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Baltic Report: May 9, 2002

9 May 2002, Volume 3, Number 15

This issue covers events in the Baltic states from 26 April to 2 May 2002.
Vaclav Havel said on 2 May that Estonia, Latvia, and Lithuania should be invited to join NATO at the organization's Prague summit in November, RFE/RL reported. At a ceremony at Prague Castle for the presidents of the three Baltic countries, Havel said, "It does not take a great historian or a great geographer to understand which cultural region these three countries belong to.... There will be peace in the world when everyone's right to a place in the region that one feels part of and to which one historically belongs is recognized." He also said, "It would not be good to postpone admission [to NATO] of the countries that meet the necessary criteria [for membership] only because somebody [i.e., Russia] does not like it."

Polish Defense Minister Jerzy Szmajdzinski on 29 April announced the formation of liaison missions of Lithuania, Latvia, and Estonia at the headquarters of the Danish-German-Polish Multinational Corps in the Polish city of Szczecin, Polish Radio reported. Szmajdzinski discussed the corps with his Danish and German counterparts, Svend Aage Jensby and Rudolf Scharping. According to Szmajdzinski, the cooperation of the corps with the three Baltic states will help them integrate with NATO. He recalled that in 1994, before joining the alliance, Poland was also invited to cooperate with Denmark and Germany. The next day in Warsaw the three defense ministers invited their Baltic counterparts Linas Linkevicius (Lithuania), Girts Valdis Kristovskis (Latvia), and Sven Mikser (Estonia) to appoint the military liaison officers by September, BNS reported. They also discussed combining the BALTBAT (Baltic Battalion) peacekeeping forces with German, Polish, and Danish forces in a body to be called the Baltic Corps.

At a meeting of the Senior Border Officials Committee of the Baltic Council of Ministers in Vilnius on 29 April, border services heads Algimantas Songaila (Lithuania), Gunars Dabolins (Latvia), and Harry Hein (Estonia) agreed to prepare a common information-sharing system, BNS reported. This would improve detention of wanted persons and stolen vehicles. They also discussed a joint plan of work for 2002-03, and the coordination of measures for strengthening security along the eastern borders along with the simplification of border-crossing procedures between their states. Current plans call for the complete dismantling of borders between new EU member states in 2008 or 2009.
* The German Bundestag adopted a resolution on 26 April calling for the admission of the Baltic states to NATO in the upcoming round of enlargement, BNS reported. Foreign Minister Joschka Fischer in his address underscored the importance of NATO enlargement. The German-Baltic Parliament Cooperation Group Chairman Wolfgang von Stetten initiated the resolution.
* Lithuanian Health Minister Konstantinas Dobrovolskis, Estonian Social Affairs Minister Siiri Oviir, and Latvian Welfare Ministry Deputy State Secretary Talis Talents signed a trilateral cooperation agreement in health care on 26 April, BNS reported. Oviir said that the three countries will offer each other advice on efficient health care restructuring and share information received during international forums.

Russian State Duma International Relations Committee Chairman Dmitrii Rogozin told members of the parliament's Foreign Affairs Committee in Tallinn on 29 April that his committee plans to discuss in May the border agreement between their countries initialed in 1996, and the abolishment of double customs duties applied by Russia on Estonian imports from 1994, ETA reported. The duties will have to be lifted for Russia to join the World Trade Organization. He praised the recent official registration of the Estonian Orthodox Church of the Moscow Patriarchate and the continuation of state-funded high school education in the Russian language after 2007. In an earlier meeting with Estonian United People's Party Chairman Viktor Andreyev, Rogozin noted that the Orthodox churches subordinate to Moscow and Constantinople still have to settle property issues in Estonia. The next day Rogozin told Prime Minister Siim Kallas that it was likely that the session of the Council of the Baltic Sea States in St. Petersburg on 10 June would provide a good opportunity for talks with his Russian counterpart Mikhail Kasyanov. This would be followed by a meeting of the Estonian-Russian intergovernmental commission, which he co-chairs with Russian Deputy Prime Minister Valentina Matviyenko.

Martin Frost, the head of the Organization for Economic Cooperation and Development's (OECD) program for investments and financial and business development, presented a report on Estonia's economy at a conference in Tallinn on 2 May, ETA reported. Frost stated that increasing foreign investments and exports are due to the country's improved business climate. The report lauded Estonian companies' willingness to react quickly to new developments; however, it noted that many Estonian companies' products do not meet EU standards, thus making their export more difficult. Frost also called for greater support for regional development, saying that while business in Tallinn has developed well, the business climate becomes more unfavorable the farther one travels from the capital.

At the general assembly of the Reform Party in Tartu on 28 April, its chairman, Prime Minister Kallas, declared that the party will take part in the parliamentary elections in March 2003 with a program calling for the reduction of the individual income-tax rate from the current 26 percent to 20 percent, ETA reported. He said, "Should the people give us a mandate to do this, the tax will be lowered on 1 January 2004." Kallas noted that only coalition governments will rule in Estonia in the future and that he is satisfied with the party's current coalition with the Center Party, as it is easier to deal with one partner than with two as in the earlier coalition with the Pro Patria Union and the Moderates. Latvian Prime Minister Andris Berzins, who is also chairman of Latvia's Way, gave a speech at the assembly on behalf of his party.

Estonian Economy, Transport, and Communications Minister Liina Tonisson and Finnish Transport Minister Kimmo Sasi agreed on 30 April on the need to speed up the signing of a bilateral naval agreement in Tallinn, ETA reported. Tonisson said, "The draft naval agreement has to be reviewed based on our current situation and experiences, and it should be approved as soon as possible by the parliaments." The ministers also discussed the communications and transport policies of the EU and Finland, naval transport, and the Rail Baltica project.
* Finnish Prime Minister Paavo Lipponen promised former Estonian Foreign Minister Toomas Hendrik Ilves in Helsinki on 2 May to protect Estonia's interests in the European Union, BNS reported the next day. He told Ilves that he understood Estonia's dissatisfaction with the agricultural quotas and subsidies which the EU has offered. Ilves also spoke about the place of small states in the future European Union at a conference at the parliament that day.
* The cabinet on 30 April approved the candidacy of Foreign Ministry Chancellor Indrek Tarand as the ambassador to Portugal, replacing Raul Malk, who never moved to Lisbon and continued to reside in Tallinn, BNS reported. Tarand, who has served as chancellor since 1994, agreed to the new position because he had conflicts with Foreign Minister Kristiina Ojuland.
* The Central Association of Estonian Employers told representatives of trade unions and the government on 2 May that work-related accident insurance and vocational sickness insurance, due to be launched in 2004, should be changed, ETA reported. The employers argue that they will boost the salary expenses of all employers by 4 percent and lessen the competitiveness of the labor market. They recommend that the new insurance should be covered by the existing 33 percent social tax which now only covers pension insurance and health care insurance.
* The parliament's constitutional committee rejected on 26 April a bill of the United People's Party which would have freed some stateless residents of the need to take tests to demonstrate a command of Estonian and knowledge of the constitution to gain citizenship, BNS reported. The bill would have abolished the citizenship tests for pension-age persons who had been born in Estonia or had lived in the country for at least 10 years. It would also have given citizenship to persons who had served in foreign armed forces and are married to an Estonian citizen, not necessarily by birth as required by the current laws.
* Customs statistics indicate that in the first quarter of the year imports totaled 24.89 billion kroons ($1.44 billion) and exports 18.83 billion kroons, BNS reported on 29 April. Most of the 6.06 billion-kroon deficit was amassed in the year's first two months.
* Correction: The 2 May "RFE/RL Baltic States Report" misspelled the name of Estonian Chamber of Commerce and Industry Chairman Toomas Luman.

At an extraordinary session on 30 April, the parliament voted 72 to 15, with one abstention, to approve amendments to the constitution aimed at strengthening the status of Latvian as the state language, LETA reported. The amendments foresee that the parliament's working language is Latvian and that each person has the right to ask questions and receive answers from state institutions in the Latvian language. The new law also requires parliament members to swear an oath before taking their posts.

Prime Minister Andris Berzins officially dismissed Andrejs Pozarnovs of the For Fatherland and Freedom/LNNK (TB/LNNK) on 2 May, LETA reported. In a radio interview that day, Berzins said he formulated his arguments for dismissing Pozarnovs on eight points, including lack of discipline, inability to work and guarantee order, and problems in relations with nonprofit organizations. Both officials have turned to the Prosecutor-General's Office with a request that it investigate dealings with a Welfare Ministry-owned property in Jurmala and its compliance with the law. TB/LNNK Chairman Maris Grinblats stressed that his party will keep the post of welfare minister, but expressed doubt that the new minister will be able to do much in the ministry because a new government will be formed after the parliamentary elections in five months.

The Latvian government approved a Latvian-Kazakh agreement pertaining to cooperation in the fight against terrorism, drug trafficking, and organized crime on 30 April, BNS reported. The states will exchange information about terrorist activity and the sources and individuals providing financial support to terrorist groups, and about persons and organizations engaged in the illegal trade of arms, including ammunition, explosives, poisonous substances, and nuclear and radioactive materials. Law enforcement agencies will also share information about drug trafficking and the persons involved, their vehicles, methods of work, and other information relevant to the prevention and elimination of drug-related crime.

On 2 May, President Vaira Vike-Freiberga awarded RFE/RL President Thomas Dine the Latvian Three-Star order for RFE/RL's role in promoting social integration in her country. The ceremony took place at RFE/RL's Prague headquarters.
* By a vote of 73 to 16 with one abstention, the parliament approved on 2 May the first reading of amendments to the parliament election law which abolished the requirement that candidates must have the highest level of Latvian-language proficiency, LETA reported. Similar amendments to the local council election law were approved by a vote of 70 to 17. Final action on the election law amendments is expected in time for the Reykjavik NATO foreign ministers meeting that begins on 14 May. The laws still prohibit staff members of former USSR and Latvian SSR. security, intelligence, and counterintelligence services from being candidates along with persons who actively participated in the Communist Party of the USSR and Latvia after 13 January 1991
* Latvian Ambassador to Washington Aivis Ronis testified before the U.S. Congress' House International Relations Committee Subcommittee on Europe on 1 May about Latvia's progress in defense and its efforts to become a full-fledged member of NATO, LETA reported the next day. He thanked the Congress for its support to Latvia during the Soviet occupation and noted that Latvia's involvement in antiterrorism operations showed that Latvia is already a U.S. ally. Ronis invited congressmen and senators to attend the NATO-candidate countries' summit in Riga on 5-6 July.
* Representatives of the European Parliament Committee on Women's Rights and Equal Opportunities delegation had meetings in Riga on 2 May with Welfare Minister Pozarnovs, Interior Ministry Deputy State Secretary Juris Labis, National Human Rights' Office Director Olafs Bruvers, NGO Center Director Kaija Gertnere, and parliament deputies, LETA reported. They praised Latvia's efforts to combat trafficking in women and gathered more information about the status of gender equality in Latvia.
* In an interview in the Russian newspaper "Izvestiya" President Vike-Freiberga said that the development of economic cooperation with Russia should be preceded by "certain preconditions," including the signing of a border agreement between the two countries, BNS reported on 30 April. She noted that the lack of a border agreement would be a nuisance to Russia's relations with the EU because Latvia's border will become the EU border after Latvia joins the EU. Vike-Freiberga regretted that Russia's efforts to include social issues along with economic and border issues had only delayed any decisions. The Latvian head of state noted that her country has made favorable changes for Russian speakers by exempting orphans, pensioners, and people with low income from paying naturalization fees.
* Finance Ministry Deputy State Secretary Inguna Sudraba has signed two financial memorandums that secure 36 million euros ($32.4 million) in funds from the EU's Instrument for Structural Policies for pre-Accession (ISPA) program, BNS reported on 29 April. One project will improve the water supply and sewage service in Jurmala while the other will update security checks on the national railway's rolling stock.
* President Vike-Freiberga decided on 2 May to call for reconsideration of certain portions of the recently adopted amendments to the alcohol law, which ban nighttime alcohol sales, LETA reported. She sent a letter to parliament Chairman Janis Straume stating that the terms "production technology" and "quality criteria" included in the amendments in relation to banning spirits imports are not specifically defined in any law and could lead to corruption or conflict of interest. Vike-Freiberga was urged to return the bill to parliament by several organizations, including the Bank of Latvia, the country's second- and third-largest banks, its largest alcohol producer Latvijas Balzams, the Federation of Food Enterprises, and the Free Trade Union Federation.
* The National Bolshevik organization "Pobeda" (Victory) asked the Prosecutor-General's Office to evaluate the ruling of the Daugavpils City Council which banned it from holding a rally on 6 April to support recognizing Russian as the official language in the city, LETA reported on 29 April. The organization's leader, Vladimirs Lindermans, also requested the office to evaluate the refusal of the chief prosecutor at the Daugavpils prosecutor's office, Arturs Lietavnieks, to review the council's decision.
* Defense Ministry State Secretary Edgars Rinkevics said that Latvia has worked out a development plan for its National Armed Forces for the period 2009-2015 based on the assumption of NATO membership, BNS reported on 27 April. The plan was discussed with NATO experts in Brussels on 29-30 April.
* Riga City Council deputy Imants Kalnins announced on 2 May that he was quitting TB/LNNK due to the "inconsistent and indecisive actions" of the party in the council, LETA reported. He has decided to follow the example of Andris Argalis and apply for membership in the People's Party. Kalnins is the third TB/LNNK deputy in the Riga City Council to quit the party this year.
* The 27th Congress of the Latvian Farmers' Union (LZS) held in Riga on 27 April also marked the 85th anniversary of the union, LETA reported. The LZS, the successor to the interwar Farmers Union of former Latvian President Karlis Ulmanis and a player in the country's first postcommunist governments, has little chance to win a seat in parliament on its own, according to party Central Board Chairman Zigurds Eglitis, and has so far failed to form a cooperation agreement with other parties holding similar views. The congress elected a six-member central board with Eglitis continuing to serve as its chairman.
* The National Statistics Office announced on 29 April that foreign investments in companies in Latvia totaled 1.036 billion lats ($1.65 billion) at the end of 2001, BNS reported. Foreign investments during 2001 grew by 204.38 million lats or 24.6 percent. The largest investments came from Sweden, Germany, Denmark, the U.S., and Russia which together made up almost 53 percent of all foreign investments.

Delegations of all 44 Council of Europe (CE) member states arrived in Vilnius on 2 May for the two-day 110th session of the CE's Committee of Ministers, ELTA reported. This is only the second session held outside France, where the CE is based, since 1990. Only 16 foreign ministers are attending the session, but other high-ranking officials who traveled to Vilnius include European Parliament Chairman Patrick Cox; CE Secretary-General Walter Schwimmer and his deputy Hans Kruger; CE Human Rights Commissioner Alvaro Gil-Robles; Arab League Secretary-General Amre Moussa; UN High Commissioner for Human Rights Mary Robinson; and OSCE Secretary-General Jan Kubis. The session will close Lithuanian Foreign Minister Antanas Valionis's six-month term as chairman of the committee, which will be taken over by Luxembourg's Foreign Minister Lydie Polfer. The same day Polfer told Lithuanian Prime Minister Algirdas Brazauskas and parliament Chairman Arturas Paulauskas that a small country does not lose its national identity in the EU, but gains economic progress and increases the well-being of its population through membership.

Finance Minister Dalia Grybauskaite and head of the European Commission (EC) delegation to Lithuania Michael Graham signed a financial memorandum for four projects on 30 April in Vilnius, ELTA reported. The EC will provide 12.68 million euros ($11.3 million) and Lithuania 3.45 million euros for the projects. Under the PHARE program, the EC will provide 2.23 million euros to the Lithuanian Standardization Department for strengthening its administrative and technical capacity and will facilitate the country's preparations for membership in European standardization organizations. The State Tax Inspectorate will receive 4 million euros from the EC to bring it into line with EU norms in administrative cooperation and mutual assistance. A project on migration and asylum management aimed at harmonizing the relevant national legislation with EU norms will receive 2.9 million euros. The fourth project will provide the Customs Department with 3.65 million euros to assist in the implementation of EU customs systems.

Milos Zeman met on 2 May with visiting Lithuanian President Valdas Adamkus to discuss Lithuania's bid to join NATO -- for which Zeman expressed full support -- and the countries' respective quests to join the EU. Zeman told CTK after the meeting that he also discussed with Adamkus the possibility of finding "friendly harbors" for the Czech fleet in Lithuania (during his recent visit to Russia, Zeman signed an agreement for Russian delivery of 20 vessels in partial payment of the Russian debt to the Czech Republic). Adamkus also held talks on interparliamentary contacts with Czech Chamber of Deputies Chairman Vaclav Klaus and attended a dinner with Czech Senate Chairman Petr Pithart, ELTA reported.

Vaira Vike-Freiberga and Valdas Adamkus received honorary doctorate degrees from Vytautas Magnus University in Kaunas on 29 April, ELTA reported. Vike-Freiberga was honored as a well-known social sciences and humanities scholar who has worked to improve Lithuanian-Latvian relations and expand the activities of the Latvian-language center at the university. She has received honorary doctorates from three other universities. Adamkus, who has received 10 honorary doctorates, was one of the supporter's of the re-establishment of Vytautas Magnus University and served as a member of its Senate from 1989 to 1996. After the awards ceremony, the two presidents opened the exhibit "Latvian-Lithuanian Cooperation in Exile" at the Lithuanian Emigre Institute. Prior to a dinner in honor of the presidents, Vike-Freiberga met with members of the local Latvian community.

The council of the New Union (Social Liberals) at its meeting in Kaunas on 27 April expressed support for the proposal of its coalition partner, the Social Democratic Party, to move up the date of the elections to local councils from February-March 2003 to December 2002, when the presidential elections will be held, "Kauno diena" reported on 29 April. Before the vote on the proposal, representatives of 44 local chapters gave their support for it, while 11 chapters opposed it. One of the main reasons for the proposal is that holding only one election would save several million dollars. Although the ruling coalition has enough votes in the parliament to change the election date, the opposition Liberal Union is trying to stop this action by declaring that, if the elections are combined, it will not support the passage of amendments to constitutional Articles 47 and 119 pertaining to local councils.

Social Liberal Vaclov Stankevic, the chairman of the Lithuanian parliament's NATO Affairs Commission, told a press conference in Vilnius on 29 April that during his recent visit to Washington he formed the impression that Lithuania is considered to be the leader among the countries seeking NATO membership, BNS reported. Commission Deputy co-Chairwoman Rasa Jukneviciene, a Conservative Party member, agreed that Lithuania will get an invitation to join NATO if no "nonsense" takes place in the county, such as an escalation of anti-Semitism, a clear drop in public support for NATO membership, or a decision to hold a referendum on entry into the alliance.

Belarusian President Alyaksandr Lukashenka, while visiting Chernobyl-affected areas on 26 April, said he is ready to consider purchasing the Ignalina nuclear power plant from Lithuania, which Brussels has demanded be closed before Lithuania can join the EU. "Our experts have proposed several scenarios to me for buying this plant," Belarusian Television quoted Lukashenka as saying. "We do not rule out such scenarios, we are considering them.... It simply grieves me to think [that this plant is going to be shut down], it's an excellent plant. Certainly, if the Lithuanians ruin this plant, they will lose a great deal. They won't get what they want from the West. We will try to do our best to preserve and ensure the safety of this plant if we manage [to buy it]." Lithuanian Prime Minister Brazauskas noted that the government had not received any official proposal from Belarus and that the Belarusian concern Belenergo still had not paid the 36 million-euro debt to Lithuania for electricity supplied in 1998 and 1999, BNS reported. Ignalina plant director Viktoras Sevaldinas compared the news from Belarus with an April Fools' Day prank.
* Deputy Foreign Minister Rytis Martikonis told Greek Minister for European Affairs Tassos Giannitsis and other officials in Athens on 26 April that "all preconditions exist for Lithuania to end accession talks with the European Union this year, and sign the entry agreement early next year when Greece presides over the EU," ELTA reported. They also discussed the effects of the planned closure of the nuclear power plant at Ignalina.
* A delegation led by Transport Ministry Secretary Ceslovas Norkus held talks in Berlin on 30 April with Brandenburg state Transport Minister Hermann Meyer on bilateral cooperation in the transport sector, ELTA reported. Local officials from Frankfurt on the Oder presented the delegation with an offer to establish a Lithuanian business park (logistic center) in the city, noting that they had already chosen a site which would embrace an area of 23,000 square meters and eight warehouses, with completed communications, roads, and street lighting.
* Finance Minister Dalia Grybauskaite signed the second annual Special Accession Program for Agriculture and Rural Development (SAPARD) agreement, which will provide 30.9 million euros in assistance to local farmers, in Vilnius on 29 April, ELTA reported. Lithuania should use the assistance by 31 December 2003.
* First Deputy Chairman of the Russian Customs Committee Vladimir Meshcheriakov notified the Lithuanian Customs Department on 29 April that Russia was postponing the imposition of compulsory police escorts on Lithuanian truckers carrying cargoes to Russia from the planned 1 May at least until 15 May, ELTA reported.
* Nine Lithuanian police officers, two of them women, attended a solemn departure ceremony in the Defense Ministry on 2 May before leaving for a year-long peacekeeping mission to Kosova, ELTA reported. They were selected from 28 applicants and attended a series of two-week intensive training courses in Finland, Sweden, and Norway.
* The government approved on 2 May a draft law on personal income tax which would reduce the current different income tax brackets from eight to two -- a 33 and 15 percent level, ELTA reported. The bill also calls for raising the basic tax-exempt monthly income from the current 250 litas ($64) to 290 litas. If passed by the parliament, the law would go into effect from 1 January 2003.
* By a vote of 40 to 12 with nine abstentions on 2 May, the 140-seat parliament approved for further debate a draft resolution giving the government the authority to negotiate with EU institutions and member states the financial terms and schedules for closing the nuclear power plant at Ignalina, BNS reported. The draft resolution does not set a deadline for the closure of the second reactor block, but the Economy Ministry estimated the cost of the closure of both reactors will come to 2.4 billion euros ($2.16 billion) by 2020.
* The Statistics Department announced on 30 April that the gross domestic product of the country in the first quarter of the year totaled 11.05 billion litas ($2.8 billion) at current price or 4.1 percent greater than in the first quarter of 2001, ELTA reported. The growth was primarily due to changes in agriculture, power supply, domestic trade, and insurance.
* The Finance Ministry announced on 26 April the launching of a 10-year Eurobond issue of 400 million euros ($360 million) through the international investment banks JP Morgan and UBS Warburg with an interest rate of 5.875 percent, BNS reported. Although the interest rate was considerably lower than the 6.625 percent interest paid last year for a 7-year 200 million-euro bond, initial bids totaled 615 million euros. The bonds will be used to cover the budget deficit, fund investment projects, and refinance a $200 million Eurobond issue, placed in 1997.
* Mazeikiu Nafta (Mazeikiai Oil) announced on 29 April that its pre-audit losses in the first quarter of the year according to domestic accounting standards was 81 million litas ($20.8 million) or 104.4 million litas according to U.S. generally accepted accounting principles (GAAP), ELTA reported. The company's managing director, Jim Scheel, told a news conference that the losses were due to the decline in the oil-refining margin by $22 per ton since the first quarter last year, the halt in the activity of the Butinge oil terminal, and 24 percent lower sales of light oil products on the Lithuanian market.