Baltic Report: January 22, 2001

U.S. SUPPORT FOR BALTIC NATO MEMBERSHIP WELCOMED.
U.S. Senate Foreign Relations Committee Chairman Jesse Helms told the American Enterprise Institute in Washington on 11 January that the NATO summit in 2002 should invite Lithuania, Latvia, and Estonia into the 19-member organization. Latvian Prime Minister Andris Berzins the next day thanked Helms for his statement, which Berzins called the strongest and most influential support so far for the early admission of the Baltic states to NATO, BNS reported. Estonia's ambassador in Washington Sven Jurgenson said that the senator's statement marked the start of a serious debate on NATO enlargement in the U.S., and Estonian Foreign Minister Toomas Hendrik Ilves welcomed the fact that both major American political parties are united on this question. And Lithuanian parliament chairman Arturas Paulauskas sent a letter to Helms on 16 January thanking him for his position.

INFLATION RATES VARY AMONG BALTIC COUNTRIES.
The consumer price index in Estonia rose by 0.2 percent in December and by 5.0 percent for the year 2000, BNS reported on 9 January. In Latvia, the corresponding increases were 0.3 and 1.8 percent, and in Lithuania, 0.2 and 1.4 percent. In Estonia, the largest price rises during the year were for food, fuel, housing, and transport services. In Latvia, the price of goods in 2000 grew by 1 percent and of services by 4.2 percent, especially for those subject to administrative regulation such as liquefied gas (45.8 percent), public transportation (8.7 percent), and sanitation (6.5 percent). In Lithuania, the largest increases were for housing and utilities, communication, and transport services while the price of food, clothing, and alcoholic beverages declined.

CZECH PRIME MINISTER VISITS TALLINN.
Czech Prime Minister Milos Zeman visited Tallinn on 18-19 January to discuss bilateral ties and the efforts of the two countries to join the European Union, BNS reported. Zeman used the occasion to reaffirm Prague's support for Estonia's membership in NATO.

COURT HALTS RAILWAY PRIVATIZATION.
The Tallinn administrative court on 17 January accepted the arguments of the Railway Privatization People's Ltd. Co. (RER) and halted the privatization of the state-owned Estonian Railroad Co., BNS reported. On 13 December, the Estonian Privatization Agency had selected the 1.7-billion-kroon ($96 million) offer by the U.S. consortium Rail Estonia for a 66 percent share of the company. RER, a consortium of local business people and Sweden's national rail company SJ, filed the suit arguing that Rail Estonia, 90 percent of which belongs to the consultancy firm Kingsley Group, did not fit the privatization requirement that the strategic investor have broad experience in rail infrastructure and rail freight management. The decision is likely to be appealed.

GOVERNMENT SUPPORTS BAN ON EX-KGB EMPLOYEES.
The government on 16 January endorsed two bills initiated by the Pro Patria Union requiring candidates for seats in the parliament or local councils to submit written certification that they had not been employees or agents of foreign intelligence services which occupied Estonia or repressed its citizens, BNS reported. The statement would take the place of the requirement of an oath of conscience; that legal form expired at the end of 2000. The parliament also approved the formation of an eight-member special committee to establish the circumstances, both factual and legal, of how the Soviet KGB concluded its operations in Estonia in 1991.

LAAR GETS AWARD FOR TAX POLICIES.
Prime Minister Mart Laar received the European Bull award from the European Taxpayers Association in Brussels on 8 January. The association presented it to him because of his work on the Estonian tax system. Laar said "the award is not meant for me but for the whole state whose tax system, namely the proportional income tax, has been maintained over the years by various governments." EU Expansion Commissioner Guenther Verheugen meanwhile told Laar that Estonia need not fear restrictions in the free movement of labor in its negotiations for EU membership, as the EU will work out a definite solution concerning that chapter.

NEW DEFENSE MINISTRY CHANCELLOR APPOINTED.
The government on 9 January approved the appointment of Indrek Kannik, 35, as the new Defense Ministry chancellor, replacing Tarmo Mand who had resigned of his own accord one week earlier, ETA reported. Kannik previously worked as the head of the foreign desk of the daily "Postimees" and had served as defense minister in 1994.

MORE THAN HALF OF ESTONIA'S RUSSIANS TRUST STATE.
A study by the Saar Poll firm indicated that 62 percent of the Russian population in Estonia had a positive opinion of their government, while in Latvia the figure was 39 percent and in Lithuania 42 percent, ETA reported on 10 January. This correlated with their opinion about the country's economies: 63, 31, and 23 percent of Russians in Estonia, Latvia, and Lithuania, respectively, positively assessed the current economic situation in their countries. They were even more optimistic about the future: 77, 44, and 43 percent, respectively, believed that they would have a positive view of their countries' economies in five years.

TALLINN PASSES 2001 BUDGET.
The Tallinn City Council on 11 January passed the city's 2001 budget of 3.323 billion kroons ($200.5 million) by a vote of 35 to 10 with one abstention, BNS and ETA reported the next day. This was 763 million kroons -- or 29.8 percent greater -- than the 2000 budget. Initially, a 2.95-billion-kroon budget had been proposed, but it was increased when it became clear that the city would receive 641 million kroons from the privatization of the city's water utility, Tallinna Vesi. The council also gave up plans to borrow 410 million kroons in 2001, but instead will pay back 200 million of the 953 million kroons of loans the city had made earlier

ESTONIAN REFORM PARTY CALLS FOR 20 PERCENT INCOME TAX.
The Reform Party board decided that one of the party's main aims for 2001 will be to reduce the individual income tax rate from 26 to 20 percent, BNS reported on 11 January. To finance this, the party wants to reform public service by removing double compensations, reducing benefits paid to officials, and rendering labor relations in the public sector more flexible. At the present time, 44 percent of income tax revenues go to the state and 56 percent to local governments. It is estimated that after the reduction, state and local governments will receive 805 million kroons ($49 million) and 1,030 million kroons less, respectively. The other partners in the ruling coalition, the Pro Patria Union and the Moderates, however, seem unlikely to support the tax reduction, believing that the reforms would not compensate the lost income.

ESTONIAN ARMY TO PURCHASE MISSILES.
Major Peeter Hoppe, acting chief of operations of the General Staff, told the daily "Eesti Postimees" on 15 January that the larger defense budget will enable the armed forces to improve their anti-aircraft and anti-tank capabilities, BNS reported. A long-term cooperation program with a partner country will help Estonia to build a radar system and decide what missiles to buy. Noting that the army has no money for acquiring medium-range missiles, Hoppe said: "But we have the money to buy short-range missiles, or U.S.-made Stingers and Russian Igla-type missiles." He also noted that there is a long-term project under way with another partner country concerning the acquisition of anti-tank weapons, such as lighter and shorter-range anti-tank rockets.

* The International Monetary Fund on 12 January released its second and final review of Estonia's performance under an 18-month stand-by arrangement, BNS reported. While the report criticized the government's failure to submit to the parliament several reform laws by agreed-upon deadlines, it noted that confidence in the currency board was high, the current account deficit remained moderate, the banking system was strengthened, and the preparation for EU membership well advanced.

* The parliament voted 39 to 29 on 17 January to retain the value-added tax on heating at the lower rate of 5 percent until 2005 instead of raising it to 18 percent from July, BNS reported. The proposal by the opposition parties was unexpectedly passed when the deputies of the Moderate Party decided to abstain in the vote. The Finance Ministry noted that this would result in a budget deficit of 120 million kroons ($7.2 million) this year because the 2001 budget had been calculated with the anticipated rise included.

* The government on 9 January endorsed a bill requiring employees to pay one percent of their gross wages and employers 0.5 percent of wages into an unemployment insurance fund, BNS reported. Employees who have contributed to the fund for less than five years would receive half of their former pay for first 100 days and 40 percent for next 80 days if they became unemployed.

* Russia's new ambassador to Tallinn Konstantin Provalov presented his credentials to President Lennart Meri on 11 January, ETA reported. Provalov called for greater cooperation between the two countries.

* The state budget received 11.3 billion kroons ($682 million) in customs revenues in 2000 or 21 percent more than in 1999, BNS reported on 11 January. More than three-fourths (8.8 billion kroons) came from value-added taxes on import items with 2.3 billion kroons coming from excise taxes and 134 million kroons from state fees.

* The parliament on 16 January by a vote of 42 to 53 rejected a no-confidence vote against Transport and Communications Minister Toivo Jurgenson, BNS reported. The People's Union and Center Union had initiated the vote, complaining that the privatization of two railroad companies had not been conducted properly.

* The parliament's body of elders on 17 January tentatively set the date for upcoming presidential elections as 27 August, the first day of the parliament's fall session, BNS reported. The parliament elects the president for a five-year term in a secret ballot. Although no party has officially nominated its candidates, the press has most often mentioned Moderate Party Chairman Andres Tarand, Center Party Chairman Edgar Savisaar, Tunne Kelam of the Fatherland Union, and Toomas Savi of the Reform Party as the most likely candidates.

* The Police Department announced on 17 January that the number of crimes registered last year was 57,799 or 6,320 more than in 1999, BNS reported. Almost 80 percent (45,641) were crimes against property, especially theft (38,117). There were 12,104 crimes against individuals, including 143 murders. The police, however, increased the number of crimes they solved to 17,920 or 3,026 more than in 1999.

* Health officials registered 390 new cases of HIV-positive infections last year, BNS reported on 10 January. Most of the infected live in the northeast cities of Narva (302) and Kohtla-Jarve (56) and are intravenous drug users. There are now 486 HIV-positive cases in the republic, six of whom have developed AIDS.

RIGA INVITES PUTIN TO VISIT LATVIA.
In his capacity as chairman of the Council of Europe's Committee of Ministers, Indulis Berzins on 18 January visited Moscow to discuss the legal situation in Chechnya with Russian Supreme Court Chairman Vyacheslav Lebedev and Foreign Minister Igor Ivanov, LETA reported. Berzins and Ivanov devoted considerable time to discussing their states' current relations, which Berzins said before the visit "can be described as inactive." Berzins invited Ivanov to visit Riga and noted that President Vaira Vike-Freiberga is also inviting Russian President Vladimir Putin to do the same.

RULING COALITION ARGUES OVER LASCO PRIVATIZATION.
Fatherland and Freedom/LNNK Chairman Maris Grinblats declared that if the privatization regulations of the Latvian Shipping Company (LASCO) are not amended by 1 February, his party may not take joint responsibility for the privatization, BNS reported on 11 January. Grinblats opposes the requirement that the main business of potential bidders has to be shipping, oil extraction and refining, transportation, or warehouse management. Prime Minister Andris Berzins, however, said that he doubted that the LASCO privatization would endanger the government coalition. The regulations cannot be changed because this would delay the privatization by at least six months and, moreover, they had already been sent out to 52 potential bidders. Berzins said that all possible steps were taken to ensure the maximum transparency of the privatization, and the regulations were drafted with the help of international advisors and World Bank experts.

AUSTRALIAN COURT TO HEAR EXTRADITION REQUEST.
An Australian court will consider on 26 January Latvia's request to extradite Latvian-born Australian citizen Konrads Kalejs, who is accused of committing war crimes during World War II, BNS reported on 8 January. Latvia formally requested his extradition only last month, even though a warrant for his arrest was issued in October. Prosecutor Liana Dadzite said the decision of the hearing will not be final because Kalejs has "all legal rights" to appeal the ruling. She said she does not think Kalejs will try to delay the extradition process on the grounds of his health condition because the proceeding will be sufficiently prolonged (up to 19 months) in any case.

PM RECEIVES BRITISH PARLIAMENT DELEGATION.
Andris Berzins on 16 January met with a visiting delegation of eight British parliament deputies -- which included Select Committee on Foreign Affairs Chairman Donald Anderson -- and discussed Latvia's integration into the EU and NATO, LETA reported. The deputies asked questions about the naturalization of non-citizens, the country's economic situation, especially about the privatization process, and the fight against official corruption.

BUDGET DEFICIT LOWER THAN EXPECTED.
Preliminary data of the State Treasury indicated that national budget revenues in 2000 were 1.305 billion lats ($2.14 billion) and expenditures 1.424 billion lats, BNS reported on 9 January. The deficit was 118.7 million lats or 2.75 percent of GDP. The planned budget had envisaged a deficit of 129 million lats, or 3.2 percent of GDP, with revenues of 1.335 billion lats and expenditures of 1.464 billion lats. The State Revenue Service announced on 17 January that the main national budget had received 337.9 million lats from value-added taxes, BNS reported. While this was 8.9 million lats less than expected, it was 21.7 million lats more than was collected in 1999. The revenues from corporate income tax were 73.7 million lats ($120 million) or 20 percent less than planned.

UNEMPLOYMENT RATE FELL IN 2000.
The unemployment rate fell steadily last year, BNS reported on 10 January. It was 9.1 percent in January and February, 8.6 percent in May, 8.1 percent in August, and 7.8 percent in October, November and December. Head of the Unemployment Records, Analysis, and Forecast Unit of the National Employment Service Ilga Upeniece said that the fall was due to the stabilization of the republic's economic situation, the creation of new jobs, and successful cooperation between the employment service and employers in training unemployed persons. Declines in the jobless rate occurred throughout the country, falling from 4.8 to 3.7 percent in Riga, from 27.2 to 25.6 percent in the Rezekne county, and from 22.1 to 20.1 percent in the Preili county.

CARGO TURNOVER INCREASED BY 5.7 PERCENT IN 2000.
Cargo turnover at Latvia's ten ports grew from 49.026 million tons in 1999 to 51.843 million tons in 2000, an increase of 5.7 percent, BNS reported on 17 January. More than two-thirds of the cargo (34.755 million tons) went through Ventspils, whose turnover rose by 2 percent over 1999. The increases at other ports were generally higher: Riga handled 13.352 million tons (up 11 percent), Liepaja 2.965 million tons (up 28 percent), and the seven minor ports handled 771,000 tons (up 39 percent).

NEW PARTY CHANGES NAME, ELECTS NEW CHAIRMAN.
The Congress of the New Party changed the party's name to the New Christian Party and elected clergyman Guntis Dislers as its new chairman on 13 January, BNS reported. Surgeon Janis Zarzeckis was elected the party's deputy chairman. The congress elected an 18-member board, which includes Justice Minister Ingrida Labucka, former LETA news agency editor-in-chief Aleksandrs Niklass, Latvian Christian Academy rector Skaidrite Gutmane, and Ainars Slesers, one of the party's founders and financiers. It also decided to participate in the local elections and to draw up lists of candidates by 20 January. Dislers mentioned the Christian Democratic Union might be a potential cooperation partner, but he added that this would be decided only after more careful analysis of its political program.

ANOTHER POLITICAL PARTY ESTABLISHED.
About 100 people gathered in Riga on 14 January and established a new centrist political party named Musu Latvija (Our Latvia), LETA reported the next day. The Congress approved the party program and elected a nine-member board and former Interior Minister Dainis Turlais as party chairman. More than 400 persons have joined, of whom about one-third are residents but not yet citizens of Latvia. While supporting Latvia's quest to join the EU, it questions the need for NATO membership since it believes that NATO requirements are unacceptable and the country cannot currently afford greater defense allocations. The party plans to run candidates in the February municipal elections.

* The Central Statistics Office announced on 17 January that in the first eleven months of 2000 Latvia imported goods worth 1.748 billion lats ($2.87 billion) and exported goods worth 1.034 billion lats, BNS reported. Exports to EU countries (673.6 million lats) grew by 16 percent compared to the same period in 1999 and accounted for 65.2 percent of total exports. Imports from EU countries (961.59 million lats) rose by 7.4 percent and accounted for 52.4 percent of total imports. Exports to CIS countries declined by 18.8 percent to 20.68 million lats, but imports rose by 31.4 percent to 89.22 million lats.

* A British delegation, headed by Defense Ministry Central and Eastern European Affairs Department Deputy Director Martin Holmes, held talks at the Defense Ministry in Riga on 11 and 12 January on NATO enlargement and military cooperation, BNS reported. In talks with Holmes, Defense Minister Girts Valdis Kristovskis noted with satisfaction the participation of Latvian soldiers in the British peacekeeping mission in Kosovo, the assistance in English-language teaching, and especially the successful cooperation in armed forces training and strategy planning.

* After a three-day seminar in Riga on cooperation in combating international organized crime, prosecutors and lawmakers from the U.S., Estonia, and Latvia decided to increase cooperation efforts in the field, BNS reported on 12 January. The U.S. will advise the Balts on how to use its experience for adopting legislation, incorporating modern methods to combat organized crime.

* The national air carrier Air Baltic carried 218,000 passengers in 2000 or 12 percent more than in 1999, even though the number of flights fell by 6 percent, BNS reported on 9 January. The airline also carried 647,000 tons of cargo, an increase of 19 percent

* The output of large industrial companies in Daugavpils fell from 50 million lats in 1999 to 46.4 million lats ($75 million) in 2000, a decrease of 7.2 percent, BNS reported on 16 January.

* The number of new cases of persons officially registered as being HIV infected rose from 241 in 1999 to 466 in 2000, BNS reported on 8 January. There are now 958 HIV-infected persons in Latvia of whom 72 are AIDS patients. Experts estimate that the true number of infected persons is at least three times higher. Statistics of the AIDS prevention center indicate that 68 percent of HIV carriers are intravenous drug users.

* President Vaira Vike-Freiberga refused on 8 January to comment on U.S. media reports the previous week that Russia had deployed tactical nuclear weapons in Kaliningrad, Interfax reported. Vike-Freiberga noted that such comment would be "premature and inappropriate," given that "there is no reliable confirmation" of those reports and that Russia has categorically denied them. But she added that if the reports prove to be true, "it would have serious international consequences."

* The Russian Foreign Ministry on 12 January denounced the decision by Latvian prosecutors to retry 78-year-old Vasilii Kononov, who has been free while his lawyers appealed his original conviction, the ministry reported. "The collapse of previous attempts to secure his conviction proves that this 'affair' has no legal grounds and is driven by considerations far removed from jurisprudence," the ministry said.

IMF APPROVES LITHUANIAN ECONOMIC POLICY MEMORANDUM.
The Executive Board of the International Monetary Fund on 11 January approved the economic policy memorandum with the Lithuanian government, BNS reported. It requires Lithuania to continue a tight fiscal policy by keeping the budget deficit under 1.4 percent of gross domestic product (GDP) or 691 million litas ($172.75 million). The IMF approved the 2000 fiscal deficit of 3.3 percent of GDP, which is higher than the commitment made in March 2000. The memorandum allows Lithuania to receive a $54 million loan, which, however, is not expected to be taken. Deputy Managing Director of the IMF Shigemitsu Sugisaki read a favorable report about Lithuania that asserted: "Economic growth resumed while inflation remained low, the current account deficit declined faster than expected, confidence in the currency board was maintained, and financial markets stabilized."

TALKS ON LITHUANIAN SHIPPING COMPANY'S PRIVATIZATION DELAYED FURTHER.
Even though the Danish navigation company DFDS Tor Line has submitted all the required documents, the Lithuanian cabinet decided at its meeting on 17 January to ask the Justice Ministry to analyze the legal aspects of DFDS Tor Line replacing B. B. Bredo in the privatization of the Lithuanian Shipping Company (LISCO), BNS reported. Bredo signed the privatization agreement in October, but failed to make a necessary payment by the 1 December deadline, primarily because court actions by other LISCO stockholders prevented it from reregistering some ships in the Marshall Islands. The privatization had raised considerable protests and, thus, Transportation Minister Gintaras Striaukas declared after the meeting: "We cannot launch the negotiations until everything is transparent and clear, so that no doubts arise."

LITHUANIAN GOVERNMENT, OPPOSITION AGREE ON EU ACTION PLAN.
Prime Minister Rolandas Paksas, Parliament Chairman Arturas Paulauskas, chief Euro-negotiator Petras Austrevicius, and Foreign Ministry officials met with leaders of the opposition parties on 15 January and agreed on the coordination of actions for the country's swift entry into the EU, ELTA reported. The left opposition dropped its demand that a public referendum be held to amend the constitution to permit the sale of agricultural land to foreign citizens. The ruling majority agreed to establish a Constitutional Amendments Commission in the parliament, to require the government to seek the best possible deal for Lithuania in EU negotiations, and to note the contributions made by the current opposition in adopting decisions on EU membership.

LITHUANIAN PRESIDENT VISITS FRANCE.
Valdas Adamkus met in Paris on 8 January with French President Jacques Chirac, who expressed firm support for Lithuania's integration into the European Union and NATO, ELTA reported. Regarding the return of the Lithuanian embassy building in Paris that the USSR had taken over after World War II, Chirac commented, "[t]he stone in our shoe should be thrown out." He also accepted Adamkus's invitation to come to Vilnius, although no firm date for the visit was set. Adamkus traveled to Paris at this time so that he could attend events commemorating the 125th anniversary of the birth of Lithuania's most famous artist and composer Mikalojus Konstantinas Ciurlionis. Ciurlonis' paintings are being exhibited at the Musee d'Orsay, while Mstislav Rostropovich conducted the symphonic poem "In the Forest" at the Champs Elysees Theater.

LITHUANIA SIMPLIFIES VISA REGULATIONS FOR CIS, EU 'WHITE LIST' COUNTRIES.
A joint order of the Interior and Foreign ministries simplified the regulations for obtaining visas for citizens of Russia, Belarus, Ukraine, Kazakhstan, Moldova, and Taiwan, BNS reported on 10 January. They will be able to get visas valid up to 30 days for Lithuania without invitations if they show that they have sufficient funds ($40 per day) to live there. Visas without invitations will also be granted to citizens of the following countries on the EU's "white list": Argentina, Bolivia, Brazil, Brunei, Ecuador, Guatemala, Honduras, Hong Kong, Israel, Korea, Costa Rica, Macao, Malaysia, Mexico, Nicaragua, Panama, Paraguay, South Africa, El Salvador, Singapore, and Uruguay. The remaining 21 states on the EU's "white list" already enjoy visa-free travel to Lithuania.

LITHUANIA'S SOCIAL INSURANCE FUND DIRECTOR RESIGNS.
Aidas Pikiotas resigned from his post as director of the Social Insurance Fund (SoDra) on 9 January, declaring that he could not continue in the post after Prime Minister Rolandas Paksas expressed dissatisfaction with his work, Radio Lithuania reported. Social Security and Labor Minister Vilija Blinkeviciute the previous day had announced the results of the first-ever study of SoDra's activities. That study revealed that SoDra has too many functions that are incompatible with its main functions and unveiled violations such as absence of administrative responsibility, duplication of functions, and improper payments for preparing programs. SoDra has an annual budget of 4.5 billion litas ($1.125 billion) and is responsible for social insurance services and payments to more than one million people.

KAZAKHSTAN TO BOOST TRANSIT VIA KLAIPEDA.
Kazakhstan's ambassador to Vilnius, Ikram Adyrbekov, told parliament chairman Arturas Paulauskas on 16 January about plans to quadruple Kazakh transit cargo through the port of Klaipeda this year to 1.6 million tons, ELTA reported. Paulauskas also encouraged Kazakhstan to investigate the possibilities of refining its crude oil at the Mazeikiai refinery or export it through the Butinge oil terminal. Adyrbekov noted that Kazakhstan has been seeking ways to export its oil to the West under the most favorable terms and views Lithuania as a possible partner. Paulauskas also mentioned that Lithuanian-Kazakh relations should improve after the scheduled state visit by the chairman of Kazakhstan's lower house of parliament, Zharmakhan Tuyaqbaev, to Lithuania on 15-18 February.

LITHUANIA IMPOSES ANTI-DUMPING DUTIES ON CEMENT FROM CIS.
The Competition Council ruled on 18 January to impose temporary anti-dumping duties on cement imported from Belarus, Ukraine, and Russia for the maximum period of six months, ELTA reported. The only Lithuanian cement producer, Akmenes Cementas, lost 11.48 million litas ($2.87 million) last year and suspended production earlier this month, asking 700 employees to take unpaid leave up to two months, The firm complained about losing the domestic market to lower-priced cement from Belarus. The temporary customs duties will be 52 litas per ton from Belarus, 47 litas from Ukraine, and 22 litas from Russia, with the different rates being due to the costs of transportation to Lithuania.

* President Bill Clinton on 10 January signed a decree canceling all restrictions on exporting high-performance computers to Lithuania, BNS reported the next day. The decree in effect moves the country from the third to the first tier of countries, which includes Western European countries, Canada, Japan, Australia, Poland, Hungary, the Czech Republic, and some other states. Earlier, exports of computers with over 28,000 million theoretical operations per second had been prohibited. The decree will go into force after 120 days to give Congress an opportunity to comment on it.

* Preliminary data released by the Finance Ministry indicated that total revenues in 2000 reached 8.66 billion litas, 95 million litas less than planned, or 28.3 million litas less than in 1999, BNS reported on 11 January. The national budget collected 5.78 billion litas or 124 million litas less than in 1999, resulting in budget deficit of 758 million litas. Municipal budgets collected 2.88 billion litas or 28 million litas less than planned. The main sources of revenue were the value-added tax (3.42 billion litas), excise duties (1.21 billion litas), and personal income tax (311.38 million litas). .

* At a meeting on 16 January with the heads of the major financial institutions in the country, Prime Minister Rolandas Paksas decided that the public, companies, investors and the whole financial market had to be informed well in advance about when the value of the litas would end its direct pegging with the U.S. dollar, BNS reported the next day. The earlier proposed option to peg the litas to a basket of currencies was dropped and it will be pegged directly to the euro. The litas, moreover, would not be devalued at the same time.

* Forty deputies from the Social Democratic Coalition on 16 January submitted the proposal to amend article 119 of the Constitution to increase the election period for local (municipal and county) governments from three to four years, ELTA reported. To be passed the amendment has to receive support from at least two-thirds of the parliament's deputies in two separate votes with an interval of three months between them. The deputies also proposed to amend article 47 to permit the sale of non-agricultural land to foreigners.

* A delegation from the Kaliningrad Region, headed by its Vice-Governor Mikhail Tsikel, in Vilnius on 10 January discussed with Lithuania's special envoy for cooperation with the Kaliningrad Region Jonas Rudalavicius mutual relations and the future working agenda of the Lithuania-Kaliningrad cooperation council which they head, BNS reported. The council's next meeting will be in March.

* Defense Minister Linas Linkevicius announced on 10 January that the government has decided to establish the posts of military attaches to Russia and Great Britain and appoint a second one to the U.S., BNS reported on 10 January. The new appointments are linked with the increased efforts to join NATO, one of whose conditions for membership is good relations with Russia.

* Foreign Minister Antanas Valionis, on an official visit to Denmark on 15 January, met with Denmark's Queen Margrethe II, Prime Minister Pol Nyrup Rasmussen, Foreign Minister Mogens Lykketoft, Defense Minister Jan Troibor, and the parliament's European Affairs Committee Chairman Klaus Larsen, BNS reported. They all assured him of Denmark's firm support for Lithuania's efforts to join the EU and NATO.

* Williams International President John Bumgarner informed President Valdas Adamkus on 12 January about what steps were being taken to sign long-term contracts for supplying crude oil for refining at the Mazeikiai oil refinery, BNS reported. At a subsequent meeting with Prime Minister Rolandas Paksas, he was urged to make the refinery profitable by increasing its annual production to seven million tons and boosting oil exports through the Butinge terminal to 8 million tons. In 2000, 4.9 million tons of oil were refined and 3 million tons of oil exported through Butinge.

* The total volume of freight through the port of Klaipeda increased from 19.396 million tons in 1999 to 24.971 million tons in 2000 or almost 30 percent, BNS reported on 9 January. The number of vessels loaded and unloaded during 2000 was 6,554, or 16.3 percent greater than in 1999.

* The number of Lithuanians deported from or refused entry and sent back from foreign countries rose from less than 2,000 in 1999 to 3,498 in 2000, BNS reported on 12 January. The greatest numbers were from Great Britain (1,372), Germany (717), and Sweden (412). The main reasons for the deportations were for working illegally or remaining in the country for more than the 90 days allowed. The deportees were from Kaunas (29 percent), Siauliai (11 percent), Klaipeda (8 percent), and Vilnius (7 percent).

* On 11 January the Vystymo Bankas (Development Bank) held a meeting of shareholders that elected a new council and changed its name to Sampo Bank, BNS reported. In December the Finnish Sampo-Leonia Insurance Company paid 10.8 million euros ($10.15 million) for almost a 100 percent stake of the bank.

* The state-owned Lietuvos Energija in 2000 sold 6.814 billion kilowatt hours (kWh) of electricity in Lithuania or 5.1 percent less than in 1999, BNS reported on 17 January. The decline was primarily due to lower consumption by small and medium-sized industrial companies. Its exports of electricity decreased by 55.2 percent from 3.3046 billion kWh in 1999 to 1.479 billion kWh in 2000.

* Former President Algirdas Brazauskas confirmed on 11 January that he will run for chairman of the new Social Democratic Party, which will officially incorporate the Democratic Labor Party at a merger congress in Vilnius on 27 January, BNS reported. The current chairmen of these parties, Vytenis Andriukaitis and Ceslovas Jursenas respectively, may also be proposed as candidates.