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Baltic Report: July 10, 2003

10 July 2003, Volume 4, Number 22
Germany's lower house of parliament on 3 July overwhelmingly ratified the agreement on enlargement of the European Union that was signed by representatives of all current and 10 future EU member states in Athens on 16 April, CTK and international news agencies reported (see "RFE/RL Newsline," 17 April 2003). A reported 575 deputies backed EU enlargement, while four lawmakers abstained and one deputy opposed the Treaty of Accession. Germany's upper house, the Bundesrat, is scheduled to vote on the ratification on 11 July.

President Arnold Ruutel wrapped up a four-day visit to France on 29 June, during which he met with French President Jacques Chirac and Prime Minister Jean-Pierre Raffarin and invited them to visit Estonia, BNS reported on 30 June. On 27 June, Ruutel and Chirac expressed satisfaction with their countries' relations but noted the need to strengthen their political dialogue. The two leaders also said their countries have similar ambitions concerning the future of the EU and relations with Russia. Economic cooperation was the main topic of Ruutel's 27 June talks with Raffarin, who called for cooperation in agriculture, transportation, and other spheres. Ruutel met earlier that day with National Assembly Foreign Affairs Committee Chairman and former Prime Minister Edouard Balladur and spoke at a regional-development seminar. Ruutel began his visit on 26 June with a tour of an agricultural enterprise and gave a speech on EU enlargement at an investment conference.

NATO Deputy Supreme Allied Commander Europe Admiral Rainer Feist paid a fact-finding visit to Estonia on 1 and 2 July, BNS reported. He held talks with Estonian armed forces commander Vice Admiral Tarmo Kouts and other high-ranking military officers. After being informed about the Estonian defense forces' development plan for the period up to 2010, Feist said: "Congratulations, your aims have been sensibly picked and coincide with what we are doing in NATO." He said Estonia could contribute to NATO with small, specialized units in the fields of logistics, communications, and special services. Before traveling to Vilnius, Feist also met with Defense Ministry Chancellor Indrek Kannik and Foreign Ministry Deputy Chancellor Tiina Intelmann.

The cabinet on 1 July discussed the government's cost-cutting plan at its regular weekly meeting, BNS reported. Prime Minister Juhan Parts told reporters before the meeting that the plan is intended not so much to curb spending, as to achieve better results at a lower cost. He declined to say how much money the plan is expected to save, but promised to keep the public informed as the development of the plan progresses. He said the plan deals with three major areas: establishing a flexible administrative structure, making investments only where it is really necessary, and preventing unnecessary spending at the end of the year. The daily "Eesti Paevaleht" reported that the plan calls for halting the creation of new government jobs and for cutting some benefits, such as automobiles, that are provided to government officials.

The extended board of the Center Party met in Kanepi, Voru County, on 29 June and voted 35-15 to approve a statement urging citizens to participate in the country's EU referendum in September as opposed to one expressing outright support for EU membership, BNS reported the next day. Party Chairman Edgar Savisaar gave a speech in which he listed positive and negative aspects of EU membership and called for postponing a decision on the issue until the party congress in Tartu on 9 August. His ambivalence was apparently strong enough to overcome the pro-EU position of party Deputy Chairmen Peeter Kreitzberg and Sven Mikser and most of the ministers of the previous cabinet.

The European Liberal Democratic Reform Party (ELDR), at its Party Council in London on 4 July, backed a proposal to admit Estonia's Center Party, with the final approval depending on the party's position on Estonia's entry into the EU, BNS reported. Estonia's Reform Party abstained, while all other parties backed the Center Party's membership. The official decision will be made at the ELDR's congress in Amsterdam in November. Center Party Deputy Chairman Peeter Kreitzberg said the main stumbling block to membership of the ELDR is his party's decision that only the party congress in August can determine its position on EU membership. The ELDR firmly backs EU expansion.
* Prime Minister Juhan Parts traveled to Helsinki on 3 July to hold talks with his newly appointed Finnish counterpart Matti Vanhanen, BNS reported the next day. They viewed the recently completed report on Estonian-Finnish relations as an important development. Parts proposed an increase in their countries' cooperation on the institutional level with Estonia learning from Finland's experience of applying for and utilizing resources from EU structural funds. The premiers expressed similar opinions on the EU Convention on the Future of Europe and voiced the hope that the upcoming Intergovernmental Conference will be a businesslike forum that will tackle still unresolved issues with sufficient thoroughness.
* Mongolian President Natsagiyn Bagabandi accompanied by a large delegation of officials and businessmen began a three-day visit to Estonia on 29 June in the southwestern seaside resort of Parnu. The following morning he traveled to Tallinn where he discussed bilateral relations with President Arnold Ruutel and invited him to visit Mongolia, BNS reported. In talks with Prime Minister Juhan Parts, Bagabandi talked about the possibilities of reciprocal appointment of honorary councils in both countries. Estonia has no representative in Mongolia while Tugalkhuu Baasansuren, who resides in Warsaw, presented his credentials as ambassador to Estonia to Ruutel in March.
* Brigadier General Istvan Samu, the chief of staff of the Hungarian Border Guard, began a four-day fact-finding visit on 30 June to get first-hand information about the work of the Estonian Border Guard, BNS reported. He toured the southeastern and eastern border including the Varska and Narva border stations on 1 and 2 July. Samu ended the visit on 3 July with an inspection of the Tallinn airport and passenger port.
* The commander of Operation Iraqi Freedom decided that the 32-member infantry unit Estpla-7 would spend the next four weeks together with U.S. soldiers on patrol duty in Baghdad instead of being stationed north of Baghdad, BNS reported on 4 July. The Estonian peacekeepers are stationed in the former barracks of the Iraqi Republican Guard in a suburb of Baghdad and will carry out operations dealing with patrolling, defense of sites, convoying, and searches.
* The cabinet accepted on 1 July the offer of the Israeli arms manufacturer Israel Military Industries Ltd. (IMI, formerly known as TAAS Israel Military Industries) to pay back 23.8 million kroons ($1.75 million) of interest it had erroneously charged for a 1993 arms deal, BNS reported the next day. The State Auditing Office discovered in November 1999 that the government had paid excessively due to mistakenly calculated interests. The government filed a suit against IMI at the London Court of International Arbitration to regain the overpaid funds, but a verdict has not yet been announced.
* Legal Chancellor Allar Joks sent an application to the Supreme Court on 3 July asking that it declare unconstitutional the stipulation of the Social Maintenance Act that prevents some students from receiving subsistence allowances, BNS reported. He had asked the parliament already in February to amend the act so as not to exclude from the allowances students residing in student dormitories or other lodgings not mentioned in the act. The parliament expressed support for his proposal, but never formally approved it.
* The Statistical Office announced on 30 June that preliminary information indicated that the gross domestic product (GDP) in the first quarter of the year was 26.4 billion kroons ($1.9 billion) in current prices or 23.6 billion kroons in constant 2000 prices, BNS reported. This is an increase of 5.2 percent compared to the GDP in the first quarter last year. The growth was mainly in the sectors of manufacturing, financial intermediation, transport, storage and communication, and electricity, gas, and water supply.
* The Statistical Office announced on 4 July that in May exports and imports were valued at 5.46 billion kroons ($400 million) and 7.42 billion kroons, resulting in a trade deficit of 1.96 billion kroons, BNS reported. Compared to April exports increased by 4 percent and imports by 1 percent so that the trade deficit decreased by 267 million kroons.

President Vaira Vike-Freiberga and Prime Minister Einars Repse said on 2 July that the United States' 1 July decision to suspend military aid to Latvia will not harm bilateral relations, LETA reported. The Baltic states were not among the 22 countries that received waivers sparing them from sanctions imposed by the United States on 1 July on 35 countries that failed to ratify bilateral extradition-immunity agreements with the United States. This is a provision allowed under the convention of the International Criminal Court (see "RFE/RL Newsline," 2 July 2003). Vike-Freiberga and Repse said the issue must be resolved by the United States and the EU, and that in the meantime Latvia will continue to side with the EU's position. Defense Minister Girts Valdis Kristovskis said the country has prepared for the U.S. action and will receive at least 85 percent of the $7.2 million worth of U.S. military aid slated for Latvia this year.

Polish Deputy Premier and Infrastructure Minister Marek Pol paid a one-day visit to Latvia on 30 June at the invitation of his Latvian counterpart Ainars Slesers, LETA reported. Latvian Economy and Transportation Ministers Juris Lujans and Roberts Zile also participated in the meeting of the deputy premiers that primarily focused on international infrastructure projects, including the Rail Baltica railway, Via Baltica highway, Baltic Ring energy network, and the Liepaja-Gdansk ferry line. Both sides agreed that the Rail Baltica project should be a priority, as it could have an important role in boosting tourism and freight transport. Pol also pledged to urge the Polish Chamber of Commerce to open a Polish trade office in Riga to improve cooperation among Latvian and Polish business people. In addition, he met in Riga with Latvian Development Agency Board Chairman Juris Kanels and Latvian Merchants' Association Chairman Henriks Danusevics and visited the Liepaja Free Port.

NATO Deputy Supreme Allied Commander Europe Admiral Rainer Feist on 4 July completed his tour of the Baltic states in Latvia, LETA reported. In talks with Foreign Minister Sandra Kalniete, Feist noted that Latvia is contributing to international security by sending medics, de-mining experts, cargo-handling specialists, and other military personnel to participate in international peacekeeping operations. Feist met with Defense Minister Girts Valdis Kristovskis, armed forces commander Admiral Andrejs Zeibots, Foreign Ministry State Secretary Maris Riekstins, and other high-ranking military officials. He also visited an infantry training center, the 1st Infantry battalion, and BALTBAT headquarters in Adazi.

Mongolian President Natsagiyn Bagabandi completed his tour of the Baltic states on 1 July in Riga, where he was welcomed by Latvian President Vaira Vike-Freiberga, LETA reported. Foreign Minister Sandra Kalniete and Martins Bondars, who heads the Latvian president's office, also participated in talks between the two presidents that primarily focused on the expansion of economic cooperation. Bagabandi pointed out that Mongolia was the first Asian country to recognize Latvia's independence in 1991 and that many Latvian products are highly valued in Mongolia. He also spoke at a Mongolian-Latvian business forum and met with Prime Minister Einars Repse and with parliament speaker Ingrida Udre. Several Latvian-Mongolian agreements on culture, education, and science were also signed during the visit.
* In her speech officially opening the 23rd Latvian Song Festival at Riga's Dome Square on 29 June, President Vaira Vike-Freiberga noted that the first song festival 130 years earlier had helped to form the identity of the Latvian nation and the establishment of an independent Latvian state, LETA reported the next day. The festival, which ended on 6 July, had a very wide variety of daily programs featuring various kinds of choirs, rock bands, a sacred music concert, brass bands, wind orchestras, folk dances, and even a "Latvian Wedding" production. Some 30,000 people actively participated in the festival as members of 319 choirs, 538 dance ensembles, 51 amateur and six professional wind orchestras, three symphony orchestras, and various other groups.
* Visiting Luxembourg Vice-Premier and Foreign Minister Lydie Polfer discussed Latvia's move to EU membership as well as increasing bilateral relations with parliament Speaker Ingrida Udre in Riga on 30 June, LETA reported. Polfer also had meetings with Foreign Minister Sandra Kalniete, Social Integration Minister Nils Muiznieks, and parliament Foreign Affairs Committee Chairwoman Inese Vaidere.
* The law passed by the parliament in June placing quotas and extra duties on pork imports (see "RFE/RL Newsline," 6 June 2003) went into effect on 3 July as the government disregarded claims by both Estonia and Lithuania that it violated the Baltic Free Trade Agreement, LETA reported. A meeting of the Baltic Free Trade Agreement Committee in Vilnius on 4 July resulted in Latvia only accepting for consideration requests by Estonia and Lithuania to increase the size of their respective pork quotas.
* In an effort to end the long queues at its border with Russia, the Latvian Foreign, Interior, Transport, and Finance ministries are preparing documents for the European Commission (EC), arguing that EU TACIS program funds should be granted to Russia to improve its border-crossing points with Latvia at Vientuli-Ludonka, Grebneva-Ubilinka, and Terehova-Burachki, BNS reported on 3 July. The EC responded to a similar request by the Foreign Ministry in April by saying that only Burachki is considered a priority for the program and that it had received some TACIS funding this year. The ministry is deciding what exactly should be improved at Burachki and how to convince the EC to also give funds for the other two points.
* Parliament deputy Vladimirs Buzajevs of the Equal Rights party signed a statement expressing hope that "reason will gain the upper hand" and the tragic experience of Ulster, Kosovo, and Macedonia would not occur in Latvia, LETA reported on 28 June. The statement was released by the Russian School Defense Headquarters, a group of activists that believes the planned introduction of Latvian as the primary language of instruction in minority schools in September 2004 will destabilize Latvian society with unpredictable consequences. The activists plan to organize massive nonviolent protests against the change in the fall. Ruling coalition politicians were highly critical of the statement, noting that it ignores the need for minorities to master the Latvian language if they want to integrate into Latvian society and was an apparent attempt to incite ethnic hatred.
* At a joint breakfast with Prime Minister Einars Repse on 1 July, the ruling coalition parties agreed to form a task force in the fall to discuss the opening of the so-called "cheka sacks," a set of archival files on alleged Soviet-era KGB collaborators, LETA reported. The files can not be opened by a government decree, but require the passage of a new law or amendments to the existing law on storing the KGB documents of the former USSR. The ruling parties say that the time has come to make the files publicly available, but Indulis Zalite, the head of the Documentation Center of the Consequences of Totalitarianism, which holds the KGB files, says that the best solution would be to keep this information secret and carry out scientific work which would be of great historic value, BNS reported.
* The Constitutional Court ruled in favor of the complaint by three individuals that the article in the Criminal Procedure Code granting the Supreme Court Senate the right to prolong pre-trial detention for persons accused of committing serious crimes or violence is unconstitutional, LETA reported on 1 July. The court agreed the article contradicted Article 92 of the constitution which gives everyone the right to a fair trial. The article will lose its effect from 1 October.
* Prime Minister Einars Repse reprimanded the Economy Ministry on 30 June for the delay in working out regulations for the further utilization of privatization vouchers, LETA reported. Economy Ministry State Secretary Kaspars Gerhards said that the regulations had already been drawn up and were now being coordinated with the expected submission in two weeks.
* The Ventspils Nafta oil terminal handled 6.5 million tons of oil and oil products during the first six months of 2003 or 2.8 millions tons less than in the same period last year, LETA reported on 3 July. This is a remarkable amount since the oil was shipped by rail instead of by pipeline due to the decision of Russia's oil pipelines operator Transneft not to send any oil to Ventspils this year.

The UNESCO World Heritage Committee decided in Paris on 4 July to send experts to the Curonian Spit to determine the environmental impact of Russian oil giant LUKoil's plans to extract oil from the D-6 deposit in the Baltic Sea later this year, BNS reported the next day. The deposit is located in Russian territory 22 kilometers off the Lithuanian-Russian Curonian Spit and 7 kilometers from the countries' maritime border. The committee called on Russia not to allow the state-owned company to begin pumping oil until the experts, along with Lithuanian and Russian specialists, prepare a report on its environmental impact. Russia claims a study it conducted determined the plan will not negatively affect the environment but has not yet fulfilled Lithuania's requests to review its results. "Today in Paris we won a very important victory in the fight with Russia," Lithuanian Ambassador to UNESCO Ina Marciulionyte said.

More than 80 Russian citizens were taken off trains heading for Kaliningrad within the first 30 hours after new rules requiring Russians traveling to Kaliningrad through Lithuania to have transit documents took effect on 1 July, ITAR-TASS reported on 2 July. All of the passengers, except one who was reportedly inebriated, were subsequently allowed to transit through Lithuania on the next train. According to ORT, Lithuanian border officials said the main problem is with Russian passengers coming from regions other than Moscow, St. Petersburg, and Kaliningrad, who are not aware of the new rules. On 2 July, Russian President Vladimir Putin urged Russian Railways Minister Gennadii Fadaev to redouble his efforts to ensure that Russian citizens can travel to Kaliningrad freely. Fadaev responded by issuing instructions that railway cashiers should not sell tickets to Kaliningrad unless they are sure that the passenger has the necessary transit documents. According to REN-TV, the transit documents have been given the nickname of "rogozinki," named for Duma Deputy and presidential envoy on Kaliningrad issues Dmitrii Rogozin who negotiated the transit rules. On 3 July, Rogozin told reporters in Moscow that the simplified transit document system was functioning smoothly, BNS reported.

Lithuanian President Rolandas Paksas officially welcomed his Mongolian counterpart Natsagiyn Bagabandi at a ceremony in his office on 27 June that kicked off the Mongolian president's tour of the Baltic states, BNS reported. Bagabandi is accompanied by a delegation that includes Mongolia's foreign, education, culture, and science ministers, as well as six business people. One of the group's aims is boosting trade with the Balts, which amounted to less than $100,000 in 2002. Foreign Ministers Antanas Valionis and Luvsangiyn Erdenechuluun signed agreements on the protection of investments and on bilateral cooperation in education, science, culture, and the arts. Bagabandi then held talks with parliament Chairman Arturas Paulauskas and toured Vilnius University and the city's historic Old Town. On 28 June, the delegation traveled to the coast and visited the port of Klaipeda and the resort town of Nida on the Curonian Spit.

The Statistics Department announced on 30 June that Lithuania's GDP in the first quarter amounted to 12.21 billion litas ($4.1 billion), 9.4 percent higher than during the same period in 2002, ELTA reported. There were significant increases in all sectors except mining. The greatest growth was in the sectors of energy (27 percent), construction (18.3 percent), and manufacturing (16.3 percent), with more moderate growth in retail and wholesale operations (8.2 percent), transportation and communications (7.7 percent), and agriculture and forestry (4.2 percent). Corresponding GDP growth in Latvia and Estonia over the same period was 8.8 percent and 5.2 percent, respectively.

Head of the Defense Headquarters' International Operations Division Lieutenant Colonel Aleksandras Temnolonskis told BNS on 1 July that Lithuania's second peacekeeping unit in Iraq will be stationed at Karbala, some 100 kilometers south of Baghdad. The unit, comprised of 50 soldiers, is scheduled to leave for Iraq on 10 August and will serve for six months in the Polish-controlled sector of Iraq together with Polish, Bulgarian, Romanian, Hungarian, Latvian, and Philippine troops. A 45-member unit from the Grand Duke Algirdas Motorized Infantry Battalion has been serving with Danish troops in southern Iraq since early June, and eight Lithuanian military cargo-handling specialists have been working in Kuwait since late April.

The government approved on 2 July revisions to its agreement with Mazeikiai Oil that will enable the company to save approximately 200 million litas ($66.7 million) per year, BNS reported. The revisions will take effect the day of their signing, which is scheduled for 8 July. The Russian oil company Yukos agreed to revise the agreement when it purchased the shares of Mazeikiai Oil from the U.S. company Williams International last fall. Economy Minister Petras Cesna said the government agreed to cut the interest rate on the loans it granted to Mazeikiai Oil from 10 percent to 8 percent this year and to 7 percent beginning next March. Yukos agreed to give up the premium of 15 percent of all operating expenses for managing the company. Mazeikiai Oil posted a loss of 114.3 million litas last year when calculated with the U.S. Generally Accepted Accounting Principles (GAAP).
* Accompanied by his wife Kristina, Prime Minister Algirdas Brazauskas attended the economic Crans Montana Forum in Switzerland on 26 to 29 June, ELTA reported. He presented two reports: "On Integration of Baltic countries into the EU and Energy Supply" and "EU Enlargement - Political Challenges" at the forum. Brazauskas also met with forum chairman Jean-Paul Carteron and Council of Europe Secretary General Walter Schwimmer.
* Foreign Minister Antanas Valionis began a working visit to Austria on 30 June, BNS reported. The next day he held talks with Austrian Foreign Minister Benita Ferrero-Waldner which focused on cooperation between their countries in the enlarged EU and other bilateral issues. Valionis also met with UN Industrial Development Organization Deputy Director Renato Fornocaldo and Executive Director of the UN Office on Drugs and Crime Antonio Maria Costa with whom he discussed a regional seminar on terrorism prevention which will be held in Lithuania in the fall. On 2 July he had a meeting with International Atomic Energy Agency Director General Mohamed ElBaradei.
* Former President Valdas Adamkus traveled to Warsaw on 30 June for a two-day visit, BNS reported. On 1 July he held talks with Polish President Aleksander Kwasniewski on greater cooperation between the Vilnius-10 and the Visegrad countries (Czech Republic, Hungary, Poland, and Slovakia) as well as infrastructure projects between their countries. Adamkus also met with Senate Chairman Liongin Pastusiak.
* Norwegian Foreign Ministry State Secretary Kim Traavik held separate talks with his Lithuanian counterpart Evaldas Ignatavicius and Foreign Ministry Undersecretaries Giedrius Cekuolis and Rytis Martikonis in Vilnius on 1 July, BNS reported. The talks focused on bilateral cooperation between Lithuania and Norway, the future of the EU, the New Neighbors initiative, and relations with eastern neighbors.
* Delegations from the Lithuanian and Polish Foreign Ministries, headed by Undersecretaries Giedrius Cekuolis and Adam Daniel Rotfeld discussed international security matters, the ratification of the NATO Accession Protocols, and the Iraq situation in Vilnius on 4 July, BNS reported. In subsequent talks with Foreign Minister Antanas Valionis, Rotfeld noted that bilateral military cooperation was very good and the officials discussed their countries integration into the EU.
* A group of 34 soldiers from the Klaipeda-based Duke Butigeidis Dragoons Battalion departed for Denmark on 2 July to prepare for peacekeeping operations in Kosovo, BNS reported. Two more units of the battalion will join the first group later on. The training will last until 20 August after which some 100 troops will serve in the Baltic Squadron mission in Kosovo for six months. Their tasks will include sentry duty at observation and control posts, patrolling, convoying, escorting, and collection of illegal weapons so as to help humanitarian organizations and secure the safety of local residents.
* The French Embassy in Vilnius sent a letter to government European Committee head Petras Austrevicius announcing France's plans to partially open its labor market to Lithuanian citizens after it joins the EU in May 2004, BNS reported on 1 July. France will not apply any restrictions upon self-employed persons and will facilitate the issuing of work permits to students graduating in France as well as persons working in the fields of trade and technologies. France will also consider the possibility of fully opening its labor market to all Lithuanian citizens in 2006.
* The parliament approved on 4 July amendments to the Law on Public Service proposed by President Rolandas Paksas which makes it easier to dismiss civil servants for misconduct in office, BNS reported. Misconduct will now include not only breaches of law but also failure to adhere to the code of conduct, abuse of position, revealing state or commercial secrets, and any activity that contains corrupt acts even if criminal or administrative responsibility for them is not envisaged in laws. The amendments provide that officials dismissed for misconduct are forbidden to work as civil servants for three years.
* The parliament approved by a vote of 79 to 21 with six abstentions a reallocation of 194 million litas ($64.7 million) in the 2003 budget on 3 July, BNS reported. The revisions which were made possible primarily by reducing the costs of public debt servicing will not change the size of the expected budget deficit of 1.31 billion litas or about 2.1 percent of GDP. The greatest change was increasing the funds for agriculture by 103 million litas. The parliament also passed a resolution declaring 2004 as the Year of Language and Books as the year marks the 100th anniversary of the abolition of the prohibition to publish anything in Lithuanian with Latin alphabet, which was imposed by the Russian government in 1864 during the Czarist occupation.
* Statistics Department Director General Algirdas Semeta announced on 2 July that the nationwide agriculture census was carried out successfully in June and data was collected from more than 700,000 land users, ELTA reported. The preliminary results of the census are expected to be published in October. Semeta said that farmers clearly realized the need for the census since less than 700 persons refused to furnish data.
* Social Security and Labor Minister Vilija Blinkeviciute appointed Interior Ministry State Secretary Mindaugas Mikaila as the new director of the State Social Insurance Fund (SoDra) on 4 July, BNS reported. The 46-year-old Mikaila, who had served as social security and labor minister in 1994-1996, defeated Dainius Pranauskas, the director of the consulting company DeuM, for the post.