Baltic Report: February 14, 2000

* European Commission President Romano Prodi, during visits to Riga and Vilnius, urged the three Baltic countries to pursue their goals of EU integration at their own pace, noting that "the three Baltic countries are different."

* Estonian Economics Minister Mihkel Parnoja and U.S. Energy Secretary Bill Richardson sign a three-year agreement in Tallinn on research of oil shale, with promised funding at $1 million. Richardson said, "Estonia is far more advanced with using oil shale and we need that expertise."

* The Pro Patria Union of Prime Minister Mart Laar announced that deputy parliamentary speaker Tunne Kelam would be the party's presidential candidate in 2001. But the three parties of the ruling coalition suggested that they will take a joint approach in electing a successor to Lennart Meri.

* The government extended the validity of privatization vouchers until the middle of 2002. This action comes as the government admitted that land reform could not be completed by the current expiration date of the vouchers at the end of this year.

* The parliament adopted a law on telecommunications that brings the country's legislation closer to EU norms, including the opening of the fixed-line telephone market to competition. Foreign Minister Toomas Hendrik Ilves earlier urged the adoption of the law, as it was an important roadblock in Estonia's legal harmonization with the EU's acquis communautaire.

* Inflation was 0.5 percent in January.

* Aleksei Paal was sentenced to 10 years in prison for the murder of his father, Anatoli Paal. The elder Paal was the head of the Narva Power Plant before being killed in an apparent domestic dispute.

* EC President Romano Prodi and Commissioner for Enlargement Guenter Verheugen visited Latvia on 9-10 February and reaffirmed support for Latvia's EU integration. Verheugen said that the EU will support Latvia with 100 million euros ($98.5 million) this year, a large part of it devoted to developing the business climate in the country. Prodi also suggested compromise in the EU-Latvia standoff about the latter's import tariffs on pork.

* The parliament passed the first EU integration strategy by a 77 to 2 vote, despite persistent criticism from the opposition. The session of parliament was picketed by "Euroskeptic" protestors.

* Israel decided to send a Foreign Ministry official to a Latvian-sponsored meeting on war crimes prosecution. Earlier, Israel said investigators were too busy to attend the session, to which Latvian President Vaira Vike-Freiberga voiced surprise and disappointment.

* Reports indicate that the contract signed with Latvian Privatization Agency Director Janis Naglis is open-ended, possibly in violation of various regulations. No decision on the fate of Naglis has been made, though there appears to be conflict within the three-party ruling coalition over his fate.

* The head of the parliamentary Chechnya friendship group, Juris Vidins, announced that he had obtained supposedly secret documents on Russia's "genocide" in Chechnya. Russia's ambassador to Latvia, Aleksandr Udaltsov, discounted the documents, calling it a "bad dream."

* A joint report by the UN Development Program and the Welfare Ministry said that 10 percent of Latvians live below the "ultimate" or third poverty line, having monthly expenditures for essentials (clothing, shelter, food) under 24 lats ($40.34).

* Inflation in January rose by 1.1 percent, a significant jump from the 0.2 percent rise in December. Prime Minister Andris Skele attributed the increase to changes in the tax code.

* Unemployment remained at 9.1 percent nationwide, with Riga showing the lowest jobless rate at 4.9 percent. Rezekne had the highest at the end of January with 27.3 percent.

* U.S. Energy Secretary Bill Richardson made a short visit to Latvia, during which he signed a memorandum on clean energy with Economics Minister Vladimirs Makarovs.

* The parliament adopts a resolution concerning the fate of RFE/RL correspondent Andrei Babitskii, who disappeared and was purportedly handed over by Russian officials to unknown parties. The parliamentary statement called on Russia to take full responsibility for Babitskii and asked the Council of Europe to urgently examine the matter.

* Unemployment hit a record high in January at 10.8 percent, a jump of 0.8 percent from the month before. Several regions have much higher levels of joblessness, such as Ukmerge (20.5 percent) and Salcininkai (20.3 percent), as well as cities like Siauliai (16 percent) and Panevezys (15 percent). But statisticians say the actual rate of unemployment is closer to 15 percent nationwide, as the official rate considers those who register only.

* Inflation in January jumped by 1.5 percent, as expected, because of utility rate increases. Electricity tariffs alone jumped by about 30.2 percent. But the producer price index dropped by 0.4 percent in January. * Lithuania successfully floated a bond issue totaling 250 million euros ($246.33 million). The eurobond issue was oversubscribed by 30 percent, according to the Finance Ministry.

* Rimantas Vaitkus was named deputy minister for economic affairs. He will be responsible for decommissioning the Ignalina Nuclear Power Plant. Lithuania is committed to shutting down the first unit of the controversial power plant by 2005; the fate of the second unit will be considered by 2004. Part of Vaitkus's task is to find funding for this operation.

* Businessman Arvydas Stasaitis was released from custody after being incarcerated for over five years. Stasaitis, accused of widescale fraud, was extradited from Russia to Lithuania in 1994. The prolonged trial ended in a 1998 conviction, but the verdict was overturned in 1999 due to an extradition technicality. However, Stasaitis was held in pre-trial custody all that time. The Supreme Court has issued a reprimand to the Kaunas District Court for violating the defendant's civil rights. Stasaitis is also pursuing a case against Lithuania at the European Court of Human Rights in Strasbourg.

* The Supreme Court also struck down a provision allowing the government to disqualify former Communist officials from pensions. An estimated 1,900 individuals were affected by the provision.

* Prosecutor-General Kazys Pednycia plans to question former Prime Minister Rolandas Paksas concerning his company. Russian investigators have asked their Lithuanian counterparts to question Paksas over the transfer of funds to Austria from a construction project in Russia. Some prosecution officials have been reprimanded for not acting on the request for many months. * The merger between Hermis and Vilniaus Bankas (Bank of Vilnius) has been completed, as the latter remains the sole legal entity.

* Two well-known former dissidents--head of the Lithuanian Helsinki Group Viktoras Petkus and parliament member Aloyzas Sakalas--condemned the county's lustration law forcing former KGB operatives to register with authorities. Petkus called the law "a major violation of human rights," while Sakalas said it is tantamount to a "state blackmail law." The registration law is among several lustration laws passed in 1999.

* Valerijonas Valickas is reappointed head of the Customs Department. Valickas headed the department from 1990-1992, but was sacked due to allegations of improprieties. However, a board examining the hiring found no information that hinders the reappointment.

* The Liberal Union of former Prime Minister Rolandas Paksas remained the most popular at 16.4 percent, according to a Gallup poll. The Center Union followed at 10.4 percent, then the ex-communist Lithuanian Democratic Labor Party at 7 percent and the Social Democrats at 6.9 percent. The ruling Conservatives fell to 3.7 percent, below the 5 percent minimum threshold.

Estonia's Birth Certificate

By Mel Huang

Russia's ambassador in Tallinn, Aleksei Glukhov, touched off a firestorm when he said on the eve of the 80th anniversary of the 1920 Tartu Peace Treaty that it was obsolete. For most Estonians, that document, in which Russia "renounces voluntarily and forever all rights of sovereignty formerly held by Russia over the Estonian people and territory," is the birth certificate of their country.

In his statement, Glukhov said that "the 1920 Tartu Peace Treaty is an object consigned to history, which should be considered by historians, not by politicians, who deal with the present day and future." Not surprisingly, Estonian politicians responded promptly and negatively.

Prime Minister Mart Laar said Glukhov transformed the issue into poetry, dryly suggesting sending a copy of a history book for fifth-graders written by himself. Parliamentary deputy and historian Kullo Arjakas remarked that the Tartu Peace Treaty is one of the basic documents of the Estonian state, and, in a way, also for Soviet Russia, as it brought the regime out of international isolation. That is because the Tartu Peace Treaty led to the recognition of Soviet Russia by Estonia, the first independent country to do so.

Looking at Glukhov's remarks more as a policy statement, Andres Tarand, the chairman of the parliament's Foreign Affairs Committee, said that he hoped this does not indicate "a new foreign policy direction for Russia"--possibly exacerbating the still unresolved issue of the border between the two countries. The Russian side continues to demand that Estonia repudiate the Tartu Treaty, despite successful negotiations to remove from the discussions the issue of lost Estonian territory--areas around the city of Ivangorod just east of Narva as well as around Pechory, where the kindred Setu people live. The latter case has proved to be most difficult on the Estonian side, as the homeland of the Setu had been chopped in half due to this concession. Though the technical points of the border agreement have been settled (such as the legal border line) during earlier negotiations, Russian officials continue to link the border finalization with non-related topics, such as Estonia's policies on language.

Another specific point raised by Glukhov that angered many in Estonia was his assertion that Estonia joined the USSR voluntarily in 1940. Glukhov wrote, "Legally and factually The Tartu Peace Treaty of 1920 faded, when Estonia joined the USSR." Foreign Minister Toomas Hendrik Ilves led the attack on that point, saying Russia remains committed to the assertion disbelieved by the rest of the world that the incorporation of Estonia, Latvia, and Lithuania into the USSR was voluntary.

Though the statement was made at the embassy level and not from the Russian Foreign Ministry, Glukhov's remarks were universally seen by Estonians as undercutting progress in relations between the two countries. And they were viewed as yet another attempt to rewrite the past to conform to Moscow's understanding. As Andres Tarand told "Postimees," "I hope that an objective historical shift is forthcoming, as the Russian ambassador would not seek to identify himself with Bolshevik leader Ulyanov-Lenin, who defended and explained his position during the time of the Tartu Peace Treaty."