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Baltic Report: May 2, 2002

2 May 2002, Volume 3, Number 14

This issue covers events in the Baltic states from 19 to 25 April 2002.
Agriculture Ministers Jaanus Marrandi (Estonia), Atis Slakteris (Latvia), and Jeronimas Kraujelis (Lithuania) met in Tartu on 19 April and sent an appeal to EU Commissioner for Agriculture Franz Fischler asking that the agricultural subsidies to farmers in new EU members countries should be the same as those given to their counterparts in current EU countries, BNS reported. The ministers discussed in general terms the agricultural production quotas, planning more detailed discussions in early May when the EU's official joint position is published. They also talked about issues of trade between the three countries and changes in prices of agricultural produce.

The cabinet approved and sent to the parliament on 23 April a 2002 supplementary budget of 404.7 million kroons ($22 million), ETA reported. The 2002 budget was passed by the parliament in December with balanced expenditures and revenues of 33.13 billion kroons. Nearly 100 million kroons of the supplementary budget will go to increase pensions beginning on 1 July, and 304 million kroons will be assigned to fulfill the top priorities of the ruling coalition agreement. These include 120 million kroons to support local governments, 65 million kroons to finance lunches for elementary school children, 24 million kroons for special police pensions, 15 million kroons for organizing the Eurovision 2002 song contest in Tallinn, and 11 million kroons to form a security police reserve unit. Some 65 million kroons will be kept in reserve.

Defense Minister Sven Mikser rejected claims in the newspaper "Eesti Paevaleht" of 25 April that the volunteer Defense League will be abolished as part of the reorganization of the defense forces in preparation for NATO membership, ETA reported. He told a press conference that, while the share of funding of the Defense League, a homeland guard, in the overall defense budget will not be increased, it will continue to perform certain clearly defined missions such as mobilization, local defense, and participation in territorial units of the defense forces. Enn Tarto, the chairman of the Defense League's elders' assembly, said that Mikser has been ambiguous when discussing the Defense League and has not met with the elders' assembly to explain his views.

Foreign Minister Kristiina Ojuland and her Russian counterpart Igor Ivanov held a telephone conversation on 17 April during which they discussed the current status and perspectives of their countries' relations, ETA reported. Ivanov praised the Estonian Interior Ministry's recent decision to register the Estonian Orthodox Church of the Moscow Patriarchate as a positive step in regulating relations. The ministers discussed a possible meeting of their prime ministers when the Council of Baltic Sea States meets on 10 June in St. Petersburg, as well as further preparations for Ivanov's visit to Estonia that will probably take place in the second half of the year. The previous day, President Arnold Ruutel said his planned meeting with Russian President Vladimir Putin should be preceded by a meeting of the countries' foreign ministers, and that the states' intergovernmental committees should also continue their meetings.

Parliament Chairman Toomas Savi, heading a delegation of four other deputies, held talks in Berlin on 24 April with German Bundestag President Wolfgang Thierse, BNS reported. The delegation also met with the heads of the Social Democratic, Liberal, and other parliamentary factions, all of whom affirmed their support for Estonia's membership in the EU and NATO. In a lecture at the European Policy Institute, Savi spoke about the future of the EU and the current views prevailing in Estonia about the effects that EU membership would have on the country. In talks with the chairman of the Bundestag Tourism Committee, the delegation presented Estonia as an attractive destination for tourists, especially those interested in nature tourism. The delegation will return to Estonia on 27 April.

Foreign Ministry Deputy Chancellor Alar Streimann, the chief Estonian negotiator with the EU, formally opened the Institutions chapter in EU membership negotiations in Brussels on 22 April, ETA reported. He said that every new member state can be an active member of the organization only if it is guaranteed an equal level of representation in EU institutions, and that Estonia will further analyze the EU position on this chapter. Estonia, he said, does not agree with the EU's offer to close the chapter on Regional Policy and Coordination, and plans to continue raising questions regarding the method used to calculate amounts of financial support. During discussions on the finance and budgetary provision chapter, Streimann said Estonia wants its payments to the EU budget to be gradually brought up to the required level.
* Austrian President Thomas Klestil during a visit to Tallinn on 24-25 April held talks with President Ruutel, Prime Minister Siim Kallas, and Chairman of the Estonian Chamber of Commerce and Industry Coomas Luman, ETA reported. He said that he expected Estonia to become a member of the EU in 2004 and that Austria may open its labor market to Estonia earlier than seven years. Klestil invited Kallas to attend the World Economic Forum in Salzburg this fall.
* Prime Minister Kallas told visiting Turkish President Ahmet Necdet Sezer in Tallinn on 19 April that Estonia will support Turkey's membership in the European Union, BNS reported. Sezer said Turkey's aims to set the date of the beginning of EU accession negotiations before the end of this year.
* Russian Ambassador to Estonia Konstantin Provalov during a visit to Setu, a region bordering the Russian Federation, told parliament deputy Georg Pelisaar and leaders of the Union of Setu Area Communes that the present double custom duties on Estonia goods imported to Russia could be scrapped as soon as this fall, BNS reported on 19 April.
* In a ceremony in Strasbourg on 22 April, President of the Parliamentary Assembly of the Council of Europe (PACE) Peter Schieder awarded its service medal to Estonian Foreign Minister Ojuland in recognition of her long-time work in the council, BNS reported. She had served as PACE Vice President in 1996-2000 and as the head of the PACE Liberal faction from 1999 until leaving the organization when she became foreign minister in January 2002.
* President Ruutel and Korea International Trade Association President Jae-Chul Kim discussed economic cooperation between their countries in Tallinn on 22 April. ETA reported. Earlier that day Kim concluded a cooperation agreement with the Estonian Chamber of Commerce and Industry.
* Justice Minister Mart Rask declared during the parliament's information hour on 24 April that he was dropping his earlier proposal that the referendum on EU membership be held on 2 March 2003 together with the parliament elections, BNS reported. He said that the people need more time to discuss the consequences of the EU accession agreement.
* Estonia's chief negotiator with the European Union Alar Streimann stated that the EU accession agreement with Estonia is likely to be signed in March or April 2003, ETA reported on 22 April.
* Two umbrella organizations of local electoral blocs, the Local Elections Party in Harju County and the Association of Citizens' Electoral Blocs in Parnu County, decided to unite to form the Local Elections Party, BNS reported on 23 April. An important reason for the merger is to meet the requirement that an official party has to have at least 1,000 members, and the new election law which prevents several parties from running a joint list of candidates for election.
* The board of Union for the Republic Res Publica on 20 April elected Urmas Reinsalu, former political secretary of the four-month-old party, as its chairman, BNS reported. It also elected the head of the party's Lasnamae chapter, Toomas Tauts, and a deputy mayor of the city of Johvi, Kristi Klaamann, as deputy chairmen.
* The Tallinn city government decided on 24 April to start negotiations with Nordea Pank on borrowing 395 million kroons ($ million) for five years, ETA reported. Nordea made the best bid among five local and 15 international banks and offered an interest rate of six-month Euribor plus 0.6 percent, or an annual rate of 4.12 percent.
* The council of the electric utility Eesti Energia elected businessman Urmas Soorumaa as its chairman on 23 April, ETA reported. Soorumaa said outside funds had to be found if one wanted to curb the rise in energy costs. He mentioned environmental protection and insurance as possible areas for obtaining funding.

Thomas Klestil began his first official visit to Latvia on 24 April with talks with his Latvian counterpart Vaira Vike-Freiberga, LETA reported. He confirmed Austria's support for Latvia's membership in the EU, and said he is sure the country will soon become a member of the union. Klestil told a press conference after the meeting that while Austria had previously focused on providing financial assistance to Central European countries, now is the time to increase cooperation with the Baltic states. He also mentioned that, although not a member of NATO, Austria also backs Latvia's efforts to join that defense alliance. Vike-Freiberga told a subsequent Latvian-Austrian Economic Forum that the bilateral relations between the two countries should become stronger after Latvia joins the EU. In separate talks with Agriculture Minister Atis Slakteris, Austrian Agriculture, Forestry, Environment, and Water Minister Wilhelm Molterer said that Austria believes that the EU's proposals concerning agricultural subsidies for new EU members are acceptable, and that it will share its own experiences with Latvia to help it receive better conditions in accession negotiations.

Accompanied by Luxembourg's Defense Directorate head Fernard Kirh, Minister of Defense Charles Goerens made an official one-day visit to Latvia on 22 April at the invitation of his Latvian counterpart Girts Valdis Kristovskis, LETA reported. He expressed his country's firm support for Latvia's efforts to join NATO and the EU, saying he believes this would contribute to global stability. The ministers also discussed various Euro-Atlantic security issues, relations between the Atlantic alliance and Russia, and the role of NATO in ensuring regional stability. The two countries are developing cooperation projects between their armed forces, mainly in the spheres of technology and training. Goerens held talks with President Vike-Freiberga at her residence in Jurmala, pointing out that small countries can be of great use in the defense sector on security and human rights matters. He also met with Foreign Affairs Minister Indulis Berzins.

The parliament on 25 April passed a law which strengthens efforts to prevent corruption among state officials, LETA reported. The law stipulates restrictions and bans on state officials, and imposes the obligation to file income declarations. The key differences between the new law and the Anticorruption Law that it replaces are in the specified list of officials, the delegation of state administrative functions to several NGOs, more precise restrictions on holding several positions simultaneously, and on the acceptance of gifts and donations. The newly established Corruption Prevention Bureau will be tasked with overseeing compliance with the law.

On the second day of his three-day official visit to Latvia, Jan Petersen discussed with his Latvian counterpart Indulis Berzins in Riga on 23 April the development of bilateral cooperation between the two countries in the areas of justice, economy, social integration, agriculture, rural development, education, and culture, LETA reported. In a subsequent meeting, Prime Minister Andris Berzins noted that Norwegian businessmen have invested almost $100 million in Latvia and stand in sixth place among foreign investors. Petersen assured President Vike-Freiberga that Norway fully supports Latvia's efforts to join NATO and the EU -- even though Norway is not a member of the latter organization -- because an expanded Europe would enhance stability in the region. Petersen also met with parliament Deputy Chairman Rihards Piks and visited the Museum of Occupation.

Welfare Minister Andrejs Pozarnovs proposed to the government on 19 April that the minimum monthly wage should be increased from the current 60 lats ($95) to 80 lats, LETA reported. The minimum wage was last raised in July 2001, when it represented 34.5 percent of the average wage at that time. Pozarnovs believes that the minimum wage should be set at 50 percent of the average wage and be adjusted every year according to the inflation rate. According to calculations by the Welfare Ministry, in 2003 the higher minimum wage would raise state expenditures by 2.7 million lats, but this would be offset by higher budget revenues of 13.4 million lats. A higher minimum wage would also improve the competitiveness of companies that honestly pay taxes from their employees' full salaries, as opposed to companies that cheat by paying taxes on the minimum wage and paying the rest of employees' salaries under the table. Opposition deputies from leftist parties praised the proposal and Arnis Lapins, the press secretary of Prime Minister Andris Berzins, told LETA the next day that Berzins supports introducing the higher minimum wage next year.
* Supreme Allied Commander Europe General Joseph Ralston held talks on 25 April with President Vike-Freiberga, Prime Minister Andris Berzins, Defense Minister Girts Valdis Kristovskis, Foreign Affairs Minister Indulis Berzins, and other officials, LETA reported. He praised the progress Latvia made since his last visit and noted that NATO membership should promote investment growth and improve the population's living standard.
* Finance Minister Gundars Berzins and Chairman of the Russian State Customs Committee Mikhail Vanin signed an intergovernmental agreement on mutual assistance in customs matters on 22 April in Riga, LETA reported. The agreement allows customs officials in one country to apply for information on a suspected person, vehicle or freight, or any other assistance, to the other country's customs.
* A delegation of parliament deputies, headed by its Chairman Janis Straume, visited Spain on 21-24 April, BNS reported. They were invited by Spanish parliament Chairwoman Luisa Fernanda Rudi Ubeda, BNS reported. The delegation met with Spanish Foreign Ministry State Secretary on EU Affairs Roman de Migueal, Madrid Mayor Jose Maria Alvarez del Manzano, Senate Chairwoman Esperanza Aquirre de Biedma, and other officials on 23 April Straume and Rudi opened an exhibition of Latvian contemporary art at the Madrid City Museum.
* A delegation from the Czech Interior Ministry, headed by Deputy Interior Minister for Economic Coverage Anna Stanclova, visited Latvia on 20-24 April. LETA reported. The purpose of the visit was to become better acquainted with the organization of operations at the Latvian Interior Ministry -- its functions, budget, and financial management principles.
* Chief negotiator with the EU Andris Kesteris closed the chapter on Telecommunications and Information Technologies in the EU membership talks in Brussels on 22 April, LETA reported. It had been expected that the EU would not close the chapter until settlement of the dispute between the Finnish company Sonera and the Latvian government over the shortening of the Lattelekom monopoly from 2013 to 2003.
* The parliament passed a law prohibiting the sale of alcoholic beverages from 10 p.m. to 8 a.m. except in bars, restaurants, cafes, and clubs, where beverages must be consumed on the premises, as well as at tax-free stores.
* Krzysztof Pilarski, the marketing manager of the Polish port of Szczecin-Swinoujscie, told the international conference Transport and Logistics 2002 held in Riga on 19 April that studies have begun on establishing a ferry route between his port and the Latvian capital, BNS reported. He said that it is now difficult for Polish highways to carry the high load of cargo which is projected to increase and thus the government is promoting more sea cargo. Pilarski noted that Szczecin is very suitable for transit cargo from the East to Germany because the port is located very close to Germany's border.
* Lithuanian Ambassador to Latvia Petras Vaitiekunas told a press conference in Riga on 23 April that the establishment of the Lithuanian Chamber of Commerce in Latvia would promote the more rapid development of economic contacts between the countries, LETA reported. This is the first Lithuanian Chamber of Commerce registered abroad.
* More than 340 people participated at the founding congress of a new political party, For Freedom of Latvia, in Riga on 21 April, LETA reported. Odisejs Kostanda was elected the party's chairman with Laila Ceberga, Daiga Reca, and Imants Misans as his deputies. The congress adopted a party program calling for Latvia to become a country where people can become wealthy on the basis of their own work and where the society is not split according to national or social classifications. Membership in the EU is one of the new party's main foreign policy goals.
* The leftist Equal Rights party held a conference in Riga on 20 April which was also attended by Chairman of the Latvian Socialist Party Alfreds Rubiks, National Harmony Party leader Janis Jurkans, and representatives of leftist parties from Estonia, Germany, and Austria. LETA reported. Participants mostly spoke in Russian, but their speeches were translated into Latvian.
* The council of the Union of Social Democrats passed resolutions on 20 April on the use of the Latvian language and Latvia's membership in the EU, LETA reported. The first resolution calls for requiring Latvian to be used not only in the parliament and all local councils but also in all government and municipal institutions. The second recommends that Latvia should not rush to complete the EU negotiation chapters as fast as possible, but to fight harder to get better conditions for the country such as in agriculture.

NATO Supreme Allied Commander General Joseph Ralston began a one-day working visit to Vilnius on 24 April with a meeting with President Valdas Adamkus, ELTA reported. He praised Lithuania for the progress it has made in the 10 months since his last visit to the country, noting that the country's fulfillment of its commitments has given "confidence for the future." In talks with Defense Minister Linas Linkevicius and armed forces commander Major General Jonas Kronkaitis, Ralston advised Lithuania to decide on the field of specialization of its military forces on its own. He told parliament Chairman Arturas Paulauskas that Lithuanian servicemen performed well in NATO-led peacekeeping operations in the former Yugoslavia. Before traveling to Latvia, Ralston also gave a lecture at the Lithuanian Military Academy about Europe's security and defense prospects, NATO enlargement, and new terrorist threats.

Accompanied by Austrian Agriculture, Forestry, Environment, and Water Minister Wilhelm Molterer and a dozen businessmen, Austria's President Thomas Klestil began his first official visit to Lithuania meeting with President Adamkus, ELTA reported. He praised the progress Lithuania has made in completing EU membership negotiation chapters, but said commercial relations between the two countries should be expanded. Klestil stressed that Lithuania will have to comply with the EU's recommendations that the first reactor of the nuclear power plant at Ignalina be shut down in 2005 and the second reactor in 2009. Adamkus responded by saying that the greatest problem in closing the reactors is obtaining the necessary funding to complete it. Klestil also discussed the issue of closing the nuclear power plant with Prime Minister Algirdas Brazauskas. The two presidents also spoke at an Austrian-Lithuanian business forum that is intended to develop contacts and boost trade. Klestil invited Adamkus to visit the Salzburg economic forum in September 2002.

At a meeting of chief negotiators for EU entry in Brussels on 22 April, Lithuania closed the chapters on Institutions and on Justice and Home Affairs in its negotiations for EU membership, ELTA reported. This raised the country's number of completed chapters to 26 of 31. It was agreed that Lithuania would have 12 seats (the same as Ireland) in the 732-seat European Parliament, and seven (the same as Ireland, Finland, Denmark, and Slovakia) of the 345 seats in the European Union Council. The completed justice chapter requires Lithuania to pay more attention to halting corruption, organized crime, drug trafficking, and illegal migration, and to change its visa policies. From 1 January 2003, visas will be required for Belarusian and Ukrainian citizens, as well as train passengers and truckers transiting to Russia's Kaliningrad Oblast. Beginning on 1 July 2003, residents of Kaliningrad will need visas to enter Lithuania. The five chapters not yet completed are Agriculture, Energy, Regional Policy and Coordination, Finance and Budgetary Provisions, and "Other," which deals with issues that are specific to Lithuania.

Russian Customs Committee's officials in Moscow on 19 April handed Lithuanian Customs Department Director Valerijonas Valickas a list of Lithuanian transport firms suspected of violations in Russia, ELTA reported. The previous day, Transport Deputy Minister Valerijus Ponomariovas succeeded in working out a compromise with Russian customs officials by which the recently re-established requirements that all Lithuanian cargo-hauling trucks traveling through Russia have a police escort will not be applicable beginning on 25 April for those companies that are listed as reliable by the Lithuanian Customs Department. Those transport companies that are not on the list will still be required to pay for police escorts. The Russian officials also agreed to broker an agreement for lifting the escorts for Lithuanian transport companies working in or transiting Belarus.

The deputy governor of Russia's Kaliningrad Oblast exclave, Mikhail Tsikel, told reporters in Vilnius on 25 April after a meeting of the Lithuanian and Kaliningrad Region Cooperation Council that the EU should make an exception in visa regulations for Russian citizens transiting Lithuania, BNS reported. Lithuania and Russia currently have visa requirements for each other's citizens, but Kaliningrad and Lithuania have a visa-free travel arrangement that Lithuania plans to end in July 2003 in line with Schengen Agreement requirements. One of the suggestions offered by Tsikel is "closed-door," or nonstop, Russian train transit after Lithuania joins the EU. Anticipating the need for more visas, Lithuania wants to expand its consulate in the city of Kaliningrad and build a new one in Sovetsk, but Kaliningrad officials have not yet agreed to this. Deputy Foreign Minister Evaldas Ignatavicius, who along with Tsikel is a co-chairman of the council, noted that only a third of the Kaliningrad population has passports. The council meeting also discussed transport, border infrastructure, energy issues, cooperation between the ports of Klaipeda and Kaliningrad, as well as cooperation in culture and education.
* Defense and Foreign Ministers Linas Linkevicius and Antanas Valionis attended the meeting of the North Atlantic Council in Brussels on 22 April evaluating the performance of Lithuania in fulfilling its Membership Action Plan, ELTA reported. NATO member states gave Lithuania good marks on regional cooperation, good relations with neighboring states, and educating the public on NATO. They called for military reforms to continue and for strengthening Lithuania's contribution to collective security in the alliance.
* President Adamkus gave one of the main speeches at the Baltic Sea Regional Security and Cooperation Conference in Stockholm on 24 April, BNS reported. The conference dealt with relations with Russia, NATO enlargement, and the scheduled November NATO summit in Prague. Adamkus had meetings with Polish President Aleksander Kwasniewski, Swedish Prime Minister Goran Persson, and U.S. Deputy Assistant Secretary of State Heather Conley.
* International Monetary Fund European Department II Director John Odling-Smee told visiting Finance Minister Dalia Grybauskaite in Washington that the IMF would no longer require Lithuania to sign another economic policy memorandum after the current one expires at the end of the year, ELTA reported on 22 April.
* In his capacity as the chairman of the Council of Europe's Committee of Ministers, Foreign Minister Valionis made a speech during the ceremonies in Strasbourg on 24 April admitting Bosnia and Herzegovina as the 44th member of the Council of Europe, ELTA reported. He welcomed the consolidation process in "an open multinational and democratic country", stressing the importance of this phenomenon for both regional stability and building a single Europe.
* Transport Minister Zigmantas Balcytis held talks in Vilnius on 19 April with deputies in the Transport and Communications Committee of the Finnish parliament on the implementation of the investment program 2001-06 for the Via Baltica highway project, ELTA reported. They also discussed the expansion of the Klaipeda sea port, ensuring navigation safety in the port, and increasing transit flows with Russia and its Kaliningrad region.
* Economy Minister Petras Cesna participated in the opening of the representative office of the Lithuanian Economic Development Agency in the German port of Hamburg on 19 April, ELTA reported. He said that he was glad the office was being opened in one of the major commercial cities of Western Europe.
* The government approved and sent to Brussels a document estimating that the costs for decommissioning the nuclear power plant at Ignalina would total 2.4 billion euro ($2.1 billion) by 2020, ELTA reported. Deputy Economy Minister Arturas Dainius noted that the government has not allocated any funds from the state budget for these expenses, but there are 40.5 million euros accumulated in the international fund pledged for the closure of the first bloc of the reactor.
* The Privatization Commission approved the agreement to sell a 34 percent share of the utility Lietuvos Dujos (Lithuanian Gas) to the consortium of German Ruhrgas and E.ON. Energie as a strategic investor for 150 million litas ($38 million) on 19 April, BNS reported. The consortium will transfer 116 million litas to the Lithuanian Privatization Fund and 34 million litas to a special government account from which it could later claim back the funds if it is not satisfied with the changes being made to the mechanism regulating natural gas prices in Lithuania. Another 34 percent share will be sold to a natural-gas supplier.
* The parliament by a vote of 46 to 17 with 77 abstentions adopted a new civil service law on 23 April, ELTA reported. The new law, which will go into effect from 1 July, specifies major civil service principles, work payments, and social guarantees.
* The congress of the Liberal Union in Vilnius on 20 April by a vote of 310 to none with three abstentions named party Chairman Eugenijus Gentvilas as its candidate for Lithuania's president, BNS reported. He said that bureaucracy, taxes, and market restrictions should be lowered, public solidarity encouraged, and the country's foreign policy should be determined by the nationl interest and internal needs.
* An international conference "Ecology of the Baltic Sea: Drowned Chemical Weapons" was held in the parliament on 19 April, BNS reported. Near the end of World War II large quantities of Nazi-produced chemical weapons were seized by the Soviet Union and sunk in the Baltic Sea. The containers holding the chemicals, such as mustard gas, are corroding and could burst sending thousands of metric tons of poisons into the sea.
* The international credit rating agency Standard & Poor's upgraded the long-term foreign-currency rating for Lithuania from BBB- to BBB on 22 April, BNS reported. It was raised due to the country's achievements in maintaining tight fiscal policy and increasing the pace of structural and fiscal reforms as well as successful harmonization of national legislation with EU law.