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Baltic Report: May 22, 2001

22 May 2001, Volume 2, Number 12
The defense ministers of Denmark, Germany, and Poland held talks with their counterparts from Estonia, Latvia, and Lithuania in the third annual "3+3" conference in Berlin on 27 April, BNS reported. The talks focused on NATO expansion, implementation of NATO membership action plans and Partnership for Peace programs, Baltic cooperation, and relations with Russia and Belarus. The three NATO members expressed support for Baltic NATO membership, but urged them to cooperate more closely with each other, linking the cooperation more closely with NATO membership plans. Latvian Defense Minister Girts Valdis Kristovskis noted that his German counterpart Rudolf Scharping did not indicate whether Germany would support the entry of the Baltic countries at the 2002 NATO summit in Prague.

The congress on 6 May re-elected Finance Minister Siim Kallas as Reform Party Chairman, ETA reported. Kallas was the only candidate and collected 1,028 votes among 1,061 delegates. Parliament Chairman Toomas Savi was elected as the party's presidential candidate, receiving 807 votes; while Justice Minister Mart Rask received 167 votes and parliament Social Committee Chairman Toomas Vilosius got 76. The congress adopted a statement declaring firm support for European Union membership and recommending that the referendum on whether Estonia should join the EU should be held in 2003, following parliamentary elections. The party, which currently has 1,925 members, seeks to increase its size to 3,000 by 2003.

The Privatization Agency and Baltic Rail Services (BRS) signed an agreement on 30 April on the sale of 66 percent of the shares in Eesti Raudtee (Estonian Railways) to BRS for 1 billion kroons ($56.8 million), ETA reported. The shareholders in BRS are Jarvis International of Great Britain (25.5 percent); the U.S. rail operator Rail World Inc. (25.5 percent); Railroad Development Corporation of the United States (5 percent); and Ganinger Invest, which is owned by Estonian businessmen (44 percent). BRS is to immediately deposit 100 million kroons as a guarantee and pay the remaining sum within two or three months. Ownership rights will pass to BRS only after the full sum is paid. BRS will also invest another 700 million kroons to purchase used engines from North America to replace existing ones. BRS is unhappy that Eesti Raudtee ignored its wishes and recently spent 125 million kroons to purchase new locomotives from Russia.

The council of the Pro Patria Union elected parliament deputy Mart Nutt as the party's new deputy chairman on 28 April, BNS reported. According to the union's statutes, the deputy chairman must be a member of the party's council. The previous deputy chairman, Tunne Kelam, could not be re-elected because he did not run for a seat on the council at the union's congress earlier this month. In nominating Nutt to be his deputy, Prime Minister Mart Laar praised him for good work in the parliament since 1992. The council also re-elected Andres Ammas as the union's secretary-general.

By a vote of 44 to zero, the parliament passed on 2 May the State Liability Law, which stipulates that state officials are accountable for the consequences of their actions, BNS and ETA reported. According to the law, which will come in force on 1 January, the state will compensate damages caused by the action or inaction of officials, from whom it will then exact the appropriate sum. The compensation of damages had been regulated earlier by two articles of the Estonian SSR Civil Code, which became invalid with the adoption of the Law of Obligations Act. Justice Minister Mart Rask noted that the liability law will also apply to government ministers, who will be obliged to pay compensation if they dismiss officials without proper grounds and those officials are later reinstated.

The cabinet on 8 May decided to support the most radical variant of administrative territorial reform, according to which the current 247 local governments would be reduced to 80-90, ETA reported the next day. In three week's time the government will submit official proposals to the local governments on foreseen mergers. It expects at least half of the local governments to accept the proposals and will take measures to convince the remaining local government units to accept them. Although administrative territorial reform was one of the points in the coalition agreement signed by the three parties two years ago, Reform Party parliament deputy Meelis Atonen said that his party still opposes the forcible merger of local administrative units, and that the local authorities need not accept the government's proposal.

Leaders of the government coalition decided that pension reforms, health care, and national defense will be the priorities of next year's state budget. ETA reported on 10 May. Finance Minister Siim Kallas said that in next year's budget pensions will get 1.5 billion kroons ($85 million) more than this year. The coalition agreed that, if necessary, the state budget could have a deficit of up to 1 percent. Prime Minister Mart Laar, however, noted that there might be no deficit because additional funds will be obtained from privatization and the sale of Estonian Railways. Kallas and Laar agreed that the value added tax or income tax should not be raised to obtain more revenue.
* Polish Defense Minister Bronislaw Komorowski held talks with President Lennart Meri, Defense Minister Juri Luik, and defense forces commander Rear Admiral Tarmo Kouts during a three-day visit (8-10 May), ETA reported. Komorowski said that Poland supports NATO membership for the Baltic states because the resulting greater stability in Europe would increase Poland's security.
* The Supreme Court ruled on 4 May that under the Law on Aliens, Russian ex-servicemen do not have the right to permanent residence permits in Estonia, BNS reported. The decision ended a case that began in March 2000 when former Russian serviceman Igor Popov protested the decision of the Citizenship and Migration Board not to give him a permanent residence permit. The Tallinn administrative court in August ruled that Popov was entitled to the permit, but the Tallinn circuit court on 28 November overturned the ruling. The Supreme Court said that in accordance with international law, each country is entitled to decide the rules for foreigners to stay in the country and the constitution does not grant foreigners the right to reside in the country.
* The parliament on 2 May approved the government initiative to wind up the activities of the Privatization Agency by 1 October, BNS reported the next day. The agency's legal successors will be the Finance Ministry in the privatization of property and county governments in the privatization of land. Currently there are 278 pieces of state property still being paid by installments, with an outstanding total debt of 566.6 million kroons ($32.28 million).
* The parliament on 9 May unanimously passed a law creating a comprehensive financial supervisory body under the Bank of Estonia, which will unite the present banking inspectorate subordinate to the Bank of Estonia and the insurance and securities supervisory bodies under the control of the Finance Ministry, BNS reported. The IMF had been urging the creation of such a body for several years. The law will go into effect on 1 June, but articles pertaining to its financing will come into force on 1 January.
* Foreign Minister Toomas Hendrik Ilves told an informal meeting of foreign ministers from 15 EU member and 13 candidate states on 6 May in Nykoeping, Sweden that the EU needs a strong two-chamber parliament, BNS reported the next day. The lower house would be elected by proportional representation while all the member states would have equal representation in the upper house.
* Maltese President Guido de Marco, on a three-day visit to Tallinn on 2-4 May, held talks with President Lennart Meri, Parliament Chairman Toomas Savi, Prime Minister Mart Laar, and Tallinn Mayor Juri Mois, ETA reported. He suggested that economic relations could be best promoted in financial services and tourism. On 4 May, the presidents traveled by train to Tartu where de Marco delivered a lecture at Tartu University.
* Transport and Communications Minister Toivo Jurgenson and Hong Kong Economy Minister Lee Sandra signed an aviation agreement in Tallinn on 30 April, ETA reported. Estonia has concluded aviation agreements with 17 countries and initialed them with seven. The aviation agreement signed with China in 1999 did not cover Hong Kong.
* The Statistical Office announced on 8 May that the consumer price index increased by 0.7 percent in April compared to March and 6.4 percent compared to April 2000, ETA reported. The price of goods grew by 0.6 percent (food products by 0.7 percent and industrial goods by 0.4 percent) in April, while the price of services increased by 0.9 percent with communications services growing by 2.8 percent.
* An Interior Minister official announced that unlike its Baltic neighbors, Estonia was not included in the new U.S. Special 301 Piracy Watch list of countries which either do not provide effective intellectual property protection or deny fair and equitable market access to U.S. artists and industries that rely upon intellectual property, ETA reported on 2 May..
* The Plant Protection Inspectorate banned on 7 May the import of potatoes from the Czech Republic, Germany, Latvia, Lithuania, Norway, and Poland because there have been occurrence of potato rot in those countries, ETA reported.

The Riga Regional Court found the three members of the National Bolshevik Party, who on 17 November 2000 seized the steeple of Riga's St. Peter's Church, guilty of terrorism and illegal border crossing, LETA reported. Russian citizens Maxim Zhurkin and Sergei Solovei were sentenced to 15 years in prison and Dmitrii Gafarov -- to five years. The lesser sentence for Gafarov was due to his confession during the pretrial investigation and because he is underage. A representative of Latvia's National Bolsheviks, Vladimir Moskovtsev, who was charged with helping the Russians cross the border illegally, received a suspended one-year jail sentence.

Tarja Halonen began a two-day state visit to Latvia on 9 April by telling her Latvian counterpart Vaira Vike-Freiberga that Finland respects Latvia's right to choose its own security arrangements, BNS reported. The issue arose after Halonen was quoted in a recent edition of the German magazine "Der Spiegel" as saying that she does not support Latvia's desire to join NATO. The presidents declared after the meeting that Latvian-Finnish relations are very good. Halonen later discussed issues relating to Latvia's entry into the European Union, bilateral economic cooperation, environmental protection, agriculture, and justice affairs with Prime Minister Andris Berzins. At Latvia University she delivered a speech entitled "Cooperation Between the Nordic States and European Union Enlargement." She held talks with parliament Chairman Janis Straume the following day.

The third attempt to sell the Latvian Shipping Company (LASCO) ended unsuccessfully on 27 April when neither of the two privatization bidders submitted the required $5 million security deposit by the end of the business day, BNS reported. In 1997, the privatization agency offered to sell a 32 percent share of LASCO for 80 million lats ($127.3 million) and in 1999 a 44 percent share for 44.88 million lats, but failed to find a purchaser in both cases. This time it planned to sell 68 percent of the shares in LASCO through an auction. Economics Minister Aigars Kalvitis said that the privatization agency should not be blamed for the failure this time because it was due to the irresponsibility of the Social Democrats and statements by some For the Fatherland and Freedom/LNNK politicians about alleged bribes to high officials. The sale was also not helped by constant concerns about the stability of the government and the no-confidence motions that had twice been proposed against Kalvitis.

A Moscow resident smashed two bottles of paint on the walls of the Latvian Embassy in Moscow on 1 May, apparently protesting the conviction in a Latvian court of several Russian National Bolsheviks, Interfax reported. Meanwhile, Dmitrii Rogozin, the chairman of the Duma International Relations Committee (People's Deputy), told Interfax on 30 April that the sentences handed down by the Latvian court were unacceptably harsh: "With us in Russia," he said, even for murder the sentences are less. [How can anyone get] 15 years for hooliganism?" Four days later, on the night of 5-6 May, four unidentified young people threw bottles filled with the same substance against the walls of the embassy. Responding to the embassy protest after the second attack, the Russian Foreign Ministry formally expressed regret to Latvia over what it called the recent "hooligan attacks" on the Latvian Embassy, Russian agencies reported on 10 May. The ministry said Russian agencies are investigating the attacks and will bring those responsible to justice.

The Belarusian Foreign Ministry on 7 May protested recent remarks by Defense Minister Girts Valdis Kristovskis in which he referred to Belarus as one of his country's potential military adversaries, Belapan reported. The Belarusian side noted that such statements damage traditionally friendly relations between the two countries and demanded official explanations from Riga. Kristovskis declared that the Russian-language weekly "Subbota" (Saturday) had shifted accents in the summary of his interview with MIX FM radio. He claimed that he had spoken about Belarus as a state which opposes Latvia's membership in NATO. On 8 May, Prime Minister Andris Berzins reprimanded Kristovskis, but did not ask for his resignation, BNS reported. He recommended that the defense minister be more careful in his remarks to the media.

Janos Martonyi told his Latvian counterpart Indulis Berzins in Riga on 2 May that Hungary "supports the admission of the Baltic states to NATO during the Prague summit at the end of 2002," BNS reported. The ministers discussed bilateral relations, the need to increase economic cooperation by promoting contacts between businessmen and developing tourism, and the possibility of holding regular consultations between the two countries' foreign ministries. The ministers signed an agreement on cooperation and mutual assistance in customs affairs. The next day, President Vaira Vike-Freiberga and Martonyi discussed their recent visits to the U.S., noting with appreciation that President George W. Bush supports greater cooperation with Central European and Baltic states and the expansion of NATO. Vike-Freiberga also mentioned that Latvia is making good progress in EU membership negotiations and intends to close six more chapters in the near future.

Culture Minister Karina Petersone signed a cooperation program for 2001-2003 with her Russian counterpart Mikhail Shvidkoi in Riga on 4 May, LETA reported. The program envisages boosting cooperation between music and concert organizations of both countries as well as the exchange of individual musicians, orchestras, and specialists. In a meeting with Justice Minister Ingrida Labucka, Shvidkoi praised the measures taken in Latvia for the integration of people of other nationalities, but noted that mostly negative information dominates in the media of both countries. He told a press conference that the monument to Peter the Great that Riga had offered to give to St. Petersburg in February should remain in the Latvian capital, but a replica could be made and erected in St. Petersburg to mark the long-lasting friendship between the cities.

Andris Berzins met with Austrian Chancellor Wolfgang Schuessel on 10 May in Vienna and invited him to visit Latvia next year, BNS reported. Their talks focused on EU enlargement and the further functioning of the EU in Central Europe. Schuessel mentioned that Austria supports the proposal that would block citizens of current EU candidate countries from working in other EU countries for up to a seven-year transition period after they join the EU. He inquired about the internal political situation in Latvia and praised its political stability and good economic results such as having high GDP growth while maintaining one of the lowest inflation rates and debt levels among EU candidate countries. Schuessel also asked questions about Latvian-Russian relations and improvements on the Latvian eastern border.

The parliament on 3 May turned down a no-confidence motion against Aigars Kalvitis that was initiated by the opposition Social Democrats, who have accused him of illegalities in the privatization of the Latvian Shipping Company, LETA reported. Only 32 deputies supported the motion while 50 were against and six abstained.
* Prime Minister Andris Berzins and the secretary-general of the Council of Europe, Walter Schwimmer, discussed Latvia's presidency at the Council of Europe on 3 May in Riga, LETA reported. The next day, Schwimmer, at the conference "Local Democracy at the Beginning of the 21st Century," declared that foreigners who have been residing and paying taxes to their local authorities for years should have the opportunity to take part in local government elections. He recommended that Latvia should give this right to its numerous non-citizen residents.
* Defense Minister Girts Valdis Kristovskis fired special task unit commander Harijs Arnicans on 9 May after receiving an in-house investigation report about the death of a soldier on 26 April as a result of a violent inauguration ceremony, BNS reported. The report said that Arnicans was responsible since he had not taken any effective measures to stop the bullying of recruits. National Armed Forces Commander Raimonds Graube said that military draftees would not serve in the special task unit in the future and that youths with previous criminal records would not be accepted into the army. He noted that currently one out of every five or six army enrollees has a criminal record.
* During his meeting with the World Bank (WB) mission on 3 May, Finance Minister Gundars Berzins commented that the possible WB Structural Adjustment Loan (SAL 2) is not essential for Latvia in the view of budgetary funding, LETA reported. Latvia had received a loan worth $40 million within the SAL 1 program and could be offered another $40 million. under SAL 2.
* Georgian Deputy Foreign Minister Merab Antadze discussed economic and political cooperation issues with Foreign Ministry State Secretary Maris Riekstins in Riga on 7 May, LETA reported. Riekstins praised Georgia's efforts to stabilize the situation in the South Caucasus region and expressed Latvia's willingness to share its experience of integration into European structures as well as relations with neighboring countries. The following day Antadze met with Foreign Minister Indulis Berzins.
* Interior Minister Mareks Seglins and British government anti-drug coordinator Keith Hellawell agreed in Riga on 10 May to cooperate by providing information and assistance in fighting the illegal circulation of drugs, BNS reported. The officials discussed the harmonization of Latvian laws with EU drug enforcement requirements and Latvia's problems in curbing drug dealing.
* The Central Statistics Office announced on 9 May that the consumer price index increased by 0.4 percent in April compared to March and 1.4 percent compared to April 2000, LETA reported. The price of goods grew by 0.4 percent in April, while the price of services increased by 0.2 percent The greatest price rises were for food products (cheese up 6.5 percent, potatoes 5.1 percent) as price for footwear and clothing increased by 1.2 percent.
* The Ministry of Economy announced on 10 May that by 1 April 91.3 million, or 82.3 percent, of the issued privatization vouchers had been utilized, LETA reported. Some 31.5 million vouchers were used to purchase 345,000 apartments and buildings, 41.4 million to buy shares in companies, 6.9 million to purchase companies and other properties, and 11.5 million to privatize plots of land.
* The unemployment rate in the state decreased from 8.1 percent at the beginning of April to 8.0 percent at the end of the month, BNS reported. The highest unemployment rates were in eastern part of the country: 27.3 percent in Rezekne county, 21.8 in Balvi county, and 21.6 percent in Kraslava county, while it was only 3.8 percent in Riga.

The Council of Lithuanian Radio and Television (LRT) on 8 May unanimously elected former Economy Minister Valentinas Milaknis as the new director-general of state-owned national radio and television, "Kauno diena" reported the next day. Eleven candidates competed for the post, but only two, Milaknis and former Baltic Television Director Gintaras Songaila, passed the first round by getting sufficiently high ratings from the council members. Milaknis declared that his lack of experience with media management is both an asset and disadvantage. His most important task will be to balance the financial situation and repay the debts of LRT, which now exceed 19 million litas ($4.75 million). He said that the number of personnel at LRT will have to be reduced and other reforms implemented.

Saxony Premier Kurt Biedenkopf proposed to Arturas Paulauskas on 8 May in Dresden that special groups of German and Lithuanian officials be formed to discuss ways to reduce unemployment, ELTA reported. Saxony parliament leader Erich Ildgen discussed bilateral cooperation projects and the restitution of property to former owners with Paulauskas. The next day, Paulauskas told Bundestag Chairman Wolfgang Thierse in Berlin that the EU proposal to close the second reactor of the nuclear power plant in Ignalina by 2009 is unrealistic, BNS reported. At a subsequent meeting, the vice chairman of the NATO Parliamentary Assembly, Markus Meckel, told Paulauskas that he supports Lithuania's efforts to join NATO. Paulauskas assured him that Lithuania's friendly relations with Russia may even improve after it joins NATO and that Russian fears about the possible isolation of the Kaliningrad region could be resolved in joint consultations among Russia, Lithuania, and the EU.

During his visit to Berlin on 10 May, Paulauskas had an unscheduled meeting with former German Foreign Minister Klaus Kinkel, one of the leaders of the Free Democratic Party, BNS reported. Kinkel said that the Baltic states should become NATO members only after the rule of law and democracy becomes firm in Russia. Moreover, according to Kinkel, Lithuania's admission to NATO would isolate Russia from the creation of a common European security system. Paulauskas replied that there is no need for such a delay and that Lithuania's membership in NATO would not affect Russia's participation in a common European security system. He doubted that Lithuania's current good relations with Russia would worsen if it joined NATO.

A two-day conference entitled "The European Union Enlargement: Benefits and Challenges in the Agriculture Sector for Candidate Countries," ended in Vilnius, BNS reported on 30 April. Its main aim was to assist EU candidate countries to deepen cooperation in agriculture, share experiences, and discuss ways to improve the competitiveness of agricultural produce in the EU. In addition quotas, problems of investment in the agriculture sector, and the implementation of the Special Accession Program for Agriculture and Rural Development (SAPARD) program were discussed. EU Commissioner for Agriculture, Rural Development, and Fisheries Franz Fischler declared that globalization, membership in the World Trade Organization, and increasing trade liberalization made painful reforms in the agricultural sector unavoidable even if the states did not join the EU. Prime Minister Rolandas Paksas declared that Lithuania needs large, specialized, and competitive farms for which EU experience and know-how would be helpful. Agriculture ministers or other representatives from Latvia, Estonia, Poland, Slovakia, Slovenia, Cyprus, Malta, Bulgaria, Romania, and Turkey also attended the conference.

The parliament, by a vote of 67 to 35 with eight abstentions, amended the state Pension Law on 8 May to allow pensioners who earn less than the established minimum monthly salary of 430 litas ($107.5) to receive their full pensions beginning 1 July, BNS reported. Pensioners who earn up to 650 litas will receive the base monthly pension of 138 litas plus an additional pension of up to 218 litas, while those earning more than 650 litas will receive only the base pension. The parliament also raised the excise tax on cigarettes from 30 to 32 litas per 1,000 units from 1 June. Even after the increase, the level of the tax will have to be increased more than four times to reach the European Union's minimum level, i.e., 57 percent of the average retail price of the most-popular brand of cigarettes.

Valdas Adamkus on 27 April rejected amendments to the Law on Public Trading of Securities that would have required any investor who purchased more than a 50 percent share of a company from the state to offer to buy all the shares from private shareholders for the same price, BNS reported The president stated that the provision should be applied only if it is specifically mentioned in the purchase contract. Presidential adviser Darius Kuolys said that Adamkus also plans to veto the law making 1 May a state holiday and will recommend that it be commemorated as Nostalgia Day.

Valdas Adamkus on 2 May vetoed the gambling law passed by the parliament in April as well as the law reinstating 1 May as a state holiday, ELTA reported. At the request of the Conservatives, the Special Investigations Service had analyzed the law from the point of view of its effectiveness in preventing corruption, and registered deficiencies in preventing corruption and money laundering. Adamkus suggested amendments to improve the law based on the service's recommendations and it seems likely that the parliament will accept them. Adamkus also refused to sign a law to make 1 May a state holiday because he believes that the date "did not represent a symbol unifying all of the nation." Nevertheless, Adamkus said that the holiday should be retained on the list of remembrance days.

Hungarian Foreign Minister Janos Martonyi told President Valdas Adamkus in Vilnius on 4 May that Hungary will continue to support the membership of the Baltic states in NATO, BNS reported. Adamkus spoke about his recent trip to Moscow, stressing that Lithuania has good and pragmatic ties with all neighboring countries. Prime Minister Rolandas Paksas told Martonyi that while economic cooperation between their countries is increasing, the level of trade is too low. Last year Lithuania imported goods worth more than $50 million from Hungary, but exported goods worth only $9 million. Martonyi and his Lithuanian counterpart Antanas Valionis signed bilateral treaties on visa-free travel and mutual aid in the event of catastrophe or large-scale emergency. The visa agreement increases the number of days citizens of one country can stay in the other without a visa from the current 30 days to 90 days.

Russian President Vladimir Putin said on 8 May that he is convinced that the Lithuanian government is promoting interethnic concord and seeking to create a situation in which "all the nationalities in Lithuania will feel comfortable," Interfax reported. A day earlier, Unified Energy Systems announced that it has begun to purchase electric power from Lithuania, but "Kommersant-Daily" reported on 8 May that tensions are increasing between Russia's LUKoil company and Lithuania's Mazeikiai Nafta.
* Homeland Union Chairman Vytautas Landsbergis discussed NATO expansion and Baltic security in separate meetings with U.S. National Security Adviser Condoleeza Rice and Speaker of the House of Representatives Dennis Hastert in Washington on 7 May, BNS reported. He also issued a statement declaring that in response to LUKoil's soft blockade of the Mazeikiai refinery, Lithuania should consider importing crude oil from the West and closing down the Birzai pipeline for repairs when LUKoil blocks the delivery of oil to the Mazeikiai refinery from other Russian oil suppliers.
* Bundestag Defense Committee Chairman Helmut Wieczorek told a press conference in the parliament on 3 May that most of his colleagues support including the Baltic states in the next round of NATO expansion, BNS reported. He also noted that Russian opposition to Baltic membership in NATO was growing softer, but it was still too early to say how much. Wieczorek praised Lithuania's decision to spend 2 percent of GDP on defense.
* Chairman of the U.S. Broadcasting Board of Governors Marc Nathanson met with President Valdas Adamkus and Parliament Chairman Arturas Paulauskas on 30 April in Vilnius, BNS reported. Nathanson told Adamkus that he was impressed by the freedom of speech in Lithuania and suggested that it could serve as an example for other countries. Nathanson discussed with Paulauskas the possibility of broadcasting radio programs from Lithuania to Belarus.
* Defense Minister Linas Linkevicius met in Vilnius on 3 May with the commander of NATO's Joint Headquarters Northeast, Lieutenant General Ove Hoegh-Guldberg Hoff, BNS reported. Hoff inquired about public opinion about NATO membership, future military financing, and the readiness of Lithuanian troops to serve in international operations. He also held talks with Brigadier General Jonas Kronkaitis and visited the headquarters of the Iron Wolf motorized infantry brigade. The next day Hoff traveled to the training regiment at Rukla and the Regional Airspace Monitoring and Control Center at Karmelava, outside of Kaunas.
* Lithuanian and Russian Culture Ministers Gintautas Kevisas and Mikhail Shvydkoi signed a five-year bilateral cooperation agreement in Moscow on 10 May, BNS reported. Kevisas said that the two countries hold sufficiently close cultural ties so the cooperation will focus on more problematic issues, such as translations of new Russian and Lithuanian literature.
* Deputy Foreign Minister Dalia Grybauskaite and Bulgarian Deputy Economics Minister Christo Mikhailovsky signed a free-trade agreement in Sofia on 8 May, BNS reported. Lithuania had an unfavorable balance of trade with Bulgaria in 2000 with imports worth some $12 million and exports of only $3.25 million. This should, however, decrease as large Bulgarian customs duties had hindered exports.
* Six small right-wing parties -- the Homeland People's Party, the Democratic Party, the Independence Party, the Lithuanian Freedom League, the Nationalist Union, and the Union of Political Prisoners and Deportees -- held a joint conference in Vilnius on 28 April, ELTA reported. They agreed that it was essential for right-wing parties to merge. Their leaders signed a statement supporting the holding of a unifying conference in the second half of the year.
* The council of the Modern Christian Democratic Union on 29 April rejected the proposal of its chairman, Vytautas Bogusis, to convene an extraordinary congress so that he could resign as chairman and be replaced by one of the three party members who are parliament deputies, ELTA reported.
* Thirty-two artists, scholars, clergymen, physicians, and other intellectuals sent an open letter to President Valdas Adamkus that condemned negative principles prevailing in the media, ELTA reported on 30 April. The letter declared: "The media see such notions as justice, love, morality, and faith as deplorable and not worthy of attention, since they do not raise their circulation and ratings." Noting with regret that moral decline proceeded more rapidly in the 10 years of independence than in the 50 years of Soviet rule, the letter urged Adamkus to initiate a discussion about the strategic vision of the state.
* The Statistics Department announced on 9 May that the consumer price index increased by 0.2 percent in April compared to March and 0.8 percent compared to April 2000, ELTA reported. The price of food and non-alcoholic beverages grew by 0.7 percent in April, of clothing and footwear by 0.5 percent, but costs of housing, water, electricity, gas, and other fuel products and services decreased by 0.3 percent.
* In the first four months of the year 249 entities were privatized for 383.1 million litas ($95.7 million), ELTA reported on 1 May. The State Property Fund sold 193 entities for 370.9 million litas and municipal privatization bodies sold 56 entities for 12.15 million litas.
* The parliament approved two amendments to the value-added (VAT) tax law on 8 May, BNS reported. By a vote of 45 to 25 with 1 abstention, the deputies lowered the VAT on bio-fuels -- made from biomass obtained in Lithuania -- from 18 to 9 percent. The parliament also decided to abolish VAT on tourism services as of 1 June.