Baltic Report: June 6, 2001

TALLINN MAYOR RESIGNS.
Juri Mois on 31 May handed his formal resignation to the City Council, which later accepted it, ETA reported. The council that day had been scheduled to vote on a no-confidence motion against Mois that was proposed by the Reform Party. Mois told reporters that he decided to leave on his own accord because the city's ruling coalition had decided to support a new candidate for mayor -- telecom businessman Tonis Palts. However, the Tallinn City Council that night failed to elect a new mayor when both Palts and opposition Center Party Chairman Edgar Savisaar received 31 votes. In order to be elected, a new mayor needs the support of 33 of the 64 City Council members.

ESTONIA TO SEEK TRANSITION PERIODS ON TWO EU ISSUES.
The government on 29 May decided to present two amendments to the taxation chapter of its EU accession negotiations asking for transition periods before increasing the VAT rate on heating and for retaining tax-free shopping, ETA reported. The Estonian delegation will present to EU representatives on 1 June in Brussels the proposal to delay increasing the current VAT rate on heating from 5 to 18 percent until 1 June 2005. It will also apply for a transition period of 6.5 years before abolishing tax-free shopping on passenger ships on the Baltic Sea in order to guarantee the competitiveness of Estonian shipping firms. Prime Minister Mart Laar said that the abolition of tax-free shopping would reduce the number of tourists and thus cut jobs in the Estonian services sphere. Estonia has previously applied for nearly 30 transition periods and more than 40 exceptions in agriculture, energy, and environment policy, among other areas.

ICELAND'S PREMIER CONFIRMS SUPPORT FOR ESTONIAN NATO MEMBERSHIP.
David Oddsson told his visiting Estonian counterpart Mart Laar in Reykjavik on 25 May that Iceland fully supports the admission of the Baltic states in the next round of NATO enlargement, BNS reported. Laar also discussed NATO and EU expansion with President Olafur Ragnar Grimsson. Estonia and Iceland have launched gene-pool projects aimed at mapping the genes of their countries' residents in order to use the results to develop science and to improve the people's health. It was agreed in both talks that the two countries would cooperate more closely in the study of human genes and would begin joint gene projects with concrete action programs.

OSCE PARLIAMENT PRESIDENT URGES LAWMAKERS TO VISIT WORLD'S HOT SPOTS.
On a one-day visit to Tallinn, Adrian Severin, the president of the Parliamentary Assembly of the Organization for Security and Cooperation in Europe, on 30 May urged parliament deputies to visit the world's political hot spots to get first-hand information about the situations there, BNS reported. He told parliament Chairman Toomas Savi that the roots and strength of the OSCE's Parliamentary Assembly lie in national legislatures and called for the formation of liaison groups of different countries' lawmakers that would visit problem regions where OSCE missions are deployed and report on developments there a couple of times a year. Severin also met with the Estonian delegation to the OSCE Parliamentary Assembly and the head of the OSCE mission to Estonia, Doris Hertramf.

* U.S. senators Gordon Smith of Oregon, Richard Durbin of Illinois, George Voinovich of Ohio, Paul Sarbanes and Barbara Mikulski, both of Maryland, met with President Lennart Meri on 27 May, BNS reported. The Senators reaffirmed their support for Estonia's admission to NATO and discussed U.S. relations with the EU and developments in Russia. Defense Minister Juri Luik, U.S. Ambassador to Estonia Melissa Wells, and Estonian Ambassador in the United States Sven Jurgenson were present at the meeting.

* After visiting visit a communications battalion, a naval base, and the base of the Baltic joint squadron, General Jack Deverell, commander in chief with Regional Headquarters Allied Forces North Europe, on 31 May expressed to Estonian defense forces head, Rear Admiral Tarmo Kouts, his satisfaction with Estonian defense structures, BNS reported. He also held talks with Defense Minister Juri Luik.

* The president of the Parliamentary Assembly of the Council of Europe, Lord Russell-Johnston, told the parliament on 31 May that he is more than satisfied with the work of the Estonian delegates in the council, BNS reported. He declared: "Estonian delegates are doing an excellent job in the Council of Europe and in particular in its assembly, and making a contribution disproportionate with the size of your country, because -- permit me to be ruthlessly honest -- you're great, but there aren't many of you."

* The council of Estonia's three-party ruling coalition does not agree with the Interior Ministry's administrative-territorial reform plan to cut the number of local governments from the current 247 to 99, but rather supports a reform plan with about 100-120 self-governments, BNS reported on 28 May.

* National television company ETV informed the European Broadcasting Union (EBU) on 29 May of its decision to stage next year's Eurovision song contest, BNS reported. ETV agreed to the decision only after receiving adequate financial promises from the government and other circles to stage the contest. It appointed the head of its foreign relations department, Juhan Paadam, liaison officer and one of whose first tasks will be to prepare a visit of an EBU working group to Tallinn in June.

* Some 60 people met in Turi on 27 May to found the Estonian Party of Pensioners, BNS reported the next day. The meeting elected Ants Tamme, editor-in-chief of the newspaper "Videvik," chairman of the party. Most members had belonged to the former Party of Pensioners and Families. The new party currently has about 900 members and intends to register officially when it reaches 1,000 members.

* Social Affairs Minister Eiki Nestor told the oil shale industry unions on 3 May of the government's aims to support the creation of new jobs in the northeastern Ida-Virumaa region and the retraining of redundant workers, BNS reported. The national mining company, Estonian Oil Shale, plans by the end of the year to dismiss 707 miners of whom only 350 will be eligible for a company pension.

BALTIC ASSEMBLY, NORDIC COUNCIL MEET IN RIGA.
Latvian President Vaira Vike-Freiberga officially opened the third joint session of the Baltic Assembly and the Nordic Council in Riga on 31 May, LETA reported. She noted that cooperation between the Baltic and Nordic parliaments is closer than ever before and that European Union accession negotiations have reached a crucial point for EU candidate countries -- Latvia, Estonia, Lithuania, and Poland. Nordic Council President Sven Erik Hovmand declared that Baltic-Nordic cooperation is no longer functioning as a "five plus three" model, but as close cooperation among eight friendly countries. Latvian Foreign Minister Indulis Berzins said that for the Baltic states, integration into NATO and the EU are inseparable things, like "two sides of a coin." Sweden's ambassador to Latvia, Tomas Bertelman, stated that the EU summit meeting in Gothenburg should define specific dates for candidate countries to join the EU. He hopes that this will take pace by the end of 2002 so new members can take part in the 2004 European Parliament elections.

POLISH PRESIDENT DISCUSSES EU ASPIRATIONS DURING RIGA VISIT.
Presidents Aleksander Kwasniewski and Vaira Vike-Freiberga opened the Polish national fair "Polexport Riga 2001" in Riga's Congress Center on 29 May. The fair will continue through 1 June, LETA reported. The presidents discussed their common goal -- membership in the European Union. They asserted that their countries are not rivals, but fellow travelers and mutual supporters in their efforts to join the EU. Kwasniewski told a subsequent press conference that Poland is "Latvia's biggest help and supporter" in its efforts to join NATO and that he will speak about NATO enlargement with U.S. President George W. Bush during the latter's upcoming visit to Warsaw. In talks with Prime Minister Andris Berzins, Kwasniewski discussed bilateral relations and inquired about the situation in the Latvian armed forces, especially regarding NATO standards.

AUSTRALIAN COURT TO EXTRADITE KALEJS.
A Melbourne court ruled on 29 May that alleged Nazi war criminal Konrads Kalejs can be extradited to Latvia to face charges of war crimes and genocide, LETA reported. The lawyers of the 87-year-old Latvian-born Australian citizen, who is not only legally blind but also suffers from prostate cancer and dementia, appealed the ruling to a higher court. If extradited and tried, Kalejs would be the first Nazi war-crimes suspect tried in Latvia since the country regained independence in 1991.

VERHEUGEN PRAISES EU MEMBERSHIP PROGRESS.
EU Commissioner for Enlargement Guenter Verheugen told Latvian Prime Minister Andris Berzins in Brussels on 28 May that Latvia is making significant progress in its EU membership negotiations, LETA and BNS reported. Verheugen said that he is sure that the so-called second group candidates, which include Latvia and Lithuania, will be able to catch up to the first group candidates. The officials discussed the situation within the EU ahead of the Gothenburg summit, which is expected to adopt a decision regarding the proposal by Germany and Austria to restrict the free movement of labor from newly admitted EU countries. They also discussed the transition periods and exemptions from EU standards that Latvia has requested in several chapters.

SAMARA DEPUTIES, STUDENTS DEMAND FREEING NATIONAL BOLSHEVIKS.
The Samara Oblast Duma on 29 May adopted appeals to Moscow and Riga to free two Samara residents who, as members of the National Bolshevik Party, were convicted of crimes in Latvia, Interfax-Eurasia reported. The two, Maksim Zhurkin and Sergei Solovev, seized a tower in Riga in November 2000 to protest what they said was the infringement of the rights of ethnic Russians in Latvia. They have been sentenced to 15 years in jail for the episode.

DISAGREEMENTS IN RULING COALITION.
Prime Minister Andris Berzins declared that For the Fatherland and Freedom/LNNK (TB/LNNK) deputies violated the ruling coalition agreement on 30 May by supporting the sending of amendments to the pension law, as proposed by the opposition Social Democrats, to parliament commissions for further review, LETA reported. The amendments specify that working pensioners would receive their full pensions and not just the 60 lats ($95) per month provided by the current law. TB/LNNK had said the previous day that they would not support the amendments. Their changed position was likely prompted by the parliament's rejection in a secret ballot of its candidate, Rimants Ziedonis, to a seat on the National Radio and Television Council.

* U.S. Senators Gordon Smith, Richard Durbin, George Voinovich, and Barbara Mikulski, on their way to Vilnius for the NATO parliamentary assembly, arrived in Riga on 27 May, BNS reported. They visited the Adazi military base, where they watched a training demonstration together with Prime Minister Andris Berzins and Defense Minister Girts Valdis Kristovskis. They told President Vaira Vike-Freiberga that Latvia should more actively publicize its achievements in seeking NATO membership in order to convince the American public of the need to expand the alliance.

* U.S. NATO Committee Chairman Bruce Jackson told parliament deputies on 29 May to pay more attention to the treatment of Russian and Jewish minorities, efforts to combat corruption and crime, as well as the presence of foreign secret services, BNS reported. Jackson met also with President Vaira Vike-Freiberga and discussed U.S.-Latvian cooperation within joint defense projects, noting the leading role of the U.S. in trans-Atlantic security. They agreed that Baltic membership in NATO would contribute to peace, stability, and development in the region. During his three-day visit Jackson also held talks with Foreign Ministry State Secretary Maris Riekstins, various parliament deputies, and Defense Minister Girts Valdis Kristovskis.

* The Finance Ministry decided on 31 May that it would suspend implementation of the 1993 Estonian-Latvian agreement on the avoidance of double taxation as of 1 June, arguing that the situation had changed after Estonia changed its tax laws, BNS reported. An Estonian registered company is required to pay taxes on profit only when it is distributed by paying dividends so that no profit taxes are owed when the company does not pay any dividends.

* The Christian Democratic Union, which has one deputy in the Riga City Council, decided on 25 May to join the recently formed coalition in the council consisting of the Social Democrats, For Fatherland and Freedom/LNNK, and a number of smaller parties, BNS reported. The coalition will now have 35 of the 60 seats in the council.

* The head of the Naturalization Administration, Eizenija Aldermane, told the conference "On the Road to a Civil Society 2001" on 28 May that the residents who recently obtained citizenship are among the most active citizens in the state, LETA reported. A recent survey indicated that about 40 percent of them have a university degree compared to 15 percent in the whole population.

NATO PARLIAMENTARY ASSEMBLY SESSION IN VILNIUS.
More than 300 lawmakers from the 19 NATO member states and 16 of the 17 partner countries (Russia decided not to attend saying the action could be misinterpreted as Russian approval of NATO expansion) gathered in Vilnius on 27 May for the spring session of the NATO Parliamentary Assembly, ELTA reported. Defense Minister Linas Linkevicius told the session the next day that Lithuania's efforts to gain NATO membership is in no way directed against Russia's legitimate security interests. He claimed that the simultaneous invitation of all three Baltic countries to join NATO would be the best solution but that the admission of at least one would also be seen as a positive step. Foreign Minister Antanas Valionis declared on 29 May that the NATO members should clearly state their position on the prospects of the Baltic countries joining the alliance. He asserted: "But, frankly, we in Lithuania are sick and tired of being labeled a 'special case' in terms of NATO enlargement.... The only special thing is the still lingering, I'd say, anachronistic fear that inviting the Baltic countries to join the alliance would mean trespassing the mythical red line (of the former Soviet Union)." He rejected the claim that Baltic admission would harm the democratic development of Russia, stating that "a democratic process cannot undermine another democratic process." Earlier that day, President Valdas Adamkus decorated U.S. Senator Gordon Smith and Congressman John Shimkus with Grand Duke Gediminas orders for their advocacy for Lithuanian efforts to join trans-Atlantic structures.

ASSEMBLY APPROVES TWO DECLARATIONS.
On the final day of the NATO Parliamentary Assembly in Vilnius, NATO Secretary-General Lord George Robertson declared that the alliance remains unswerving in its open-door policy, but declined to comment on the prospects of specific candidate countries for accession at the Prague summit next year, BNS reported on 31 May. He noted that the candidates' chances for admission would be based not only on military potential, but also on many criteria ensuring democracy and economic growth. Assembly Chairman Rafael Estrella hinted that U.S. President George W. Bush's "clear and unequivocal" position on NATO enlargement will determine the position of other members in the alliance. The assembly approved two declarations. The first, repeating the resolution of the previous NATO assembly in Berlin, "calls upon the North Atlantic Council to issue no later than during its Summit meeting in 2002 invitations to NATO accession negotiations to any European democracy that seeks membership in the alliance and that has met the criteria for NATO membership as established in the alliance's 1995 Study on NATO Enlargement." The declaration, however, was also supplemented by an amendment declaring that no third state shall hold a veto right in the enlargement process. Lithuanian deputy Rasa Jukneviciene, who proposed the amendment, stated: "Some think this amendment is aimed at Russia, but it is mainly aimed at Western states." The second declaration expressed "grave concern at the continued tensions" in the Balkans and support for the democratic processes in the Federal Republic of Yugoslavia.

GOVERNMENT APPROVES REVISED 2001 BUDGET.
The cabinet on 30 May approved a revised 2001 budget in which revenues and expenditures would be increased by 80.3 million litas ($20.075), BNS reported. The government plans to save 87.28 million litas in state administration costs and redistribute a total of 167.5 million litas in state budget resources. Among the major changes would be an additional 53.9 million litas for subsidies to municipalities, 29 million litas for payment settlements between farmers and bankrupt companies, 23 million litas for the Guarantee Fund, 9.5 million litas for the National Patients' Fund, and 7.5 million litas for Lithuanian Radio and Television. The revised budget must still be approved by the parliament.

* President Valdas Adamkus said at the 18th International Workshop on Political and Military Decision Making in Copenhagen on 25 May that NATO expansion into new areas of Europe increases security in the entire continent, BNS reported. He asserted: "Limited enlargement means less integration, and less integration implies that more European nations are left on their own in coping with the challenges of globalization and advancing technology." Adamkus agreed that good relations with Russia are necessary for future stability and cooperation on the continent, but rejected its efforts to slow down or halt NATO expansion.

* At the meeting of the foreign ministers of the NATO candidate countries with U.S. Secretary of State Colin Powell in Budapest on 30 May, Foreign Minister Antanas Valionis said that the U.S. will be the engine behind NATO enlargement, BNS reported. Valionis also took part in the Euro-Atlantic Partnership Council's meeting of foreign ministers which discussed cooperation and measures for increasing security in the Euro-Atlantic space. The council is composed of the 19 NATO countries and 27 countries participating in the Partnership for Peace program.

* The Foreign Ministry announced on 31 May that its diplomats had succeeded in convincing Germany that compensation to Lithuanian citizens who were taken for forced labor to Germany during Word War II, would not be through Moscow but directly through one of Lithuania's banks, BNS reported.

* Deputy Foreign Minister Evaldas Ignatavicius, during a two-day visit to the Kaliningrad region on 25-26 May, had meetings with Kaliningrad Duma Chairman Vladimir Nikitin, the Russian Federation's envoy in Kaliningrad, Artur Kuznetsov, the vice governor of the Kaliningrad region, Mikhail Tsikel, and Kaliningrad city officials, BNS reported. His talks primarily focused on how the entry of Poland and Lithuania into the European Union would affect their relations with Kaliningrad.

* Defense Minister Linas Linkevicius told the chairman of Georgian parliament Foreign Affairs Sub-Committee, Iraklyi Gogava, in Vilnius on 30 May that Lithuania is ready to assist Georgia in reforming its military forces and implementing democratic army control, BNS reported.

* Massoud Samiei, the head of the European division of the International Atomic Energy Agency's technical cooperation department, has declared that in the radiation safety sphere Lithuania achieved an enormous progress as he compared the current situation and that observed by him six years ago, BNS reported on 31 May.

* The U.S. has decided to lift all restrictions on exports to Lithuania of certain high technologies, including super computers, BNS reported on 25 May. Lithuania was raised from the third to the first tier of counties, which also included Canada, Mexico, Australia, Japan, Western European states, Poland, Hungary, and the Czech Republic.

* An extraordinary shareholders' meeting of the Lithuanian Shipping Co. (LISCO) on 26 May approved a reorganization plan according to which the company would be split into two smaller specialized companies -- ferry operator Lisco Baltic Service (LBS), managed by the Danish company DFDS Tor Line, and the state-run tramp shipping company Lietuvos Juru Laivininkyste, ELTA reported on 28 May. According to the plan, LBS will receive 61.72 percent of all capital and reserves, including six ferries and six container tramps.

* The State Border Protection Service announced on 31 May that 16 ethnic Chechens, citizens of Russia, have applied for political asylum in Lithuania, BNS reported. The Chechens -- five men, four women, and seven children -- disembarked at the Vilnius station from a train going from Homel, Belarus to Kaliningrad. They will be housed at the Center for the Registration of Foreigners in Pabrade, near Vilnius. The center housed 94 Russian citizens last year, but even before the most recent applicants there were 93 such Russian citizens so far this year.