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Newsline - October 5, 1998


Currently in Washington for the annual IMF/World Bank meetings, Russian government officials have adopted a conciliatory tone toward the international financial institutions. Finance Minister Mikhail Zadornov told reporters on 4 October that IMF Managing Director Michel Camdessus regarded the government's new economic program "rather favorably." Zadornov later clarified that by "program," he was referring to the emergency budget for the fourth quarter, which the government will submit to the State Duma before the end of October. Zadornov added that the government expects foreign loans worth $2.5 billion through the end of the year. According to "Kommersant-Daily" on 2 October, the draft budget calls for expenditures of 167 billion rubles ($10 billion) and revenues of only 70 billion rubles, leaving a deficit of almost 100 billion rubles. In theory, part of the deficit will be financed by borrowing from abroad and increasing export taxes and excise duties on alcohol. JAC


Former Prime Minster Yegor Gaidar told reporters on 2 October that any large budget deficit would have to be financed through a monetary emission, since he doubted foreign loans would be forthcoming. He added that he suspects that Central Bank has already extended the government a 7 billion ruble ($438 million) loan, covered by newly printed money. According to Interfax, the government has already disbursed 500 million rubles as payment on defense contracts, 400 million rubles for subsidies to the coal mining industry, and 1.4 billion rubles in back wages to soldiers. First Deputy Prime Minister Vladimir Gustov said the government has allocated 1.17 billion rubles assistance for depressed regions, 9.6 billion for the Pension Fund, and 2 billion rubles for the coal industry for the rest of the year. JAC


The Duma passed a resolution on 2 October labeling the potential use of force by NATO in Kosova "an illegal aggressive action." The Duma said that such an action would cause it to review all existing agreements between Russia and NATO, including the accord restricting arms trade with Yugoslavia. The Duma also recommended that the Foreign and Defense Ministries recall their representatives to NATO for consultations with the government. A Defense Ministry source told Interfax that NATO air strikes would eliminate any possibility that the Russian legislature would ratify START II. According to "Izvestiya" on 3 October, the Russian Foreign Ministry has not yet decided whether to use its veto at the UN Security Council. JAC


Russian President Boris Yeltsin has altered the composition of the Security Council, according to his press spokesman. In addition to Security Council Secretary Nikolai Bordyuzha, Foreign Minister Igor Ivanov and Federal Security Service (FSB) Director Vladimir Putin are members. Former Prime Minister Sergei Kirienko, former Deputy Prime Minister Boris Nemtsov, and former FSB Director Nikolai Kovalyov have been officially relieved of their duties on the council. First Deputy Prime Minister Gustov told reporters on 2 October that the post of deputy prime minister in charge of financial affairs, which Aleksandr Shokhin quit last month, should not be filled "for a while." In the meantime, Shokhin's duties have been divided among several members of the government. JAC


Prime Minister Yevgenii Primakov has increased the number of groups his government is willing to support by offering assistance to cash-strapped farmers. On 3 October, according to ITAR-TASS, he signed a resolution allowing farmers and agricultural enterprises to defer their debts to the federal budget by five years. "Izvestiya" concluded on 1 October that despite the poor grain harvest, the Russian population will have sufficient quantities of bread. However, the food consumption pattern throughout the country will change dramatically as the amount of meat and dairy products falls. According to "Rossiyskaya gazeta" on 2 October, certain regions are already experiencing shortages of specific products. For example, Yakutia and Bashkortostan lack poultry, while Nizhnii Novgorod and Vladimir Oblast lack groats. JAC


Both the IMF and former Prime Minister Gaidar's Institute for Economic Problems during Transition are predicting that Russian GDP will fall 6 percent in 1998--Gaidar suggests it may drop even as much as 6.5 percent. The fund predicts that also in 1999 GDP will drop 6 percent, while Gaidar's institute foresees a 4-5 percent drop assuming hyperinflation is averted. If not, then GDP will drop from 12-13 percent. The State Statistics Committee reported that inflation reached 38 percent in September. "Izvestiya" reported on 3 October that wages and salaries have dropped two to three times in all sectors of the economy, while managers predict they will continue to decline to 1994 levels. JAC


Yabloko party leader Grigorii Yavlinskii published his version of an anti-crisis program in "Nezavisimaya gazeta" on 2 October. Yavlinskii calls for forcing all exporters to sell their foreign exchange for a three-month period and for an immediate lifting of the moratorium on servicing short-term treasury bond debt. First Deputy Prime Minister Yurii Maslyukov's plan, at least according to "Kommersant-Daily," required exporters to sell 75 percent of their hard currency proceeds for an indefinite period. Yavlinskii also suggested introducing new taxes on gasoline, alcohol, and tobacco, imposing a 20 percent tax on all personal incomes, and guaranteeing the first $5,000 of all individual bank deposits with Central Bank reserves. According to "Kommersant-Daily," Finance Minister Mikhail Zadornov also supports a 20 percent flat tax on incomes. JAC


Mikhail Khodorkovskii, CEO of the Yukos-Moskva company, told reporters on 2 October that if oil production continued to fall in Russia, then by 1999 the oil sector will not need either to reduce exports or trim domestic consumption in order to meet the country's domestic requirement. Since the beginning of 1998, according to Interfax, oil production volumes have fallen by an estimated 5 percent from the previous year's level. Khodorkovskii also warned that the 10 percent drop in industrial output envisaged by the "Maslyukov plan" will slash living standards in the country, create new wage arrears, extinguish investment, and lead to a total economic breakdown in Russia. Meanwhile, Minister for Fuel and Energy Sergei Generalov told ITAR-TASS on 4 October that he opposes new taxes on the oil and gas industries and is convinced that they can act as a "locomotive to drag Russia out of its current crisis." JAC


First Deputy Prime Minister Maslyukov himself joined the chorus of officials denying that the dollar would be banned from circulation (see "RFE/RL Newsline," 2 October 1998). "Kommersant-Daily" earlier published what was allegedly Maslyukov's economic plan, which called for banning the trading of hard currency by individuals. Maslyukov told NTV on 4 October that reports of the government's plan to prohibit use of the dollar are "nonsense." And Central Bank chairman Viktor Gerashchenko, according to Interfax on 2 October, warned Duma deputies not to enact any kind of restrictions on the use of the dollar. JAC


The UK-based Keston News Service reported on 2 October that Russia's financial crisis has had various effects on religious institutions. Those that are most dependent on Western financial support are doing the best, while those that had secular, domestic sponsors such as "Russian banks and firms that were providing money for the construction of churches, chapels or rectories," suddenly find themselves without a sponsor. However, according to Keston, many religious organizations are expecting the government to increase its scrutiny of the financial system and in particular foreign exchange transactions. As it becomes possible "to monitor every dollar transaction," these flows from the West are likely to shrink. JAC


The opposition Republican Party of Tatarstan has accused the government of President Mintimer Shaimiev of failing either to protect the republic's population from economic disaster or to alleviate the crisis's negative effects, according to "Izvestiya" on 3 October. The newspaper reported that the Republican Party has about 3,000 members and 60 local branches. The "EWI's Russian Regional Report" on 1 October reported that President Shaimiev has been on vacation in Turkey for three weeks, while the prime minister has "been racing cars in Kursk." Meanwhile, local enterprises have begun paying their workers in food products instead of cash. One researcher at a state-run factory received 300 grams of candy and half a kilogram of cookies. JAC


Four employees of a British firm building a telecommunications system in Chechnya were kidnapped in Grozny on 3 October following an early morning gunfight, ITAR-TASS reported. The British Foreign Office has warned Britons against any further travel to Chechnya until at least April 2002, the Russian agency reported. Chechen officials said they have identified the kidnappers and believe they will be able to free the four captives. Chechen Prosecutor- General Mansur Tagirov told Interfax that he believes the kidnapping was intended to discredit Chechen President Aslan Maskhadov. PG


Akmal Saidov, the head of the social and economic department of the Russian government office in Grozny, was found dead on 3 October near the border between Chechnya and Ingushetia, Interfax reported. He had been kidnapped on 29 September in the Chechen capital. The Russian government protested the move, but even as it did so, Russian First Deputy Prime Minister Vadim Gustov told ITAR-TASS on 2 October that Russia must keep all its promises to Chechnya. PG


Chechen President Maskhadov said that the United States is using Saudi Arabia as a proxy to destabilize the Caucasus region, Interfax reported on 2 October. He said that the Saudis are financing what he called "pure Islam," a reference to what Maskhadov and others have often referred to as Wahhabism. These activities, Maskhadov said, pose "a serious threat to Chechnya because America and the West are more dangerous than Russia." PG


Interfax reported on 5 October that Russian Prime Minister Primakov will meet with Chechen President Maskhadov on 10 October. The Russian news agency cited Interior Minister Sergei Stepashin as its source. Primakov's office, however, refused to confirm the story when queried by ITAR-TASS. PG


The Supreme Religious Council of the Caucasian Peoples has sent an appeal to the Russian president to take personal responsibility for the investigation of a terrorist act in Makhachkala that led to the death of Dagestani Mufti Sayed Mukhammed-khadzhi Abubakarov, ITAR-TASS reported on 2 October. The appeal was made at an international conference in Baku. At that meeting, Sheikh ul- Islam Allahshukyur Pasha-zade was reelected chairman of the council. PG


Tajik military helicopters flew over neighborhoods east of Dushanbe on 4 October to drop leaflets ordering the surrender of illegal arms within one week, ITAR-TASS reported. A presidential adviser on defense and social order, Mizrob Kabirov, said this distribution method was necessary because not all residents of the areas have access to television and radio, both of which are broadcasting the order. Kabirov said the leaflets are directed at groups engaged in "banditry, mafia territorial wars, terrorism, and kidnapping." The Tajik government will guarantee the safety and freedom of those who heed the call. Kabirov said, however, said that both the government and United Tajik Opposition are currently drawing up measures to "liquidate" those who refuse to hand over their arms. BP


Prime Minister Armen Darpinian on 2 October asked his political opponents in the parliament to delay a discussion of his privatization program until he returns from Washington, RFE/RL's Armenian Service reported. Darpinian left for the U.S. on 3 October to participate in consultations on the international financial crisis. PG


Georgian and Abkhazian units exchanged fire along the Inguri River on 4 October, ITAR-TASS reported the next day. Georgian Television said that the Abkhaz had attacked the Georgians and that the Georgians had returned fire. PG


Following a meeting on 3 October with visiting Russian State Duma speaker Gennadii Seleznev, Georgian President Eduard Shevardnadze said that Tbilisi is "interested in political and economic stability of its great neighbor Russia as well as in its democratic development," ITAR-TASS reported on 4 October. Seleznev reiterated Moscow's desire to continue to serve as an intermediary in Tbilisi's dispute with the breakaway republic of Abkhazia. But he asked Shevardnadze not to press Moscow to ratify the friendship treaty between the two countries anytime soon, the Russian agency said. PG


Georgian Minister of State Vazha Lortkipanidze met with a delegation from Adjaria on 1 October to discuss the tensions between the Georgian central government and that autonomous republic, Caucasus Press reported quoting the daily "Rezonansi." The Adjar delegation expressed concern at what they perceived as a campaign of vilification of Adjar Supreme Council Chairman Aslan Abashidze in the Georgian central press. And it hinted that the Adjar leadership may demand the closure of some of the media outlets involved. LF


Some 100 schoolchildren blocked the Zugdidi-Anaklia highway on 1 October to protest the continued occupation of their schools by displaced persons who fled Abkhazia's Gali Raion during the fighting in May, Caucasus Press reported the following day. The displaced persons refuse to move from the schools to other accommodation, thus preventing the start of tuition. In Kutaisi, 43,000 pensioners staged a protest against the city authorities' decision to pay their pensions in wheat flour. They have not yet received their pensions for August. LF


Ukrainian National Bank Chairman Viktor Yushchenko says the country's economic situation has improved in recent days and that the hryvnya has stabilized within the exchange band of 2.5-3.5 to $1, AP reported on 3 October. "The key thing is that we have managed to separate ourselves from the Russian economic crisis and its negative influence," he said. The hryvnya exchange rate stood at 3.41 to $1 on 2 October. President Leonid Kuchma met with top economic officials the same day to discuss ways of stabilizing the hryvnya, Ukrainian Television reported. Participants in the meeting failed to reach agreement on how to achieve that goal. Many analysts believe the present hryvnya exchange rate is artificially maintained by regulations forcing exporters to sell much of their foreign currency earnings to the state and by restrictions on foreign currency purchases. JM


Belarusian Chamber of Representatives speaker Anatol Malafeyeu says he sees no need to hold a referendum on confidence in President Alyaksandr Lukashenka, Interfax reported on 2 October. The Belarusian Popular Patriotic Union had proposed such a vote at its constituent congress in Minsk last month (see "RFE/RL Newsline," 14 September 1998). Malafeyeu told Interfax that Belarusians expressed their attitude toward the president and his policies in the November 1996 referendum. Central Electoral Commission Chairwoman Lidziya Yarmoshyna told "Sovetskaya Belorussiya" on 1 October that the referendum proposal is "juridical nonsense" since the Belarusian Constitution does not envisage plebiscites on issues such as confidence in politicians. JM


Peter Kolb, German charge d'affaires in Belarus, has said Belarus must observe international agreements before it can solve its dispute over housing foreign diplomats in the Drazdy residential compound, near Minsk, Reuters reported on 2 October. "Problems of housing or safety in the Drazdy conflict are secondary. The departure of ambassadors had political causes and their return also requires a political dimension," Kolb said. He added that all EU states have a single approach toward the eviction of ambassadors and demand that Belarus observe the Vienna Convention on diplomatic relations. JM


The Estonian Central Bank on 2 October said it will temporarily acquire a majority stake in Forekspank and the Estonian Investment Bank, which announced a merger at the beginning of last month but have experienced difficulties in carrying out that plan, ETA reported. The Central Bank will invest a total of 255 million kroons. Central Bank President Helo Meigas said the bank took that decision because although Forekspank lacked the capital to push through the merger, its assets exceed its liabilities. JC


Also on 2 October, the Central Bank announced it is launching bankruptcy proceedings against EVEA Pank, the country's oldest commercial bank. A Central Bank official said that EVEA Pank's balance sheet indicated that it was not possible to continue banking activities and that the Central Bank was seeking to prevent the loss of further money. Analysts said that one of the likely reasons for EVEA Pank's difficulties is the "close connection" of many of its clients with the Russian market. EVEA Pank Board Chairman Boris Shpungin, however, has accused the Central Bank of persecuting the country's only "Russian-speaking bank" for "subjective reasons," ETA reported. EVEA Pank claims to have reached an agreement with an unidentified U.S. investor willing to put up some 60 million kroons to meet the bank's short-term obligations. JC


Some 800 people wearing black armbands took part in a "black march of social dialogue" organized in Warsaw on 2 October by the left- wing National Trade Union Alliance (OPZZ), PAP reported. The union presented Labor Minister Longin Komolowski with a book containing the OPZZ's complaints against Premier Jerzy Buzek's government. "We told the minister that the government is consciously breaking the law on trade unions, International Labor Organization regulations, and the principle of social dialogue laid down in the constitution," OPZZ Deputy Chairman Ryszard Lepik commented. Komolowski responded that the government is holding a number of consultations at both the central and regional levels. JM


Solidarity leader Marian Krzaklewski has said the 11 October local elections will be the "true decommunization" of Poland, Polish Radio reported on 4 October. Krzaklewski added that Buzek's government has already scored signigicant success by implementing local government reform and transferring power to the people. Simultaneously he warned against the "forces of the old system," which, he said, are "still embedded within the administrative system and other structures." Meanwhile, President Aleksander Kwasniewski has criticized the government for its failure to submit a law defining how local authorities are to be financed. Kwasniewski said he is concerned that under government proposals, local authorities would be able to determine only some 5 percent of their budgets (see "RFE/RL Newsline," 2 October 1998). JM


The Czech and Polish foreign and defense ministers agreed at a meeting in the northern Czech town of Liberec on 2 October to push for the soonest possible date for joining NATO, ITAR-TASS reported. Polish Foreign Minister Bronislaw Geremek and his Czech counterpart, Jan Kavan, said they believe their countries will join the defense alliance in early 1999. Czech Defense Minister Vladimir Vethy agreed with his Polish counterpart, Janusz Onyszkiewicz, that Prague and Warsaw will intensify military cooperation. PB


Czech President Vaclav Havel said in the German city Hannover on 3 October that Germany is a "laboratory of a uniting Europe," CTK reported. Havel, speaking as a special guest on the eighth anniversary of German reunification, said that East Germany was "born of the evil of the then divided Europe and was preserved by this evil." He said its demise was "good for the whole world." Meanwhile in Prague, Russian banker Alim Karmov was sentenced to five years in jail for fraud in the setting up of a pyramid scheme in the Czech Republic. Karmov, who called himself a "Russian beast," apologized to creditors. He is the first foreign financier to be sentenced in the Czech Republic. PB


Jozef Migas, the chairman of the Party of the Democratic Left (SDL), said on 2 October that his party opposes forming a coalition government that would include the Hungary Coalition Party (SMK), SITA reported. Migas said after talks with SMK leaders that the "optimal solution" would be to have a coalition consisting of the SDL, the Slovak Democratic Coalition, and the Party of Civic Understanding. Migas did not say why his party, the reformed Communists, opposes the SMK, but he added that he has not ruled out further talks with the ethnic Hungarian party. Without the SMK, the coalition proposed by Migas would have 78 of the 150 seats in the parliament--short of the 90 votes needed to make changes to the constitution. PB


According to a survey conducted by two monitoring organizations, Private Radio Twist was the most objective of all television and radio stations in Slovakia before the 25-26 September elections , CTK reported on 2 October. The Helsinki Civic Assembly and the Association for the Support for Local Democracy said that though Radio Twist showed favoritism to the opposition Slovak Democratic Coalition, it was in general the most objective. The survey concluded that Slovak Television violated the principles of fairness the most often, devoting 75 percent of its news programs to Premier Vladimir Meciar's Movement for a Democratic Slovakia (HZDS). PB


Prime Minister Vladimir Meciar will remain as head of the HZDS, TASR reported on 3 October. Ivan Gasparovic, a member of the HZDS leadership, said after a party meeting in Krajne, northwest of Bratislava, that the party will not make any personnel changes. The HZDS finished ahead of all parties in last week's elections, garnering 27 percent of the vote (see "RFE/RL Newsline," 28 September 1998). Gasparovic said the chairman of the board of East Slovak Steelworks, Jan Smerek, will begin talks with all parties in an attempt to form a new government, despite declarations from the major parties that they will not form a coalition with the HZDS under any circumstances. PB


The Budapest branch of the opposition Hungarian Socialist Party (MSZP) decided on 4 October to withdraw Bela Katona as the party's Budapest mayoral candidate in the 18 October local elections. By a vote of 110 to 50, the MSZP delegates also decided to support incumbent Mayor Gabor Demszky of the Free Democrats, thus favoring "the unity of democratic forces and preventing a victory of the right wing." Demszky welcomed the decision , saying it greatly helps his chances of reelection. Janos Latorcai, the Federation of Young Democrats and Democratic Forum candidate, said that by withdrawing Katona , the MSZP is openly acknowledging in advance its defeat in the local elections. According to public opinion polls, Demszky has the support of 65 percent of decided voters, followed by Latorcai (27 percent). Katona was favored by only 6 percent of the Budapest electorate. MSZ


The federal legislature is scheduled to discuss Kosova in a special session on 5 October. The previous day, Yugoslav President Slobodan Milosevic chaired a meeting of the Supreme Defense Council to discuss possible NATO intervention against Yugoslav military targets (see "RFE/RL Newsline," 2 October 1998). The council then issued a statement that said "if we are attacked, we shall defend the country by all available means." Besides Milosevic, those present included Serbian President Milan Milutinovic, Montenegrin President Milo Djukanovic, federal Defense Minister Pavle Bulatovic, and General Momcilo Perisic, who is chief of the General Staff. On 3 October, that body placed air defense systems on a heightened state of alert. PM


In Luxembourg, EU foreign ministers on 5 October began talks on further tightening economic sanctions against Belgrade. In Brussels, NATO planners awaited UN Secretary-General Kofi Annan's report on whether Milosevic has met Security Council demands regarding Kosova, which Annan is scheduled to present later in the day. NATO is prepared to act if Annan concludes that Milosevic has not met the demands and authorizes the Atlantic alliance to launch air strikes. In Washington, U.S. officials said that special envoy Richard Holbrooke will soon meet with Milosevic in Belgrade. In London, British Defense Secretary George Robinson said on 4 October said that "what is clear is that Milosevic now recognizes that [NATO] means business and that's why he's moving with such speed at the moment." In Paris, British Foreign Secretary Robin Cook discussed Kosova with his French counterpart, Hubert Vedrine. Earlier, Vedrine had a telephone conversation about Kosova with U.S. Secretary of State Madeleine Albright. PM


Russian Foreign Minister Igor Ivanov and Defense Minister Igor Sergeev delivered a message from Russian President Boris Yeltsin to Milosevic on 4 October in which the Russian leader urged his Yugoslav counterpart to take immediate measures to end the crisis in Kosova or risk facing NATO attacks. In Moscow, a Foreign Ministry spokesman said that Russia opposes "any use of force, especially [if it involves NATO] circumventing the UN Security Council, something that can have grave consequences." He added that "hostilities must be stopped [in Kosova], army and security forces withdrawn to permanent locations, and urgent measures taken to overcome the humanitarian crisis and secure the return of refugees." In Prishtina, Kosovar sources reported on 3 October that Serbian forces continued to shell villages in the Gjakova area. PM


In Podgorica, President Djukanovic is slated to make a televised address on 5 October to explain his differences with Belgrade over Kosova. His supporters will not attend the special session of the federal legislature that same day, RFE/RL's South Slavic Service reported on 3 October. The Belgrade authorities rejected a key Montenegrin demand that opening a border crossing between Montenegro and Croatia at Debeli Brijeg be included on the agenda of the next round of Yugoslav-Croatian talks, the daily "Pobjeda" wrote on 3 October. The previous day, Yugoslav Prime Minister Momir Bulatovic, who is a loyal Milosevic supporter and Djukanovic's arch-rival, sent his wife and children to Bulgaria, "Pobjeda" reported. The pro-Djukanovic paper added: "the man who did nothing to help resolve [the crisis in Kosova] knows how to protect himself and his family, leaving the people to bear the consequences of the flawed policy" of Milosevic. PM


Following a 3 October meeting in Delphi, Greek Prime Minister Kostas Simitis said that he and Bulgarian President Petar Stoyanov and Romanian President Emil Constantinescu agreed that air strikes "are not the best solution" for the Kosova problem. Simitis added that he made the same point in telephone calls to French Prime Minister Lionel Jospin, Italy's Romano Prodi, and German Chancellor-designate Gerhard Schroeder. In Skopje the previous day, President Kiro Gligorov and his Turkish counterpart, Suleyman Demirel, agreed that the Kosova question should be resolved through diplomacy and "within the frontiers of Yugoslavia." Demirel added that his country would participate in any NATO air strikes, although he said he hopes military intervention will not be necessary. Gligorov stated that "the Macedonian government will make a decision" if NATO asks for its support. PM


Foreign Minister Paskal Milo told the UN General Assembly on 2 October that the Hague-based International Criminal Tribunal for the former Yugoslavia should investigate Milosevic. Milo accused the Yugoslav leader of ordering "the implementation ethnic cleansing policy against Albanians under the pretext of combating... terrorism." Milo repeated Albania's position that the international community should intervene militarily in Kosova. He stressed that "the peaceful means applied by the international community so far [have failed]." He added that "we risk having another, wider conflict" if the international community takes no action. Milo said that Albania is "in favor of an immediate end of the conflict and...negotiations between Belgrade and Prishtina, [mediation]." The minister added that a solution should respect "the will of the Albanians for self-determination conventions [banning] the change of borders through violence." FS


The Albanian Interior Ministry issued a statement on 3 October accusing Serbian forces of twice attacking a border post in the village of Pogaj, in the northern Has Mountains, the previous day. It said there were no casualties and only slight damage but added that the attacks were "a continuation of [previous] provocations the Serbian military machine, which [is] confronted with a probable NATO attack [and] trying to involve Albania." FS


Pandeli Majko became Europe's youngest head of government on 2 October after President Rexhep Meidani swore him in (see "RFE/RL Newsline," 2 October 1998). The parliament is expected to approve Majko's cabinet by 12 October. Among the few key changes, Minister for European Integration Ilir Meta will become deputy prime minister and fellow Socialist Petro Koci interior minister. Majko told journalists on 2 October that he will seek a dialogue with the opposition Democratic Party. He added that his priorities are "a return to stability, drafting a new constitution, and solving the Kosova problem." FS


Pope John Paul II said in Split on 4 October that he hopes that "the international community...will not fail to provide timely help" for Kosova. The previous day in Marija Bistrica, the pontiff beatified Cardinal Alojzije Stepinac at a mass attended by some 350,000 persons, including representatives of the Jewish and Islamic communities. The cardinal, who died under house arrest in 1960, is regarded by most Croats as a martyr for his country and faith at the hands of the communists. His critics charge that he did not do enough to rescue Serbs, Jews, and opposition Croats from death at hands of the pro-Axis Ustasha regime during World War II. The Vatican has rejected those charges. The pope said in Marija Bistrica that Stepinac "sums up the whole tragedy that befell the Croatian people and Europe in the course of this century...[namely] fascism, national socialism, and communism," adding that "we all know the circumstances of his death." PM


Spokesmen for the UN-sponsored international police force said in Mostar on 4 October that a special anti-terrorist unit will soon go to Croat-held areas of Herzegovina to investigate a recent series of violent incidents against Muslims, who were attempting to return to their former homes. One Muslim was killed and three wounded in a grenade attack on 2 October, and another Muslim's home was damaged in a similar assault two days later. Valentin Coric, the local police chief, resigned his post on 3 October. PM


The Hungarian Democratic Federation of Romania (UDMR), decided on 3 October to remain in the ruling coalition, AP reported. The decision was reached at the party's headquarters in the Transylvanian city of Targu Mures. The party said it does not want to be blamed for a failure of the economic reforms. The UDMR had threatened to leave the coalition because the government refused to establish a Hungarian-language university. The government said last week it would set up a German-Hungarian university, a move that has been criticized by many Romanian politicians. PB


Romanian Prime Minister Radu Vasile agreed with IMF Managing Director Michel Camdessus on 3 October that negotiations on a standby loan will resume later this month, an RFE/RL correspondent in Bucharest reported. Vasile is in Washington for talks with IMF and World Bank officials. Central Bank Governor Mugur Isarescu and Finance Minister Traian Decebal Remes are accompanying Vasile. The IMF froze a $530 million loan in May because of dissatisfaction with the pace of Bucharest's economic reforms. PB


Bulgaria and Romania have failed again to resolve a dispute over the location of a bridge to be built across the Danube River, Reuters reported on 4 October. Bulgarian President Petar Stoyanov and his Romanian counterpart, Constantinescu, discussed the issue at a meeting in the Greek city of Delphi but failed to come to an agreement on its location. Stoyanov said Bulgaria favors a location close to the Yugoslav border so that in times of crisis it would offer the shortest route available in circumventing Yugoslavia. The two did agree, however, to set up a committee to examine various options for the bridge. The meeting, hosted by Greek Prime Minister Simitis, also focused on the prospects of Romanian and Bulgarian membership in Western organizations and the fight against crime and drug trafficking. PB


Petar Stoyanov ended a three-day visit to the Netherlands on 3 October by signing an economic cooperation agreement with Prime Minister Wim Kok, ITAR- TASS reported. Stoyanov, who met with Queen Beatrix, held talks with Kok and other officials to discuss the strengthening of relations between The Hague and Sofia. Stoyanov also visited the International War Crimes Tribunal in The Hague. PB


by Christopher Walker

On the face of it, the results of the recent German and Slovak elections were somewhat similar. Voters in each country decided to change long-standing governing coalitions. In both cases, the countries' leaders, dominant figures on their respective political landscapes, were voted out following lengthy terms in power. However, that is where the apparent similarity ends.

The German election results reflect what can be best described as a normal, cyclical flow in democratic electoral politics. Germans voted for change with a small "c." In contrast, Slovaks voted for a systemic change in their country's political orientation. As a result, the incoming governing coalition in Slovakia will have a challenge that is wholly different from that of Gerhard Schroeder and his expected Red-Green coalition in Germany. The Slovak challenge will doubtless be significantly more difficult.

As they prepare to take power, Mikulas Dzurinda and his governing partners must not only put forward a set of policies on education, the environment, health care, the economy, and a host of other important issues. They must also simultaneously attempt to restructure many of the country's fragile institutions. That restructuring will include overhauling the civil service system and state security apparatus as well as reshaping the Slovak diplomatic corps and judiciary. In addition, the privatization process must be made more even-handed and transparent, and an environment in which a balanced, independent media may flourish must be created. That list is not exhaustive. At the very least, the new government can be said to be facing a demanding agenda.

The case of Slovak media illustrates the challenge facing the new government. Unlike their counterparts in mature democracies, independent media in Meciar's Slovakia found themselves in a constant state of confrontation with the regime. Meciar's extremist policies created a deep split within Slovak society. One was either "with" Meciar's Movement for a Democratic Slovakia (HZDS) and thus "with" Slovakia or against both the leadership and the country. With his astute political instincts, Meciar extracted the maximum mileage out of pitting Slovaks against one another based on his definition of what constituted a "good" or "bad" Slovak. This unyielding governing style forced much of Slovakia's political discourse to extremes. For the media, the dynamic was the same. The result was a polarized environment that allowed for pro-government or opposition media, but little in between. A key question now is whether Slovak editors and reporters can shed their combat mentality and allow the news media to perform its vital role in a more balanced manner. The new government can set the tone for this fresh and sorely needed environment.

The need to reshape and reconcile Slovak society is no less important in other key sectors, including the economy--especially with regard to privatization. The opposition forces preparing to take power have said they will seek to prevent any further privatizations by the outgoing government during the HZDS's final 30 days in power. This is one of a number of important signals the new government can send to both the international community and the Slovak population. For foreign investors, it will demonstrate a commitment to reestablishing the soundness of Slovakia's economy and restoring integrity to the country's business culture. For Slovaks, accustomed to cronyism and insider deals, it will help revive a sense of fair play that has been missing for most of the time since Slovakia split from the Czech Republic at the beginning of 1993.

A steadfast commitment to reform by the new government could also bring about another important result: namely, inspire the return to Slovakia of the many talented and ambitious Slovaks who ventured abroad during the Meciar era. Attracting back this valuable human capital would provide an important boost to the country's economic and cultural development and help the country stay the course with its democratic reform program.

Predictably, statements on the opposition victory from the EU and the entire Western establishment have been supportive. While the new Slovak government should have a reasonably long honeymoon period with the West, this time frame will not be infinite. The vast challenges confronting the government may generate a great deal of pressure on the four-party coalition. Should the economy sour in the meantime, the task of implementing tough reform measures will become even more difficult.

In such a case, it may be tempting for the incoming ruling coalition to blame Slovakia's ills on the policies and actions of the HZDS. That strategy, however, would ultimately have limited utility. Attacking the former leadership would only perpetuate the culture of polemic in Slovak politics. Moreover, the opposition will need to show it can govern ably and bring about results in its own right.

The challenges are substantial, but a demonstration of mature and capable political leadership by the incoming Slovak government can go a long way toward gaining back the confidence of average Slovaks and putting Slovakia back on the path to EU and NATO membership. The author is manager of programs at the European Journalism Network.