Baltic Report: June 20, 2001

OECD BALTIC REGIONAL PROGRAM EXTENDED UNTIL 2003.
The Organization for Economic Cooperation and Development (OECD) held the third annual meeting for assessing its Baltic Regional Program (BRP) in Riga on 11 June, LETA reported. The BRP, which was launched on 12 March 1998, is the main cooperation mechanism between the OECD and the three Baltic states. The meeting decided that the program had been useful for reforms in the countries and did not overlap the initiatives of other organizations. After suggestions that the work of the BRP should be continued until the Baltic states obtain EU membership, it was decided to continue the BRP until at least 2003.

GORBACHEV IN 1988 KNEW DETAILS OF BALTIC DEPORTATIONS.
Despite his protestations of ignorance to the contrary, in 1988 Soviet leader Mikhail Gorbachev knew the details of the Soviet deportations from Estonia, Latvia, and Lithuania which began in 1940 and continued through the early 1950s, according to an article in "Vremya MN" on 14 June. At the insistence of the communist parties in the three Baltic republics, the KGB under the leadership of Viktor Chebrikov prepared a top-secret report on the subject in 1988, and Russian archivists have now found Gorbachev's signature on that document.

* Lithuania on 8 June, and Latvia and Estonia on 11 June, banned the import of live cattle, sheep, and goats and their meat from the Czech Republic after it was officially confirmed that there was a case of mad cow disease in the country, BNS reported.

DECLARATION ON COMMUNIST PARTY CRIMINALITY POSTPONED.
By a vote of 51 to 39, the Estonian parliament decided on 13 June to postpone until the fall the adoption of a declaration that would pronounce the communist regime equally criminal to the Nazi regime, ETA reported the next day. After a five-hour debate it became clear that the passage of the declaration was not certain. The Pro Patria Union and the Moderate Party favored the declaration, but opposition parties opposed it, expressing the fear that approving the declaration could lead to a witch-hunt against former Communist Party members. The Reform Party was split over the issue. It was originally planned for the declaration to be passed on 13 June, the day before the anniversary of the beginning of the mass deportations from the Baltic states in 1941. The next day President Lennart Meri released a statement expressing his full support for the declaration explaining: "To forget about crimes against humanity would mean to open the door to new crimes, [and] would mean that crimes against humanity can recur in Europe," BNS reported.

PARLIAMENT ADOPTS UNEMPLOYMENT INSURANCE LAW.
The parliament, in a session that lasted until 5:15 a.m., on 14 June adopted a government-sponsored mandatory unemployment insurance law by a vote of 54 to zero, with four abstentions, ETA and BNS reported. The law, which will go into effect on 1 January, provides that employees pay 1 percent of their salaries into the unemployment insurance fund while employers pay an additional 0.5 percent of their salaries. Unemployment benefits for the first 100 days will be 50 percent of the recipient's last salary and 40 percent for the remainder of the year. At present, unemployment benefits are a symbolic 400 kroons ($22) per month. The parliament earlier rejected a no-confidence motion on Economy Minister Mihkel Parnoja by a vote of 42 to 42. The motion needed at least 51 votes to oust the minister.

PEOPLE'S UNION CONGRESS CHOOSES PRESIDENTIAL CANDIDATE.
The Congress of the People's Union in Tallinn on 9 June nominated its honorary chairman, Arnold Ruutel -- who is the last chairman of the Supreme Council of the Estonian SSR -- as its candidate for president, ETA reported. According to recent public opinion polls, Ruutel is the third-most popular presidential candidate after Peeter Tulviste of the Pro Patria Union and Toomas Savi of the Reform Party. The Congress also re-elected former Environment Minister Villu Reiljan as party chairman, with Mai Treial and Ants Kaarma as his deputies. Reiljan fiercely criticized the government of Prime Minister Mart Laar and called for its resignation.

POLICE COOPERATION ACCORD WITH BELGIUM SIGNED.
Estonian and Belgian interior ministers Tarmo Loodus and Antoine Duquesne signed an agreement on police cooperation on 11 June in Tallinn, BNS reported. Under the agreement, Estonian and Belgian police will work closely in operational matters, exchange information, and stage joint operations and seminars. Duquesne stated that the main goal of the agreement is to fight against international drug trafficking and trade in humans, as well as illegal immigration. He noted that the signing of the agreement is not an indication that Belgium sees a threat from crime originating in Estonia because it intends to sign similar agreements with all East European countries. Loodus declared that while police cooperation between the countries had been regulated by a memorandum, the new agreement makes joint activities by the police authorities an every-day affair.

PURCHASE OF ELECTRICAL CABLE AS SCRAP BANNED.
By a unanimous vote on 12 June, the parliament amended the Waste Act to ban the purchase of aluminum and copper cable as scrap metal until the end of 2003, ETA reported the next day. This year, more than 700 kilometers of cable have been stolen from the Estonian Energy Co., at times leaving households and villages without power or telephone connections. The same day, the government decided to give the Business Development Foundation the task of shaping Estonia's international image. It also completed the first reading of the draft law on the merger of Estonian Radio and Estonian Television into a national broadcasting organization, and charged Economy Minister Mihkel Parnoja with overseeing the use of Technology Agency funds to study the opportunities for financing the genetic database project.

* Interior Minister Tarmo Loodus presented on 13 June a revised plan for administrative territorial reform, BNS reported. The previous plan to reduce the number of local governments from the current 247 to 80-90 (see "RFE/RL Newsline," 10 May 2001) was modified to increase the number of local governments to 108. The suggested new borders of local governments by and large correspond to the borders of Estonia's historic parishes and are in harmony with the present locations of police and rescue authorities.

* The parliament passed a revised value-added tax (VAT) law on 13 June which in part differed from the draft law, BNS reported. The duty free import of goods by travelers was retained at the current 5,000 kroons ($275) and not reduced to 2,700 kroons. The new law, however, will reduce the VAT from 18 to 5 percent from 1 January for books, medicines on a government-approved list, medical equipment, and performances and concerts staged by state, municipal, and privately-owned performing institutions if they have no current tax debts.

* The coalition council on 11 June unexpectedly supported postponing the enactment of three laws that would have raised employees' tax burden from 1 January, BNS reported. The endowment pension law will take effect from 1 July 2002, the law on industrial accident and occupational disease insurance from 1 January 2004, and the unemployment insurance law one year after its adoption.

* The parliament agreed on 14 June to borrow 45 million euros ($38.44 million) from the Nordic Investment Bank to finance a project for rebuilding the Tallinn-Narva and other highways, BNS reported. The loan is for 15 years with a 10-year grace period at an interest of the six-month Euribor plus 0.38 percent, or currently about 5.1 percent.

* The cornerstone of the steel loading and processing terminal -- which has an investment worth 3.7 billion kroons ($205 million) -- was laid in the Muuga Port of Tallinn on 12 June, ETA reported the next day. The U.S.-owned Galvex Estonia project will start operating in 2003. The plant will receive steel from Russian and Ukrainian producers via rail, and then cut, galvanize. and package the products for shipment to buyers in Europe, the U.S., and other countries. The full output of the plant should reach up to three million tons of steel per year.

* The business daily "Aripaev" reported on 11 June that inefficiencies and mistakes by government ministers had cost Estonia about two billion kroons ($110 million) in the last two years. The most glaring example was the decree of Economy Minister Mihkel Parnoja on motor fuel quality which may have resulted in a loss of 850 million kroons in excise revenue. Transport and Communications Minister Toivo Jurgenson was charged with losing 468 million kroons of funding for road repair due to incorrectly held tenders for road construction.

TWO MORE EU NEGOTIATION CHAPTERS CLOSED.
Latvian negotiators in Luxembourg closed two more chapters in the European Union accession talks on 12 June, raising the number of completed chapters to 15, LETA reported the next day. The newly closed chapters concerned the free movement of services and social policy and employment. Transition periods were granted in both chapters. In the services chapter, Latvia has until 2008 to achieve required payment levels for deposit guarantees and investor compensation. In the social policy chapter, three transition periods were granted for introducing EU legislative norms on labor safety and health. During the meeting, Latvia also opened two new chapters for negotiation -- agriculture and the free movement of people. Latvia hopes to complete EU entry negotiations by the end of 2002.

PRIME MINISTER VISITS PRAGUE.
Czech President Vaclav Havel told Latvian Prime Minister Andris Berzins on 12 June in Prague that "the world must respect the will of the Baltic countries to independently decide their own fate," according to CTK. Havel said "the world seeks...a new architecture, corresponding to the 21st century" and is "parting with the division into big power spheres of influence." Havel expressed his support for Latvia, Estonia, and Lithuania's efforts to become members of both NATO and the EU. Presenting Havel with a Latvian painting entitled "Masks," Berzins said his generation had been forced to live part of its life "under masks" and that everything must be done to prevent a repetition of such a scenario in order to allow younger generations to "live happily in a new Europe." Later, Berzins discussed economic relations and military cooperation with Premier Milos Zeman and, during a visit to RFE/RL headquarters, stated that the three Baltic states must be invited jointly for accession into NATO and the EU. "We, in Latvia," he said, "are looking forward to...trans-Atlantic participation in Latvia's security, as a guarantee that no group of countries will ever decide, divide, or influence [developments] here in Europe without asking us what we think about that." Berzins discussed Latvia's quest for EU and NATO membership, as well as bilateral relations, at meetings with the chairmen of both Czech parliamentary chambers, Vaclav Klaus and Petr Pithart.

SENIOR CUSTOMS OFFICIAL MURDERED.
Vjaceslavs Liscovs, director of the Ludza District of Latvia's State Revenue Service, was shot in the head and killed while on his way to work on 14 June, LETA reported. Liscovs, a seven-year veteran of the revenue service with a reputation for honesty and integrity, had been threatened in recent months by disgruntled former customs agents that had been fired on suspicion of corruption. Revenue service spokesmen said that businessmen angered by recent efforts by Liscovs to clean up operations at the Grebneva customs post on Latvia's border with Russia may also be responsible for the murder. Prime Minister Andris Berzins called the murder an act of "impertinence and a challenge" the government must meet, while revenue service head Andris Sonciks suggested that the murder showed that the "Mafia has declared war" on the revenue service.

EGGS THROWN AT AGRICULTURE MINISTER IN MOSCOW.
During the opening of the "Made in Latvia" exhibition at the Moscow International Trade Center on 13 June, Latvian Agriculture Minister Atis Slakteris was hit by an egg thrown at him by three youths, BNS reported. Moscow police detained two of the youths, aged 14 and 18. The elder of the two youths said he threw the eggs as a protest against the 15-year prison sentences meted out in Latvia to two Russian National Bolsheviks who occupied the steeple of Riga's St. Peter's Church in November.

FINLAND SIGNS MILITARY COOPERATION AGREEMENT WITH LATVIA.
Finnish and Latvian defense ministers Jan Enestam and Girts Valdis Kristovskis signed a military cooperation agreement on 9 June, BNS reported. The agreement was inked in the course of meetings between the defense ministers of the five Nordic and three Baltic states with U.S. Secretary of Defense Donald Rumsfeld in Turku, Finland. Kristovskis noted that Latvia hopes to receive military equipment and training assistance from Finland, which has become one of Estonia's main partners for military supplies after signing a similar agreement with that country.

NATURALIZATION FEE REDUCTION NECESSARY FOR CLOSING OSCE MISSION.
Foreign Minister Indulis Berzins asserted on 11 June that the recently passed reduction of the naturalization fee was an important precondition for closing the Organization for Security and Cooperation in Europe (OSCE) mission in Latvia, BNS reported. The OSCE Permanent Council forum on 14 June will hear a report by its representative in Latvia, Peter Semneby, who recently declared that he would recommend extending the mandate of the OSCE mission there for another six months until the end of 2001. Semneby said the developments in Latvia are very positive, but a "few things had to be completed" before the OSCE mandate can be fulfilled. He noted that while naturalization and citizenship issues are the focus of the OSCE mission, it is also helping Latvia develop an ombudsman's office and to strengthen other human rights institutions.

2001 BUDGET DEFICIT LIMIT RAISED TO 1.8 PERCENT OF GDP.
The parliament on 14 June approved in principle and designated as urgent amendments to this year's national budget that were approved by the Cabinet of Ministers the previous day, LETA reported. The amendments call for an increase in the state budget deficit of more than 10 million lats ($15.6 million) to 89.8 million lats, or 1.8 percent of GDP. The Welfare Ministry is expected to receive an additional 3.17 million lats, most of which would be for child benefits. Opposition deputies left the session before the vote, protesting that they had insufficient time to review the amendments since they were handed out only that morning. The parliament will vote next week on final approval of the amendments.

* A new monument to victims of communist terrorism was unveiled in Riga on 14 June, the 60th anniversary of the deportation by Soviet forces of more than 15,000 Latvian citizens to Siberia, BNS reported. President Vaira Vike-Freiberga, Chairman of the Union of Politically Repressed Persons Visvaldis Aivars, and Riga Deputy Mayor Inese Vaidere spoke at the dedication ceremonies. Later, at the Occupation Museum of Latvia, Vike-Freiberga said that the museum was needed because many people in the West know nothing about the deportations and many in the East do not wish to recall them.

* The parliament confirmed Olafs Bruvers to a second term as the director of the National Human Rights Office on 13 June, LETA reported. His first term, begun in 1997, expired on 28 May. The only party that formally opposed his appointment was the People's Party.

* The parliament confirmed Andris Gulans to a second seven-year term as chairman of the Supreme Court on 13 June, LETA reported. In hearings prior to the vote, Gulans suggested that the law on the Supreme Court, which defines the court as an independent body, should be amended so that its chairman is not nominated by the government, but rather by the president or the Supreme Court judges.

* The State Employment Service announced that on 1 June there were 94,763 people officially unemployed in Latvia, a decrease of 1,343 persons from 1 May, BNS reported on 11 June. The jobless rate varies in the country from a maximum of 27.7 percent in the eastern county of Rezekne to 3.7 percent in the city of Riga.

* The Statistics Office announced on 8 June that Latvia's consumer price index increased by 1 percent in May compared to April and by 2.7 percent compared to May 2000.

* In the first five months of 2001 cargo turnover at Latvia's three largest ports -- Ventspils, Riga, and Liepaja -- was 24,186,400 tons, an increase of 10 percent over the same period last year, LETA reported on 13 June. Cargo turnover in Ventspils (16,570,000 tons) and Liepaja (1,413,200 tons) increased by 9 percent, while in Riga it rose by 13 percent, to 6,203,200 tons.

WORK GROUPS FORMED TO RESCUE FOUNDERING GOVERNMENT.
At a meeting on 11 June, the leaders of the ruling coalition -- Prime Minister Rolandas Paksas of the Liberal Union, parliament Chairman Arturas Paulauskas of the New Union (Social Liberals), and Center Union Chairman Kestutis Glaveckas -- decided to establish five work groups to find a common position on important issues which have divided them, BNS reported. Vytautas Bogusis, the chairman of the Modern Christian Democratic Union (the fourth party in the ruling coalition), did not attend the meeting. The five issues to be discussed are tax reform, pension reform, the return of land nationalized during the Soviet occupation, the fate of the Mazeikiai oil refinery, and privatization of the state-owned natural gas monopoly Lithuanian Gas. Earlier the same day, Paulauskas met with President Valdas Adamkus, who stressed the necessity of having a political coalition capable of implementing necessary reforms. The next day Paulauskas lunched with Social Democratic Party Chairman Algirdas Brazauskas, whose party forms the main parliamentary opposition.

KALININGRAD, LITHUANIAN LEGISLATORS CREATE JOINT FORUM.
Kaliningrad Duma Chairman Vladimir Nikitin and Algimantas Matulevicius, the chairman of the Lithuanian parliament's contact group with Russia, signed an agreement on 13 June in Vilnius establishing a joint interparliamentary forum, ELTA reported. The forum, which intends to hold two meetings a year -- one in Kaliningrad and one in Lithuania -- will be headed by co-chairmen Nikitin and Lithuanian parliament Foreign Affairs Committee Chairman Alvydas Medalinskas. Nikitin is the head of a delegation of deputies from the Kaliningrad Oblast Duma that earlier that day met with Lithuanian parliament Chairman Arturas Paulauskas. Nikitin said the people of Kaliningrad have no fear of the possible membership of Lithuania in NATO, but are more concerned with its membership in the European Union because of the problems it would likely trigger, primarily in connection with the free movement of people and cargo. Nikitin also said that problems could arise because EU membership would make transmission of electrical power to Kaliningrad via Lithuania impossible.

DEFENSE COOPERATION WITH POLAND.
A delegation of Polish parliament deputies, headed by its National Defense Commission Chairman Stanislaw Glowacki, held talks in Vilnius on 12 June with Defense Minister Linas Linkevicius, ELTA reported. Glowacki suggested that the two countries organize joint purchases of weapons, as larger orders might provide them better terms. He stressed that Poland is "Lithuania's friend" and will try to help it become a member of NATO in 2002. Linkevicius reminded the Poles that Lithuanian-Polish relations are frequently cited as a model for other countries to follow. For example, the joint battalion LITPOLBAT has participated successfully in peacekeeping exercises and operations. The delegation held meetings with Lithuanian parliament National Security Committee Chairman Alvydas Sadeckas and other deputies. It also visited the Military Academy and the regional airspace surveillance center in Karmelava, which is located near Kaunas.

PARLIAMENT ADOPTS COMPULSORY MOTOR VEHICLE INSURANCE LAW.
The parliament by a vote of 65 to two, with seven abstentions, passed a compulsory third-party motor liability insurance on 14 June that will go into effect beginning 1 March 2002, "Lietuvos rytas" reported the next day. The law fixed the base insurance fee for cars at 220 litas ($55), but it can be reduced by up to a half or increased up to three times depending on the driving record of the vehicle's owner. The basic fees for motorcycles, mopeds, and tractors will be 80 litas, for buses 350 litas, and for trucks 375 litas. Farmers will be able to get a joint policy covering up to five pieces of equipment, such as tractors, combines, and harvesters. Lithuania is the only EU candidate country that does not yet have compulsory vehicle insurance and only about 20 percent of the cars in Lithuania are insured.

* Finnish and Lithuanian Defense Ministers Jan Enestam and Linas Linkevicius signed a military cooperation agreement in Turku, Finland on 9 June, BNS reported. It was Lithuania's 21st military cooperation treaty and provided for greater bilateral military cooperation with joint activities in medicine, history, and geography. The agreement also intends to regulate the two countries' efforts to boost security and stability in the Baltic region.

* Lithuanian State Border Protection Service Director Algimantas Songaila and Belarus National Border Guard Force Committee Chairman Lieutenant General Alyaksandr Pavlovsky signed in Hrodno, Belarus on 8 June a plan for carrying out joint border operations against illegal migration and drug smuggling, BNS reported. The border officials also discussed prospects for the signing of an intergovernmental agreement on the activities of authorized border agents.

* Lithuanian and Belarusian deputy foreign ministers Evaldas Ignatavicius and Alyaksandr Mikhnevich during a meeting in Vilnius on 12 June stated that cooperation between the two states was improving, BNS reported. They cited the example of the Belarusian economic exhibition, Belarus EXPO 2001, which opened that day in Vilnius. Ignatavicius noted that the favorable visa regime, which requires no fees for pensioners and border residents for Belarus, would have to end when Lithuania joins the EU.

* The veterinary authorities ended mandatory vehicle disinfection -- aimed at preventing the spread of foot-and-mouth disease -- at its border crossings with Poland on 8 June and with Latvia on 11 June, BNS reported. The disinfection requirements, however, remained at the border crossings with Kaliningrad and in the port of Klaipeda.

* The Department of Statistics announced on 8 June that the consumer price index rose by 0.6 percent in May compared to April and by 1.7 percent compared to May 2000, ELTA reported. Among the items whose prices increased the most in May were gasoline by 9.1 percent and diesel fuel by 6.4 percent. The prices of food and drinks increased by 0.4 percent.

* The parliament passed a law on 12 June which regulates terms for the use, sale, and purchase of products of genetic engineering and ways of determining their effect on the environment and human health, BNS reported the next day. The law, which will go into effect on 31 December 2002, stipulates that the public must be informed about genetically modified products and that a comprehensive database of genetically modified products will be established with open public access.

* In the first five months of this year, 7.462 million tons of cargo passed through the port of Klaipeda, or 18.8 percent less than in the same period in 2000, BNS reported. More than half the total cargo (4.955 million tons) was exports of heavy fuel and other oil products, whose volume decreased by 1.08 percent. This year 2,458 ships were loaded and unloaded at the port, a decline of 12.59 percent compared to 2000.