Baltic Report: August 7, 2002

NOTE TO READERS:
This issue covers events in the Baltic states from 19 to 25 July 2002.
CHIRAC BACKS RUSSIA ON KALININGRAD VISAS.
A two-day informal summit in Sochi between Russian President Vladimir Putin and French President Jacques Chirac ended on 20 July following wide-ranging discussions of international and bilateral issues, Russian and Western news agencies reported. Chirac offered his support in Russia's dispute with the European Union over the Kaliningrad exclave, saying it would be "unacceptable" to require Russians to get visas "to go from one part of Russia to another." "There are no technical problems without a solution, and this solution should not be humiliating for Russia," Chirac told a press conference on 19 July. Polish Premier Leszek Miller, however, told Polish Radio on 22 July, "I think [Chirac's] declaration...was a public utterance without any real consequences, and that France will not change its position." He stressed that EU leaders in June confirmed the requirement for countries joining the EU to tighten border controls and issue visas to citizens of non-EU states visiting or transiting their territory.

KALININGRAD TALKS WITH EU OFF TO 'TENSE' START.
Talks in Brussels between Russia and the European Union over the status of the Kaliningrad exclave after expected EU expansion in 2004 were described as "rather tense" by a Russian participant, ITAR-TASS reported on 24 July. "Russia has made no concessions," Deputy Foreign Minister Sergei Razov said, adding that the EU also remained intransigent on the issue of visa-free travel between the exclave and the rest of Russia. Meanwhile, a public-opinion poll in Kaliningrad Oblast revealed that 46 percent of residents believe their life will become worse after neighboring Lithuania and Poland join the EU and that bonds between the oblast and the rest of Russia will be weakened, ITAR-TASS reported the same day. Sixty-eight percent believe that Russia should insist on visa-free transit. Just 8 percent said that expansion will be beneficial for the oblast.

* French Foreign Minister Dominique de Villepin has presented to President Chirac three bills on the payment of compensation to Estonia, Latvia, and Lithuania for their former embassy buildings in Paris that were handed over to the Soviet Union and are still used by Russia, BNS reported on 24 July. The foreign ministers of the four countries signed the compensation agreements in Paris on 14 December 2001.

PROGRESS MADE IN AGRICULTURAL TALKS WITH EU.
Agriculture Minister Jaanus Marrandi announced on 22 July that talks on agriculture with the European Union are progressing favorably, BNS reported. He said Estonia has already been offered larger quotas for milk and grain output, with the annual milk quota of 560,000 tons initially proposed by the European Commission increased by 100,000 tons. Marrandi cautioned that these were the results of technical discussions and that, "the political aspect will follow later." Estonia is still seeking a milk quota of 900,000 tons, but Marrandi noted that the quota system may be eliminated altogether if the EU's farming policy is changed to become more open and market-oriented. Estonian farmers fear that any milk quota below 900,000 tons is too small and could drive Estonia's dairy-farming sector into decline.

PARNU OFFICIALS ORDER 'REVISION' OF CONTROVERSIAL MONUMENT...
Officials in Parnu on 23 July ordered that a privately funded monument featuring a World War II soldier in a German Waffen-SS uniform be redesigned following objections that it misrepresents the Estonian struggle for liberation, BNS and Western agencies reported. The controversy revolves around a bas-relief image that includes a soldier whose helmet originally bore an SS symbol and whose submachine gun points east toward Russia, with the accompanying text: "to all Estonian servicemen who fell fighting in the second war for the liberation of Estonia for their homeland and free Europe in 1941-1945," BNS reported. Nazi Germany's military was welcomed as liberators by many Estonians in 1941, driving out Soviet occupation forces before unleashing their own terror against the population. Prime Minister Siim Kallas on 23 July condemned the monument in its current form, saying, "It is extremely regrettable, and such monuments should not be born," BNS reported. "It will certainly cause a lot of trouble in Estonia and abroad," Reuters quoted him as saying at the same press conference.

...AND DISTANCE THEMSELVES FROM ITS PLANNING.
City planners on 17 June approved the site for the memorial, but officials only recently learned the details despite its planned unveiling in less than a week, BNS quoted a spokesman as saying on 23 July. The text will be changed, while the bas-relief is still a matter of negotiations, the agency reported the following day, quoting Parnu spokesman Romek Kosenkranius. "We agreed that he is ready to revise the text on the monument and we will continue talks so the whole complex would take a slightly different shape," Deputy Mayor Taimi Vilgats said on 23 July. "The monument should depict Estonia's freedom fight," Vilgats added. The monument was initiated by the creator of a museum on the Estonian Legion, Leo Tammiksaar, and others "Of course Europeans will not understand us," Tammiksaar said, according to Reuters. "We made this [monument] for our soldiers and not for Brussels."

ANNUAL DEBATE ON RAISING TAX-EXEMPT INCOME RATE WEIGHED.
Leaders of the Estonian Central Trade Unions Association (EAKL) told Finance Minister Harri Ounapuu on 19 July that they plan to raise the issue of increasing the monthly tax-exempt income from the current 1,000 kroons ($65) to 1,400 kroons at the next round of three-way talks with the government and employers' organizations in August, BNS reported. This would raise all employees' monthly take-home salary by 104 kroons. EAKL is arguing that the higher exemption is needed because the tax burden has increased and will rise even more with the implementation of unemployment insurance, compulsory payments into pension funds, and health insurance. They also noted that in earlier three-way talks, it was agreed that in principle the tax-exempt income rate should be raised to the level of the national minimum wage (1,600 kroons). Ounapuu noted that such a measure would negatively affect local governments' revenues and require the national government to subsidize the loss.

SECURITY POLICE SAY PARTICIPATION IN NAZI ATROCITIES UNPROVEN...
Security Police spokesman Olar Valtin said on 23 July that his organization has uncovered no evidence that the 36th Estonian Police Battalion participated in the execution of thousands of Jews in Novogrudok (in what is now Belarus) in 1942, BNS reported. Valtin stressed that, "the Security Police must prove the fact of a crime in criminal proceedings and the guilt of specific persons in the perpetration of crimes." The Estonian Security Police earlier in the day said no criminal action will be taken over the allegations. Valtin referred to the findings of an International Commission for the Investigation of Crimes Against Humanity initiated by President Lennart Meri in 1998 as "a historical appraisal of World War II events."

...WHILE NAZI HUNTER, U.S. EMBASSY QUESTION DENIAL.
Efraim Zuroff, a staff member of the Simon Wiesenthal Center, and Thomas Hodges, the public-affairs officer at the U.S. embassy in Tallinn, noted a contradiction between Estonian Security Police statements on 23 July and conclusions by a special Estonian commission, BNS reported. Both quoted a 2001 report by the Estonian International Commission for the Investigation of Crimes Against Humanity that stated that "the 36th Police Battalion participated on 7 August 1942 in the gathering together and shooting of almost all the Jews still surviving in the town of Novogrudok." Zuroff has sent a letter to Estonian Security Police chief Juri Pihl demanding a retraction and the launching of a complete investigation into the culpability of 16 men listed by the Wiesenthal Center as participants in the Novogrudok massacre. "The unprofessional and incompetent results of the investigation carried out in this case raises serious doubts as to the ability of the Security Police Board to properly investigate the cases of Estonian Nazi war criminals," Zuroff said in a statement sent to BNS. Hodges said the Security Police statement "appears to contradict" the findings of the Estonian commission. He added that the U.S. government "remains ready to work with the Estonian government on the investigation and prosecution of war criminals."

BORDER AREAS OF ESTONIA, RUSSIA TO KEEP FREE VISAS.
Representatives of the Estonian Foreign Ministry and the Russian embassy in Tallinn agreed that residents of the two countries' border areas will continue to be able to apply for free-of-charge visas next year, BNS reported on 25 July. The Russian-language daily "Molodezh Estonii" wrote that over the past few years, Estonia and Russia have regularly exchanged lists of border-area residents who received free visas for entrance into the neighboring country. Reporting that nearly 1,300 residents of Russia's Pskov Oblast use free visas at the present time, the paper commented that, "this is the only case in modern Europe where so many border-area residents use free visas." The practice will end on 1 January 2004 in accordance with Estonia's agreement with the EU to begin issuing visas in line with the Schengen agreements.

JAPAN APPOINTS NEW DEFENSE ATTACHE TO ESTONIA.
On his first visit to Tallinn, Colonel Hisanori Kato, who was recently appointed Japan's defense attache to Estonia, Latvia, Lithuania, and Finland for three years, held talks with Defense Minister Sven Mikser on 24 July, ETA reported. The two discussed possible bilateral military cooperation and Estonia's preparations for the Prague NATO summit in November. Mikser invited the Japanese military to compete in the ERNA international reconnaissance-teams competition held in Estonia every summer. Kato also met with Defense Ministry Deputy Chancellor Margus Kolga and Defense Forces headquarters Chief of Staff Colonel Alar Laneman.

* Finnish Ambassador to Estonia Jaakko Blomberg, in the presence of Finnish parliament speaker Riita Uosukainen, decorated Estonian parliament Chairman Toomas Savi in Tallinn on 23 July with the Big Cross of the Finnish Lion Order, which Finnish President Tarja Halonen had awarded him, BNS reported. Savi received the cross for his work in developing cooperation between the two countries' parliaments and between Nordic and Baltic countries.

* During a four-day visit to the Swedish island of Gotland, Regional Affairs Minister Toivo Asmer determined that local governments in Sweden are much more independent of state assistance than their Estonian counterparts when applying for support from the EU's structural funds, BNS reported on 19 July. He regretted that Estonian local governments rely entirely on the state's support in getting both information and funds.

* Estonian Orthodox Church of the Moscow Patriarchate Metropolitan Cornelius told Interfax on 25 July that he is looking forward to a visit to Estonia by Russian Orthodox Church Patriarch Aleksii II, but it depends on the settlement of church property issues. He said that talks with the Interior Ministry are proceeding in an atmosphere of goodwill and should be resumed after several senior officials return from vacations. Cornelius also noted that Aleksii has a personal interest in making the visit because he served in Estonia for many years and his parents are buried in the country.

* The cabinet unanimously decided on 23 July to accept Foreign Minister Kristiina Ojuland's proposal to dismiss Foreign Ministry Chancellor Indrek Tarand, ETA reported. Tarand was accused of insulting Ojuland at the ministry's summer meeting in Valga County on 10 July and was cited in Tallinn two days later for drunk driving. Ojuland and Tarand's relationship has been strained ever since Tarand dismissed Ojuland when she was an employee at the Foreign Ministry several years ago. She was reinstated by a court after filing a suit against the ministry. Ojuland herself has been arrested for drunk driving in the past, ETA reported.

* After a tour of southern Voru County on 19 July, Economy, Transportation, and Communications Minister Liina Tonisson said that talks have been started with the Defense Ministry over the financing of road repairs in border areas, BNS reported the next day. She said that this was fully justifiable because roads lying close to the border are necessary for both local people and the border-guard and defense forces.

* The cabinet decided on 23 July to accept the proposal of Finance Minister Harri Ounapuu to allocate almost 5.4 million kroons ($345,000) for the purchase of housing for residents who are being evicted from five apartment buildings that were privatized without giving the residents an opportunity to participate in the sale, BNS reported. The residents had been spending nights in city government building for two weeks, demanding assistance.

* Prime Minister Siim Kallas promised on 23 July to compensate the drought losses of Estonian farmers, although it was not clear where the money will be found, ETA reported. Agriculture Minister Marrandi said that a special committee had estimated the losses to farmers to be about 550 million kroons ($34.7 million),

* The cabinet agreed on 23 July that it would propose amendments to the local-council election law at the special parliament session on 30 July that would allow electoral alliances only in smaller counties, ETA reported. The Justice Ministry had suggested that only counties with populations under 5,000 could have the alliances, but the cabinet decided that it would allow the parliament to determine the minimum size.

* The board of Estonia's youngest political party Res Publica appointed Tonis Kons the party's new secretary-general at a meeting in Parnu County on 19 July, BNS reported. He previously worked for the "Eesti Paevaleht" daily and as public-relations adviser to the Reform Party and also currently heads Res Publica's Election Council.

* Prime Minister Kallas told reporters on 23 July that the government was seriously considering passing a second supplementary budget because the budget balance was so favorable, BNS reported. He said that additional expenditures should be spent on one-time investments, such as the purchase of a building in Brussels in which the growing number of Estonian officials could work. The Bank of Estonia and the International Monetary Fund have advised against a second supplemental budget, calling on the government to channel the additional revenue into the stabilization reserve instead.

* According to preliminary customs information, exports in June totaled 7.4 billion kroons and imports 9.53 billion kroons, resulting in a trade deficit of 2.13 billion kroons, BNS reported on 25 July.

* The Statistics Office announced on 25 July that preliminary data for the first half of the year indicated that the production of milk amounted to 320,800 tons, or 6 percent less than in the same period last year, BNS reported. The live weight of slaughtered livestock was 43,000 tons, or 5 percent less, while 128.5 million eggs were produced, or 10 percent less.

SELL-OFF OF VENTSPILS NAFTA POSTPONED.
Economy Minister Aigars Kalvitis declared on 19 July that his ministry and the Latvian Privatization Agency have postponed preparations for a final privatization of the remaining 43.62 percent share of Ventspils Nafta (VN) held by the state, BNS reported. He noted that in early July, the government's ruling coalition council backed away from its previous plan to privatize 38.62 percent of all outstanding VN shares for privatization vouchers, and it is likely that the sale will only be considered again after a new government is formed following the October parliamentary elections. The postponement was prompted by a newfound desire to sell the VN shares for cash instead of privatization vouchers in order to maximize the income for the state after the dramatic increase in VN's value that followed its controversial cash purchase of a nearly 50 percent stake in Latvijas kugnieciba (Latvian Shipping Co.) (see "RFE/RL Baltic States Report," 9 and 15 July 2002). The remaining 5 percent state share in VN is to go to the company's largest stakeholder, Latvijas naftas tranzits (Latvian Oil Transit), which already holds about 47 percent of VN shares.

UN RANKS LATVIA AMONG WORLD'S DEVELOPED COUNTRIES.
The recently released annual UN Human Development Report for the first time listed Latvia among the world's developed countries, LETA reported on 24 July. Last year, Latvia ranked 50th among 162 countries with a rating of 0.791 according to the Human Development Index (HDI), which measures average life expectancy, education, and per capita income. This year, Latvia's rating rose to 0.80, the requirement to be considered a developed country, although its ranking dropped to 53rd overall out of 173 countries. Lithuania's rating increased from 0.803 to 0.808, but it dropped from 47th to 49th place, while Estonia's rating increased from 0.812 to 0.826, and it rose in the rankings from 44th to 42nd place. Norway was again the highest-ranked country, followed by Sweden, Canada, Belgium, Australia, and the United States.

SPAIN, LATVIA DISCUSS NATO PARTICIPATION.
Defense Ministry State Secretary Edgars Rinkevics held talks on 22 July with Lieutenant General Luis Feliu, the Spanish military representative to NATO, LETA reported. The two discussed NATO enlargement and the development of Latvia's armed forces. Feliu expressed Spain's support for Latvia's NATO bid and said the country is prepared to offer assistance to help Latvia achieve its goal. Feliu also said Latvia should have no difficulties in integrating with NATO upon accession, as it has already met most of the accession targets set by the alliance. In addition, Feliu noted Latvia's achievements in forming specialized military units.

TSP USES SAEIMA CANDIDATE LIST TO FORCE LUSTRATION DEBATE.
The Popular Harmony Party (TSP), which is a member of the leftist coalition For Human Rights in a United Latvia (PCTVL), submitted a separate list with a single candidate to run in this fall's parliamentary elections in addition to participating in a joint list of candidates filed by the PCTVL, Latvian mass media reported on 24 July. The only candidate on the list is the leader of the early-1990s anti-independence Interfront movement and current leader of the Equal Rights party, Tatjana Zdanoka, who was prevented from running in the last parliamentary election because she was found by a court to be a member of the Latvian Communist Party after 13 January 1991 -- and thus ineligible under Latvian law for election to public office. If Zdanoka is again kept off the ballot, she and TSP Deputy Chairman Janis Urbanovics have pledged to bring suit against Latvia at the European Court of Human Rights (ECHR), where the TSP has already enjoyed a "successful legal experience with the Ingrida Podkolzina case", according to Urbanovics (see "RFE/RL Baltic States Report," 17 April 2002). Zdanoka already has one lustration case pending before the ECHR -- she was stripped of her Riga City Council mandate in late November 1999 because of her post-January 1991 Latvian Communist Party membership.

FUNDS ALLOCATED FOR EUROVISION SONG CONTEST...
The cabinet adopted a decree on 23 July on allotting 547,000 lats ($875,000) from privatization revenues to Latvian State Television (LTV) for launching the organization of next year's Eurovision Song Contest, LETA reported. Culture Minister Karina Petersone said the Economy Ministry intends to ask for 2.38 million lats to stage the contest in the first quarter of 2003, but there are a number of activities that require funding this year. For example, LTV needs funds to prepare promotional films for Latvia that will be televised in countries participating in the Eurovision contest. LTV also wants to purchase necessary technical equipment and must prepare the draw that will determine the order for participants in the contest.

...LOCATION CHOSEN FOR NEXT YEAR'S SHOW.
Eurovision Song Contest Executive Producer Arvids Babris told a press conference on 25 July that next year's contest will be held on 24 May at the Skonto Olympic Center in Riga, LETA and BNS reported. Latvian Television's Eurovision steering committee voted unanimously in favor of Skonto over the Kipsala Exhibition Center, although Kipsala will be offered to host other Eurovision-related events for the duration of the contest. The European Broadcasting Union also approved the selection of the Skonto Center. Babris also announced that Ugis Brikmanis, who was in charge of Riga's 800th-anniversary celebrations last year, was chosen to be the director of the Eurovision Song Contest Riga 2003.

* After talks with Russian Deputy Transportation Minister Anna Belova during the conference Railway Reforms in the Baltics and the CIS held in Jurmala, Transportation Minister Anatolijs Gorbunovs stated on 25 July that railway transportation fees in the CIS states and the Baltics will be equalized by the end of this year, BNS reported. At the conference, Belova spoke about the ongoing reform of Russia's railways, noting that no mistakes were permissible because 80 percent of all cargo transportation in Russia is by rail, while it is only 10 percent in Western Europe.

* UN Resident Representative in Latvia Jan Sand Sorensen discussed with Justice Minister Ingrida Labucka and representatives from the Norwegian, Finnish, and British embassies in Riga the reform of Latvia's judicial system on 24 July, LETA reported. The three countries and the UN Development Program have allotted considerable funding for carrying out a project that should boost the formation of an independent and efficient judicial system, raise the professional qualification of judges and other judicial employees, and work out a strategy for recruiting highly qualified employees and instruction of the staff.

* The Lithuanian State Food and Veterinary Service imposed a temporary ban on the import of pork and pork products from Latvia on 22 July after the Latvian Agriculture Ministry announced it suspected a case of classic swine fever on a farm in southeastern Latvia the previous day, BNS reported. Further tests, however, found no evidence of swine fever and Lithuania lifted the ban on 24 July.

* The Council of Europe's European Commission Against Racism and Intolerance, in its report on Latvia, approves of the measures taken by the Latvian government for easing the naturalization process, as well as the successful implementation of the Latvian-language instruction program, the adoption of the Social Integration Program, and formation of the Social Integration Fund, BNS and LETA reported on 23 July. It also noted that serious problems remain, particularly for the Russian-speaking minority, many of whose members are noncitizens and are "at risk of exclusion and marginalization from the structures of society and the decision-making processes."

* Although the preaccession talks with the EU have not yet been completed, the government has begun considering the funding needed to hold the referendum on EU membership, BNS reported on 22 July. Central Election Commission Chairman Janis Cimdars has estimated that the referendum would cost about 1.2 million lats ($2 million) or the same as general elections. Latvia expects to hold the referendum in 2003 so that it can participate in the 2004 Europarliament elections as a full-fledged EU member.

* The Latvian fixed-line telephone monopoly, Lattelekom, signed an agreement on 23 July for a four-year, $45 million credit line arranged by Vereinsbank Riga and Nordea Bank Finland Plc, LETA reported. The credit line is in many respects a continuation of an earlier $60 million credit line with Sumitomo Mitsui Banking Corporation, which ended in December 2001, as no additional collateral or financial guarantees from Lattelekom's shareholders were requested.

* Representatives of Latvia's Farmers Union (LZS) and the Green Party (ZP), which had decided earlier to join forces for the parliament elections on 5 October, elected former New Faction head Ingrida Udre as chairwoman of the new union on 24 July, LETA reported. Latvia's Farmers Union Chairman Augusts Brigmanis said that the list of candidates is being prepared and will be submitted to the Central Election Commission on 2 August.

* The Latvian Social Democratic Workers Party (LSDSP) submitted its list of candidates for the October parliamentary elections to the Central Election Commission on 23 July, LETA reported. Riga City Council deputy Dainis Ivans heads the list in Riga, Zemgale, and Vidzeme, while parliamentary deputies Aija Barca and Janis Adamsons head the lists in Kurzeme and Latgale, respectively. All current LSDSP parliamentary deputies are competing again.

* The international rating agency Fitch Ratings published its figures for Latvia on 24 July, which remained the same as earlier despite the global economic slowdown, BNS reported. Latvia's long-term foreign- and domestic-currency ratings were BBB and A, respectively, with an outlook rating of positive. The agency said that in many respects, Latvia's creditworthiness has strengthened since 1998 because inflation remains low, per capita foreign direct investments are among the highest in the region, and the country is on track to receive invitations to join NATO and the EU. The greatest drawback is the large current-account deficit.

* Latvian Television (LTV) General Director Uldis Grava stated on 25 July that the station would not run a revised political advertisement of the Freedom Party that he considered still to be racist, BNS reported. In June, LTV had refused to run a video ad that showed two black men, one of whom was wearing a Latvian military uniform, standing at the Freedom Monument with the caption beneath them: "Today, Latvia's Defender, Tomorrow, Your Son-In-Law?" The men filmed, natives of Sierra Leone and Nigeria, are musicians from the African-Latvian reggae band Los Amigos and have filed a defamation suit against the political party.

EU TO PAY HEED TO LITHUANIA'S VIEW ON TRANSIT TO KALININGRAD.
EU External Affairs Commissioner Chris Patten has sent a letter to Foreign Minister Antanas Valionis offering assurances that the European Commission will first seek the approval of Lithuania and Poland before making any proposals to EU member countries on transit between mainland Russia and Kaliningrad Oblast, BNS reported on 23 July. Patten was responding to a letter Valionis sent him on 28 June declaring that Lithuania will abide by its agreements reached with the EU on visa policy in order to join the Schengen agreement as soon as possible. It is not clear if Patten's response was influenced by French President Jacques Chirac's recent comments in Sochi supporting Russia's position on visa-free transit (see "RFE/RL Newsline," 22 July 2002). Meanwhile, Lithuanian War Academy professor Algimantas Ambrazevicius has offered another alternative: building a 70-kilometer underground railroad tunnel from Belarus to Kaliningrad via Poland, at an estimated cost of 2 billion euros ($1.93 billion).

NEW CZECH PRIME MINISTER MEETS PRESIDENT.
Prime Minister Vladimir Spidla told visiting Lithuanian President Valdas Adamkus on 19 July that his recently formed government strongly endorses Lithuania's bid for NATO membership, CTK reported. Adamkus expressed Lithuania's appreciation for the support it has received from the Czech Republic, as well as for the extensive military ties between the two countries. In response to a question from Spidla, Adamkus said Lithuania supports the European Union's position on requiring visas for Russian citizens transiting Lithuania to and from Russia's Kaliningrad Oblast, but added that his country is simultaneously open to alternative solutions acceptable to both Brussels and Moscow. He added that Lithuania's relations with the Kaliningrad exclave are better than is reflected in Russian media reports.

POLISH NATIONAL BANK HEAD PRAISES LITHUANIA'S FINANCIAL POLICY.
Following discussions with Finance Minister Dalia Grybauskaite in Vilnius on 22 July, Polish National Bank Governor Leszek Balcerowicz gave a positive evaluation of Lithuania's fiscal policy and hailed the country's success in reducing its budget deficit and improving macroeconomic indicators, ELTA reported. The two spoke about their respective countries' efforts to join the EU and recent financial developments such as the fall in the value of the U.S. dollar against the euro. During the meeting, Balcerowicz and Bank of Lithuania President Reinoldijus Sarkinas signed a banking-supervision appendix to the cooperation agreement between the two countries' central banks that was signed in December 2000. Lithuania has signed similar agreements with Finland, Germany, Latvia, Estonia, Russia, and Belarus. The bank heads later discussed the macroeconomic situations in the two countries with President Adamkus.

LITHUANIA NOT TO SIGN CFE TREATY BEFORE JOINING NATO.
Deputy Defense Minister Jonas Gecas said on 19 July that Lithuania does not intend to sign the Conventional Forces in Europe (CFE) treaty before joining NATO, BNS reported. The CFE treaty was signed in November 1990 by NATO and the Warsaw Pact countries, but not by the Baltic states because they had not yet regained their independence. Gecas's statement was prompted by recent remarks made in Helsinki by Russian Defense Minister Sergei Ivanov that the entry of the Baltic states into NATO could destabilize the situation in the Baltic region since there is a danger that NATO would place large numbers of weapons there. Russian Duma Defense Committee Chairman Andrei Nikolaev had said on 2 July that the Baltic states should sign the CFE treaty before entering NATO. Parliament NATO Affairs Commission Deputy Chairwoman Rasa Jukneviciene said the Russian statements were primarily intended to discourage Western politicians from backing the entry of Lithuania, Latvia, and Estonia into NATO. Lithuania is expected to receive an invitation to join the alliance at the NATO summit in Prague in November.

HIV CASES ON THE RISE IN ALYTUS PRISON.
The Lithuanian AIDS Center has announced that recent tests on blood samples of inmates at the prison in Alytus have found that 38 of the 547 samples tested positive for HIV, BNS reported on 23 July. This raises the number of HIV-positive prisoners to 245, accounting for more than one-third of the 638 recorded HIV cases in Lithuania. AIDS Center Director Saulius Caplinskas proposed that syringes should be sold at the prison to reduce the risk of infection from intravenous drug use. Health Minister Romualdas Dobrovolskis criticized the proposal the next day, saying, "If they are allowed to buy syringes, they will at the same time find a way to get hold of drugs."

LITHUANIA, RUSSIA FAIL TO BREAK ICE ON KALININGRAD VISAS.
Chairmen of the Lithuanian-Russian governmental cooperation commission, Lithuanian Foreign Minister Antanas Valionis and Russian Transport Minister Sergei Frank, did not make any progress in resolving the issuance of visas for Russia's Kaliningrad Oblast residents at a meeting in Palanga on 25 July, BNS reported the next day. Valionis said Lithuania cannot revise its EU obligations and will require visas for Kaliningrad residents beginning in mid-2003, but is "ready to be very flexible" and "introduce inexpensive and long-term visas, and develop infrastructure to ensure as few difficulties as possible." He also urged Russia to hold negotiations with the European Union, noting that Lithuania will comply with any decisions reached. Frank maintained Russia's total opposition to any visas as they would isolate the Kaliningrad exclave from the rest of Russia and could result in mass violations of human rights in the process of issuing visas. Frank also visited the port of Klaipeda and held talks with Transport and Communications Minister Zigmantas Balcytis.

PRIME MINISTER DOWNPLAYS TALK OF CRACKS IN RULING COALITION.
Prime Minister Algirdas Brazauskas denied on 25 July that the ruling coalition of Social Democrats and Social Liberals is suffering from infighting and accused "saboteurs" of trying to fracture the coalition, ELTA reported on 26 July, citing "Lietuvos rytas." "The coalition is strong and based on parity. Those who try to split us artificially are really committing a bad deed," BNS reported Brazauskas as saying. Brazauskas's comments followed reports by a presidential representative earlier this week that President Adamkus has expressed doubts regarding the capabilities of the current Social Liberal leadership. While many regarded this statement as the opening remark of Adamkus's election campaign, Adamkus denies allegations that he is trying to break up the coalition. Meanwhile, Brazauskas anticipates a meeting between partners of the ruling majority to gather and debate social and political issues following the government's summer recess.

* Russian President Vladimir Putin endorsed on 25 July the treaty with Lithuania regarding the extradition of convicted persons to serve sentences in their country, BNS reported. The treaty had been signed in June 2001 and was ratified by the Lithuanian parliament in January. Currently, 39 Russian citizens are serving sentences in Lithuania and 71 Lithuanian citizens in Russia. The bilateral treaty, based on international conventions, stipulates that a handover of an inmate requires the agreement of the person and officials of the two countries.

* The Open Skies Commission at the Organization for Security and Cooperation in Europe (OSCE) approved on 22 July Lithuania's application to join the Open Skies Treaty, BNS reported the next day. At the end of May, Lithuania submitted an application to join the treaty, which will go into effect for Lithuania upon ratification by its parliament. The treaty, which was signed in Helsinki in March 1992 by a number of NATO and Warsaw Pact countries, as well as by some former Soviet republics, regulates the procedures for reconnaissance flights over the territories of other signatory countries, as well as the exchange of information and performance of joint missions.

* Presidential adviser Egidijus Meilunas, Foreign Ministry Secretary Darius Jurgelevicius, and other Foreign Ministry officials held talks in Tashkent on 22-24 July on Uzbek President Islam Karimov's planned visit to Lithuania in the fall, BNS reported. The delegation also discussed bilateral relations, the establishment of an intergovernmental trade and economic-cooperation commission, and strengthening legal cooperation.

* On 22 July, parliament Chairman Arturas Paulauskas discussed with U.S. Ambassador to Lithuania John Tefft the possible use of the former Soviet military airport near Siauliai by NATO after Lithuania joins the alliance, BNS reported. The airport, which was prepared as one of the emergency-landing sites for the Soviet Buran shuttle, is large enough to accommodate planes of any type.

* Lithuanian Border Guard Service Chief Algimantas Songaila and Customs Department Director Valerijonas Valickas attended on 19 July the opening ceremonies of the Belarusian customs post of Kammenyi Log, which is near the Lithuanian customs post of Medininkai, BNS reported. The post is equipped with modern equipment and by using more efficient border procedures should decrease the lines of cars entering Belarus while tightening customs control and uncovering violations of customs regulations.

* On 21 July, President Adamkus refused to sign, and sent back to parliament with suggested changes, three recently passed bills, BNS reported the next day. Two of the bills deal with the controversial issue of the rights of the former owners and current tenants of houses or apartments and the third with the law on financial institutions. Adamkus proposed that the dates when the first two bills will go into effect be postponed from 1 September and 1 November 2002 to 1 April 2003 to give the Constitutional Court sufficient time to rule on the legality of the restitution law.

* The State Food and Veterinary Service imposed a ban on the import of poultry and poultry products from Denmark on 18 July after receiving information from Denmark's chief veterinary inspector about the discovery of Newcastle disease on a poultry farm, BNS reported the next day. In the first half of this year, Lithuania imported a total of 5,884 tons of poultry of which 3,634 tons came from Denmark.

* Lithuania's new ambassador to the United Kingdom, Aurimas Taurantas, presented his credentials to Prince of York Andrew and Royal Princess Anne in London on 25 July, BNS reported. Andrew and Anne substituted for Queen Elizabeth II, who is traveling in the country to participate in events marking the 50th anniversary of her reign.

* Germany's new ambassador to Lithuania, Alexander von Rom, presented his credentials to President Adamkus on 23 July, ELTA reported. He said that his main goals are to encourage greater bilateral ties between the countries and to ensure their political and public readiness for common life in the EU and NATO, especially in economic and cultural fields. Adamkus also accepted that day the credentials of the new ambassador from Kazakhstan, Rashid Ibraev.

* Lithuanian Telecom announced on 22 July that it intends to raise rates for calls to mobile-telephone networks from 1 September, ELTA reported. The proposed increases are about 40 percent during peak hours and about 60 percent in other hours. The Lithuanian Communications Regulatory Authority began an investigation the next day to determine whether the rate increases are justified.

* In the first half of the year, Lithuania imported 36,260 tons of fresh vegetables, or 72.5 percent more than in the same period last year, while exports fell by 27.6 percent to 7,290 tons, BNS reported on 22 July. Head of the State Plant Protection Service Edmundas Morkevicius explained that the changes were primarily due to the very small potato harvest in Lithuania, which resulted in the import of 14,000 tons of potatoes instead of its being a major export item.

* In the first half of this year, Lietuvos Gelezinkeliai (Lithuanian Railways) carried 17.22 million tons of cargo, or 20.6 percent more than in the same period last year, and anticipates a profit of 15 million litas ($4.19 million), or almost 50 percent greater than in January-June 2001, BNS reported on 25 July. Domestic freight transportation increased by 25.4 percent to 3.519 million tons while international freight rose by 19.4 percent to 13.703 million tons

* The market-research company SIC Gallup Media announced on 19 July that advertising in all media in the first half of 2002 was significantly higher than in same period last year, BNS reported. This was particularly true for television advertisements, whose volume increased by 87.8 percent. The volume of radio advertisements rose by 54.1 percent. Outdoor advertising in major cities and towns grew by 52.88 percent to 117,000 square meters while advertisement space in magazines increased by 11.7 percent to 2.3 million square centimeters and in newspapers by 2 percent to 12 million square centimeters.