Baltic Report: June 3, 2002

NOTE TO READERS:
This issue covers events in the Baltic states from 17 to 23 May 2002.
EU CANDIDATES PRESENT COMMON FRONT IN WARSAW.
The foreign ministers from 10 countries aspiring to join the European Union -- Poland, Cyprus, the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Slovakia, and Slovenia -- met in Warsaw on 22 May and adopted a joint statement urging the EU to treat them as equal members when they are admitted, possibly as soon as 2004, AP and dpa reported. Ahead of difficult EU membership talks on budgetary and agricultural integration, the candidate countries demanded that all provisions of the Common Agricultural Policy be extended equally to farmers both in existing and future EU members. The ministers insisted that new members not be forced into being net contributors to the EU budget following expansion. The statement also stresses that any transition periods placed on the budget and farm sectors should not extend beyond the current EU budget, which runs out in 2006.

U.S. SENATE VOTES TO BACK NATO ENLARGEMENT.
By a vote of 85 to six, the U.S. Senate approved on 17 May the Freedom Consolidation Act, which expresses support for NATO enlargement in the near future, BNS reported. The House of Representatives had approved the act last November by a vote of 372 to 46. The law also authorizes military assistance of $55.5 million to seven candidate countries: Romania ($11.5 million), Bulgaria ($10 million), Slovakia ($8.5 million), Lithuania ($7.5 million), Latvia ($7 million), Estonia ($6.5 million), and Slovenia ($4.5 million). Senate Foreign Relations Committee Chairman Joseph Biden said, "NATO enlargement significantly furthers the process of moving the zone of stability eastward in Europe, thereby hastening the day when the continent will be truly whole and free."

KYRGYZSTAN EXERCISES CIS VETO OF ANTITERRORISM FORCES.
At the request of the Kyrgyz Foreign Affairs Ministry, the Kyrgyzstan Security Council on 21 May banned the entry of coalition forces from Estonia, Latvia, and Lithuania, LETA and Rosbalt news agencies reported. The Kyrgyz Defense Ministry pointed out that it had not raised any objections to the Baltic troops, LETA and KABAR reported on 22 May. Denmark and the United States had invited a small number of troops from the three Baltic countries to participate in the antiterrorism campaign Enduring Freedom to perform peacekeeping activities at airbases used by coalition forces in Kyrgyzstan. Noting that Kyrgyzstan had given permission to all NATO member states to operate on its territory, Latvian Defense Minister Girts Valdis Kristovskis told LETA that there are "some, who in the final stage of NATO enlargement, want to demonstrate how problematic the inclusion of applicant countries in such operations is." Lithuanian Defense Minister Linas Linkevicius told ELTA, "I want to believe that Kyrgyzstan's decision was not influenced by third countries." As a signatory to the Commonwealth of Independent States' (CIS) collective-security agreement, Kyrgyzstan is required, in part, to gain approval from other members, all former Soviet republics, before allowing foreign troops on its soil. The "Financial Times" reported on 7 March that Askar Aitmatov, international adviser to Kyrgyz President Askar Akaev, said that Bishkek consulted all members of the collective-security agreement, as well as the Shanghai Cooperation Forum, which includes China, about the stationing of the U.S.-led coalition forces, and encountered "no problems."

DEFENSE-COOPERATION AGREEMENT SIGNED WITH BELGIUM.
Defense ministers Sven Mikser of Estonia and Andre Flahaut of Belgium signed a defense-cooperation framework agreement in Tallinn on 21 May, ETA reported. Mikser noted that the agreement creates preconditions for more efficient defense cooperation between the two countries. Flahaut said, "Belgium supports the large-scale enlargement of NATO and the European Union because these organizations guarantee balance in the world," which he said should lead to peace and economic prosperity. He told parliament Defense Committee Chairman Tiit Tammsaar that NATO encourages its members to undertake realistic tasks. Flahaut added that small and medium-sized countries have a very important role in both NATO and the EU as they guarantee internal integration and balance.

PARLIAMENT REJECTS LEGAL CHANCELLOR'S PROPOSAL ON ELECTORAL ALLIANCES.
The Estonian parliament rejected by a vote of 49 to 25 the proposal of Legal Chancellor Allar Joks to change the recently amended local elections law once again to allow electoral alliances in local elections, BNS and ETA reported. In March, the parliament adopted amendments to the local-council elections law that banned election alliances. Joks told the parliament on 21 May that he considers the amendments to be contrary to articles 156 and 12 of the constitution as they "violate the right to free and general elections" and the requirement for equal opportunities, respectively. The Pro Patria Union and the Moderates supported Joks's proposal, which the ruling coalition of Center and Reform parties opposed, while the People's Union did not participate in the vote. Joks was not present at the parliamentary vote as he had not yet returned from an official trip to Poland, but later said that he plans to ask the Supreme Court to declare the amendments unconstitutional. The next local elections are set to take place on 20 October.

PRO PATRIA UNION RE-ELECTS CHAIRMAN.
Collecting 446 out of 507 votes, former Prime Minister Mart Laar was re-elected Pro Patria Union chairman by its congress in Tallinn on 18 May, ETA reported. He told the congress that the current coalition government of the Reform and Center parties is "reactionary and cannot be of use to Estonia." It has continued the same political course as his previous government, but is avoiding making any decisions, Laar said. This has resulted in a halt in higher-education and health reforms, confusion in the energy sphere, and the abandonment of positions in European Union membership talks. The congress also elected a new board and program, which states that the party's most important task during the upcoming period is increasing the birthrate of Estonians. It calls for increasing state support for each child to 1,000 kroons ($58.50) a month. The support is currently 150 kroons for the first child and 300 kroons for each subsequent child.

STUDENTS RALLY IN DEFENSE OF BENEFITS.
University and high-school students held separate rallies in front of the parliament in Tallinn and the Education Ministry building in Tartu on 22 May, expressing their dissatisfaction with the decision of the government not to introduce a new system of student benefits beginning in September, ETA reported. Data from the national tax authority shows that 60 percent of students in the country do not devote their full time to studies because they also have jobs. The benefits that had been planned by the previous government were deemed to be too costly. Students from low-income families would have received benefits of up to 1,300 kroons ($76.50) per month. Organizers of the rallies had hoped that more than 1,000 people would participate, but their number was estimated to be somewhat lower.

* A delegation of visiting Italian parliamentary deputies, headed by the chairman of the Italian parliament's Baltic support group Ricardo Migliori, held talks with parliamentary deputy chairmen Tunne Kelam and Peeter Kreitzberg on 17 May, BNS reported. Migliori invited them to visit Italy later this year to conclude an agreement on cooperation between the parliaments.

* Russian Foreign Ministry spokesman Aleksandr Yakovenko declared on 17 May that the ministry condemned the vandalization of the Estonian embassy in Moscow on 13 May and expressed regret about the incident, BNS reported. He said, "An investigation of these lawless acts is in progress."

* Government delegations from Estonia and Russia reached an agreement in Moscow on 17 May on the final wording of a document on border checkpoints, BNS reported. Head of the Foreign Ministry Consular Department Mart Piiskop and Deputy Director of the Russian Foreign Ministry Consular Service Department Sergei Garmonin signed a corresponding protocol.

* Deputies of the Estonian and Lithuanian parliaments' Rural Affairs committees met on the Estonian island of Saaremaa on 17 May to harmonize their positions on agricultural issues in EU membership negotiations, BNS reported. They agreed that all members of the EU, regardless of the time of joining, must be accorded equal treatment from the moment of accession. They also said that the Baltic states should receive higher production quotas than the European Commission has recommended.

* Spokesmen for the Russian embassy in Tallinn and the consulate in Narva stated that their offices had registered nearly 114,000 Russian citizens as residing in Estonia at the end of March, BNS reported on 17 May. They said that this figure may not be totally accurate since many Russian citizens do not inform them when entering or leaving Estonia.

* Prime Minister Siim Kallas said that Estonia is not ready to receive and put to use European Union regional aid funds now, but should be ready to do so in 2004, BNS reported on 18 May. The EU intends to provide Estonia with about 9.5 billion kroons ($560 million) in support for regional development in the period 2004-2006. He asserted that he expected fewer problems for Estonia to handle regional aid funds than those of the SAPARD (Special Accession Program for Agriculture and Rural Development) program because the EU and candidate countries are now better acquainted with each other.

* Prominent Estonian writer, Jaan Kross, called on the Estonian Olympic Committee on 20 May not to send athletes to the CIS youth games that will open in Moscow on 14 June, the anniversary of the mass deportation of Estonians to Siberia by Soviet occupation forces in 1941, BNS reported the next day.

* President Arnold Ruutel appointed Juri Seilenthal as the new Estonian ambassador to Italy on 20 May, replacing Jaak Joeruut, BNS reported. Seilenthal, who had served as Foreign Ministry deputy chancellor, has also been serving as the country's ambassador to Israel since 1999.

* The Transport and Communications Ministry said on 21 May that it considers illegal the decision of Baltic Rail Services (BRS), the majority owner of the recently privatized national rail firm Eesti Raudtee (Estonian Railway), to pay dividends of 250 million kroons ($14.7 million) to stockholders, ETA reported. At the general shareholders meeting on 15 May, the ministry opposed the dividend payment as excessive because the railroad's profits in 2001 and 2000 were only 144 million and 38 million kroons, respectively. It asserted that the firm's statutes required the approval of all stockholders, which was not obtained.

* The Statistics Office announced on 20 May that the average monthly gross pay of full-time and part-time employees of enterprises, institutions, and organizations in the first quarter of the year was 5,721 kroons ($340), or 12.2 percent higher than in the same period last year, ETA reported. The average hourly gross pay reached 34.78 kroons.

* The Statistics Office announced on 22 May that the unemployment rate in the first quarter of the year, calculated by methods of the International Labor Organization, was 11.2 percent as compared with 14.1 percent a year earlier, ETA reported.

CONSIDERABLE FINANCIAL BENEFITS FROM EU MEMBERSHIP EXPECTED.
Finance Ministry Deputy State Secretary Inguna Sudraba told the parliament's European Affairs Committee on 21 May that Latvia will receive much more financial support from the European Union than it will be required to contribute to it, LETA reported. She said that if Latvia becomes a member of the EU in 2004, the Finance Ministry forecasts that it will have to pay 118 million euros ($106 million) in 2004, 123 million euros in 2005, and 128 million euros in 2006 to the EU budget. The ministry also presented pessimistic and optimistic forecasts for EU payments to Latvia, since they will depend on how well Latvia prepares the numerous projects that are required for receiving funding from the EU's Cohesion Fund. The pessimistic forecast envisions EU payments of 261 million euros in 2004, 395 million euros in 2005, and 447 million euros in 2006, while they would be 286 million, 437 million, and 498 million euros, respectively, according to the optimistic scenario. Latvia's EU negotiating team head Eduards Stiprais stressed that these figures are "just predictions," since the accession negotiations have not yet been completed.

COUNCIL OF EUROPE GROUP PRAISES LATVIA'S STRIDES IN COMBATING CORRUPTION.
Experts from the Group of States Against Corruption (GRECO) organization presented a favorable report regarding Latvia's efforts to fight corruption to a Council of Europe plenary session in Strasbourg on 17 May, LETA reported. The experts visited Latvia in December. The report praised the operations of Latvia's Crime and Corruption Prevention Bureau and the passage of laws on combating corruption and on eliminating conflicts of interest on the part of state officials. The experts' recommendations will be presented to Latvia next week. GRECO, which Latvia joined in June 2000, currently has 27 member states.

LATVIAN, HUNGARIAN BORDER GUARDS DISCUSS FUTURE EU BORDER-GUARD CORPS.
A Hungarian border-guard delegation, headed by its chief, Jozsef Bendek, arrived in Riga on 20 May, BNS reported. Bendek told a press conference that, although this is the first visit by Hungarian border-guard officials to Latvia, cooperation between the two countries began earlier with Latvian delegations participating in the annual international border-guard conferences held in Hungary for the past three years. Latvian Border Guard Chief Gunars Dabolins noted that once they join the European Union, both states will have borders with non-EU states, and he said that the structure and objectives of the planned EU border-guard corps would be a topic of discussion. The delegation is expected to sign a protocol of cooperation with the Latvian border service during the visit, and the Hungarians will also visit posts on the Latvian-Russian and Latvian-Estonian borders.

PARLIAMENT APPROVES NEW WELFARE MINISTER.
By a vote of 52 to 21, with 13 abstentions, the parliament approved Viktors Jaksons as the new welfare minister on 22 May, LETA reported. The post became vacant earlier in the month when Prime Minister Andris Berzins officially dismissed Andrejs Pozarnovs. The current ruling coalition had earlier decided that For the Fatherland and Freedom/LNNK would be responsible for the ministry and backed that party's nomination of Jaksons, who had been an adviser to Pozarnovs. Jaksons is well acquainted with the work of the cabinet since he previously served as health minister in the governments of Guntars Krasts and Vilis Kristopans.

LITHUANIAN PREMIER ATTENDS 'LITHUANIAN DAYS IN LATVIA.'
Algirdas Brazauskas visited Latvia on 22-23 May to take part in the "Lithuanian Days in Latvia," LETA reported. Prior to the official opening of the event, which will end on 25 May, he discussed with his Latvian counterpart Andris Berzins their countries' common goals to join NATO and the European Union, as well as bilateral trade relations and simplifying border-crossing procedures. On 23 May, Brazauskas and Latvian Economy Minister Aigars Kalvitis opened the Lithuanian Export 2002 exhibition in which 122 Lithuanian companies are participating. At the parallel economic forum, "Successful Cooperation Between Neighbors: Trade and Investment Development Between Latvia and Lithuania," Brazauskas noted that both countries are successfully integrating into the global community and have achieved considerable economic progress. He mentioned that Latvian investments in Lithuania are 2 1/2 times greater than Lithuanian investments in Latvia.

* Latvian and Belgian Defense ministers Girts Valdis Kristovskis and Andre Flahaut, respectively, signed a framework agreement on cooperation in defense in Riga on 21 May, LETA reported. Flahaut also held talks with President Vaira Vike-Freiberga about Latvia's integration into NATO and European defense policy.

* Economy Minister Aigars Kalvitis signed a protocol to the EU Association Treaty on the Conformity Assessment and Acceptance of Industrial Products in Brussels on 21 May, BNS reported. The protocol will allow Latvia to export industrial goods to EU countries without previously required EU safety certificates as Latvian certification will be sufficient.

* Interior Minister Mareks Seglins signed in Strasbourg on 23 May the Council of Europe's convention against the spread of narcotic and psychotropic substances along maritime routes, BNS reported. After ratification by the parliament, the convention will give Latvian officials the right to board and check for narcotics any vessel registered in a country that has also ratified the convention. Latvia is the 10th country to sign the convention.

* International Financial Affairs Minister Roberts Zile represented Latvia at a meeting of representatives of the Finance ministries of EU candidate countries in Bucharest on 18 May, BNS reported. He spoke in detail about issues concerning pre-accession economic programs.

* On 20-22 May, Latvia hosted the Third Central and Eastern European agriculture-advisers conference in Sigulda, which was attended by some 45 participants from 15 countries, including Switzerland, Denmark, Great Britain, and Russia, BNS reported. The conference discussed joint work within the EU, the development of training programs for farmers, and the formation of an association that would simplify information exchange.

* The cabinet issued a decree on 21 May appointing Latvia's representatives to the Latvian-Belarusian intergovernmental commission for trade and economic cooperation, LETA reported. Economy Minister Kalvitis will head the delegation with Economy Ministry State Secretary Kaspars Gerhards as his deputy.

* The ferry route linking Riga and Kiel resumed operation on 19 May after almost a monthlong suspension, LETA reported. The route will use the ferry "Nordhav," a Norwegian-flagged ship that is smaller but faster than the one used previously, enabling it to make two round-trips a week.

* The Constitutional Court ruled on 20 May that the amendments to government regulations on ownership of dogs and cats, adopted last July, banning the importation, keeping, and breeding of certain dogs were inconsistent with the constitution, LETA reported. The regulations, which banned Pit Bull terriers, Strafordshire terriers, Fila Brasilario, Dogo Argentina, and Tosa Inu dogs, had been prompted by several attacks on children by dogs of these breeds last summer.

* The results of a poll conducted in April by the public-opinion center SKDS indicate that Latvia's residents believe that their country's prosperity mainly depends on Russia and CIS countries, LETA reported on 20 May. About 40.7 percent of the respondents said that Latvia's prosperity mainly depends on Russia and other CIS countries, 28.6 percent said that the European Union was more important, while 30.7 percent had no opinion.

COMPROMISE REACHED ON CONSTITUTIONAL AMENDMENT.
The planned second vote in the parliament on amendments to Article 119 of the Lithuanian Constitution was postponed from the scheduled 21 May to mid-June when the ruling Social Democrats and the opposition Liberal Union reached a compromise, "Kauno diena" reported the next day. The amendments, which the parliament had approved in January by a vote of 108 to two, with one abstention, would extend the term of local council deputies from three to four years and allow noncitizens permanently residing in Lithuania to vote and be elected to local councils. The two parties agreed that the four-year term for council deputies would go into effect beginning in 2003, but the extension to noncitizens only upon Lithuania's entry into the European Union. The Social Democrats apparently agreed to the compromise when it became clear that they could not gather the 94 votes needed to approve the amendments without the support of the Liberal Democrats headed by former Prime Minister Rolandas Paksas, who, according to unofficial reports, had requested support for the ouster of Vilnius Mayor Arturas Zuokas in exchange.

RUSSIA MAY RATIFY LITHUANIAN BORDER TREATY THIS YEAR.
Dmitrii Rogozin, the head of the State Duma's International Relations Committee, told a delegation from the Lithuanian parliament in Moscow on 20 May that the Duma might ratify 1997 by the end of the year the Lithuanian-Russian border treaty signed in, BNS reported. The Lithuanian Seimas ratified the treaty in 1999, while Russia's Duma has provided various reasons for not doing so. Last year, some Duma members expressed their dissatisfaction with the Lithuanian law requesting that Russia pay compensation to Lithuania for damages inflicted during the Soviet era. Duma members are now objecting to the EU requirement that takes effect in July 2003 that Kaliningrad Oblast residents obtain visas to enter Lithuania. The Lithuanian delegation, headed by Social Democrat Gediminas Kirkilas, is composed of four parliamentary deputies from various political parties who are members of the Foreign Affairs Committee

LITHUANIA JOINS UN'S SHIRBRIG.
Defense Minister Linkevicius signed documents in Vilnius on 22 May formally confirming Lithuania's membership in the UN Multinational Standby High Readiness Brigade SHIRBRIG, BNS reported. Visiting SHIRBRIG commander Brigadier General Sten Guunar Edholm also signed the documents. SHIRBRIG was founded in 1997 by small and medium-sized countries participating in UN peacekeeping missions as a multinational military unit capable of preparing for new UN peace missions within 30 days. The core of the brigade is composed of the armed forces of NATO and EU member states. Ten countries -- Argentina, Austria, Canada, Denmark, Italy, the Netherlands, Norway, Poland, Romania, and Sweden -- are full-fledged members of SHIRBRIG, while Finland, Portugal, Spain, and Slovenia have participated in its activities. Lithuania plans to contribute eight military doctors and two ambulances to SHIRBRIG, but this might be increased in the future.

COOPERATION PACT SIGNED WITH BELGIUM'S FLANDERS REGION.
Romas Svedas, the director of the Foreign Ministry's Economics Department, and Diane Verstraten, the general director of the Flanders region's Foreign Affairs Administration, signed a cooperation agreement for 2002-2004 in Vilnius on 17 May, BNS reported. The agreement, which was prepared on the basis of a cooperation agreement signed in 1996 by the Lithuanian and Flanders governments, is designed to help the Belgian region share with Lithuania its experience in developing a free-market economy, dealing with environmental issues, and achieving balanced social development. Svedas said that experts from Flanders should spend about 420 days in Lithuania working in the program's priority areas of science and education, culture, small and medium-sized businesses, administration, employment, regional policy, port development, the environment, and agriculture.

PRESIDENT VETOES LAW BANNING ADVERTISING OF PRESCRIPTION DRUGS.
President Valdas Adamkus announced on 23 May that he had vetoed suggested changes to the pharmaceutical-activities law that the parliament passed on 9 May, ELTA reported. The changes would have banned information about prescription medicines on radio and television. In accordance with the law, such information would have only been allowed in specialized medical publications. Adamkus said that while the changes were aimed at prohibiting advertisements of prescription medicines, they had gone too far as "all information about medicines cannot be identified with commercials." He said that the amendments violated the constitutional right of citizens "to seek, receive, and spread information," and would have prevented even the Health Ministry from informing the public about the negative effects of some medicines. In order to combat hidden advertisements, the president proposed that the government establish a procedure for supplying information about prescribed and reimbursable medicines via radio, television, and electronic media.

* Belgian Defense Minister Flahaut made an official visit to Vilnius on 21-22 May during which he met with President Adamkus, parliament Chairman Arturas Paulauskas, Defense Minister Linkevicius, and Foreign Ministry Secretary Giedrius Cekuolis, BNS reported. Flahaut expressed skepticism about U.S. President George W. Bush's call for other NATO members to increase defense spending, claiming it is more important "to make a better investment."

* During a visit to London on 20-21 May, Foreign Minister Antanas Valionis and British Foreign Secretary Jack Straw signed an agreement on avoidance of double taxation and prevention of tax evasion, ELTA reported. Straw mentioned that Lithuania's chances to receive an invitation to join NATO were good. Valionis also met British experts at the Royal Defense Studies Institute.

* At the annual meeting of the European Bank for Reconstruction and Development in Bucharest on 18 May, Finance Ministry Secretary Asta Ungulaitiene presented Lithuania's macroeconomic and fiscal achievements in 2001, ELTA reported on 20 May. Although there was an economic recession in the world, Lithuania's gross domestic product grew from 3.9 percent in 2000 to 5.9 percent in 2001, while the current-account deficit decreased from 8 percent in 2000 to 4.8 percent in 2001.

* Chief negotiator with the EU, Petras Austrevicius, signed a protocol to the EU Association Treaty on the Conformity Assessment and Acceptance of Industrial Products in Brussels on 21 May, BNS reported. The protocol, which will go into effect after ratification by the parliament, which is expected this summer, will improve trade conditions with EU countries, which will now accept required safety certificates from Lithuanian laboratories.

* Lithuanian State Property Fund managing director Povilas Milasauskas, Ruhrgas Vice President Stephen Kamphues, and E.ON Energie Regional Manager Heinz-Peter Schierenbeck signed an agreement on the sale of 34 percent of the natural-gas utility Lietuvos Dujos (Lithuanian Gas) in Vilnius on 17 May, BNS reported. The German companies will pay 116 million litas ($30.3 million) for the shares and invest another 70 million litas in the company.

* Border officials at the Kena border railroad checkpoint with Belarus did not allow a military team consisting of two Russian officers and some 155 citizens of India, all students of Russian naval schools, to proceed through Lithuania to a training session in Russia's Kaliningrad Oblast on 18 May, BNS reported. The military group, which wore civilian clothes and carried no weapons, was traveling without the necessary special permit from the Lithuanian Defense Ministry's Transportation Service and was returned to Belarus.

* Russia's Unified Energy Systems on 21 May signed an agreement with the Belarus state-owned energy corporation Belenergo allowing Lithuanian electricity deliveries through Belarus territory to Poland, Ukraine, and Russia, BNS reported the next day. The deliveries to Poland should begin in July while those to Russia and Ukraine will begin in the fall.

* The Butinge floating oil terminal, owned by Mazeikiai Oil, loaded nearly 100,000 tons of crude oil for the Russian state-owned oil company Rosneft on a tanker heading to Cuba on 19 May, ELTA reported. Rosneft has signed an agreement with Butinge to ship 400,000 tons of oil in May, but no contract for June has been signed.

* The government accepted the resignation of Deputy Justice Minister Gintaras Svedas as Lithuania's representative to the European Court of Human Rights in Strasbourg on 22 May, ELTA reported. Svedas, who had served in the post since September 1995, said that he was resigning because the new law on state service, which will come into force on 1 July, does not allow him to retain the two positions.

* President of the Lithuanian National Olympic Committee Arturas Poviliunas was elected to the executive committee of the Association of National Olympic Committees by the general assembly of European Olympic Committees in Kuala Lumpur, Malaysia, on 21 May, ELTA reported.