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Baltic Report: June 11, 2003

11 June 2003, Volume 4, Number 19

This issue covers events in the Baltic states from 24 May to 8 June 2003.
Danish lawmakers approved the EU Treaty of Accession in a 96-0 vote on 4 June with 15 abstentions by right-wing politicians opposed to enlargement, AP reported. Sixty-eight deputies were absent from the vote, which gives the green light to 10 new states from Eastern Europe and the Mediterranean (Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia) to join the bloc. The Danish parliament is the first legislature among the 15 current EU member states to have ratified the treaty.

Hungarian lawmakers unanimously approved the eastward expansion of NATO entailed in the alliance's Protocols of Accession on 3 June, AFP reported. All 329 parliamentarians present voted in favor of Bulgaria, Estonia, Lithuania, Latvia, Romania, Slovakia, and Slovenia being allowed to join the North Atlantic alliance. Andras Barsony, a senior Hungarian Foreign Ministry official, said, "It is with pleasure that we can say that of the seven new members, three are neighbors of Hungary." Hungary joined NATO in 1999, along with Poland and the Czech Republic, in the alliance's first wave of enlargement. The seven invitees are likely to join NATO at the alliance's 2004 summit.

The Bundestag on 5 June ratified by an overwhelming majority the decision made at NATO's Prague summit in November to enlarge the alliance, TASR, dpa, and Romanian Radio reported. All parliamentary parties with the exception of two representatives of the Party of Democratic Socialism -- the successor party of the communist Socialist Unity Party -- voted in favor of ratifying the agreement, under which Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia will join the Atlantic alliance in 2004.

The Foreign Ministry said in a statement on 1 June that Russia continues to be concerned about the military consequences of NATO's eastward expansion and the future membership of the Baltic states, ABNews reported. Foreign Ministry spokesman Aleksandr Yakovenko said that at the NATO-Russia Council meeting, which was to begin on 3 June in Madrid, Russia will "insist on clear and unambiguous guarantees that arms and armed forces of other countries will not be deployed on the territory of the Baltic states." An Ekho Moskvy opinion poll reported on 2 June showed that 57 percent of 2,815 respondents said they are not concerned about the possible deployment of NATO troops in the Baltics, while 43 percent expressed concern.
* A delegation of 12 U.S. congressmen, led by Douglas Bereuter (Republican-Nebraska), who participated in the NATO Parliament Assembly (PA) in Prague began a tour of the Baltic states in Riga on 28 May, BNS reported. President Vaira Vike-Freiberga hosted a dinner that evening in honor of the U.S. ratification of the NATO accession protocol. The next day Bereuter, in his role as chairman of the NATO PA, traveled to Vilnius while the congressmen went to Tallinn. After talks with parliament Chairman Arturas Paulauskas, Bereuter said in an address to the Seimas that NATO would draw on "your experience and your insights" as it seeks to have "better relations with Russia." He also met with President Rolandas Paksas and Defense Minister Linas Linkevicius. In Estonia, Defense Minister Margus Hanson and defense forces commander Vice Admiral Tarmo Kouts gave the congressmen an overview of the country's preparations for joining NATO. On 30 May, the congressmen visited Vilnius where they met with Paulauskas, Linkevicius, and armed forces commander Major General Jonas Kronkaitis. They also observed a military exercise by soldiers of the Grand Duke Algirdas Motorized Infantry Battalion at the Gaizunai training grounds. Bereuter returned to Riga where in talks with parliament speaker Ingrida Udre he said that NATO could get advice on how to form relations with Belarus. On 31 May, the congressmen returned to Latvia where they had a meeting with Defense Minister Girts Valdis Kristovskis and visited the army training base at Adazi.
* A Hungarian parliament delegation, headed by National Assembly Speaker Katalin Szili, began a working visit to the Baltic states in Tallinn on 4 June, BNS reported. She had meetings with President Arnold Ruutel, Prime Minister Juhan Parts, and parliament speaker Ene Ergma in Tallinn that day. On 5 June, the delegation visited Valga and Tartu where Szili had talks with Tartu University Rector Jaak Aaviksoo and Tartu Mayor Andrus Ansip before traveling to Riga. On 6 June, the Hungarians met with parliament speaker Ingrida Udre and deputies from the European Affairs Committee and attended a reception hosted by President Vaira Vike-Freiberga. Udre thanked Hungary for the rapid ratification of the NATO Accession protocols and expressed satisfaction with the successful passage of its EU membership referendum. Szili mentioned that Hungary was likely to open an embassy in Riga soon.
* Border guard chiefs Harry Hein (Estonia), Gunars Dabolins (Latvia), and Algimantas Songaila (Lithuania) met in Tallinn on 5 June to discuss cooperation after their countries join the EU, BNS reported. The talks were continued the next day on the island of Saaremaa with special attention devoted to matters related to guarding the sea border, search and rescue operations, and fighting pollution.

Defense Minister Margus Hanson told NATO Parliamentary Assembly President Doug Bereuter and Secretary-General Simon Lunn in Tallinn on 31 May that his country intends to keep spending 2 percent of GDP on defense, BNS reported. Armed forces commander Vice Admiral Tarmo Kouts spoke about the Force Structure Review -- the development plan of the armed forces for the medium term -- and about the state of affairs in membership compliance. Bereuter, a senior Republican congressman from Nebraska, praised the role of the Baltic states in advising the armed forces of Georgia. The NATO Parliamentary Assembly officials also met with parliamentary Foreign Affairs and National Defense Committee Chairmen Marko Mihkelson and Sven Mikser. Mihkelson noted that although a border treaty has not been signed, relations with Russia are the best they have ever been since the restoration of Estonia's independence.

The government approved a budget strategy for 2004-2007 at its meeting in Tallinn on 28 May, BNS reported. The plan calls for a reduction of the income-tax rate from the current 26 percent to 24 percent in 2004, to 22 percent in 2005, and to 20 percent in 2006. Income-tax revenues will also be reduced by another measure that will raise the maximum untaxed earnings from the current 1,000 kroons ($75) per month to 1,400 kroons in 2004, 1,700 kroons in 2005, and 2,000 kroons in 2006. Since a large share of the income of local governments comes from personal income taxes, which will decline, the strategy provides for maintaining current spending levels by raising the local-government share of those revenues from the current 44 percent to an estimated 85 percent by 2006. The document also pledges balanced budgets each year and conservative budgetary policies, with deficits allowed only in connection with pension reforms.

Estonian Defense Minister Margus Hanson and Finnish Defense Minister Matti Vanhanen signed a renewed framework agreement in Tallinn on 26 May on defense cooperation between their countries, BNS reported. Vanhanen, who took office just a few weeks ago, said Estonia's entry into NATO will have a stabilizing effect on the entire Baltic Sea region. However, he added that the role of Finnish officers training Estonian soldiers will diminish as the new Finnish government has no plans to join NATO. Hanson noted that Finnish support for the Baltic Defense College in Tartu is likely to increase as that institution becomes more international. During his one-day visit, Vanhanen held talks with Estonian armed forces commander Vice Admiral Tarmo Kouts and with members of the parliament's defense committee.

EU Director General for Employment and Social Policy Odile Quintin told reporters in Tallinn on 5 June that Estonia should adopt EU legislation on social and labor affairs before becoming a member of the EU, BNS reported. She said that Estonia has made very little progress in adopting EU labor law, with only a single directive dealing with working hours approved. Quintin recommended that Estonia also pass the gender equality law and complete the adoption of the EU anti-discrimination law before joining in May next year. She noted that the unemployment rate in the country is too high, especially for young people and for Russian-speakers, who are more than twice as likely to be without a job as ethnic Estonians.

Estonian Customs Board Director General Aivar Rehe and Russian Customs Committee Chairman Mikhail Vanin signed a cooperation memorandum between their services in Tallinn on 29 May, BNS reported. Its aim is to speed up border-crossing procedures for cargo. The customs officials also agreed to exchange information about the cost of goods and the related transactions to make sure that the correct value of goods is declared at the border. The customs heads agreed to set up a permanent working group comprising representatives of their central and regional bodies that will meet at least once a year. Rehe noted that investments in information technologies and training will be necessary as the border with Russia will become an external border of the EU next year. During a meeting with Finance Minister Toni Palts, Vanin praised the increased trust between the customs services of the two countries, citing as examples successful joint operations against smuggling and drug trafficking.

The council of the government's ruling coalition of Res Publica, the Reform Party, and the People's Union agreed on 2 June to suggest amendments to the constitution that would provide for direct popular elections of the country's president, BNS reported. Parliament's Constitutional Affairs Committee Chairman Urmas Reinsalu said that the proposed amendments would provide for the election of the president by direct popular vote for a term of six years without the possibility of re-election instead of the current system, under which the president is elected by the parliament or a special electoral assembly for a term of five years with the possibility of serving a second term. The constitutional changes would have to be approved by a referendum, which it proposed be held in June 2004 together with elections to the European Parliament. Although there have been various suggestions about changing the powers of the president, the council did not agree on proposing any of them within this referendum.

Six Russian-speaking members of the parliament announced on 3 June the formation of a parliamentary group to deal with issues of national minorities, BNS reported. The group elected former Ethnic Affairs Minister Eldar Efendiyev of the Center Party as its chairman, with Sergei Ivanov of the Reform Party as his deputy. Ivanov told BNS: "We are in favor of developing in Estonia an integrated, multicultural society with conditions for the preservation of the culture and language of national minorities. This is particularly topical in view of [Estonia's] accession to the European Union." He said the group is open to all interested deputies who consider themselves members of a national minority.

Constantinople Patriarch Bartholomew I told Estonian Prime Minister Juhan Parts in Tallinn on 4 June that he hopes Estonians approve EU membership in the referendum on 14 September, BNS reported. Bartholomew was visiting Tallinn as part of an eight-day environmental protection tour of the Baltic Sea aboard the cruise ship "Ocean Monarch." More than 200 clergy members, political leaders, and scientists from all over Europe are taking part in the tour, entitled "Baltic Sea: Common Legacy, Shared Responsibility." The talks between the two leaders primarily focused on environmental issues, with Parts mentioning the environment-related points of his government's program and the government's long-term development plan "Sustainable Estonia 21." Parts also said that environmental protection will be one of the main issues for Estonia when it heads the Council of Baltic Sea States in the second half of this year.

The government decided on 27 May that the country will not field an exhibit at EXPO 2005 in Aichi, Japan, citing the high price tag, BNS reported. The costs of participation were estimated at between 45.3 million kroons ($3.3 million) and 65.1 million kroons. The previous government of Prime Minister Siim Kallas decided in February not to participate, but Japan's extension of the deadline for responding left the final decision to the current government (see "RFE/RL Baltic States Report," 10 and 28 February 2003). Ninety-six countries, including Latvia and Lithuania, had announced by March that they will participate in the fair.
* European Commission Secretary-General David O'Sullivan discussed Estonia's preparations for EU membership with Foreign Minister Kristiina Ojuland in Tallinn on 6 June, BNS reported. He also held talks with deputies of the parliament's European Affairs Committee and officials from the Justice Ministry and the State Chancellery's EU information center. O'Sullivan told reporters that public administration in Estonia has to be improved with officials getting similar wages as in the private sector.
* President Arnold Ruutel told UNESCO Director-General Koichiro Matsuura in Tallinn on 29 May that the Estonian song and dance festival tradition, which goes back to the 19th century, should be included in UNESCO's World Heritage List, BNS reported. Culture Minister Urmas Paet, who also attended the meeting, supported the president's suggestion that UNESCO's list also include the island of Kihnu in the Gulf of Riga which has retained its original culture. Matsuura noted that an international jury will decide in November what will be added to the list.
* Finance Minister Tonis Palts met with British Paymaster General Dawn Primarolo and Chancellor of the Exchequer Gordon Brown in London on 4 June, BNS reported. Palts presented the principles of the Estonian tax system and expressed the hope for continued cooperation in taxation issues. Brown praised Estonia's economic development and underlined the importance of tax-related information exchanges.
* Finnish Labor Minister Tarja Filatov told visiting Social Affairs Minister Marko Pomerants in Helsinki on 28 May that Finland intends to follow the 2+3+2 system of transition to free movement of labor within the EU, BNS reported. Under the system certain restrictions on labor would be introduced for a transitional period of two years after which they would be reviewed and possibly eased or extended for three more years. Then there would be another review which could result in a further two-year extension. Pomerants also noted that the Finnish parliament is debating a bill which would simplify the system of issuing permits for seasonal workers.
* Economy and Communications Minister Meelis Atonen had a meeting in Helsinki with Finnish Transport and Communications Minister Leena Luhtanen on 26 May, LETA reported citing Postimees Online. They discussed issues concerning land and sea transport between Estonia and Finland and the possibilities for cooperating in ice-breaking operations.
* Defense forces commander Vice Admiral Tarmo Kouts flew to Italy on 1 June to establish contacts with Italy's armed forces commander General Rolando Moschini, who will from April 2004 become the chairman of the EU Military Committee, BNS reported. He also participated in the commemorations of the 57th anniversary of the Republic of Italy. Kouts traveled to Kosovo on 3 June to visit the two Estonian units stationed there: the military police platoon ESTPATROL-7 in Pristina and the light reconnaissance company BALTSQN-7 in Mitrovica. Kouts heard praise about the performance of the Estonian peacekeepers from the chiefs of the Italian and Danish battalions in whose units they are based. After meetings with the NATO forces, the KFOR leadership in Kosovo, and the chief of the Northeastern Region Multinational Brigade, Kouts returned to Estonia on 5 June, LETA reported.
* Culture Minister Urmas Paet held talks in Tallinn on 2 June with Giorgio Risicaris, a manager of Euro projects and consultant specializing in the transformation of former prisons, about the possibilities to get funds from the EU prisons renovation project "Reprise" to transform the 200-year-old sea fortress which was Tallinn's Central Prison until late 2002 into the Estonian Academy of Arts, BNS reported. A condition for obtaining this aid is joint financing by ministries, the city of Tallinn, and the Estonian Academy of Arts.
* The parliament's Security Institutions Supervision Committee failed to support the appointment of Foreign Ministry Personnel Department head Andres Unga as the director-general of the security police on 29 May, BNS reported. Although the reasons for the rejection were not officially announced, Reform Party deputy Vaino Linde told BNS on 5 June that Unga did not have at least three years experience in the police as required by the Police Service Act. Interior Minister Margus Leivo, who nominated Unga, explained that the police act should not apply as the security police is a security institution governed by the Security Institutions Act of 2001 which does not mention the need for police experience. The approval of the committee, however, is not a requirement for the appointment.
* President Arnold Ruutel signed resolutions appointing two new ambassadors on 28 May, BNS reported. Former Foreign Minister Juri Luik will replace Sven Jurgenson as Ambassador to the United States and Mexico, residing in Washington. General Director of the Foreign Ministry European Integration Department Katrin Saarsalu will take over from Mart Laanemae as Ambassador to Austria, Slovakia, Slovenia, and Switzerland residing in Vienna.
* Several tens of Russian-speaking young people from Tallinn, Narva, Sillamae, and Paldiski founded a new political association called "Front" in Tallinn on 31 May, BNS reported. They elected 19-year-old Ilya Petrov, who had organized an unsanctioned anti-war rally in front of the U.S. Embassy which turned violent (see "RFE/RL Newsline," 31 March 2003), as its chairman.
* Pro Patria Union Chairman Tunne Kelam told the party congress in Tallinn on 24 May that the party did poorly in the March parliamentary elections due to a reputation of arrogance, BNS reported. The congress elected a new 14-member board with former party chairman Mart Laar receiving the most votes. A motion by the party's women's association to re-elect Kelam who had been serving as interim chairman since Laar's resignation was defeated.
* The Statistical Office announced on 6 June that in May the consumer price index was 0.3 percent lower than in April, but 0.6 percent higher than in May 2002, BNS reported. In May, the price of goods fell by 0.4 percent as the price of food grew by 0.3 percent while the prices of non-food articles decreased by 1.2 percent. The price of services declined by 0.1 percent during the month.
* The Tartu city government signed an agreement with Nordea Bank to obtain a one-year loan of 90 million kroons ($6.7 million) with an interest rate of 2.822 percent, BNS reported. Most of the loan (58.6 million kroons) will be used to refinance earlier loans with the remainder to cover planned infrastructure investments.

Latvia's Constitutional Court on 6 June struck down controversial regulations in the Radio and Television Law mandating that no more than 25 percent of programming can be broadcast in a foreign (non-Latvian) language, LETA reported. According to the decision, the court found that the language restrictions are unconstitutional, as they could not be regarded as necessary or adequate in a democratic society. The now-stricken language restrictions applied only to broadcast media, not to audio or video programs transmitted via cable or satellite.

The opposition People's Party (TP) introduced a resolution on 6 June calling for a vote of no confidence in Prime Minister Einars Repse's coalition government, Latvian media reported. The party accuses the government of failing to fulfill its campaign pledges, of leading the country into a financial crisis as a result of its budget policies, of influencing the judiciary and, in an effort to "take the path of authoritarianism," is attempting to bring "organs of repression" such as the Constitutional Defense Bureau (SAB) and the Corruption Prevention Bureau (KNAB) under Repse's personal control. The resolution must be considered at the parliament's next meeting, on 12 June.

The "no confidence" resolution came one day after the Union of Greens and Farmers (ZZS) -- a member of the Repse governing coalition -- sided with the opposition and voted against government-sponsored amendments to the law regulating the Corruption Prevention Bureau (KNAB), BNS reported on 5 June. The amendment would have removed provisions requiring candidates for the KNAB directorship to hold a degree in law.

President Vaira Vike-Freiberga and Russian President Vladimir Putin had an informal meeting in St. Petersburg on 31 May during the EU-Russia summit, LETA reported the next day. They agreed that relations between their countries should become closer. Vike-Freiberga also held informal talks with Russian Prime Minister Mikhail Kasyanov as well as Kazakh and Finnish Presidents Nursultan Nazarbaev and Tarja Halonen. In her speech at the summit, she said that EU expansion will bring better cooperation between the EU and Russia, noting that talks on an EU-Russia visa-free regime can begin only after major improvements are made in border procedures for both people and goods, and after border treaties are ratified with all EU countries, including Latvia.

Ambassador to Latvia Brian Carlson told Economy Minister Juris Lujans in Riga on 4 June that U.S. investors are ready to invest in the joint-stock oil company Ventspils Nafta (VN), BNS reported. Its export operations have been reduced to a trickle by the decision of the Russian state-owned oil exporter Transneft not to send any more oil to Ventspils by pipeline (see "RFE/RL Newsline," 21 February 2003). The bulk of the company's shares are currently held by the private company Latvijas Naftas Tranzits (47 percent) and the state (43.6 percent). Carlson said that the unclear structure of VN's shareholders makes investors somewhat cautious. He invited Lujans to visit the United States in the fall to present to U.S. businessmen the possibilities for investment in Latvia as a future member of the EU. Ventspils Mayor Aivars Lembergs visited the United States in early May, to survey investor interest in Ventspils Nafta.

The parliament by an overwhelming margin adopted a bill on 5 June aimed at protecting the domestic pork market by establishing quotas and extra duties, BNS reported. The annual quota for pork imports that are not subject to an extra duty of 0.257 lats ($0.46) per kilogram was set at 6,200 tons. No quota for live pig imports was set, but those will be subject to an import duty of 0.205 lats per kilogram. The Estonian Foreign Ministry immediately condemned the bill, calling it a violation of World Trade Organization policy and the Baltic states' agricultural free-trade agreement. Last year Estonia exported more than 10,000 tons of pork to Latvia, but its new quota for 2003 according to the bill will be only 2,370 tons. Meat packers in Latvia opposed the bill, arguing that the problem was not legally imported but contraband pork, the amount of which would likely only increase.

Prime Minister Einars Repse discussed bilateral and regional cooperation and EU enlargement with his visiting Swedish counterpart Goran Persson in Riga on 26 May, BNS reported. Repse accepted Persson's invitation to attend a planned meeting of the premiers of Estonia, Latvia, Lithuania, Denmark, Finland, and Sweden in Stockholm on 6 June. The prime ministers will discuss all the items on the agenda of the European Council meeting that is to be held in Greece on 20-22 June. The two prime ministers also talked about EU agricultural policies and preparations for the referendums in September on the introduction of the euro in Sweden and EU membership in Latvia. In later talks with President Vaira Vike-Freiberga, Persson praised Latvia's rapid economic growth and expressed the hope that trade between the two countries will increase.

Finance Minister Valdis Dombrovskis told parliament on 29 May that in 2004-2006 Latvia will receive 830 million euros ($990 million) more that it will contribute to the common EU budget, LETA reported. He said that during that period Latvia will receive about 1.117 billion euros from EU structural funds and assistance programs, but would have to contribute just 287 million euros. Dombrovskis said the size of Latvia's payment to the EU budget should not grow much year to year, but EU funding to Latvia should increase annually.
* Mechtild Rossler, chief of the UNESCO World Heritage Center in the European Region, told Latvian parliament and Riga City Council deputies on 2 June that the planned construction of the 26-story Sun Stone business complex in Riga's Kipsala district could result in the removal of the city from the UNESCO list, LETA reported. He noted that a similar situation had arisen in Vienna, where a project for constructing four skyscrapers in the city's historic center was halted after a similar warning. Two floors of the Riga building and a parking lot have already been built. Culture Minister Inguna Ribena and the head of the State Cultural Monument Protection Inspection Juris Dambis told a press conference on 4 June that the most reasonable way to resolve the situation would be to alter the plans for the complex to bring them into line with Kipsala regulations that do not allow buildings of more than 15 stories.
* The head of the United Kingdom's National Audit Office, Comptroller and Auditor General Sir John Bourn, and Finance Minister Valdis Dombrovskis signed a bilateral cooperation agreement in Riga on 28 May, LETA reported. The accord provides for British assistance in preparing a financial-monitoring system in Latvia in order to efficiently implement projects financed by the EU. The agreement is valid for two years and will be financed by 2.5 million euros ($2.95 million) from the EU's PHARE program. Bourn held talks the previous day with parliament speaker Ingrida Udre, who briefed him on the establishment of a parliamentary public-expenditures and audit commission that is authorized to supervise and control budgetary expenditures. State Controller Raits Cernajs also participated in the meeting.
* Vike-Freiberga traveled to Helsinki on 2 June to speak at a conference entitled, "Stop Child Trafficking: Modern-Day Slavery," organized by the Finnish government in cooperation with the Council of the Baltic Sea States, Sweden, Canada, and the United States, LETA and BNS reported. She noted the importance of adequate legislation and the need for greater cooperation among interior affairs institutions and nongovernmental organizations to halt the practice, which is growing rapidly in the Baltic Sea region. Vike-Freiberga also pointed to the disastrous influence of the Internet in spreading child prostitution and sexual abuse. She also held separate talks with Prime Minister Anneli Jaatteenmaki and President Tarja Halonen about the changes that will take place in the EU as it expands to include Latvia and nine other states next year.
* Deputy Chairwoman of the Russian State Duma Lyubov Sliska presented a special report on Russian minorities in the Baltic States at the NATO Parliamentary Assembly (PA) in Prague on 26 May, which stated that half a million mostly Russian-speakers in Estonia and Latvia are treated as second class citizens, RFE/RL reported on 29 May. Baltic representatives responded by noting that the report was biased and inaccurately presented the situation. The report was simply "noted" by the NATO PA standing committee on Civic Dimensions of Security, and the committee decided to send a delegation to Latvia and Estonia to investigate and report on the conditions of the Russian minority for the next NATO PA which will be held in Florida in early November.
* European Commission Director General for Employment and Social Policy Odile Quintin held talks on 5-6 June with Welfare Minister Dagnija Stake, Minister for Social Integration Affairs Nils Muiznieks, and officials from the ministries of welfare, economy, finance, education and science, as well as representatives of the State Employment Service, the Latvian Employers' Confederation, and the Association of Free Trade Unions, LETA reported.
* Foreign Ministry Deputy State Secretary Andris Kesteris told LETA on 26 May that a recent European Commission interim report noted that Latvia still must harmonize its legislation with EU laws in the areas of customs control, tax administration, financial control over structural funds, and shipping safety.
* Belgian Foreign Ministry Deputy State Secretary Mark Geleyn held talks about bilateral cooperation opportunities after Latvia joins NATO and the EU with Defense Ministry State Secretary Edgars Rinkevics on Riga on 5 June, BNS reported. In the past Belgium has provided great help to the development of BALTRON and the Baltic Defense College.
* Finance Minister Valdis Dombrovskis told a conference of the Latvian Association of Free Trade Unions in Riga on 30 May that Latvia's taxes have been gradually coordinated with directives of the EU and a majority of them already meet EU requirements, LETA reported. He noted that EU directives regulate rates of indirect taxes -- customs, excise, and value-added taxes (VAT) -- while countries are free to set the levels of personal income tax, social insurance payments, and corporate income tax.
* The Unified Russia party organized pickets in front of the Latvian Embassy in Moscow on 28-29 May protesting against the planned educational reforms in minority schools, LETA reported. They will make Latvian the main language of instruction in all schools from September 2004. The protesters, mainly high-school students, held flags and symbols of the party, with a banner saying "Brother Latvians, protect the Russian language from your politicians!" The protests passed without incident.
* After Riga City Council Executive Director Maris Tralmaks did not grant permission to For Human Rights in a United Latvia (PCTVL) to hold a protest against the planned 2004 education reforms, parliament deputies Jakovs Pliners and Vladimir Buzajevs staged a public meeting with voters in front of the Education and Research Ministry building on 2 June, LETA reported. About 150 mostly Russian youths gathered in front of the building some of them with signs in Russian and English. The deputies submitted a statement to the ministry affirming that the parents should have the right to decide what language their children should be taught.
* The parliament without debate agreed to the resignation of Guntis Rutkis as head of the Corruption Prevention Bureau on 29 May, LETA reported. Rutkis filed a letter of resignation on 14 May, which the government approved on 20 May.
* The parliament voted unanimously on 5 June to hold the referendum on EU membership on Saturday, 20 September, BNS reported. Voters will be asked to answer the question: "Are you in favor of Latvia's membership in the European Union?"
* The Riga City Council and Multihalle Ltd. signed a land rental agreement on 28 May for the construction of the new ice arena which will be used for the 2006 World Ice Hockey Championships in Riga, LETA reported. The foundation stone of the arena was officially laid a short time later that day, but actual construction will begin later.
* The 48th International Eurovision song contest finals were held in Riga on 24 May, LETA reported. The contest to which 1,218 reporters were accredited, was broadcast live to 42 countries. From the 26 competing countries Turkey, with singer Sertaba Erener, won first prize, followed by Belgium and Russia.

Accompanied by Defense and Economy Ministers Linas Linkevicius and Petras Cesna and more than 30 businessmen, Prime Minister Algirdas Brazauskas began an official three-day visit to Kyiv on 4 June, ELTA reported. He was unexpectedly welcomed at the airport by his Ukrainian counterpart Viktor Yanukovych who also drove with him to the city where they had informal talks with President Leonid Kuchma. On 5 June, the premiers opened the first session of the newly established Intergovernmental Cooperation Council which was devoted to discussions about the further development of commercial and cultural links between the countries. The council will meet at least once a year in the two countries on a rotating basis. The prime ministers agreed to establish a system of free visas between their countries, but did not specify when it would enter into force. Both leaders also spoke at the Lithuanian-Ukrainian Business forum with Brazauskas offering support to help improve Ukrainian business ties with EU countries. Defense Ministers Linkevicius and Volodymyr Shkidchenko signed agreements of cooperation and assistance in catastrophes and on mutual protection of classified information. On 6 June, Brazauskas reportedly discussed with Foreign Minister Anatoliy Zlenko sharing each country's experience in highway construction and the use of Ukrainian specialists to close down the Ignalina atomic power plant in Lithuania.

Sergei Mironov, the chairman of the Russian Federation Council, began an official one-day visit, meeting with parliament Chairman Arturas Paulauskas during which he condemned the law adopted in 2000 demanding $20 billion in compensation from Russia for damages Lithuania suffered while occupied by the USSR, ELTA reported. Mironov said that Russian lawmakers should soon ratify the 1999 agreement with Lithuania on avoiding double taxation and called on Lithuania to join the Treaty on Conventional Forces in Europe (see "RFE/RL Newsline," 22 November 2002 and 14 May 2003). When President Rolandas Paksas raised the issue of LUKoil's plans to extract oil from sea platforms off the ecologically sensitive Curonian Spit, Mironov affirmed that all ecological standards were being followed and that LUKoil should invite Lithuanian experts to visit the site. Chairman of the Confederation of Lithuanian Industrialists Bronislovas Lubys gave Mironov a letter addressed to the Russian Duma calling for the successful implementation of the "2K project" of closer cooperation between the cities of Kaliningrad and Klaipeda.

The Lithuanian parliament (Seimas) voted unanimously on 29 May to ratify the recently signed readmission treaty with Russia (see "RFE/RL Newsline," 13 May 2003), BNS reported. The treaty still must be ratified by the Russian Duma and Federation Council so that the agreement on travel documents for Russian citizens transiting Lithuania to and from Kaliningrad Oblast can take effect on 1 July.

Parliament the same day also approved by a vote of 61 to 10 with two abstentions a resolution authorizing sending up to 130 military personnel to participate in coalition stabilization operations in Iraq, BNS reported. Defense Minister Linas Linkevicius noted that the funds to pay for the mission will be raised by canceling the third rotation of troops in Afghanistan, ending the service of a military transport plane in the Balkans, and reducing the number of draftees in the armed forces. These new troops will be in addition to the four military doctors currently serving in Iraq and 10 cargo specialists stationed in Kuwait. The additional deployment of troops was proposed by President Rolandas Paksas on 26 May after the State Defense Council voted to accept the invitations of both Denmark and Poland to join their planned operations in Iraq. Defense Minister Linas Linkevicius told the Lithuanian parliament that "the unit that should join the Danish forces might be deployed as early as June," while the others would likely join the Polish forces in August. He said participation in the international mission in Iraq will improve Lithuanian businessmen's chances of winning tenders related to Iraq's reconstruction.

Delegates from the Liberal Union, the Center Union, and the Modern Christian Democratic Union voted unanimously to form a new center-right party, the Liberal and Center Union, in Vilnius on 31 May, "Lietuvos rytas" reported on 2 June. Earlier that morning the three held separate congresses, voting to end their activities and form a single party. This completed the process that began in March (see "RFE/RL Newsline," 6 March 2003), when the three parties formed a joint 25-member faction in the parliament. Former Vilnius Mayor Arturas Zuokas of the Liberal Union was elected chairman of the new party by a vote of 519 to 28 with nine invalid ballots. Former Liberal Union and Center Union Chairmen Eugenijus Gentvilas and Kestutis Glaveckas were elected first deputy chairmen. The next day, former members of the Center Union who opposed the merger held another congress in Vilnius, at which 116 delegates established the new National Center Party. Romualdas Ozolas, who helped found the Center Union and served as its chairman from 1993-2000, was elected chairman.

The annual congress of the Homeland Union (Conservatives of Lithuania) was held in Vilnius on 24-25 May, "Lietuvos rytas" reported on 26 May. By a vote of 291 to 23, the congress elected 46-year-old former Prime Minister Andrius Kubilius as the party's new chairman, replacing Vytautas Landsbergis, who had headed the party since its founding in 1993, but who decided not to run again (see "RFE/RL Newsline," 19 May 2003). Landsbergis was elected chairman of the newly created Party Policy Committee, which was given the authority to call meetings of the party's presidium and council and even extraordinary party congresses. Rasa Jukneviciene and Arvydas Vidziunas were elected party deputy chairmen. Anticipating the planned union with the Lithuanian Union of Political Prisoners and Deportees and the Lithuanian Rightists' Union later this year, the congress changed the party's name to Homeland Union (Conservatives, Christian Democrats, and Freedom Fighters). It also adopted a new party program entitled "The Right-Wing Alternative: Lithuania's Success."

General Mihail Popescu held talks with his Lithuanian counterpart Major General Jonas Kronkaitis in Vilnius on 28 May, ELTA reported. Popescu said the aim of his visit is "to learn something useful" from Lithuania's military reforms. The generals noted that their armed forces face similar challenges in preparing for their anticipated entry into NATO in May 2004. Both countries supported the U.S. campaign in Iraq and are participating in peacekeeping operations in the former Yugoslavia and Afghanistan. Popescu also visited the Lithuanian parliament and the Foreign Ministry. On 29 May, he met with Defense Minister Linas Linkevicius and visited the Radvilas Training Regiment in Rukla and the Regional Airspace Surveillance and Control Center in Karmelava.

Central Election Commission Chairman Zenonas Vaigauskas announced on 3 June that a referendum on changing the electoral system will not be held, as the necessary 300,000 signatures of registered voters were not collected, "Lietuvos zinios" reported the next day. The referendum, for which signatures began to be collected in February (see "RFE/RL Newsline," 13 February 2003), called for amending the constitution by replacing the 70 parliamentary deputies elected from party lists with 60 directly elected deputies -- one from each of the country's municipalities. Parliamentarian Viktor Uspaskich brought more than 330,000 signatures to the commission on 19 May, but Vaigauskas said that almost 65,000 were rejected because the signers had not filled out the required information. A computer check also revealed that more than 41,000 signatures were repeated, almost 1,700 of the signers were already dead before the campaign started, and more than 2,150 were too young to vote.

Farmer representatives expressed disappointment and threatened further strikes and blockades after a meeting with Prime Minister Algirdas Brazauskas, Agriculture Minister Jeronimas Kraujelis, and Finance Minister Dalia Grybauskaite in Vilnius on 2 June, BNS reported. The cabinet decided on 4 June to redirect 188 million litas ($63 million) in the 2003 budget toward agriculture, police, health, education, and other fields, "Lietuvos zinios" reported the next day. The funds would be taken from savings in the servicing of the state debt, SAPARD programs, and the highway fund so as not to increase the budget deficit, which stands at 1.31 billion litas. The largest share of the funds will go toward assisting farmers and guaranteeing the same price for milk as last year. Dairies will receive an additional 56 million litas for this purpose. Parliament is expected to approve the proposals.

Vilnius Mayor Gediminas Pavirzis officially resigned from his post on 5 June in anticipation of the Vilnius District Administrative Court ruling the next day that his election in April was illegal, BNS reported. Pavirzis' election was immediately challenged by the Liberal Party on the grounds that three parliamentary deputies voted in violation of a Constitutional Court ruling from December forbidding simultaneous membership in the parliament and local councils (see "RFE/RL Newsline," 10 April 2003). The administrative court suspended the powers of Pavirzis and Deputy Mayor Juozas Imbrasas on 15 April and the city has been without an official head for two months. On 30 May, the Constitutional Court also ruled that the elections had been improper. A new round of voting in the Vilnius City Council is expected on 11 June.

Foreign Minister Antanas Valionis traveled to Stockholm on 6 June to attend a meeting of the prime ministers of the Baltic states, Denmark, Finland, and Sweden in place of Prime Minister Algirdas Brazauskas, who was on an official visit to Ukraine, ELTA reported. The main topic of the meeting was preparations for the EU summit to be held in Thessaloniki, Greece, on 20-21 June. The prime ministers also decided to send a letter to European Commission President Romano Prodi underscoring the need for joint action to ensure the environmental safety of shipping in the Baltic Sea. In talks with Swedish parliament Chairman Bjorn von Sydow, Valionis talked about bilateral cooperation and the work of the EU Convention on the Future of Europe. Von Sydow said that there should not be any difficulties in the parliament's ratification of the EU accession accords, which is scheduled for November.
* A group of 45 soldiers from the Grand Duke Algirdas Motorized Infantry Battalion flew from Denmark to Iraq on 4 June where they will serve in peacekeeping operations with Danish troops in the sector controlled by British forces northeast of Basra, ELTA reported.
* The Russian Federation Council approved by a vote of 132 to one with one abstention on 28 May the land border agreement with Lithuania signed in 1997, BNS reported. With one more vote in favor it also ratified the agreement on the exclusive economic zone and the continental shelf in the Baltic Sea. The Russian Duma had ratified the agreements on 21 May. The ratification was one of the necessary conditions for the introduction of easier transit for Russian citizens to and from the Kaliningrad Oblast via Lithuania from 1 July.
* Foreign Minister Antanas Valionis flew to Madrid to attend the NATO Euro-Atlantic Partnership Council (EAPC) meeting of foreign ministers on 3 and 4 June, BNS reported. He was joined there by Lithuanian Ambassadors to NATO and Spain Ginte Damusis and Vytautas Dambrava as well as Foreign Ministry Secretary Giedrius Cekuolis. Valionis told the EAPC meeting that Lithuania wants the doors of NATO to be open so that Albania, Croatia, Macedonia, Georgia and Ukraine could join the alliance in the future and that Lithuania was willing to share its experience in seeking NATO membership with them.
* Economy Minister Petras Cesna held talks in Warsaw on 29 May with Polish Economy, Labor, and Social Minister Jerzy Hausner, Deputy Prime Minister Grzegorz Kolodko, and the heads of power utility companies, ELTA reported the next day. The main topic of discussion was cooperation in the energy field and the project on connecting the power grids of both countries. It was decided that a joint Polish-Lithuanian letter to the European Commission would be prepared expressing the need for Lithuania to join the power grid of Western Europe. The ministers also discussed the need to improve work procedures at the customs check points on their border.
* NATO Security Bureau Director Wayne Rychak told reporters in Vilnius on 5 June that he had given a positive evaluation to Lithuania's readiness to handle classified information, BNS reported. The remarks were made after a meeting with parliament Chairman Arturas Paulauskas about which he declined to disclose any details.
* Foreign Ministry State Secretary Evaldas Ignatavicius attended the conference of foreign ministers of the 15 European Union and 10 Mediterranean Sea countries in Crete on 26 and 27 May to which representatives from the 10 EU candidate states were invited as observers, BNS reported. It addressed the concept of the Broader Europe/New Neighbors initiative and new partnership in the light of admission of new members, as well as political, economic, and cultural cooperation.
* Foreign Ministry Security Policy Department Director Rytis Paulauskas attended the first meeting of security policy heads of Nordic and Baltic foreign ministries in Stockholm on 26 May, BNS reported. They discussed security policy in Europe, the consequences of the Iraq war, and NATO enlargement as well as the activities of the Organization for Security and Cooperation in Europe.
* The parliament passed a resolution on 29 May expressing concern about the proposals within the EU to establish the position of EU president and end the practice of having a rotation in the presidency of the EU, BNS reported. The resolution stated: "Such reforms would change the EU institutional balance and would create conditions for rivalry between the European Council and the European Commission." It also affirmed that the number of countries' representatives at the EU institutions should remain the same as stipulated by the Nice treaty, i.e. every member state should have at least one commissioner at the European Commission.
* The remains of some 3,000 soldiers of Napoleon's army who died of diseases and cold in the campaign of 1812, and were found at a construction site in Vilnius were buried in the city's prestigious Antakalnis Cemetery on 1 June, BNS reported. At the request of France, which organized and financed the reburial project, the ceremony included military honors, a solemn volley of guns and both the French and Lithuanian national anthems. The French Ambassador in Lithuania Jean Bernard Harth and parliament Chairman Arturas Paulauskas spoke at the ceremonies at the cemetery where a monument to the French armed forces was unveiled. Historians estimate that 80,000 Napoleonic soldiers may have died in Lithuania.
* President Rolandas Paksas received the credentials of former Icelandic Foreign Minister Jon Baldwin Hannibalsson as Iceland's new Ambassador to Lithuania on 26 May, BNS reported. He will reside in Helsinki where he has been Ambassador to Finland since early in 2003.
* The leftist Union of Peasant and New Democracy Parties (VNDPS) and the rightist Christian Democrats formed a joint faction in the parliament on 29 May, ELTA reported. The action was to a great extent prompted by the decision earlier in the week of VNDPS members Jane Narviliene and Edvardas Karecka to join the ruling Social Democratic faction. The defections reduced the number of deputies in the VNDPS faction to six or one less than the required minimum of seven for a parliamentary caucus.
* President Rolandas Paksas told the international conference "Economic Diplomacy in the Changing World" in Vilnius on 27 May that the search for new markets for Lithuanian products and foreign direct investment in Lithuania should become the country's foreign policy priority, BNS reported. He said that accession to the common EU trade policy would open new opportunities in other parts of the world, but also stressed the importance of the Baltic states pooling their efforts to work in more remote and less familiar markets. The conference started with the signing of a memorandum on cooperation between the Lithuanian diplomatic corps and associated business structures.
* The Statistics Department announced on 28 May that in the first four months of the year, the number of foreign visitors to Lithuania was 942,000 or 10.2 percent fewer than in the same period last year, ELTA reported. The largest number came from neighboring countries: Russia (30.4 percent). Latvia (28.9 percent), Belarus (14.8 percent), and Poland (7.4 percent).
* The Finance Ministry announced that in 2002 total revenues to the consolidated budget amounted to 15.3 billion litas ($3.9 billion) while expenditures reached 15.0 billion litas, BNS reported on 2 June. The budget deficit of 613 million litas equaled about 1.2 percent of the country's gross domestic product (GDP).
* The Labor Exchange announced on 4 June that at the beginning of the month the number of officially registered unemployed people was 162,900, BNS reported. The unemployment rate fell from 10.8 in April to 10 percent in May.

Speech by Doug Bereuter, president of the NATO Parliamentary Assembly to the Seimas of the Republic of Lithuania, 29 May 2003

Mr. Speaker, members of the Seimas, thank you for inviting me to address you today in my capacity as president of the NATO Parliamentary Assembly. It is an honor and a privilege.

Your parliament enjoys a special place in the history of the NATO Parliamentary Assembly. You were one of the first countries to become an associate member of the NATO Parliamentary Assembly following the historic events of 1989, and Lithuanian parliamentarians have played an active role in the assembly's work since that time.

Your capital city, Vilnius, also has a particular resonance for us because it was here in December 1991 that the assembly held the first of many "outreach" seminars across the face of Europe. Those were the early and tense days of independence for Lithuanians when the consequences and costs -- but never the outcome -- of your courageous actions were far from clear. The sandbags around this building provided a graphic reminder of the violence that had recently taken place and that many feared would return. No doubt anxiety and uncertainty characterized the public mood, but there was also a fierce determination that freedom and democracy would prevail.

And so it has. Twelve years later, so much has changed. Where there was anxiety and uncertainty there is now confidence, enthusiasm and the expectation of a prosperous and secure future. Your journey has been difficult and, at times, painful. But you have arrived and now stand on the threshold of membership of both NATO and the European Union. This is an international confirmation of the enormous progress you have made.

For the member nations of NATO, the invitation to seven new members is particularly satisfying, as the assembly was an early champion of NATO enlargement; we have consistently urged the benefits of a wider alliance. I know we can now count on your active engagement and assistance in sustaining the momentum of enlargement and in ensuring that the benefits of cooperation and partnership with the alliance are spread as widely as possible. I also know that you are already active in this process by providing advice and assistance to several additional countries seeking closer association with, and indeed, membership in the alliance.

You are joining NATO at a decisive moment in its history. Faced with threats of a very different nature -- terrorism and the proliferation of weapons of mass destruction -- the alliance is undergoing fundamental changes that will allow it to assume an effective and even crucial role in this new, and increasingly global security environment. You and the other six new members are a central part of NATO's transformation. You will bring new perspectives, new ideas, and new energies that will help shape the alliance as it takes on these new roles and responsibilities.

Your contribution to the peace and stability of this region is also important; not just through the development of a strong and prosperous society at home, but also through constructive engagement and dialogue with your neighbors and, in particular, Russia. The development of a constructive relationship between NATO and Russia has become an integral part of both NATO and assembly policy. We are making good progress in developing a common approach in many areas. But, as you know, overcoming the legacy of suspicion and mistrust is not easy. I am certain that in pursuing our goal of better relations with Russia, we will wish to draw on your experience and your insights.

Coping with the new security agenda will require the collective resources of all alliance members, large and small. The very strength of NATO lies precisely in its ability to mould the diverse contributions of its members into a coherent and cohesive strategy and response. There is probably no better example of NATO's ability to act together than the substantial number of alliance armed forces deployed in the Balkans from so many, diverse countries. Your own soldiers have already served there for several years, and I would add, with commendable distinction; their presence providing an early demonstration of your willingness to contribute to the collective security burden.

The deployment of NATO forces in the Balkans was the first tentative step by the alliance towards accepting responsibilities "beyond its traditional boundaries," out-of-area -- something we parliamentarians had been urging for some time. Now with the decision by the NATO Council to take over the command, coordination and planning of the International Security Assistance Force in Afghanistan, we are reaching another milestone. I believe that this decision is an important signal for the future, as it demonstrates the acceptance by all members that the new NATO must be willing and able to respond to threats wherever they exist. And perhaps the request by Poland for NATO assistance in fulfilling its new role in post-conflict Iraq is a prelude to a more formal role for NATO in the reconstruction of that country.

NATO's success in establishing a new role will depend on a sound and healthy trans-Atlantic relationship. As the assembly's president and a member of the U.S. Congress, I would be remiss if I did not tell you that here -- in the field of trans-Atlantic relations -- there is work to be done. The controversy over military action in Iraq has caused deep divisions among allies which will take time to repair. However, international terrorism and related threats will not wait. We must rise above these current tensions and focus on the immediate challenges that confront us. This means setting aside the negative and divisive rhetoric of recent months throughout Europe and on both sides of the Atlantic; we must return to the constructive discussions that underpin the development of consensus.

I am pleased that in this respect our own assembly is setting an admirable example. During our recent meetings in Brussels, Paris, and Prague, our differences were aired in a tolerant and entirely constructive fashion, which I believe will facilitate, within NATO, the finding of common ground. Mutual respect for each other based on personal contacts and relations, and a common experience base as parliamentarians, is the strength of our assembly. Differences will always exist but should not prevent us from working together as friends and allies.

Members of the Seimas, during the difficult and uncertain times of transition, your endeavors and those of the Lithuanian people, were widely noted in the United States and in the entire alliance. The sacrifices made were no doubt caused by a simple belief in peace, civil liberties, human rights, and democracy. Likewise, our efforts today to re-orientate the alliance are motivated by the same basic conviction that NATO is, and will remain, the indispensable guarantor of the collective security of our democratic community of nations.

Your aspirations of membership are about to be realized. Now we look forward to you joining us in achieving the goal of a rejuvenated and reinvigorated alliance that will indeed sustain our collective security and our democratic way of life.

Thank you for your attention and for honoring the NATO Parliamentary Assembly by inviting me to address you.

Congressman Doug Bereuter is the chairman of the Subcommittee on Europe in the U.S. House of Representatives and represents the first district of Nebraska. He currently serves as the elected president of the NATO Parliamentary Assembly.