Baltic Report: February 4, 2002

KALLAS APPROVED AS NEW PRIME MINISTER.
By an unexpectedly large margin of 62 to 31, the parliament approved the candidacy of Reform Party Chairman Siim Kallas as prime minister on 22 January, ETA reported. He received support from all the deputies of the Reform, Center, and Estonian United People's parties as well as from most members of the People's Union. Deputies from his former coalition partners, the Pro Patria Union and the Moderates, voted against him. Kallas has seven days to present his cabinet to President Arnold Ruutel who in turn has to officially approve it within three days. Kallas said that he expects the new cabinet to hold its first meeting on 29 January.

CANDIDATES FOR NEW MINISTERS NAMED.
The Center and Reform Parties have decided that the cabinet to be formed by their new coalition will have eight ministers from the Center Party and six from the Reform Party, including Prime Minister Siim Kallas. The cabinet will have one fewer seat because the Transport and Communications Ministry will be merged with the Economy Ministry. The Center Party approved its candidates on 21 January, ETA reported. They are: Sven Mikser for defense minister; Ain Seppik for interior; Liina Tonisson for economy, transport, and communications; Meelis Polda for finance; Jaanus Marrandi for agriculture; Siiri Oviir for social services; Mailis Rand for education and science; and Eldar Efendiev for ethnic affairs minister. The Reform Party will retain four current ministers: Culture Minister Signe Kivi, Environment Minister Heiki Kranich, Justice Minister Mart Rask, and Regional Affairs Minister Toivo Asmer, while naming Kristiina Ojuland as foreign minister.

PREMIER PRESENTS PROGRAM TO PARLIAMENT.
Siim Kallas told the parliament on 22 January that the main objectives of the new government will be to reduce domestic political tensions, pursue a growth-oriented economic policy, and maintain continuity in foreign policy, ETA reported. The program reflects the ruling coalition's agreement. It calls for raising pensions by 200 kroons ($11.26) instead of 138 kroons from 1 July, in part by using funds that will be saved by terminating the trade promotion project "Put Estonia on the Map," which had been allocated 40 million kroons. The merger of the Economy Ministry with the Transport and Communications Ministry is to be accelerated while the Education Ministry will remain in Tartu, but restructured into a Ministry of Education and Science. Kallas said the new government would like to hold three referendums: for the direct election of the president, for extending the terms of local governments from three to four years, and for membership in the European Union.

PRESIDENT VISITS FINLAND.
Arnold Ruutel held talks with Finnish President Tarja Halonen in Helsinki on 24 January, ETA reported. He briefed Halonen on the formation of the new government coalition and both presidents expressed satisfaction that it plans to continue the same foreign policy priorities of quickly joining the EU and NATO. At a speech at Helsinki University later in the day, Ruutel said Estonian membership in NATO would not adversely affect its defense cooperation with Finland.

HEAD OF ESTONIAN TELEVISION DISMISSED.
The Broadcasting Council fired state-owned Eesti Televisioon (ETV) board chairman Aare Urm on 15 January, ETA reported. The decision preempted his plans to resign after the Eurovision song competition. Urm was charged with a lack of cooperation with the broadcasting council and violating the Broadcast Act, which banned commercials on ETV as of 1 July 2001. He was also accused of increasing the broadcasting share of entertainment and sports, at the expense of education, culture, and public information programs. The next day the council proposed its member, former head of private channel TV3, Andres Joesaar, as Urm's replacement.

FUTURE OF ESTONIAN ENERGY DISCUSSED.
Tallinn Technical University held an oil-shale energy forum on 23 January to discuss the future of Eesti Energia (Estonian Energy) and various ways of funding that utility's renovation, ETA reported. Estonian Energy board chairman Gunnar Okk said it is unlikely that the company will remain 100 percent state-owned, and recommended a merger with Latvia's state-owned energy company Latvenergo. Such a merger was discussed a few years ago, but was dropped after an agreement was signed with U.S. firm NRG Energy for the privatization of the Narva Power Plants. However, that agreement was canceled by the government last month after NRG failed to obtain needed loans for the renovation of the power plants by 31 December 2001. Hansapank Grupp board chairman Indrek Neivelt suggested that Estonian Energy does not need a strategic investor, as sufficient funding can be obtained through the issuing of bonds and selling up to 49 percent of the company's shares on the country's stock market.

* Estonian and Finnish defense ministry delegations on 14 January signed a new bilateral defense cooperation plan, ETA reported. They discussed the development of Estonian-Finnish relations, analyzed Baltic cooperation projects supported by Finland, and debated issues related to NATO enlargement and regional security policies.

* The Tallinn City Council, by a vote of 40 to six with four abstentions, adopted on 17 January the city's 2002 budget of 4.52 billion kroons ($255 million), which is 6.8 percent greater than the 2001 budget, BNS reported the next day. The new ruling coalition of Center and Reform parties said that the priorities of the budget were road construction and communal services, housing and municipal construction, education, culture and sport, security, development of small business, and hospital reform.

* The government approved on 25 January and sent to the parliament a bill to extend the deadline for the use of privatization vouchers because of the slow pace of land reform, ETA reported. The deadline for land and apartment privatization was extended until 1 July 2006 while the deadline for vouchers used for other purposes remains 1 July 2002.

* The number of people using the passenger railway Edelaraudtee (Southwest Railway) fell from 3.5 million in 2000 to 1.67 million in 2001, ETA reported on 11 January. The main reason for the decline was a decrease in government subsidies which resulted in the closure of some lines. The railway was sold to the British firm GB Railways in the summer and there will be no more government subsidies after 2003.

* The government adopted decrees on 15 January regulating the distribution of state-budget resources deposited in the support fund of communes and towns, and raised the minimum pay of teachers of municipal schools, BNS reported. The minimum monthly pay was set at 4,950 kroons ($282) for junior teachers, 5,290 kroons for teachers, 6,010 kroons for senior teachers, and 7,290 kroons for teachers certified as experts in teaching methods.

* In order to slow down growing unemployment among young people, Education Minister Tonis Lukas wants to increase obligatory schooling to age 18, ETA reported on 16 January. At present students must attend school for at least nine years or until they reach 17 years of age.

* The first investment of the U.S. company EGeen International into the Estonian Gene Reserve project may double from the initially planned $2.5 million because several foundations have expressed an interest in contributing to the project, ETA reported on 24 January. The project's head, Krista Kruuv, who said that the first blood samples would be taken in the first half of the year, noted that unlike the planned Latvian gene reserve project, which is seeking $2 million from the state's budget, Estonia's gene reserve would rely only on private capital.

* Fulfilling requests of member firms, the Supervisory Board of the Tallinn Stock Exchange decided on 17 January to postpone the date of its merger into the Helsinki Stock Exchange (HEX) and implementation of the HEX trading system from 28 January to 25 February, ETA reported. The member firms will thus be given more time to enhance and test their technical readiness for the implementation of the new system.

* Tallinn Mayor Edgar Savisaar of the Center Party will become the head of the coalition council of the new national government formed by the Center and Reform parties, ETA reported on 22 January.

STATE LANGUAGE COMMISSION TO BE FORMED.
President Vaira Vike-Freiberga and Prime Minister Andris Berzins issued a joint directive on 16 January forming a state language commission to oversee Latvian-language protection and to open a debate on problems faced by minority languages, BNS reported. They appointed poetess Mara Zalite as the commission's head. Vike-Freiberga told a press conference that she will select the commission members by late January together with Zalite. By late February, Zalite should formulate -- with the assistance of the State Chancellery -- the commission's statutes and funding requirements for the next three years. Berzins suggested that international experts be invited to join the commission so the body will work not only on state language problems in Latvia, but also initiate a debate on minority-language issues on a global scale. The next day Zalite -- in an interview on Latvian State Radio -- urged the abolishment of the requirement of high-level Latvian language proficiency for candidates to the parliament and local councils as international organizations have recommended.

PARLIAMENT ADOPTS NATIONAL SECURITY CONCEPT.
Prime Minister Andris Berzins presented a report to the parliament on 24 January on the national security concept, BNS reported. The concept is based on the assumption that the country's security situation is affected not only by military and political conditions abroad, but also by domestic factors, such as economic development, social security and welfare, crime, social and other factors. It also provides guidelines on how state institutions should act to support the state's general security policy and develops plans and programs for specific branches. Berzins noted that it was the first time the parliament was invited to participate in the discussion of the national security concept, as it was previously developed and approved by the government and assessed by the National Security Council. Although some opposition deputies complained that the concept is not based on an analysis of the actual situation, the parliament approved it.

POSITIVE EVALUATION FROM NATO EXPERTS RECEIVED.
During a Planning and Review Process plenary meeting of Defense Ministry officials and a group of NATO experts on 11 January, NATO Assistant Secretary-General for Political Issues Gunter Altenburg praised Latvia's efforts to develop its defense capacities in compliance with NATO standards, LETA reported. He said the results of the previous five days of work by the experts will be summarized in a 200-page report that will be forwarded to NATO member governments to help assess Latvia's readiness for alliance membership. Altenburg noted that "Latvia has set out the right goals" in defense planning, defense structure, staff planning, and other defense-related spheres. Defense Minister Girts Valdis Kristovskis declared that the reform of the National Armed Forces will be completed in 2008.

LATVIA INVITED TO TAKE PART IN ANTITERRORISM OPERATION IN KYRGYZSTAN.
The Defense Ministry received an invitation from its Danish counterpart to take part in the U.S.-led antiterrorism operation "Enduring Freedom" with a mission of 10-12 soldiers, LETA reported on 22 January. The soldiers would likely be based at the Manas international airport in Kyrgyzstan from February until the end of June. Defense Minister Girts Valdis Kristovskis and National Armed Forces Commander Raimonds Graube told reporters that the invitation indicates that Denmark has been satisfied with the performance of Latvian soldiers in joint peacekeeping missions in the former Yugoslavia. Denmark sent similar invitations to Estonia and Lithuania, and the matter was to have been discussed at a scheduled meeting of the three Baltic defense ministers in Vilnius on 23 January, which was postponed due to the formation of the new Estonian government.

NEW EC DELEGATION HEAD CALLS FOR FOCUS ON STATE ADMINISTRATION AND COURTS.
After meeting with Prime Minister Andris Berzins, the new head of the European Commission Delegation in Latvia, Andrew Rasbash, told reporters in Riga on 23 January that Latvia should focus on strengthening state administration skills and the judicial system, BNS reported. Rasbash, who was officially accredited by President Vaira Vike-Freiberga the previous day, praised Latvia for its great progress in moving toward EU membership, having completed 23 of the 31 negotiation chapters. He noted that unlike the Czech Republic, Poland, and Hungary, Latvia has shown strong administrative ability by meeting the requirements for obtaining funding for its agricultural sector.

AGREEMENT ON JUDICIAL SYSTEM SUPPORT SIGNED WITH UN.
Justice Minister Ingrida Labucka, Supreme Court Chairman Andris Gulans, Constitutional Court Chairman Aivars Endzins, and UN permanent coordinator in Latvia Jan Sand Soerensen signed an agreement in Riga on 18 January for the project entitled "Judicial System Support," BNS reported. The judges said that past cooperation with the UN was instrumental in training Latvian judges, improving their performance, and getting valuable assistance for further judicial reforms in the country. The project enabled judges to undergo training in foreign countries and the European Union court. Gulans expressed satisfaction that the project calls for further measures to raise public awareness of the role of courts, since members of the Latvian judiciary have found themselves to be "outcasts" since both the public and other branches of government have failed to realize and appreciate the importance of their work.

SOCIAL DEMOCRATS TO COOPERATE WITH RUSSIAN COUNTERPARTS.
The council of Latvia's Social Democratic Workers Party (LSDSP) has decided to develop a cooperation agreement with Russia's United Social Democratic Party (ROSD), LETA reported on 17 January. LSDSP Secretary-General Janis Dinevics said the Russian party proposed the agreement, which would state that it will not cooperate with any other "would-be social democratic party in Latvia," including Juris Zuravlovs' Social Democratic Welfare Party. He answered complaints that the agreement would bring reproaches from right-wing political parties and the media by noting that the agreement would likely be signed in Latvia not by the ROSD's leader, Mikhail Gorbachev, but by party board member Aleksandr Yakovlev, who has been awarded Latvia's highest honor, the Three Star Order. LSDSP Chairman Juris Bojars proposed that the agreement include a stipulation that Russia's Social Democrats will facilitate the signing and ratification of the Latvian-Russian border treaty.

RUSSIAN CRITICISM OF PROSECUTING EX-SOVIET OFFICIALS REJECTED.
Foreign Ministry spokesman Vilmars Henins declared on 14 January that Latvia categorically rejects Russia's regular reproaches over the criminal prosecution of World War II veterans in Latvia, and regards them as an interference in the internal affairs of a foreign country, BNS reported. The statement came in response to the recent charges made by Russian Foreign Ministry spokesman Aleksandr Yakovenko that "Latvian authorities have stepped up legal prosecution of anti fascist veterans, causing quite grounded concern." Yakovenko said that such "investigation is biased, antifascist soldiers are presented as 'occupiers,' and Hitlerite minions as 'freedom fighters.'" In December, the Latvian Prosecutor's Office opened three more criminal cases dealing with possible genocide against the Latvian population by former officials of the State Security Ministry in 1949, but no charges have been filed thus far.

* Estonian President Arnold Ruutel began talks in Riga on 16 January with Latvian Foreign Minister Indulis Berzins over their countries' efforts to join NATO and the EU, LETA reported. After a meeting with President Vaira Vike-Freiberga, Ruutel agreed that it was too early to set a joint date for holding referendums in the Baltic states for EU membership. Ruutel also met with Prime Minister Andris Berzins and parliament chairman Janis Straume.

* Prime Minister Andris Berzins met on 19 January with a group of advisers to U.S. senators visiting Latvia as part of their tour of five NATO candidate states to examine their readiness for NATO integration, BNS reported. He told them that Latvia understands the importance of international cooperation and is thus seeking EU and NATO membership. Berzins underlined that the Baltic states were cooperating in defense matters and that over 60 percent of Latvia's citizens favor NATO membership.

* Justice Minister Ingrida Labucka and Dutch Ambassador to Latvia Nicolass Beets signed on 11 January an agreement on cooperation in justice affairs, aimed at consolidating the current successful, but fragmented, cooperation under a single umbrella agreement, BNS reported. According to the agreement, both Justice Ministries agree to promote cooperation in the justice sector and enhance mutual awareness of the rights and legal system upon Latvia's integration into the EU.

* During a visit to London to attend the Wilton Park conference, Foreign Minister Indulis Berzins discussed EU enlargement matters with British Minister for Europe Peter Hain on 21 January, LETA reported the next day. Hain praised Latvia's progress in fulfilling EU membership requirements and said that there were good prospects that Latvia would be among the first candidates to conclude entry talks successfully. The ministers also talked about security issues, including the NATO enlargement process.

* Moscow city government minister Vladimir Malishkov told Riga city officials on 19 January that Moscow was planning to spend about $5 million for converting a former railwayman union house into a Moscow representation office and culture center, LETA reported. The extensive renovation of the house is to be completed this year so that the Moscow representation would open in 2003. Malishkov noted that Moscow did not purchase the building, but acquired it under the principle of parity since the state-owned Latvian railway company Latvijas Dzelzcels owns a building in Moscow's center. If sufficient funds are found this building would be converted into a Riga or Latvian culture center.

* President Vaira Vike-Freiberga decided on 22 January to return to the parliament for review the amendments to the law on the liquidation of the Latvian Privatization Agency (LPA), LETA reported the next day. The president wrote that the current reading of the law contains contradictions, while Economy Minister Aigars Kalvitis questioned why the Registry of Enterprises and the Association of Certified Auditors were to name two of the six candidates to the commission which would liquidate the LPA.

* President Vaira Vike-Freiberga decided on 23 January not to sign the recently passed bill on conservation zones, but to return it to parliament for review, LETA reported. Her adviser on legal issues, Sandra Kukule, told reporters that the main reasons for the president's refusal to sign the bill were its unbalanced rights, and likely negative effect on economic development, including the development of the port and tourism sectors.

* The leftist alliance For Human Rights in a United Latvia has called on President Vaira Vike-Freiberga to ask the Constitutional Court to declare as unconstitutional the requirement that candidates in parliament and local council elections have to have the top-level state language proficiency, LETA reported on 24 January. The president had proposed earlier that the parliament should amend the election laws to abolish the language requirement as non-democratic, but did not receive support from any of the parliament's factions.

* The leaders of the New Faction and Union of Social Democrats faction in the parliament, Ingrida Udre and Egils Baldzens, respectively, signed an agreement on mutual support and unity in a political bloc on 24 January, LETA reported. An unnamed member of the Union of Social Democrats faction said that the agreement is a step towards forming a united parliamentary faction and that some members of the New Faction would probably participate in the founding congress of the Union of Social Democrats in late March.

* The cabinet on 15 January passed the Crime and Anti-Corruption Council's charter, LETA reported. The council, headed by the prime minister with the justice and interior ministers as his deputies, will also include the education and science, finance, foreign affairs, and welfare ministers as well as the prosecutor-general, Bank of Latvia president, Constitutional Protection Bureau director, and the state controller. It will be a coordination institution with the goal of facilitating the work of government institutions in preventing and combating crime and corruption.

* According to data from the Naturalization Administration, 10,637 people were granted Latvian citizenship through naturalization procedure last year, LETA reported on 17 January. Since 1995 49,396 people have received their Latvian citizenship through naturalization.

PRESIDENT MEETS WITH BUSH...
U.S. President George W. Bush reaffirmed to Valdas Adamkus on 17 January that Lithuanian efforts to join NATO are being noted and appreciated, ELTA reported the next day. Repeating that Russia will not have any veto rights against new members, he called Lithuania a front-runner among the applicant states. Bush also thanked Lithuania for its support in antiterrorist activities and its active role in Balkan peacekeeping operations. NBC television crews filmed the meeting, parts of which might be included in a television special "The Bush White House: Inside the Real West Wing." Earlier on 17 January, Adamkus met with IMF Managing Director Horst Kohler, who informed him about a recent IMF study that affirms that the three Baltic states are financially able to join NATO and the EU while ensuring macroeconomic stability. Adamkus also spoke with House Policy Committee Chairman Christopher Cox (R-California) and dined with members of the American NATO Committee. The next day he discussed NATO integration and the role of Lithuania in the antiterror coalition with Deputy Defense Secretary Paul Wolfowitz, laid a wreath at the monument to the victims of the 11 September terrorist attack on the Pentagon, and hosted a video link with reporters in Vilnius.

...VISITS CHICAGO AND CONCLUDES VISIT IN WASHINGTON.
Adamkus flew to Chicago -- where he had lived and worked for more than 30 years -- on 18 January, but returned to Washington five days later for a meeting with Senator Richard Lugar (R-Indiana), which focused on Lithuania's preparations for joining NATO. Adamkus also delivered a lecture entitled "Traditions and New Challenges -- Return of Lithuania to Nature," at the American Science Development Association, in which he noted that the Ignalina nuclear power plant meets all safety standards but will have to be closed with the financial aid of the EU. While in Chicago he met with the editorial board of the "Chicago Tribune" and attended a supper on 21 January with Senator Richard Durbin (D-Illinois), whose late mother was born in Lithuania, "Lietuvos rytas" reported on 23 January.

FOREIGN MINISTER VISITS MOSCOW.
In his capacity as chairman of the Committee of Ministers of the Council of Europe, Antanas Valionis led a three-day (14-16 January) working visit to Moscow, ELTA reported. On 15 January he discussed with Russian Foreign Minister Igor Ivanov economic support for Kaliningrad Oblast and the visa requirements that will arise for the oblast's residents to visit Russia after Lithuania joins the EU. Earlier that day he had talks with Russian Transport Minister Sergei Frank about transport corridors from Russia to Kaliningrad and the possible construction of a 200 kilometer gas pipeline through Lithuania. Valionis and Frank, in their capacities as cochairmen of the Lithuanian-Russian intergovernmental commission, confirmed that the third session of this group will take place in mid-April in Moscow. The Duma's International Relations Committee chairman, Dmitrii Rogozin, told reporters after a meeting with Valionis in Moscow on 16 January that the Duma will not ratify the Lithuanian-Russian border treaty before Russia, Poland, and Lithuania submit a joint proposal to the European Union on visa requirements for Kaliningrad residents. Valionis also had a meeting with Gazprom Board Chairman Aleksei Miller to receive more information about the company's intentions to participate in the privatization of Lithuanian Gas and the possible gas pipeline to Kaliningrad.

DEFENSE COOPERATION AGREEMENT WITH SLOVAKIA SIGNED.
The Latvian and Slovak defense ministers, Linas Linkevicius and Josef Stank, respectively, signed a military cooperation agreement in Vilnius on 22 January, ELTA reported. In talks the previous day, the ministers noted the many similarities between the defense policies of their countries, the most important of which is the desire to receive an invitation to join NATO at the fall summit meeting in Prague. Both countries have been reforming their military structures to create comparatively small but well-trained armed forces. Stank noted that Slovakia plans to reduce its armed forces from 42,000 to 23,000 troops. One of the results of the agreement will be the training of two Slovak officers at Lithuania's Regional Air Control Center based at the Karmelava air base, which meets NATO standards. Stank also met with Deputy Defense Minister Giedrius Cekuolis, as well as with parliament Deputy Chairman Arturas Skardzius and National Security and Defense Committee Chairman Alvydas Sadeckas.

GOVERNMENT APPROVES CONSTITUTIONAL AMENDMENT...
The cabinet expressed its unanimous approval on 14 January for the draft amendment to Article 47 of the constitution, which would allow foreigners to purchase agricultural land, inland waters, and forests, ELTA reported. If adopted, the measure would become effective only once Lithuania becomes a member of the European Union. The main incentive for the amendment is Lithuania's desire to comply with EU requirements. Amending the constitution is a difficult process requiring the approval of two-thirds of the parliament in two votes separated by a minimum of three months. Fearing that foreigners would buy a significant amount of farm land, the parliament's Agricultural Committee has recommended that the government should try to obtain a seven-year transition period from the EU before land sales to foreigners are allowed.

...AS PARLIAMENT APPROVES TWO AND...
The parliament, by a vote of 84 to six with nine abstentions, approved on 15 January changes to Article 47 of the constitution, which will allow foreigners to purchase farmland, but postponed debate on the question of whether a transition period is needed for the law to come into force, ELTA reported. On 24 January the parliament agreed to debate the issue of a transition period at an extraordinary session of parliament to begin on 28 February. It also voted by a wide margin to amend the constitution's Article 119 to extend the term of local governments from three to four years, and to allow all residents and not just citizens to vote and run in local elections.

...OVERRIDES PRESIDENTIAL VETO.
By a vote of 81 to 30, with two abstentions, the parliament on 15 January overturned the veto by President Valdas Adamkus of amendments to the law it adopted in December weakening the restoration of ownership rights to nationalized real estate, ELTA reported. All the members of the ruling coalition made up of Social Democrats and Social Liberals, as well as the factions of the Peasants and New Democracy Party present at the session voted to override the presidential veto. The chairman of the recently formed Independent faction, Eugenijus Maldeikis, said its members boycotted the vote, since they "did not wish to attend an anticonstitutional act." On 22 January deputies favoring the president's veto forced a vote on a resolution asking the Constitutional Court to rule whether the amendments comply with the constitution, but lost 38 to 56 with seven abstentions. If the resolution had been approved, the disputed law would have been suspended until the court made its ruling. Nevertheless, 52 deputies signed an appeal to the Constitutional Court asking it to rule on the constitutionality of the amendments.

PRISONER EXCHANGE TREATY WITH RUSSIA RATIFIED.
The parliament on 15 January ratified the prisoner-exchange agreement with Russia signed last June, ELTA reported the next day. There are now about 100 Lithuanians imprisoned in Russia and about 40 Russians in Lithuanian prisons. The agreement provides for the opportunity to hand over prisoners who have less than six months remaining in their prison terms to their home countries if both countries and the prisoner give their consent. The agreement must still be ratified by the Russian State Duma.

AGREEMENT WITH RUSSIA TO BUILD NEW BORDER BRIDGE.
Following two days of talks in Vilnius, Russian Deputy Transport Minister Oleg Skvortsov and his Lithuanian counterpart Arijus Ramonas agreed on 18 January to conduct a cost-benefit study for building a new bridge across the Nemunas River from Panemune, Lithuania, to Sovetsk (Tilsit) in Russia's Kaliningrad exclave, BNS reported. The current Queen Luiza Bridge would serve only pedestrian traffic following the construction of the new bridge. Ramonas estimated that the construction of the new bridge would probably cost Lithuania some $10 million of the total cost and would not be completed before 2007 or 2008.

LIBERAL DEMOCRATIC PARTY TO BE FOUNDED.
Former Prime Minister and Liberal Union Chairman Rolandas Paksas told a news conference on 22 January that he and the other parliament deputies who were expelled from the Liberal Union after they withdrew from its parliamentary faction plan to form a new political party to be called the Liberal Democratic Party, ELTA reported. This was decided at a meeting the previous evening in Raseiniai. The founding congress of the new party will be held in May and working groups are already drafting its program and statutes. Paksas said that the party program will be similar to that of the Liberal Union, but will devote more attention to government problems, social policy, and rural issues.

TREATY RATIFIED IN EXTRAORDINARY SESSION.
The parliament held an extraordinary session on 12 January that, by a unanimous vote of 98 votes, ratified the bilateral treaty with Great Britain on the elimination of double taxation of income and capital gains, "Lietuvos rytas" reported on 14 January. The treaty was to have been ratified during the last session in December, but the vote was postponed when it became apparent that fewer than the 57 deputies needed for ratification were present. Great Britain ratified the treaty in December.

* On his first visit to Lithuania as Estonia's president, Arnold Ruutel met with parliament chairman Arturas Paulauskas and members of the Lithuania delegation to the Baltic Assembly on 17 January, ELTA reported. Noting that economic cooperation and parliament relations between the two countries had developed well, he urged joint arms purchases and greater cooperation in seeking NATO membership. Talks with Prime Minister Algirdas Brazauskas focused on efforts to join the EU with special attention to energy problems. The EU is not pleased with their countries' main energy sources, the atomic power plant at Ignalina and the Narva power plants, which run on shale oil.

* President Mikhail Khodorovsky, the president of the Russian oil firm YUKOS and Keith Bailey, the executive director of Williams International, resumed discussions in Tulsa, Oklahoma on 15 January on the agreement signed in June by which YUKOS agreed to pay $75 million, loan another $75 million, and supply 4.8 million tons of crude oil per year in exchange for a 26.85 percent share of Mazeikiai Nafta, BNS reported. Williams had unilaterally broken off the negotiations in December after YUKOS reported that the Russian government was blocking access to oil pipelines for future exports to Lithuania and other countries.

* The parliament approved on 15 January a new version of the law on international operations, military exercises, and other events, BNS reported. It abolishes earlier restrictions prohibiting military units from participating in joint operations with CIS units and barring CIS troops from entering Lithuanian territory.

* Fulfilling a NATO request, the parliament on 23 January extended the participation of a Lithuanian air force An-26 plane in the peacekeeping operation in the Balkans from March until the end of 2002, BNS reported. The plane, stationed at the NATO base in Naples, has been carrying out alliance tasks in Kosova and Bosnia-Herzegovina.

* Foreign Minister Antanas Valionis sent an official letter to the 15 EU foreign ministers asking that an additional 15 months be granted to Lithuania for its transition period to increase domestic excise taxes on tobacco to EU levels or until 31 December 2010, BNS reported on 15 January. The extension request was prompted by the EU decision in November 2001 to raise the minimum excise tax on 1,000 cigarettes to 64 euros ($57).

* The parliament adopted by a unanimous vote on 17 January a resolution approving the national program for fighting corruption, BNS reported. The program provides for measures to limit political and administrative corruption, creates regulations for investigating violations of corruption law, and increases public awareness of corruption. It proposes to prohibit legal persons from supporting political parties, currently the major financing source of parties during elections. The program proposes to simplify the procedure of issuing various permits and licenses as well as the customs procedures and to create a system for protecting persons who inform about cases of corruption at work.

* The parliament ratified on 22 January a U.S.-Lithuanian treaty on extradition, which obligates the two countries to extradite persons so they can stand trial or serve sentences in their home country, ELTA reported. The Justice Ministry said this is Lithuania's first international agreement allowing extradition of its citizens to a foreign country. The treaty, which still has to be ratified by the U.S., replaces treaties of extradition of 1924 and 1934.

* The Finance Ministry announced on 14 January that government revenues in 2001 increased by 564 million litas ($141 million) over 2000 to 6.35 billion litas, but were some 2.5 percent -- or 164 million litas -- less than planned, BNS reported. The deficit was primarily due to a 187 million litas shortfall in the value-added-tax and 55.8 million litas less in corporate profits tax than anticipated as well as the failure to gather 25 million litas in gambling taxes because no gambling casinos were yet in operation.

* The World Trade Organization and the World Bank (WB) have requested that the government cancel a resolution made in September that established the minimum delivery price of refined sugar at 2.43 litas ($0.6075) per kilogram, ELTA reported on 22 January. The WB has made the cancellation a condition for Lithuania to receive the second disbursement of a structural loan.

* The Monitoring Committee of the Council of Europe's Parliamentary Assembly (PACE) unanimously decided on 15 January to discontinue the observation of adherence to human rights requirements in Lithuania, BNS reported. The post monitoring procedures which exist throughout Eastern and Central Europe had been applied to Lithuania since 1997, and have ended only in Estonia, Hungary, Poland, and Slovenia to date.