltsin and draft an impeachment motion if it deems those allegations valid, RFE/RL's Moscow bureau reported. Communist deputy Vadim Filimonov is to head the commission, whose 15 members will include representatives from all seven Duma factions. Duma First Deputy Speaker Vladimir Ryzhkov of Our Home Is Russia, who will join the commission, explained that while his faction opposes efforts to impeach Yeltsin, it will participate in the commission to keep apprised of its activities and express dissenting opinions when necessary. The commission will operate until the Duma votes on an impeachment motion or until the end of the Duma's term, in December 1999. Yeltsin's opponents would likely have trouble gaining the two-thirds majority vote needed to adopt an impeachment motion. LB


Although Communist leaders have been outspoken supporters of ousting Yeltsin, the 15 June edition of the weekly magazine "Profil" argued that "oligarchs" testing their strength against the president are behind the Duma's latest impeachment efforts. The weekly quoted Duma Deputy Speaker Mikhail Gutseriev of the Liberal Democratic Party of Russia as saying that bankers are using their money and influence to promote the creation of an impeachment commission in the hope of encouraging Yeltsin to confirm that he will not seek a third term. Duma deputy Vladimir Semago, a maverick member of the Communist faction, told "Profil" that the formation of a commission on impeachment would signify "the active interference of bankers in political affairs, not the strengthening of the left wing of the Duma." Bank Imperial, reportedly close to the gas monopoly Gazprom, is a shareholder in "Profil." LB


Communist Party leader Gennadii Zyuganov on 20 June said his party will seek to use "all legal means" to remove Yeltsin, Russian news agencies reported. Addressing a plenum of the Communist Party's Central Committee in Moscow, Zyuganov hailed the creation of a Duma impeachment commission and said Communists will prepare for a nationwide political protest. (Critics of Zyuganov's party, in particular members of Grigorii Yavlinskii's Yabloko movement, have accused the Communists of using the impeachment procedure to quell discord within their own ranks and help erase memories of the Communist votes that helped confirm Kirienko as prime minister in April.) Zyuganov also announced that the presidium of the Central Committee has said that attempts to create a "Leninist-Stalinist platform" within the party are "politically erroneous" and has dissolved that platform, founded recently by more radical party members (see "RFE/RL Newsline," 25 May 1998). LB


Russian Minister for Atomic Energy Yevgenii Adamov and Indian Nuclear Energy Commission Chairman R. Chidambaram signed a protocol on 21 June whereby Russia will provide two light water reactors to India, ITAR-TASS reported. The original agreement had been signed in 1988 between the Soviet Union and India, but differences over the means of payment delayed implementation of the deal. The protocol was due to be signed on 22 June, but Adamov said the two sides reached agreement quickly so "I signed the additional protocol [on 21 June] with a light heart." The agreement to provide two 1,000 megawatt reactors to the Kudankulam project in Tamil Nadu is worth $2.6 billion. Adamov also met with Indian Prime Minister Atal Behari Vajpayee in Simla and "confirmed the solidity of our roots of friendship and partnership." BP


The Russian Foreign Ministry on 19 June issued a statement welcoming Washington's recently announced intention to normalize relations with Iran, Russian news agencies reported. The statement expressed the hope that recent statements by U.S. President Bill Clinton and Secretary of State Madeleine Albright will be followed by "practical steps," namely that the U.S. will "abandon attempts to apply their legislation impede Iran's trade and economic cooperation with other countries and to expose them to sanctions." On 17 June, Albright offered Iran new confidence-building measures, while the next day, Clinton called for "genuine reconciliation" with Iran, Reuters reported. The U.S. has voiced objections to Russian-Iranian cooperation in the energy sector, particularly to Russia's recent sale of technology for the Bushehr nuclear reactor (see "RFE/RL Newsline," 12 and 26 May 1998). BT


The Duma will ratify the START-2 treaty, Chairman of the Duma Defense Committee Roman Popkovich (Our Home is Russia) predicted in an interview with the weekly "Interfax-Argumenty i Fakty," published on 22 June. However, Popkovich told a news conference on 19 June that "the agreement as it exists now is hard to ratify." Among preconditions he views as necessary for ratification are a government report on compliance with START-2, a protocol attached to START-2 outlining future START-3 negotiations, and a provision stating that Russia would automatically opt out of START-2 if the U.S. violated the 1972 Anti-Ballistic Missile Treaty. Meanwhile, Duma deputy Andrei Nikolaev, the former director of the Federal Border Service, has expressed his support for START-2 and predicted that the treaty will be ratified in September or October, ITAR-TASS reported on 19 June. Earlier this month, the Duma postponed START-2 hearings until the fall session (see "RFE/RL Newsline," 10 June 1998). BT


Lechi Khultygov, the head of the Chechen Security Service and Vakha Dzhafarov, chief of staff to field commander Salman Raduev, were killed during a shoot-out in Grozny on 21 June, ITAR-TASS reported. The day before, Interfax reported that the kidnappers of Valentin Vlasov, Yeltsin's envoy to Chechnya, had demanded a $2 million ransom for his return; but Chechen Interior Minister Kazbek Makhashev denied that report, according to ITAR-TASS. PG


Yeltsin on 22 June warned that the threat of far-right extremism in Russia "is a real danger, even if not everybody feels it," Interfax reported. In a nationwide radio address to mark the 57th anniversary of the Nazi invasion of the USSR, Yeltsin warned that "Nazism is surging in Russia and poisoning the youth. Teenagers, fascinated by military symbolism, are modeling black uniforms." He criticized those who are "crazed with ideas of national supremacy and anti-Semitism" and asked whether Russians will "allow the worst ideology humanity has known to take root in this soil." The weekly "Novaya gazeta" predicted in its 11-17 May edition the fascist threat will be used during the 2000 presidential election in the same way as the threat of a Communist return to power was used in 1996 to encourage voters to support Yeltsin's re-election. LB


Leonid Potapov beat out nine challengers to win a second term as president of the Republic of Buryatia with some 63 percent of the vote, ITAR-TASS reported, citing preliminary returns from the 21 June election. Vladimir Saganov, the chairman of the Budget Committee of the Buryatian legislature, finished a distant second with 6.5 percent. Potapov received a boost when Aleksandr Korenev, the president of Buryatia's Union of Industrialists and Entrepreneurs, who was considered a strong presidential candidate, dropped out of the race on 18 June and endorsed the incumbent. Although Potapov supported Yeltsin's re-election in 1996, he has not always backed the federal government's economic policies. Earlier this year, he criticized efforts to legalize the purchase and sale of farmland and scheduled a referendum on land reform in Buryatia for 21 June. He later postponed that vote until 5 July, Interfax reported. LB


The Central Electoral Commission on 19 June confirmed that Agrarian Party leader Mikhail Lapshin won a 31 May by-election in Altai Republic for a seat in the State Duma, Russian news agencies reported. At the request of former First Deputy Finance Minister Andrei Vavilov, who lost the race by a slim margin (see "RFE/RL Newsline," 1 June 1998), the commission sent a team to Altai to investigate allegations of foul play during the election. They found isolated violations of electoral rules but determined they were not widespread enough to have influenced the outcome. Vavilov's campaign had far greater financial backing than Lapshin's, and the former Finance Ministry official also had the support of the republic's leader, Semen Zubakin. LB


Georgian President Eduard Shevardnadze and South Ossetian leader Lyudvig Chibirov have agreed to continue discussions on the status of that breakaway region following talks in Borzhomi on 20 June, Interfax reported. The same day, Russian First Deputy Foreign Minister Boris Pastukhov and CIS Executive Secretary Boris Berezovskii met with Shevardnadze in Tbilisi to discuss the situation in Abkhazia, ITAR-TASS reported. The Russian representatives claimed that there was progress in the talks, but the Russian Defense Ministry on 19 June had ordered Russian peacekeepers in that region to respond with force if they are threatened, the Russian news agency said. In a statement, the ministry blamed both sides for "not taking the necessary measures to ensure the normal functioning" of their troops. PG


Following a meeting with Armenian President Robert Kocharian on 20 June in Yerevan, Berezovskii said that he has reached a tentative agreement to visit Karabakh sometime later this summer, RFE/RL's Armenian Service reported. The two men also discussed increasing economic ties within the CIS. Berezovskii told ITAR-TASS that he believes the "oil factor" will have little impact on the settlement of the Karabakh conflict. PG


The following day, the CIS executive secretary met with Azerbaijani President Heidar Aliyev in Baku and expressed optimism that progress can be made toward resolving the Karabakh conflict, ITAR-TASS said. Berezovskii said that CIS leaders should say "no" to separatism throughout the region, and he urged Armenia to take a clear position on the future status of Karabakh. Saying that he welcomes these ideas, Aliyev expressed the hope that the OSCE Minsk Group process could continue. The previous day, the Azerbaijani Foreign Ministry released a statement criticizing an alleged remark last week by Armenian Foreign Minister Vartan Oskanyan that Yerevan plans to annex Karabakh. The Armenian authorities have denied that Oskanyan made such a comment. PG


President Robert Kocharian on 19 June issued a decree establishing a special consultative council that will include representatives from the country's major parties regardless of whether they are represented in the parliament, RFE/RL's Armenian Service reported. The council's decisions will not be legally binding. As yet, there is no system for selecting its members. PG


Acknowledging that Armenia lacks the ability to operate the nuclear power station at Metzamor without assistance, the plant's director, Suren Azatyan, on 20 June told a group of visiting nuclear expects from Russia that his country appreciates their continuing assistance, ITAR- TASS reported. Azatyan said there have been no accidents at the plant since it was reopened three years ago. H added that there will be routine repair and reloading operations this fall. PG


President Kocharian on 19 June told a visiting delegation from the Council of Europe that "integration into European structures" is a top priority for his government, RFE/RL's Armenian Service reported. "Armenia must become the most democratic nation in the Transcaucasus since democracy predetermines the future of the country," he commented. Meanwhile, some 2,500 Armenians demonstrated in Yerevan against the sale of the country's brandy distillery to Pernod-Ricard of France, Interfax reported. But Kocharian said that the country cannot afford to block the sale lest it "find itself left out of global economic processes." PG


The new UN special envoy to Tajikistan, Jan Kubis, presented his credentials to Tajik President Imomali Rakhmonov in Dushanbe on 19 June, ITAR-TASS and Reuters reported. Kubis said the compromise reached by a special commission and Rakhmonov after the Tajik parliament adopted a law banning religious parties last month is a "positive step" in maintaining the peace process in Tajikistan. Kubis met with United Tajik Opposition leader Said Abdullo Nuri the following day to discuss the law banning religious parties as well as "military aspects" of the Tajik peace agreement. Kubis assessed the peace process as slowly moving forward but added that "sometimes it comes to a standstill and becomes problematic." BP


Six border guards, five Tajiks, and one Russian were killed on 20 June while attempting to prevent drug traffickers from crossing into Tajikistan from Afghanistan, ITAR-TASS reported. Three people were also wounded in the incident The drug traffickers escaped, and border guards have launched a search for them. According to ITAR-TASS on 20 June, more than 140 kilograms of narcotics have been seized by border guards in the "last few days." BP


Minsk toughened its stance in the row over the Drazdy compound on 19 June by cutting off water, electricity, and telephone services to diplomatic residences (see "RFE/RL Newsline," 19 June 1998). The police set up checkpoints at roads leading to Drazdy and are allowing only vehicles with special passes to enter the compound. The authorities, however, have made no provision for issuing such passes, U.S. State Department spokesman James Rubin told a briefing in Washington on 19 June. JM


Ambassadors to Minsk from five EU countries-- Britain, France, Greece, Italy, and Germany--are to return home on 22 June for consultations with their governments over Minsk's attempt to evict them from their residences. Germany has taken a further step by demanding that the Belarusian ambassador to Bonn leave immediately, dpa reported. German Foreign Minister termed Minsk's action in the Drazdy affair as "unprecedented in the history of diplomacy" and said the Belarusian government is "rapidly maneuvering itself into isolation." On 22 June, the U.S. announced it is also recalling its ambassador for consultations. JM


Russian Foreign Minister Yevgenii Primakov has said the Russian ambassador to Belarus will not be recalled in connection with the conflict over the Drazdy compound. "But of course we will react in some way," ITAR-TASS quoted him as saying. "Our Belarusian friends and brothers are not acting via diplomatic means," he stated. JM


Following his recent announcement on national television (see "RFE/RL Newsline," 19 June 1998), the Ukrainian president has signed several emergency economic decrees easing taxes and other payments to the state, Interfax reported. Employers' obligatory payment to a state fund for the consequences of the Chornobyl accident has been reduced from 10 percent to 5 percent of the wage fund. A single tax on agricultural produce replaces 10 such taxes. And 1.25 billion hryvni ($620 million) has been allocated to pay back wages, pensions, and social benefits. JM


Following the Ukrainian government's deal with the Dnipropetrovsk to pay back wages (see "RFE/RL Newsline," 18 June 1998), a group of miners in Donetsk has begun picketing the oblast administration building to demand payment of their outstanding wages. Coal Industry Minister Serhiy Tulub has appealed to the miners to end their protest, ITAR-TASS reported on 19 June. Meanwhile, a Donetsk miners trade union has demanded that Tulub be held responsible for issuing a directive to coal mining managers to freeze funds allocated to pay overdue wages and benefits. JM


Javier Solana told Estonian Prime Minister Mart Siimann in Tallinn on 19 June that Estonia can best approach NATO by increasing its military cooperation with other countries, BNS and dpa reported. He also told Estonian leaders that a drive to increase defense spending will not necessarily improve their country's chance of joining the alliance. "The main problem is for you to develop your cooperation ability, language [and] communication skills, and management techniques," Solana said. The NATO chief was wrapping up a tour of all three Baltic States (see "RFE/RL Newsline," 19 June 1998). JC


Latvian President Guntis Ulmanis has postponed his departure for a NATO seminar in Vienna, saying he plans to be in Riga on 22 July when the parliament discusses amendments to the country's citizenship law, BNS reported. Ulmanis told U.S. Undersecretary of State Strobe Talbott in a telephone conversation on 19 June that he hopes lawmakers will approve the amendments, which will ease restrictions on granting citizenship to non-Latvians. JC


The Trade Union of Train Drivers on 20 June suspended its strike over pay increases and early retirement (see "RFE/RL Newsline," 17 June 1998). The government has agreed to review the wage scale for railroad workers but refuses to discuss early retirement plans. The 22 June "Zycie" reported that the trade union suspended the strike following government threats to resort to mass layoffs if the protest is continued. Normal railroad traffic is expected to be restored on 22 June. JM


Presidential aide Danuta Hubner has said Aleksander Kwasniewski will veto the bill on dividing the country into 15 administrative provinces. The upper house of the parliament amended the lower house's bill providing for 12 new provinces in Poland by increasing that figure to 15. Hubner said the president supports the opposition Democratic Left Alliance's proposal to set up at least 16 provinces. If Kwasniewski vetoes the bill, the Solidarity- led government will suffer a serious setback in its drive for administrative reform since it does not have the two- thirds parliamentary majority necessary to override the presidential veto. JM


The Social Democratic Party (CSSD) will be the largest formation in the new Chamber of Deputies, having won 32.3 percent of the vote and 74 seats in the 200-strong chamber in the 19- 20 June elections, Reuters reported. The Civic Democratic Party (ODS) came second with 27.7 percent and 63 seats, followed by the Communist Party of Bohemia and Moravia (11 percent and 24 seats), the Christian Democrats (KDU- CSL, 9 percent and 20 seats) and the Freedom Union (8.6 percent and 19 seats). The far-right Republican Party (3.9 percent) and the Pensioners' Party (3 percent) will not be represented in the chamber. MS


"Mlada Fronta Dnes" on 21 June noted that CSSD chairman Milos Zeman "has most of the votes but has not won." Observers doubt the CSSD will be able to form a coalition, for which it would need the support of the KDU-CSL and the Freedom Union. Zeman said the same day that he will let the party decide whether it should form a coalition with the KDU-CSL and the Freedom Union, but he added that he is not in favor of a coalition with the Freedom Union. Freedom Union leader Jan Ruml, for his part, has ruled out a coalition with the CSSD, while KDU-CSL leader Josef Lux is opposed to a coalition with the CSSD alone, since the government would depend on the backing of the Communists. Both ODS leader Vaclav Klaus and Zeman have ruled out a "grand coalition." President Vaclav Havel on 22 June begins consultations with the leaders of the parties that gained entry to the new parliament. MS


Slovakia's three ethnic Hungarian parties formally merged on 21 June to form the Hungarian Coalition Party. Bela Bugar of the Hungarian Christian Democratic Movement was elected chairman of the new party, and Miklos Duray of the Co-existence Party honorary chairman. The congress also decided that the former Hungarian Civic Party will name an executive deputy chairman. That post is likely to be filled by Laszlo Nagy, whose resignation last week as chairman of the Hungarian Civic Party was rejected by the formation's presidium, RFE/RL's Bratislava bureau reported. MS


The 20 June extraordinary congress of the Alliance of Free Democrats (SZDSZ) elected Balint Magyar as the party's new chairman, Hungarian media reported. Magyar said the party's structure and political style must be renewed in order to make the SZDSZ a strong liberal party. He said entering a coalition with the Socialist Party was the right decision but that the SZDSZ's mistake was its inability to change its political strategy when it realized that it could not implement its own principles. Commenting on the composition of the newly elected executive body of the party, Ferenc Koszeg, a founder of the party, said the SZDSZ has rewarded those who are responsible for unsuccessful policies. MSZ


Russian Foreign Minister Yevgenii Primakov told Russian Television on 21 June that Belgrade cannot withdraw its forces from Kosova unless there is a decrease in "terrorist activity." Local Serbs would regard a withdrawal "right now" as a sign to leave, and the result would be "a stream of Serbian refugees," he said. Primakov stressed that the Kosovars must stop resorting to violence and that talks between the Serbian government and representatives of Kosovar political parties must begin at once. The Contact Group foreign ministers, including Primakov, have repeatedly said in joint declarations that Serbia must withdraw its forces immediately from Kosova. Yugoslav President Slobodan Milosevic told Russian President Boris Yeltsin in Moscow last week that he cannot withdraw his forces without a decrease in "terrorism." At the time, U.S. Secretary of State Madeleine Albright warned Milosevic not to exploit differences between individual Contact Group countries. PM


Primakov also told Russian Television on 21 June that his country is playing an influential role in ending the crisis in Kosova. He noted that NATO aircraft on recent exercises stayed at least 100 kilometers from the Serbian frontier, not out of fear of the Yugoslav defense system, as Milosevic claimed, but because NATO promised Russia it would do so. Primakov noted that one Russian deputy foreign minister left for Belgrade and Prishtina on 21 June for talks and that another went on a mission to Tirana and Skopje. PM


Primakov also blasted unnamed U.S. officials "whose work directly involves Albania" for spreading "a false report" from Kosovar refugees that Serbian forces recently used a helicopter with Red Cross markings to attack refugees (see "RFE/RL Newsline," 17 June 1998). He called Albright "a sensible person" with whom he nonetheless has "some differences.... I once told her, Russia has been involved in the Balkans for 200 years, so how can you think we know the situation there worse than you, the Americans?" Primakov rejected Western calls for a meeting of representatives of the Contact Group on 24 June and argued that the session should be postponed for a week to see whether Milosevic has kept the promises he made to Yeltsin (see "RFE/RL Newsline," 17 June 1998). PM


Albright told NBC Television on 21 June that Richard Holbrooke, the U.S. ambassador-designate to the UN, will visit Belgrade in the next few days to impress upon Milosevic the importance of his meeting the demands of the Contact Group, including the withdrawal of Serbian forces from Kosova. PM


Shadow-state President Ibrahim Rugova said in Prishtina on 19 June that the Kosova Liberation Army (UCK) must submit to the authority of the political leadership. He added that the vast majority of UCK fighters are ordinary citizens who want to defend their homes and property, the "Frankfurter Allgemeine Zeitung" reported. Prime Minister Bujar Bukoshi told the Belgrade "Dnevni telegraf" of 22 June that "the armed resistance of the UCK is a reality...and it is necessary to place it under the control of political institutions [and] bring the UCK into Kosova political life." Previously, the Kosovar political leadership either made no reference to the UCK or suggested it was invented by Serbian security services to discredit the non-violent political leadership. In Prishtina on 21 June, Parliamentary Party leader Adem Demaci said his party wants to "serve as the political wing of the UCK." PM


Two Yugoslav conscripts from Montenegro told Reuters in the Albanian town of Bajram Curri on 21 June that they were ordered to kill civilians. Fahrudin Muric and Fahrudin Avdic, whose names suggest that they are Muslims from Sandzak, said they deserted to the UCK five days earlier. The UCK then helped them to flee to Albania and handed them over to the OSCE. Muric quoted Yugoslav officers as telling troops that "it is war and you have to kill civilians.... If you do not kill them, they will kill you." Muric added that "I decided to become a deserter because I did not want to kill people on their doorstep." Avdic said: "We were told to catch everyone who cannot defend themselves and then either kill them or take them to prison." Meanwhile, an RFE/RL correspondent reported from Podgorica on 22 June that two additional Montenegrin conscripts have deserted to the UCK. FS


Three buses containing beaten or otherwise badly injured Kosovars passed through the Sandzak town of Novi Pazar on 21 June en route to Serbia proper, an RFE/RL correspondent reported from Prishtina, citing eye-witness reports from Novi Pazar. Passers-by noticed the ethnic Albanians when the buses stopped for repairs. Police chased away onlookers who tried to approach the Kosovars, whose hands were bound. PM


Yugoslav troops over the weekend continued to seal off the border with Albania in the Tropoja region to prevent refugees from fleeing (see "RFE/RL Newsline," 16 June 1998). A spokesman for the United Nations High Commissioner for Refugees said in Geneva on 19 June "that does not mean, however, that people are no longer attempting to flee the country." On 19 June, only 36 refugees made it across the frontier on a mountain path, after waiting two weeks to cross into Albania. Refugees who arrived in Tropoja earlier in the week said that "thousands" of people are still trapped inside Kosova. On 21 June, Reuters journalists on the Albanian side of the border observed a Serbian tank firing at a group of farmhouses near the border crossing of Qafa e Morines and heavy exchanges of fire throughout that day. FS


Albanians in seven municipalities and nine smaller communities went to the polls on 21 June. The turnout was only 35 percent in the southern city of Vlora but reached 85 percent in some other areas. About 100 OSCE and Council of Europe monitors observed the voting. Results are expected on 22 June. Local government collapsed in the respective communities and municipalities during unrest in February and March 1997. Officials appointed from Tirana have been in charge of those areas since mid-1997. FS


The leadership of the Hungarian Democratic Federation of Romania (UDMR) on 20 June accepted the resignation of Minister of Health Francisc Baranyi, who earlier admitted having been forced to sign a pledge to work as an informer for the communist secret police. Baranyi said he was "a victim" rather than a collaborator of the Securitate but has decided to "put UDMR interests above my personal interests." The same day, Prime Minister Radu Vasile announced all government members must submit a written declaration saying whether they worked for the Securitate. The leaderships of the National Peasant Party Christian Democratic, the National Liberal Party, and the Romanian Alternative party are to demand that their leaders and parliamentary representatives submit a similar declaration. MS


President Emil Constantinescu on 21 June cut short a visit to Austria and flew back to Bucharest because of the heavy damage caused by floods in his country. At least half of Romania's 41 counties are reported to be affected by the floods, with most damage being registered in Transylvania. Reuters reported on 19 June that the floods have caused the death of 16 people, and at least seven more deaths were reported on 21 June. Prime Minister Radu Vasile has visited the affected areas. MS


Petar Stoyanov, in an interview with the Belgrade "Nin" magazine, said his country follows closely developments in Kosova "because it does not want to be a hostage of what is happening in Yugoslavia," BTA reported on 19 June. Stoyanov said internal developments in Yugoslavia "hinder bilateral relations" at present. He added that the imposition of sanctions on Serbia were "a severe blow" to Bulgarian economic reform efforts and encouraged "arms trafficking and black marketing.". Stoyanov said that for this reason, Bulgaria opposes the sanctions and that the situation in Kosova cannot be viewed as an internal Yugoslav problem alone because it encourages "the bad image" of the Balkans as "a region where political emotions run higher than they should." MS


by Stephanie Baker

Amid a deepening financial crisis, President Boris Yeltsin has appointed former economic policy chief Anatolii Chubais as his special envoy in charge of Russia's relations with international lending organizations.

Chubais, who was sacked as first deputy prime minister in March, returns to the government as Russia's financial markets have been plunged into turmoil.

A Kremlin spokesman said Chubais will assume the role of a deputy prime minister responsible for negotiations with multilateral financial institutions, such as the IMF. Yeltsin on 19 June said, however, that Chubais will remain in government only temporarily to help Russia win "certain support and investments." He said Chubais will remain chief executive of national electricity company Unified Energy Systems (EES).

Two days earlier, Prime Minister Sergei Kirienko had announced that the government is hoping to tap additional funds from the IMF to help prop up the Central Bank's reserves, which have dwindled since Asia's financial woes hit Russia last October. He emphasized that "It will not be a new wasteful credit for consumption." And while he declined to comment on the size of the loan under discussion, other Russian officials have said it could be for as much as $10 billion. An IMF team is due in Moscow next week to discuss the new financial aid package.

Russia is battling one of its most serious financial crises in years, which has sharply increased the government's cost of borrowing to cover budget holes. The economic turmoil has been compounded by poor tax collection and slumping world prices for oil, one of Russia's leading exports.

Reports of Chubais returning to the government came after Kirienko met with Russia's leading bankers and financial tycoons early last week to discuss ways to stabilize the country's jittery markets. According to Russian news reports, the financiers were pushing for Chubais to coordinate the government's anti-crisis measures.

The government is preparing to announce an anti- crisis plan this to restore the confidence of investors, Further budget cuts could be in the making. And the government already is planning to slash spending by 3 percent of GDP.

Kirienko acknowledged that the program will be "unpopular." But he said: "The world financial crisis has fallen on fertile ground, namely the crisis of confidence in a system that lives beyond its means."

Media reports that Chubais would be brought back into the government sparked a rally on the country's stock market, which rose 8 percent on 17 June. The Finance Ministry also abruptly canceled its weekly treasury bill auction. The move fueled speculation that the government had found other sources of funds to redeem more than $1 billion dollars in maturing T-bills. And on 19 June, the government launched a major Eurobond for a reported $2 billion, but the exact amount has not been disclosed.

With Chubais back in government, markets are betting that Russia will succeed in getting additional IMF support, which investors believe is needed to halt speculation on the ruble. Chubais has long played a key role in the government's relations with the IMF and World Bank. His latest appointment confirmed that this will continue.

Last month, Chubais was in Washington for "informal" talks with senior officials from the IMF and U.S. administration, as financial markets continued to plunge. As he put it: "I happened to have close friendly relations with top officials of financial bodies, such as the IMF and the World Bank."

Analysts agree that Chubais has the political clout and track record to do a deal with the IMF. In the words of Chris Speckhard, an economist at the Russian brokerage Alfa Kapital in Moscow: "He's someone they know and trust. His ties with the final oligarchs also have a big influence on the decision."

But there is also a possibility that putting Chubais in charge of international financial institutions could divert his attention from EES, which is at the center of a circle of non-payments choking the economy.

As John Paul-Smith, a Russian strategist at Morgan Stanley in London, put it: "The more time Chubais spends on this, the worse it is for EES. Sorting out EES is one of the biggest structural problems facing the government." The author is a Moscow-based RFE/RL correspondent.