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Baltic Report: April 5, 2002

5 April 2002, Volume 3, Number 10
Presidents Arnold Ruutel (Estonia), Vaira Vike-Freiberga (Latvia), Valdas Adamkus (Lithuania), and Aleksander Kwasniewski (Poland) held wide-ranging talks in Vilnius on 22 March, BNS reported. Primary focus was placed on foreign-policy issues, particularly NATO and EU expansion. The presidents decided to hold further meetings between their ambassadors in Washington to better coordinate the support of their respective nationals living in the United States in lobbying for the admission of the Baltic states to NATO at the Prague summit in November. The presidents noted that agricultural issues will pose the greatest problems to their common efforts to join the European Union. They also agreed on the need to complete the Via Baltica highway and modernize railway travel between Warsaw and Tallinn.

Prime Ministers Siim Kallas (Estonia), Andris Berzins (Latvia), and Algirdas Brazauskas (Lithuania) with their counterparts from Albania, Bulgaria, Croatia, Macedonia, Romania, Slovakia, and Slovenia attended the forum of NATO candidate countries in Bucharest on 25-26 March, BNS reported. They adopted a common declaration, confirming their goal to become NATO members. It also welcomed the cooperation between Russia and NATO that followed the terrorist attacks of 11 September and pledged to ease the integration of a democratic Russia into the Euro-Atlantic community.
* Statoil, Norway's state oil company, announced on 22 March that its has signed a non-binding preliminary agreement with Shell Europe Oil Products about buying the entire chain of Shell service stations in the Baltic states, BNS reported. At present Statoil has 90 full-service gas stations and nine automatic gas stations in the Baltic states. With the additional Shell stations, its network will grow to some 160 gas stations in the region.
* The planned merger of Finnish Sonera and Swedish Telia will result in the new company holding 49 percent of Eesti Telekom and Latvia's Lattelekom, as well as control of 60 percent of Lietuvos Telekomas, 55 percent of Lithuania-based Omnitel, and 60 percent of Latvijas Mobilais Telefons, the main Latvian mobile telephone operator, BNS reported on 26 March.

OSCE High Commissioner on National Minorities Rolf Ekeus told Prime Minister Siim Kallas in Tallinn on 26 March that he does not see any major problems in Estonia and will focus his efforts in the country on supporting social integration, BNS reported. The two discussed the status of education in the minority languages, and the controversy over the registration of the Estonian Orthodox Church subordinate to the Moscow Patriarchate, which is nearing a settlement. During his two-day visit, Ekeus also met with President Arnold Ruutel, Foreign Minister Kristiina Ojuland, and officials dealing with ethnic affairs.

By a vote of 55 to 31, the parliament adopted amendments to the local council election law on 27 March that abolishes local election alliances effective with the fall elections, ETA reported. The ruling coalition, supporters of the amendments, said their aim was to increase the responsibility of parties in local governments. Deputies of the opposition Moderates and Pro Patria Union opposed the amendments, saying they would force people to join parties and lower the authority of politicians. The amendments also state that beginning in 2005, parliament deputies will not be allowed to also hold office in local councils. They allow EU citizens to vote in the local elections if their place of residence according to the Estonian population register is in the territory of the respective local government, as well as other foreigners and stateless persons who have resided legally in the local government's territory during the past five years.

Eesti Polevkivi (Estonian Oil Shale Company) managers Mati Jostov and Lembit Kaljuvee have officially appealed to Economy Minister Liina Tonisson to approve the company's merger with Narva Elektrijaamad (Narva Power Plants), ETA reported on 22 March. Tonisson's adviser, Heido Vitsur, said she has not yet made a decision on the proposal, but noted that the merger would solve the oil-shale price issue by ending the company's interest in selling its oil-shale at the highest possible price. The U.S. embassy in Tallinn issued a press release the same day expressing its disappointment with Prime Minister Siim Kallas' rejection of U.S.-based NRG Energy's offer to resume privatization negotiations of the Narva Power Plants. The press release stated: "This arrangement would have produced significant benefits for the Estonian public and for communities in northeastern Estonia."

Eesti Energia (Estonian Energy) announced on 25 March that it will agree to the Energy Market Inspectorate's demands on electricity rate hikes scheduled to begin on 1 April, ETA and BNS reported. It accepted the inspectorate's request for a new monthly electricity fee of 5 kroons ($0.28) for all, and rejected an alternative to charge some users a basic 20 kroon monthly fee. The new night-time electricity rate was reduced by 0.03 kroons to 0.95 kroons per kilowatt-hour, or 0.10 kroons lower than the newly increased day rate. Eesti Energia estimates that due to these changes its expected annual income will be reduced by some 150 million kroons.
* Prime Minister Siim Kallas traveled to Budapest on 22 March to attend the Liberal International's Congress under the theme of Good Governance -- the Liberal Agenda, BNS reported. He made a report at the congress the next day on the economic competitiveness of the European Union and tax policies the European Commission has recommended for the candidate countries. Kallas also held talks with Frits Bolkenstein, the European Commissioner for the home market, taxation, and customs union.
* The head of the Foreign Affairs Committee of the Russian Federation Council, Mikhail Margelov, presented the paper "New Trends in Russian Foreign Policy and Their Domestic Political Resource" at a seminar arranged by the Baltic Center for Russian Studies in Tallinn on 25 March, BNS reported. He said that it would be good for both Estonia and Russia if relations between the countries were arranged before the next round of NATO enlargement. Margelov also had an unofficial meeting with Foreign Minister Kristiina Ojuland.
* Delegations from the defense ministries of Estonia and the Czech Republic held talks in Tallinn on 26-27 March, BNS reported. They discussed matters dealing with NATO enlargement and the fight against international terrorism. They signed a cooperation plan for the current year which includes a visit to Estonia by Czech Defense Minister Jaroslav Tvrdik.
* Defense Minister Sven Mikser held talks in Copenhagen on 27 March with his Danish counterpart Svend Aage Jensby that focused on NATO enlargement, BNS reported. They discussed the participation of an Estonian unit as part of Denmark's contingent in the Enduring Freedom operation in Kyrgyzstan.
* Foreign Minister Kristiina Ojuland told the daily "Eesti Paevaleht" on 28 March that her ministry was preparing a new concept of relations with Russia. She noted that the three main stumbling blocks were the double tariffs imposed by Russia, the lack of a signed border agreement, and the registration of the Estonian Orthodox Church subordinate to the Moscow Patriarchate. Ojuland said that Estonia should become more active in its relationship with Russia.
* The parliament, by a vote of 44 to 34, adopted on 26 March amendments which will allow state-funded high school education in the Russian language in Estonia after 2007, BNS reported. The amendments were supported by the Center Party, the United People's Party, and a majority of the Reform Party. Since there is a shortage of teachers qualified to teach in the Estonian language in predominantly Russian-populated areas such as Narva, the revised law will ease problems in the education system.
* Center Party deputies Evelyn Sepp, Mikhail Stalnukhin, Vladimir Velman, and Endel Paap have proposed a bill that would shorten the period necessary for the naturalization of new citizens, BNS reported on 23 March. Applicants will still need to have lived in Estonia as permanent residents for five years to apply, but the period for fulfilling other necessary citizenship procedures will be reduced from 12 to six months.
* The Pro Patria Union held discussions with other parties on 25 March on the passage of a bill that would condemn the crimes of the communist regime of the Soviet Union as criminal, BNS reported. The bill was proposed by 36 deputies last May, but its passage was delayed by various factors. Pro Patria wants the bill to be passed before the anniversary on 14 June of the first Stalinist mass deportations in 1941.
* The Estonian Broadcasting Council, in a unanimous vote on 26 March, appointed Ilmar Raag as the new board chairman of the public ETV channel, ETA reported. His term lasts until 1 March 2005.
* Preliminary calculations of the Estonian Statistical Office indicate that the country's gross domestic product in 2001 was 95.3 billion kroons ($5.3 billion) or 5.4 percent greater than in 2000, ETA reported on 28 March.

On 27 March, the second day of her four-day official visit to Greece, Vaira Vike-Freiberga held separate meetings with Greek President Constantinos Stephanopoulos and Prime Minister Costas Simitis, LETA reported. Both men assured her that Greece fully supports Latvia's efforts to join the European Union and NATO. While noting that the political relations between their countries are excellent, the presidents agreed that cultural cooperation should be increased, and Simitis said he will seek funds for translating Latvian literature into Greek. Defense and Economy Ministers Girts Valdis Kristovskis and Aigars Kalvitis and a group of Latvian businessmen are accompanying Vike-Freiberga on the visit. As part of the effort to increase economic cooperation, agreements were signed on the prevention of double taxation and tax evasion on income and capital taxes, as well as a pact on maritime trade. The next day Athens Mayor Dimitri Avramopoulos presented Vike-Freiberga with the Athens Golden Honorary Medal.

Anna Lindh told the parliament's European Affairs Commission during her visit to Riga on 25 March that Latvia has made great progress in introducing EU standards and should be admitted to the EU, LETA reported. Lindh said she was shocked by OSCE official Gerard Stoudmann's suggestion that Russian be granted the status of an official language in Latvia (see "RFE/RL Newsline," 21 March 2002). However, she fully agreed with his call for the abolition of Latvian-language requirements for candidates to the parliament and local councils. Prime Minister Indulis Berzins informed Lindh that Latvia expects to close another four EU negotiation chapters during Spain's EU presidency in the first half of this year. Berzins also stressed that Latvia is interested in further cooperation with Russia, as it will facilitate regional development and stability. Lindh praised President Vaira Vike-Freiberga for her initiatives and attitude toward fighting corruption.

Events were held throughout Latvia on 25 March to commemorate the victims of communist terror, BNS reported. On that day in 1949, some 40,000 people were deported from Latvia to Siberia. President Vaira Vike-Freiberga, Lutheran Church Pastor Guntis Kalme, and Latvia's Association of Politically Repressed Persons Deputy Chairman Peteris Simsons spoke during the ceremony at Riga's Freedom Monument. Vike-Freiberga said the deportations "were genocide against the Latvian people." Simsons expressed regret over the social discrimination against politically repressed persons, the inability of politicians to eliminate the consequences of the Soviet occupation, as well as the lack of a program for the repatriation of repressed persons. The same day at the Occupation Museum, the recently published book "Nation in Captivity" was presented. Based on documents in the archives of Russia, Germany, and other countries, it concludes that Latvia lost some 325,000 people or 17 percent of its population from 1940-59.

Dissatisfied with the Public Services Regulatory Commission's decision to reject its proposed rate increase for natural gas, the state utility Latvijas Gaze (Latvian Gas) is threatening to take the commission to court, BNS reported on 28 March. Commission head Inna Steinbuka told reporters that the gas company supplied insufficient information to justify the requested rate increases. The company had sought to raise the price of natural gas for industrial consumers by an average of 7.8 to 10.3 percent, and to households by 20 percent beginning on 1 April. Prices for households have not changed since 1997. Steinbuka said that the commission asked the utility to provide additional information about the technical condition of the Incukalns underground gas-storage facility and other issues, and that its executive board will meet again to discuss the arguments Latvian Gas presented in its letters protesting the rejection of the rate hikes.

The founding congress of the Union of Social Democrats was held at the Riga Latvian Society House on 24 March, LETA reported. The new party, which has 958 members, elected parliament deputy Egils Baldzens as its chairman on a vote of 545 to four. Baldzens and four other parliament deputies left the Latvian Social Democratic Workers Party (LSDSP) in January in protest against the growing cooperation between the LSDSP and the leftist party For Human Rights in a United Latvia (see "RFE/RL Newsline," 8 January 2002). The congress elected Antra Line and Arnis Mugurevics as deputy chairmen, and approved the party's program and statutes.
* U.S. Deputy Assistant Secretary of State Heather Conley, in an interview in "Diena" of 23 March, said that amending the election laws by dropping the requirements for candidates to have top Latvian language proficiency was not a precondition for Latvia's membership in NATO but a step which is important for the country itself, BNS reported. She had traveled to Riga to attend the conference "OSCE and Latvia: Past and Future Cooperation," organized by the Latvian Center for Human Rights and Ethnic Studies.
* Danish Defense Minister Svend Aage Jensby told his Latvian counterpart Girts Valdis Kristovskis in Copenhagen on 25 March that Denmark would be a strong guardian of the Baltic states in the NATO enlargement process, BNS reported the next day. They also discussed participation of a Latvian unit in Denmark's contingent in the antiterror operation Enduring Freedom in Kyrgyzstan.
* At the 58th session of the United Nations Human Rights Commission in Geneva, Ambassador Janis Karklins rejected Russian charges that Latvia -- by not granting official minority-language status to Russian -- was contradicting Europe's laws on language, BNS reported on 23 March. He said that officials of the EU, UN, OSCE, Council of Europe, and its member countries have expressed satisfaction with Latvia's human rights and minorities policy.
* Prime Minister Andris Berzins signed a convention on avoiding double taxation with his Romanian counterpart Adrian Nastase in Bucharest on 25 March, BNS reported. He also said that Latvia had prepared an agreement for visa-free travel between the countries.
* Prime Minister Andris Berzins spoke at the opening of the European Youth Parliament General Assembly in Riga on 22 March, BNS reported. The 39th session of the parliament, which is attended by 350 senior high school students from 26 European countries, began on 14 March in Ventspils.
* A Moscow delegation led by the Moscow City Duma's economy minister, Vladimir Malishkov, began an official visit to Latvia on 22 March, LETA reported. They had meetings with Riga City Council officials, representatives from the Orthodox Church, and Latvian commercial banks. Some delegation members also traveled to the Latvian cities of Jurmala and Daugavpils on 24 March.
* The congress of the Latvian Social Democratic Workers Party (LSDSP) in Riga on 23 March endorsed a series of amendments to the constitution drafted by the party's chairman, Juris Bojars, which they hope to present for adoption through a national referendum during the next parliamentary elections, LETA reported. The nearly 100-page-long, so-called Bojars constitution would be quite different from the current constitution by providing for the direct election of the president by the people and a parliament in which half of whose deputies would be elected directly and the other half by party lists.
* Riga Mayor Gundars Bojars stated that the ferry between Riga and Stockholm which is scheduled to begin operation in late April might alter its route in the summer to make a stop at the Estonian island of Saaremaa, BNS reported on 26 March. He expects the trip to be successful since Saaremaa is popular with many Swedish and Latvian tourists.
* The Bank of Latvia announced on 28 March that the country's current account deficit in 2001 was 476.8 million lats ($763 million) or 10.1 percent of gross domestic product (GDP), LETA reported. In 2000, the current account deficit was only 6.9 percent of GDP. The deficit rose because imports increased by 18.3 percent while exports grew by only 11.5 percent.

In London on 26 March, Tony Blair told President Valdas Adamkus that Lithuania had made "impressive progress" since regaining independence, and that the EU and NATO will become more dynamic after the country joins those organizations, ELTA reported. Blair expressed interest in the atomic power plant at Ignalina, and agreed that Western support will be needed to finance its closing. The president visited London to participate in a 26 March concert and banquet hosted by Prince Charles celebrating the 75th birthday of famous conductor and cellist Mstislav Rostropovich, a leading humanitarian and fighter for human rights who is an honorary citizen of Lithuania and its capital, Vilnius. Adamkus began a three-day official visit the previous day with discussions on Euro-Atlantic integration and the fight against international terrorism with members of the House of Lords' parliamentary contact group with Lithuania. He was delivered a lecture at the Royal Institute of International Affairs and met with World Jewish Congress Vice President Lord Janner on 27 March.

The parliament on 28 March failed to gather sufficient votes to override President Valdas Adamkus' 21 March veto of amendments to the laws on employment contracts and holidays, ELTA reported. Presidential adviser Audrius Penkauskas told the parliament that the amended laws, adopted on 12 March, are incompatible with the principle of flexible regulation of labor relations and would lead to higher unemployment and slowed economic growth. The ruling coalition did not undertake any measures to require its deputies to vote against the vetoes, and some Social Democrats even supported the president's position. Social Issues Committee Chairman Algirdas Sysas expressed regret that the president and the deputies backing his vetoes never read the thousands of letters people sent in support of the amendments.

German Green Party parliament deputy Antje Vollmer told parliament chairman Arturas Paulauskas in Vilnius on 25 March that farmers in new EU member states will have a hard time competing with farmers in current EU member states, ELTA reported. She said it is likely that the EU will follow the European Commission's recommendations that agricultural subsidies to new EU member states initially be one-fourth of those given to current EU members, and be increased to parity only after 10 years. Noting that there is a growing demand for organically grown products in Western Europe, Vollmer suggested that farmers in Lithuania might direct their efforts to satisfy this need. She also mentioned that Lithuania has left a positive impression on her, as its population is "energetic and optimistic, rather than melancholic, as she had been told before."

Parliament chairman Arturas Paulauskas and Prime Minister Algirdas Brazauskas, the chairmen of the New Union (Social Liberals) and the Social Democratic Party, respectively, reached a compromise over educational reform on 27 March, ELTA reported. Paulauskas told reporters that the parliament's Education and Culture Committee will hold a final meeting and present a project for a new education law to the government this week. When asked whether Education and Science Minister Algirdas Monkevicius will retain his post, Paulauskas said his resignation was not discussed and there is no basis for the rumors that he will be replaced by the chairman of the parliament's education committee, Rolandas Pavilionis. Paulauskas mentioned that it was agreed that the education reforms are necessary, but that no reforms will be carried out if the schools and the local government oppose them. At another press conference the same day, the heads of the parliamentary factions of the two parties, Alvydas Ramanauskas and Juozas Olekas, said that education issues will not undermine the ruling coalition.
* NATO Secretary-General Lord George Robertson, in a letter to Foreign Minister Antanas Valionis, commended Lithuania for reaching a high level of public support for NATO membership, BNS reported on 26 March. He welcomed Lithuania's "valuable cooperation" with Russia and "attempts to bring stability to the entire region."
* The European Commission gave a positive evaluation of Lithuania's progress in the development of its economic and financial sectors, BNS reported on 26 March. Lithuania was praised for successfully reducing its budget deficit and inflation, stabilizing economic growth, and strengthening the financial sector, but needs to further promote domestic investment and reduce unemployment.
* President Valdas Adamkus on 28 March paid a one-day visit to Kyiv, where he met with his Ukrainian counterpart Leonid Kuchma, Ukrainian media reported. Both presidents signed a declaration providing for the establishment of the Council of the Presidents of Lithuania and Ukraine, which is to convene at least once a year and address the most topical issues of bilateral and regional cooperation. The presidents will recommend to their parliaments and governments to form a Lithuanian-Ukrainian Interparliamentary Cooperation Council and Intergovernmental Cooperation Council.
* After talks with Chinese Ambassador Yuming Chen on 28 March, Defense Minister Linas Linkevicius announced that Chinese President Jian Zemin plans to visit Lithuania this summer, BNS reported. The visit was still being scheduled via diplomatic channels, but it is likely to be in June.
* The head of the Polish Senate's European and Foreign Affairs Committee, Genowefa Grabowska, told a press conference in Vilnius on 28 March that she supports the proposal by the chairman the Lithuanian parliament's European Affairs Committee, Vytenis Andriukaitis, that the three Baltic states and Poland hold their referendums on EU membership on the same day in the fall of 2003, ELTA reported. However, she expressed dissatisfaction that Prime Minister Algirdas Brazauskas postponed his visit to Warsaw during which an agreement on the writing of Lithuanian and Polish surnames would have been signed.
* The International Intellectual Property Alliance (IIPA), stated in its annual report that Lithuania remains one of the largest transportation hubs for pirated goods and is the main re-exporter of pirated goods in the region, BNS reported on 28 March. The report said: "Failures by the police, prosecutors, and especially by customs officials, to engage in effective domestic criminal enforcement are destroying the possibility of establishing legitimate markets for copyrighted materials in Lithuania." IIPA reported that 90 percent of video cassettes, 85 percent of sound recordings, and 75 percent of business software sold last year in Lithuania were pirated versions.
* The parliament approved amendments on 26 March by a vote of 61 to 35 with six abstentions that will change the administrative structure of ministries by leaving only one politically appointed deputy minister and handing the leadership of ministry administration over to the new post of state secretary, ELTA reported. The 13 ministries currently have between two and five deputy ministers, all of whom are political appointees.
* The Finance Ministry announced on 26 March that the international investment banks JP Morgan and UBS Warburg will handle Lithuania's planned 10-year Eurobond issue worth 400 million euros ($350 million) in the second quarter of this year, ELTA reported.
* Lithuania's monopoly fixed-line telephone operator, Lietuvos Telekomas (Lithuanian Telecom), has appealed the fine of 2.08 million litas ($526,000) imposed by the Competition Council for abusing its dominant position on the Internet telephone market, BNS reported on 25 March.
* After a break of more than four months, the Butinge floating oil terminal resumed operations on 27 March by loading 86,000 tons of crude oil into the Russian-owned tanker "Ross Sea," ELTA reported. The terminal's operations had been stopped since 23 November when 59 tons of oil leaked from a damaged underwater hose.
* The European Court of Human Rights in Strasbourg awarded former parliament deputy Audrius Butkevicius 8,600 euros ($7,600) in compensation for his rights being violated during a pretrial detention, BNS reported on 26 March. It found that the Lithuanian authorities breached Butkevicius's right to liberty and security, and the presumption of innocence stipulated in the European Convention of Human Rights.
* President Valdas Adamkus nominated 40-year-old judge Egidijus Kuris for the post of chairman of the Constitutional Court on 25 March, ELTA reported. If the parliament approves the nomination, Kuris will serve a six-year term.
* The cabinet on 27 March approved changes in its visa-free agreement with South Korea, signed in 1995, by lengthening the period of visa-free stay from 15 to 90 days, ELTA reported.