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Baltic Report: August 7, 2000

7 August 2000, Volume 1, Number 27
Prime Minister Mart Laar said that talks with U.S.-based NRG Energy on privatization of the Narva power plants will take several more months, ETA reported on 28 July. Laar's comments came after a regularly scheduled meeting with representatives of Estonia's largest business associations, who are concerned that electricity rates remain low. Opposition parties told BNS on 27 July they have gathered 60,000 signatures of the 160,000 needed to force a referendum on the question of privatizing both the Narva plants and Estonian Railways, but they failed to rally enough members of parliament for a special session on 25 July to debate the government's proposed deal with NRG Energy. Only 47 of the needed 51 parliament members assembled while an estimated 1,500 persons protested the proposed NRG deal outside the parliament building. Opposition parties, led by the People's Union, said they would continue to organize protests until the parliament could take up the question. Andres Tarand, chairman of the ruling coalition's parliamentary council, said that another extraordinary session could be called in August after further negotiations with NRG are held by the government. BNS reported on 21 July that the Estonian energy union had said that if the Narva power stations are not modernized by 2003 they will be closed because their pollution rates--particularly the release of sulfur dioxide--will exceed European Union standards.

Opposition party leaders stepped up their attacks against the government's plan to sell a minority share in the Narva electric power plants by charging that U.S. officials were pressuring Estonian authorities to complete the deal with U.S.-based NRG Energy, BNS reported on 29 July. The daily "Eesti Paevaleht" wrote on 29 July that U.S. officials have pressured Estonian authorities on at least 10 occasions in the last three years. Villu Reiljan, head of the opposition People's Union, said that Estonia would lose tens of millions of dollars of environmental assistance "because the European Union will not aid American capital," BNS reported on 27 July. Former parliamentary speaker Ulo Nugis accused U.S. Secretary of State Madeleine Albright of "unheard of and incomprehensible" behavior for sending a letter to Prime Minister Mart Laar welcoming the Estonian government's decision to sell a minority share of the Narva power plants to an American company. Leaders of four opposition parties, the Center Party, the People's Union, the United People's Party, and the Christian People's Party signed a joint letter to U.S. Ambassador to Estonia Melissa Wells warning that the sale to NRG would be detrimental to Estonia's national interests and economic competitiveness, BNS reported on 24 July.
* President Lennart Meri received the Batliner Prize for 2000--the Small Countries Prize on 23 July in Salzburg, Austria BNS reported. The award was given for devising and supporting the policy of small countries in Europe. Austrian President Thomas Klestil and the head of state of Liechtenstein, Prince Hans Adam II, attended the ceremony. In his remarks, Meri said, "A small country is more vulnerable, consequently more sensitive...The role of small countries is to be the barometer of European balance."
* The Russian Foreign Ministry issued a statement criticizing OSCE High Commissioner for Ethnic Minorities Max van der Stoel for being "unobjective" in his latest report on human rights in Estonia and Latvia, ETA reported on 30 July. The Russian Foreign Ministry said that the OSCE is "refusing to notice the opinion of national minorities in Estonia and Latvia" as the language situation continually worsens.
* Preliminary results of the latest census shows that Estonia's population has declined by more than 200,000 in the last decade, BNS reported on 24 July. The population stands at 1,370,500, of whom women form 53.9 percent.
* The Estonian State Audit Office criticized the general staff of the defense forces for failing to draft national defense plans and a security strategy, BNS reported on 26 July. The State Audit Office's report said that without these plans, the defense forces are unable to prepare an adequate number of officers corresponding to NATO requirements.
* The National Defense Committee of the Estonian parliament wants President Lennart Meri himself to explain his June decision to dismiss the defense forces commander, Lieutenant-General Johannes Kert, to an extraordinary session of parliament called for 28 August. The closed session of parliament was called by Meri to discuss the dismissal.
* Oleg Bodrov, chairman of Zelyonyi Mir (Green World), a Russian environmental organization, bicycled with 12 colleagues to Tallinn from St. Petersburg to draw attention to the environmental hazards to the Gulf of Finland caused by Russia's Sosnovy Bor nuclear power plant, which is 80 kilometers from St. Petersburg, BNS reported on 19 July. Bodrov said that the threat to Estonia's northern coast would increase if Germany and Russia build a plant for the production of nuclear fuel. Russia would ship the fuel to Germany through the Gulf of Finland. Bodrov said, "A single accident with a ship carrying nuclear fuel may cause... [an] environmental catastrophe [that could] destroy life in a large part of the Gulf of Finland."
* The European Bank for Reconstruction and Development will give Tallinna Vesi (Tallinn's Water) a 22.5 million euro ($22 million) loan, of which 15.5 million euros would be used to refinance a 1994 loan, ETA reported on 27 July. EBRD will also invest 10 million euros in the equity capital of Tallinna Vesi, once the city has sold a 50.4 percent stake to a strategic investor.
* Estonia's state-owned public television, ETV, is asking for a 42 million kroon ($2.62 million) loan from the country's stabilization fund, ETA reported on 26 July. Estonian broadcasting council members said that without the infusion, ETV will close by the end of the year. Finance Ministry advisor Daniel Vaarik said that under the law the stabilization fund can only be used to avoid or alleviate socioeconomic crises and lower risks to the overall economy, not solve the problems of one company.
* Estonian Economics Minister Mihkel Parnoja and his Latvian counterpart, Aigars Kalvitis, met on 26 July to discuss the proposed merger of the two countries' energy utilities, BNS reported. Parnoja said that future cooperation will depend on the decision of the Latvian parliament concerning Latvenergo's privatization. ETA reported that the Latvian government has cooled to the merger idea since the Estonian government agreed to sell a minority stake in its Narva power plants to U.S.-based NRG Energy.
* Representatives of Estonian and Latvian opposition parties decided at a meeting in Parnu on 24 July to form a joint working group to promote the creation of a joint Baltic energy system and to discuss energy problems at the Baltic Assembly as well, BNS reported.
* Experts at the Agriculture Ministry have forecast a better grain and potato crop for the country this year than in the previous two rainy summers, BNS reported on 19 July. The grain crop should reach 650,000 tons and the potato crop is estimated at 465,000 tons, or 15 tons per hectare. Last year, the country produced 404,000 tons of grain, and only 403,687 tons of potatoes, which is only 13 tons per hectare.
* Representatives of agricultural producers and the government agreed on 20 July that farmers will receive 639 million kroons ($32 million) in direct subsidies next year, ETA reported. Agriculture Minister Ivari Padar said 500 million kroons will be paid directly, with an additional 139 million kroons used to co-finance the European Union's SAPARD program for farmers. This year, farmers are receiving 478.8 million kroons in subsidies.
* Over 600 kilometers of electric power lines have been stolen in Estonia during the last week, dpa reported on 28 July. Authorities suspect the thieves snipped the lines for scrap metal causing a blackout for 543 rural households. Until this year, attacks on working infrastructure have been rare since there was considerable scrap metal left at abandoned Soviet army sites and outmoded factories. Estonian Energy estimates that it has sustained over 10 million kroons ($633,000) in damage to its power grid since the beginning of the year.
* Gennadii Gribovsky, director of the Viru Mine, which extracts the bulk of Estonia's oil shale, was shot to death on 24 July, AP reported. The Viru Mine is part of the energy deal negotiations between U.S.-based NRG Energy and the Estonian government. According to AP, assassinations of businessmen--while common in Russia--are comparatively rare in Estonia.
* Leeni Simm, head of the state language department at the Examination and Qualification Center, said that at least 5,000 ethnic Russians are waiting to take language proficiency exams , BNS reported on 20 July. The center suspended the exams when it ran out of funding from the Estonian Ministry of Education, which seriously underestimated the number of people who would be seeking language certification. Over 3,000 people have qualified this year already. Simm said: "Particularly young non-Estonians are interested in becoming fluent in the language because employers have begun to seriously demand fluency in the official language."
* A total of 22 children from Kyiv, Minsk, St. Petersburg, Vilnius, and Krasnoyarsk are attending Estonian-language camp in Estonia, BNS reported on 28 July. The camp is financed by the Integration Foundation with funds from Nordic countries, Great Britain, and the UN Development Program. Many more children of ethnic Estonians from former Soviet republics would like to learn their native language, but Population Minister Katrin Saks said that the ministry has insufficient funding.
* An administrative court in Tallinn fined Russian activist Oleg Morozov 2,300 kroons ($135) for violating the law on aliens but did not order his deportation, BNS reported 21 July. Morozov, a 45-year old Russian citizen, has refused to apply for a residence permit, protesting what he says is the Estonian government's 1992 action stripping him and thousands of other former Soviet citizens of their rights.

Speaking at RFE/RL headquarters in Prague on 28 July, Vaira Vike-Freiberga said she is confident her country will join NATO, adding that Russia "will simply have to accept reality." She said her country's aim of integration into NATO and the EU stems from its being a European country, and she remarked that "it does not matter one bit who is sitting in the Kremlin." The media in her country, she argued, are "distorting reality" when reporting on relations between the ethnic majority and the large Russian minority in connection with the controversy over Latvia's language law.

The presidium of the Latvian parliament on 26 July called an extraordinary session for 3 August to examine the privatization of the energy utility Latvenergo. This action became necessary after a petition drive against the privatization succeeded in collecting twice the number of signatures needed. A referendum will be called if the parliament amends or defeats the bill, but Janis Naglis, the director of the Latvian Privatization Agency, said the bill is likely to be defeated, BNS reported. The ruling coalition agreed to a bill on 26 July that restricts Latvenergo to a restructuring process without privatization, and keeps the Daugava power plants and high-voltage power line grid as state-owned property, registered in the name of the state. The opposition parties, led by the Social Democrats, are proposing to turn over the power plants and the energy grid to a joint-stock company that has yet to be created.

A study published by the Central Statistics Bureau indicates that 90 percent of 15 and 16 year olds in Latvia have used alcohol or drugs during 1999, BNS reported on 27 July. The report shows that 89 percent of boys and 88 percent of girls have consumed alcohol, while 59 percent of boys and 50 percent of girls have been drunk some time during the year. Some 71 percent of boys and 83 percent of girls have tried tobacco, while 12 percent of boys and 22 percent of girls tried marijuana. Some 28 percent of boys and 12 percent of girls consume alcohol at least once a week during the year. The report indicated that consumption has risen since a similar report in 1995, including a tripling of marijuana use.
* Latvian Defense Minister Girts Valdis Kristovskis will nominate Juris Kiukucans, the Latvian Defense Ministry's military representative to NATO, to become chief of the Latvian Home Guard, BNS reported on 19 July. The previous head of the LHG, Janis Kononovs, resigned over a disagreement with the government regarding military housing.
* The Latvian cabinet of ministers on 18 July decided that the Justice Ministry rather than the Education Ministry will administer the government's new program for societal integration, BNS reported. The program includes efforts to increase civic participation by non-governmental organizations, repatriation and migration issues, social and regional integration, education, language, culture, and information issues. A society integration fund is planned to popularize integration ideas within Latvia.
* According to preliminary estimates, as many as 6,000 Latvian residents may claim compensation as victims of Nazi slave labor during World War II, BNS and LETA reported on 19 July. Dainis Vanags, chairman of the Totalitarian Crime Assessment Commission in Latvia, said that the German government had not yet provided any information on how residents of Latvia could apply for claims. The German government had planned to compensate Latvian and Lithuanian victims through a Belarusian foundation, but Lithuanian authorities are protesting the decision insisting that compensation be made directly without third-party intermediaries.
* Latvian Economy Minister Aigars Kalvitis, after a meeting in Tallinn to discuss energy issues, told the Estonian daily "Postimees" that the merger between Estonian Energy and Latvian Energy has been stopped because of the involvement of a third party--U.S.-based NRG Energy, ETA reported on 27 July. Kalvitis said that the planned referendum in Latvia and the general anti-privatization attitude in the country has also contributed to the situation.
* The Russian Foreign Ministry issued a statement criticizing Latvia's and Estonia's language policies on 28 July. The Latvian Justice Ministry has just completed its draft regulations for implementing the state language law and sent them for review to the Organization for Security and Cooperation in Europe, BNS and LETA reported on 28 July. As soon as the OSCE opinion is obtained, the Latvian cabinet of ministers will consider the draft regulations--which could be as early as 14 August.
* Russia still has not provided a written reply to repeated requests by the Latvian Consul General in St. Petersburg to provide 24-hour guards at the consulate, BNS reported on 29 July. The consulate was provided guards for a few days immediately after the attempted firebombing of the building in early July. Latvian diplomats said that security arrangements at Russian diplomatic representations in Latvia will be revised if Russia fails to provide the 24-hour protection in St. Petersburg.
* BNS reported on 21 July that Aleksandr Perelygin, an advisor to the mayor of Moscow, who is also suspected of masterminding Russia's anti-Latvian campaign in 1998, had arrived in Liepaja, Latvia. The city council's press service said that the visit was organized by Latvian parliament deputy Gundars Boyars. Boyars said that Perelygin's goal is to promote investments by Moscow businessmen in Liepaja's port infrastructure and the development of agriculture.
* The Social Democrats have become the most popular political party in Latvia during July, BNS reported on 28 July. The latest public opinion poll conducted by SKDS, a survey research company, shows that if parliamentary elections were held now, the Social Democrats would win with 15.4 percent of the vote, up 1.2 percent from June. The party has been leading the opposition to the government's privatization of state-owned utilities.
* The Latvian Prosecutor-General's Office is investigating several current and former government officials under the anti-corruption law, BNS reported on 25 July. All the cases involve state officials who have declared income and assets in obvious disproportion with their previously declared incomes. The case involving ex-Premier Andris Skele has been delayed because the State Revenue Service has not yet turned over a report that should help determine if Skele's claim that he received a $29 million promissory note from Bolster Management for the sale of his former company Ave Lat Grupa (ALG), was a legal transaction. BNS also reported that income declarations showed that Riga International Airport board members had each received monthly salaries of over 4,000 lats ($6,400) last year. Transportation Minister Anatolijs Gorbunovs is considering terminating trusteeship agreements with all current Riga airport board members.
* The State Revenue Service has fined four of Latvenergo's nine council members for violations of the anti-corruption law, LETA reported on 28 July. The four, Uldis Pilens, Valdis Sutens, Dainis Dzervitis and Halfors Krasts, were found guilty of conflict of interest under the law and were fined between 50 lats and 100 lats ($80-$160) each. The investigation was conducted at the request of the prosecutor-general. Persons found guilty of such violations can be fined up to 250 lats ($400) and also dismissed from their posts.
* The State Revenue Service has fined seven members of the Latvian Privatization Agency's council, including chairman Ojars Kehris, with violations of the anti-corruption law , LETA reported on 28 July. The fines were 100 lats ($160) for assuming various positions simultaneously and receiving salaries for all of the positions.
* The Latvian National Civil Service Administration has ruled that Peteris Simsons, a defense ministry official dismissed over alleged violations of the anti-corruption law, had been fired illegally and reinstated him, replacing the dismissal with a reprimand, BNS reported on 27 July. Simsons was originally charged with violations in the awarding of public contracts for the supply of military uniforms. The Defense Ministry said that it will be difficult to reinstate Simsons because the former procurement department he ran has been reorganized, transferring some of its functions to the legal department of the ministry.
* Janis Lapse, state secretary at the Agriculture Ministry, said that if the current rainy weather remains, Latvia will have an emergency situation, LETA reported on 27 July. Lapse said that destructive rain is not included in the country's subsidy program. Harvesting of hay in the Jekabpils and Daugavpils districts is "catastrophic," Lapse said, and crops are under water in some lowland areas of Latgale.
* All five aviators from Latvia recently released from prison by the Indian government will soon travel back to Latvia to reunite with their families, BNS reported on 29 July. The men were detained in India in 1995 and sentenced to life imprisonment on charges of arms smuggling and conspiracy to overthrow the Indian government. They were recently pardoned by the Indian government and flown to Moscow on 25 July after Russian President Vladimir Putin joined Russian diplomats, the Russian Orthodox Church, as well as human rights groups in asking for their release. At the time of their arrest, four of the five crewmen held Latvian passports, the fifth, second pilot Oleg Gaidash, was a Russian citizen. During their imprisonment, the men accepted Russian citizenship, but plan on returning to Latvia to live.
* The city of Ventspils is celebrating its 710th anniversary, LETA reported on 28 July. Ventspils Mayor Aivars Lembergs is hosting a reception in honor of the city's founding and Minister of Economy Aigars Kalvitis will represent the government at the event.
* The Russian Global Press Forum was held in Riga from 25-28 July, LETA reported. Russian newspaper editors and publishers from Russia and 17 European countries as well as Australia, the United States, and Canada attended the conference to discuss mutual problems. A discussion devoted to the future of the Russian press showed that the most favorable conditions for the Russian press outside of Russia exist in Germany, where an estimated 3.5 million Russian-speakers live. There are about 6,000 foundations which regularly provide grants to the Russian press in Germany, one of the conference speakers, Dmitrii Feldman, said. Vladimir Beider said that the Russian press in Israel is thriving because the number of Russian readers is growing, and there are more newspapers in Russian than in Hebrew. Participants discussed starting a joint Russian newspaper to distribute in all Western European countries, especially Cyprus and Spain, where many Russians travel during summer.
* The Siberian tiger cub Amur was shown to the public at the Riga Zoo for the first time on 20 July, LETA reported. The cub, born in April at the zoo, is doing fine and accompanied his mother into the tiger enclosure. Siberian tigers are the largest and most powerful members of the cat family and the species is close to extinction due to shrinking habitat and increased poaching. Amur's parents, Arsis and Ambra, were captured in the late 1980s.

While on a private trip to Vilnius, Russian parliament member Aleksandr Chuyev called on Lithuania to suspend its law seeking compensation from the Russian Federation for the Soviet occupation, BNS reported on 19 July. Chuyev, the head of the Duma's group for relations with Lithuania, said that if that law was suspended then the Russian Duma could ratify the border agreement between Russia and Lithuania. Chuyev also called for clemency for those individuals convicted in Vilnius of taking part in the attempted communist coup in January 1991, and advised President Valdas Adamkus that it would be better to visit Russia after Lithuania's October parliamentary elections. Chuyev has been honored in Lithuania for his activist role supporting Lithuania in January 1991.

The Lithuanian parliament on 18 July successfully overrode a presidential veto on the controversial changes to the election law with a 72 vote in the 141-member chamber, ELTA reported. President Valdas Adamkus had vetoed the bill on 12 July, agreeing with opposition parties that the changes were too drastic to be instituted just three months before the general elections, scheduled for 8 October. The law changes the system for the 71 single-mandate constituencies by eliminating a second round of voting if no candidate receives a majority of votes cast; a simple plurality in the constituency voting will be sufficient for victory.

Before adjourning for its summer recess on 20 July, the parliament on 18 July also passed the country's first post-Soviet civil code, BNS reported. Parliamentary chairman Vytautas Landsbergis hailed the passage, saying that "this is truly the final separation from the USSR's civilian legal system." The legal code currently in place is a legacy from 1964. The six volume legal code was drafted with EU legal harmonization in mind, and the chapter on family law was harmonized with UN agreements such as the UN Convention for the Protection of the Child. The new civil code also covers areas such as inheritance and obligation. In its final days, the parliament adopted a number of laws ranging from the regulation of the electricity market to ratifying bilateral agreements with the Holy See, ELTA reported.
* European Commissioner for EU Enlargement Guenter Verheugen praised Lithuania for its progress in meeting European Union standards for membership, ELTA reported on 26 July. Verheugen was meeting with Lithuanian Prime Minister Andrius Kubilius in Germany to review Lithuania's situation.
* The Lithuanian Statistics Department on 28 July announced that the country's GDP grew by only 0.2 percent in the second quarter of this year, compared to the same period in 1999, ELTA reported. In the first half of 2000, GDP grew by a total of 2 percent. The previous week, the central bank had upped its forecast for 2000 to 3.1 percent. In the second quarter of 1999, GDP dropped by 1.4 percent. Average wages after taxes decreased 36.3 litas ($9.07) in the first half of the year. Comparing wage figures for June 1999 and 2000, wages decreased by 3.6 percent this year.
* Lithuanian President Valdas Adamkus vetoed two amended laws and returned them to the parliament on 27 July, BNS and ELTA reported. The president decided to veto the Law on Provision of Information to the Public because he had serious reservations about the role created by the new media controller's office. Adamkus also returned the Law on Public Service for further deliberation.
* The Lithuanian Military Academy has admitted women for the first time this year, BNS and ELTA reported on 24 July. The nine women will join 136 men who were also admitted to the academy this year seeking to become military officers. There were 540 applicants in all, 62 of whom were women. Last October, Lithuanian Defense Minister Ceslovas Stankevicius ordered that women be given opportunities for full-time studies at the academy.
* Preliminary data reveals that almost 20,000 Lithuanians may be eligible for slave labor compensation from Germany, ELTA reported on 19 July. The Center for Investigation of the Lithuanian Population's Genocide and Resistance Movement is in the process of drafting lists of applicants to submit to the Moscow-based public fund Accord and Mutual Understanding, which is to function as mediator in handling the compensation claims. Lithuanian Foreign Ministry officials have informed ELTA that Germany neglected numerous petitions by Lithuania to handle the compensation through local institutions and that they will continue to pursue the issue through the German Embassy in Vilnius.
* The office of the Lithuanian Prosecutor-General again has sent requests to Russian and Belarusian law enforcement officials to provide assistance in the ongoing case against defendants in the attempted January 1991 coup against the Lithuanian state, BNS reported on 20 July. Russia's "Novostei" news agency reports that Belarusian Deputy General-Prosecutor Aleksey Dovbysh acknowledges receipt of the request but doubts that it will be acted upon because "Lithuania's general-prosecutor failed to provide credible proof of Belarusian General Vladimir Uskhopchik's culpability during the January 1991 events.
* The British government may reintroduce visa requirements for Lithuanian passport holders because of increased numbers of Lithuanians seeking political asylum in Great Britain, BNS reported on 19 July. The British consul in Vilnius, Stephen Norman Tarry, brought up the issue in meetings with officials of Lithuania's Interior Ministry called to discuss the need for controlling the illegal flow of Lithuanian migrants.
* The implementation of a Lithuanian-Polish agreement on the export of energy to Poland via Belarus has been delayed because of Russia's influence, BNS reported on 21 July. Sources close to BNS report that the energy deal has been delayed because Russia's UES, which is headed by Anatoly Chubais, has its own interests in this energy sphere.
* Lithuanian energy distributor Lithuanian Energy posted a 51 million litas ($12.7 million), pre-audit net profit for the first six months of this year, ELTA reported on 24 July. The company kept its word and paid 50 million litas on its debt to the Ignalina nuclear power plant. Lietuvos Energija still owes Ignalina and various other creditors 80 million litas ($20 million). The significant half-year profit is attributed to a surge in electricity prices in local markets and a 10 percent decrease in production and distribution costs because of increased volume.
* The Lithuanian government on 26 July approved the plan drawn up by the Ministry of Economy to split the state-owned natural gas distributor Lietuvos Dujos into three independently operating companies, ELTA reported. The plan calls for Suskystintos Dujos (Liquified Gas) and Dujiniai Irengimai (Gas Equipment) to be split off from the core company. All three companies should be ready for privatization by fall. On 28 July, Prime Minister Andrius Kubilius ordered Economy Minister Valentinas Milaknis to conduct an investigation into whether any violations have occurred in the tender process for a consultant to prepare Lietuvos Dujos for privatization.
* Local governments in Lithuania want an increase in the 2001 municipal budget allocated by the central government, ELTA reported on 28 July. The board of the Association of Municipalities says that a minimum of 3.7 billion litas ($920 million) must be allocated for municipal budgets--37 percent of the national budget. This year municipalities received only 3.18 billion litas ($790 million) from the central government. Bronis Rope, president of the Association of Municipalities, said that the association may appeal to the Council of Europe if the government continues to underfund municipalities while increasing their legal obligations. Furthermore, 20 of 60 local governments have agreed to go to court to recover allocated money never paid to them during the current fiscal year, ELTA reported on 20 July.
* Vilnius resident and computer specialist Pavelas Iljinas, recently accused by Russia of spying for Lithuania and the United States, fled the country to Poland, on either the night of 24 July or early morning of 25 July, BNS reported on 26 July. Iljinas before his departure had asked the Lithuanian Prosecutor-General's office to protect him from Lithuania's State Security Department on 24 July. Iljinas charged that a car tried to run him down in Vilnius and that State Security officials were violating his rights. On the night he fled to Poland, Lithuanian customs officials confiscated two computer disks from Iljinas. On July 27, BNS reported that Lithuanian officials had found no state secrets on the disks.
* Members of the unregistered Lithuanian National Socialist Party told "Respublika" that they will field up to 10 candidates in the upcoming general elections in October, BNS reported on 17 July. The party's leader, Mindaugas Murza, said that they will take part in the single-mandate portion of the elections, noting that "to do that we only need to collect 1,000 voter signatures and put up collateral." The neo-Nazi party failed to gain official status after the Ministry of Justice refused to register the party on 12 July.
* On 21 July, the leader of the New Union (Social Liberals), Arturas Paulauskas, met with Kaunas Mayor Vytautas Sustauskas, ELTA reported. After the meeting the Kaunas mayor said that the New Union and his own Freedom Union "shared common views" and "both parties would fight to defend the property created by the local people in Lithuania."
* The Lithuanian Central Electoral Commission registered three initiatives on 28 July, sponsored by the opposition electoral alliance of Social Democrats and Labor Democrats. The initiatives ask for a reduction of the value-added tax (VAT) on heating, raises the minimum tax-free income, and preventing the privatization of strategic state-owned companies, BNS reported. If 50,000 individuals sign the petitions within two months, bills on these three issues will go to the parliament after the October general elections.
* The Lithuanian parliament on 17 July voted to create the preconditions for the restoration of the historical Jewish ghetto in the old town of Vilnius, ELTA reported. Jacques Legendre, the European Commission's culture and education committee member, visited Vilnius on 19 July and endorsed the action by parliament , BNS reported. Legendre said, "It is of great importance to all of Europe, and not only Vilnius and Lithuania, to preserve the memory of the past when Jewish and Christian cultures co-existed successfully together."
* Protesting Lithuanian farmers blocked the road leading to a border crossing point with Latvia, BNS reported on 26 July. Ten farmers blocked traffic travelling to the Salociai-Grenstale border station by sitting down in the middle of the road about three kilometers from Salociai. On the same day, farmers from various regions in Lithuania picketed outside government offices in Vilnius protesting new prices for grain. On 28 July, BNS reported that farmers from the Sulvakija region in southern Lithuania announced that they will join the protest actions of farmers in the north by blocking the Kalvarija border crossing with Poland next week.
* Prime Minister Andrius Kubilius, speaking on national radio on 28 July, urged protesting farmers to take a more active role in solving the problem of farm exports. Kubilius said that his government will provide just social support to farmers through direct payments based on the amount of cultivated land and number of cattle. Kubilius said that grain purchase prices should be governed by agreements between farmers and the processing firms.
* German authorities are offering a five-year legal employment program for information technology specialists from Lithuania, ELTA reported on 21 July. The program, developed by German federal authorities, comes into force on 1 August. This year Germany has simplified the issue of work permits to allow up to 20,000 green cards for information technology specialists from EU non-member states.
* ELTA reported on 28 July that preliminary talks between the city of Kaunas and French energy concern Dalkia on leasing the city's heating facilities have collapsed. Kaunas negotiators are reported to have said there was no point beginning official talks since Dalkia is offering only a $123 million investment plan. The issue will be decided by the Kaunas City Council. Similar talks to lease Kauno Energija to Sweden's Vattenfall failed to yield results earlier this year.


By Paul Goble

An unusual electoral arrangement between Lithuania's largest left of center party with a small one on the far right raises questions about what the former group intends if it wins the election later this fall and what the latter hopes to achieve.

This move appears likely to raise the specter both in Lithuania and abroad that the coalition of forces often thought to be far apart which has operated in one Lithuanian city may now spread to the country as a whole, a development that could fundamentally change Lithuania's domestic arrangements and reorient its foreign policy goals.

Arturas Paulauskas, the leader of the leftist New Union-Social Liberal Party which is widely expected to win the October parliamentary elections, earlier this week announced that his party would not field a candidate in a district in Kaunas where that city's mayor and leader of the radical populist Freedom Union Party Vytautas Sustauskas is running.

This is the second time that Paulauskas, who lost to Valdas Adamkus in the presidential race two years ago, has allied himself with Sustauskas, a man whose xenophobic views and authoritarian approach would appear to put him completely at odds with the left of center politics Paulauskas himself has publicly espoused.

In April, Sustauskas became mayor of Kaunas when the eight city council members from Paulauskas' party voted for him. That arrangement struck many people at the time as evidence of the possible emergence of an unusual coalition in Lithuania's second largest city which some have described as red-brown: red because of Paulauskas' ties to the old communist and security elites, and brown because of Sustauskas' nationalist populism and the anti-Semitism of some of his allies.

Such fears were fueled when the Kaunas city police controlled by Sustauskas did nothing to stop a group of rowdies many Lithuanians believe have ties to the mayor from beating up student demonstrators against his rise to power there, an action that has chilled political life in the pre-war capital so thoroughly that there have not been any marches or demonstrations since that time.

But because Paulauskas continued to maintain his ties with a number of centrist parties in the Lithuanian parliament and because he continued to support Lithuanian efforts to reintegrate into the West through eventual membership in NATO and the European Union, suspicions about the actions of his party colleagues in Kaunas had receded into the background.

Now, however, such suspicions appear certain to increase, thus affecting Lithuanian politics both during the campaign and afterwards.

By making this deal with Sustauskas, Paulauskas has effectively broken with the centrist parties with which he had been allied. They are thus likely to be ever less certain as to what he believes and thus ever less willing to cooperate with him in the future. And at least some are likely to ask why Paulauskas would be giving respectability to someone like Sustauskas, whom they have shunned.

Several centrist political figures already have pointed out the fact that Paulauskas could have helped their candidates in the same way he is helping Sustauskas. Others are now asking why the leadership of Paulauskas' party includes some who worked against Lithuania's drive to recover its independence. One of these--a failed candidate for the Vilnius city council--even was sentenced to prison for his role in the January 1991 events.

Such questions could further poison the upcoming election campaign and more seriously make the formation of a new coalition government far more difficult after the votes are counted. Indeed, it could force Paulauskas, whose party leads the polls but is not expected to gain a clear majority in the 141-seat national legislature, to seek the support of or even build a coalition with right-wing groups like those of Sustauskas.

In addition to giving Sustauskas a greater opportunity to spread his views, any such arrangements could mean that his opposition to foreign investment in Lithuania, to spending the money that NATO membership will require, and to the respect for civil rights that democracy requires would affect Lithuanian policy and especially its relations with the West.

That possibility is all the greater because Paulauskas himself already took the lead in organizing opposition to a major U.S. investment project in Lithuania and has raised questions about defense spending.

For all these reasons, at least some both in Lithuania and the West may conclude that Lithuania may be about to follow the path of several other post-communist countries where populists of the left and the right have linked up, and thus they may decide that Paulauskas and Sustauskas are as different as they appear at first glance are not really strange political bedfellows after all.