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Baltic Report: September 11, 2000

11 September 2000, Volume 1, Number 31
One of Sweden's largest banks, Skandinaviska Enskilda Banken (SEB), announced on 28 August that it is planning to take full ownership of the banks it now holds a controlling stake in by the end of the year, BNS reported. SEB holds large stakes in Lithuania's Vilniaus Bankas (42 percent), Latvia's Unibanka (50.5 percent), and Estonia's Uhispank (50.2 percent), which in turn owns Latvia's Saules Banka. The bank plans to delist all three banks from the stock exchange by offering to buy all floating shares. SEB President Lars Thunell said that it was a "logical step" in their regional strategy, ELTA added.

The prime ministers of Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden met in the Estonian resort town of Parnu on 28 August in a regular meeting under the "5+3" formula. The Nordic premiers reiterated their support for Baltic membership in NATO, hoping that the planned NATO summit in 2002 would yield positive results for the three Baltic states, BNS reported. Swedish Prime Minister Goran Persson also said that EU enlargement should become clearer under the Swedish presidency next year. The group also discussed information technology issues, such as general cooperation and e-commerce.

Foreign ministers from the Nordic and Baltic countries met on 29-30 August in Middelfart, Denmark, to discuss regional cooperation, including EU and NATO enlargement, BNS reported. Danish Foreign Minister Niels Helveg Petersen said that EU enlargement is "well on track," adding that "the Baltic countries have made impressive progress economically and in other areas, and their membership perspective is now very clear." The group agreed that the EU must be ready for enlargement by 2002. EU foreign policy chief Javier Solana also attended the meeting and suggested the Baltic countries are on their way to both NATO and EU membership: "I am sure that both processes will end happily soon." More important, after years of meeting under the so-called "5+3" formula, the foreign ministers also decided to acknowledge the strengthened cooperation between the two regions and to simply call such regional forums a meeting of "eight." Estonian Foreign Minister Toomas Hendrik Ilves called the move "logical and sensible," ETA reported.

The environment ministers of Estonia, Latvia, and Lithuania met in Riga on 31 August and 1 September to discuss preparations for European Union membership and the negotiations over the environment chapter, ETA reported. They also discussed preparations for the European environment conference in Kyiv in 2002. Swedish Environment Minister Kjell Larsson advised the Estonian government on 30 August that the European Union would not ease any of the environmental requirements applicable to Estonia and that transition periods for compliance can only be granted in cases where large investments are necessary to comply with those standards. The Environment Protection and Energy Committee under the Baltic Assembly met in Vilnius on 1 September to survey the utilization of EU funds provided for environmental protection in the three countries, BNS reported.

In an acrimonious session on 28 August, the Estonian parliament narrowly voted to dismiss Lieutenant-General Johannes Kert from the post of Defense Forces commander, ETA reported. This 47 to 46 vote, supported mainly by the ruling coalition, affirmed the 30 July decision of President Lennart Meri to remove Kert. Speaking to parliament before the vote, Meri suggested Kert was overpoliticized: "I made a proposal to the general, in a very discreet and calm manner, to assume another office in the Defense Forces leadership. General Kert refused that, taking steps which are not consistent with principles of civilian control," BNS reported. Kert, also speaking to the parliament, defended himself saying: "I don't know what the president is reproaching me for." The parliament did not vote to appoint a new commander, so Lieutenant-Colonel Aarne Ermus remains acting commander of the Defense Forces.

It appears that a mistaken vote by parliament deputy Tonu Kauba of the opposition Center Party resulted in Kert's dismissal, ETA reported. Kauba said he was playing with the electronic voting system when his erroneous "for" vote was registered, despite his party being adamantly against the dismissal. Disputed votes can only be challenged during the same session, thus the close 47 to 46 vote to remove Kert stands. The Center Party faction the next day voted to remove Kauba from their faction. "I'm extremely upset that I let my colleagues down," Kauba told BNS.

At a meeting of the State Defense Council on 27 August, President Lennart Meri proposed Rear Admiral Tarmo Kouts, head of the Border Guards, be named as the new commander of the Defense Forces, ETA reported. The defense council subsequently approved this nomination and two of four parties in the ruling coalition have endorsed Kouts' candidacy. Among the opposition parties, the Center Party, has not yet adopted a position, while the People's Union has agreed to support Kouts, ETA reported on 29 August. The extraordinary session of parliament failed to draw a quorum on 29 August because several governing coalition members failed to stay for the session to discuss important legislation on EU integration, also leading to a delay in consideration of Kouts' candidacy.

Estonia ordered two Russian Embassy officials to leave the country within 48 hours for "activities incompatible with their diplomatic status," a normal euphemism for spying, Reuters and AP reported on 31 August. Though the Estonian Foreign Ministry confirmed the expulsion, it refused to comment on the case. Citing an anonymous source from the government, the daily "Postimees" reported on 1 September that the two expelled diplomats "definitely exceeded the limits of diplomacy" in collecting information about Estonia's border defense, adding that diplomats "cannot turn diplomacy into espionage." BNS reported on 31 August that the two Russian diplomats were Legal Attache Vladimir Telegin and Yuri Yatsenko, whose status with the embassy remains unknown. Estonian special services identified the espionage activities of Telegin and Yatsenko as early as this spring, and the Estonian Foreign Ministry asked Russian Ambassador Aleksei Glukhov to send the men home to Russia voluntarily, ETA reported on 1 September. They were ordered out only after the Russian government refused to abide by the Estonian request.

The Russian Foreign Ministry issued a statement on 31 August "bluntly rejecting the accusations" of spying from Estonia, calling this a "deliberate provocation" that "seriously damages Russian-Estonian relations," BNS reported. Russia retaliated by ordering two Estonian diplomats expelled, saying, "Estonia bears the full responsibility for this." Estonian Ambassador Tiit Matsulevits said such things are common between neighbors and noted that "Estonian-Russian relations have not been as good [as they are now] in the past 500 years," "Postimees" added. Russia first expelled an Estonian diplomat for alleged spying in 1996 and Tallinn followed suit, expelling a Russian Embassy official. Then, in March 2000, Russia's Federal Security Bureau detained a Russian citizen it said had spied for Britain with the help of Estonia's security police.

The parliament on 28 August defeated a no-confidence motion against Economics Minister Mihkel Parnoja, Reuters and ETA reported. The opposition-sponsored motion failed on a 46 to 50 vote. The opposition accused Parnoja of harming the nation's interest by pushing for the sale of a 49 percent stake in the country's main power plants to the U.S.'s NRG Energy, which was signed on 25 August. The opposition also criticized Parnoja for adhering to a non-disclosure clause and not making the entire sale agreement public. Following that, a session due to discuss the NRG deal collapsed for the third time in recent weeks due to a lack of quorum.
* David Oddsson, the prime minister of Iceland, said on 29 August while on a three-day visit to Estonia that Iceland supports Estonia's membership in NATO and that the historic opportunity to enlarge the alliance should not be wasted, ETA reported. But he added that many NATO countries were not ready to admit Estonia and its Baltic neighbors during the next round. Oddsson, also in Estonia for the meeting of Nordic and Baltic premiers, said that although Iceland is small and plays a smaller role in NATO affairs, it can speak through its vote. President Lennart Meri expressed interest in learning from Iceland's experience in creating a national genetic database, which Estonia has decided to develop. Oddsson also opened an exhibition on Icelandic books at the National Library.
* Estonian Interior Minister Tarmo Loodus and Russian Interior Minister Vladimir Rushailo signed a cooperation protocol on joint activities of the two countries in the fight against crime, BNS reported on 31 August. The two ministers met in Pskov, a Russian regional capital not far from the Estonian border, to sign the agreement, which includes plans for information exchange, the training of specialists, and crime control and prevention in border regions.
* The Estonian government voted to drop sanctions against Yugoslavia on oil and oil products, ETA reported on 29 August. The action brings Estonia into compliance with the Council of Europe position on Yugoslav sanctions adopted on 22 October 1999. The Council of Europe made its decision in order to support the democratic opposition in Serbia, which holds the majority in several city councils in Serbia. Trade between Estonia and Yugoslavia is almost non-existent.
* The Estonian Defense Ministry announced its intention to sell four Soviet-made helicopters at public auction to make room in air force hangars for four Robinson helicopters given to Estonia by the U.S., BNS reported on 29 August. The asking price for the cheapest of the helicopters is 43,000 kroons ($2,500) and bidding for two others will start at 200,000 kroons ($11,700). The United States is donating the four Robinson R-44 helicopters, which are valued at $1.8 million, to the Estonian Air Force. The U.S. military will also pay for the training of the helicopter crews.
* U.S. businessman Gregg Beemis, who led the controversial diving expedition at the site of the sunken ferry "Estonia" in the Baltic Sea last week, announced in Hamburg on 1 September that his team had discovered a hole on the starboard side of the sunken boat, Reuters reported. However, Beemis could not confirm that the hole was caused by a bomb, as has been speculated. A three-year official investigation blamed the ferry disaster in which 852 of almost 1,000 persons drowned on a design flaw that allowed heavy waves to knock the ferry's bow door open and flood the car deck.
* Prime Minister Mart Laar told Social Affairs Minister Eiki Nestor that he must find money from the ministry's existing budget to implement the law requiring an allowance system for the disabled, BNS reported on 29 August. Laar said that the government could not provide an additional 100 million kroons ($5.75 million) to pay for the subsidies. The governing board of Nestor's party, the Moderates, voted that the law on social support of the disabled must come into effect on 1 January 2001. Laar, who is the leader of the Pro Patria Union, the largest party of the ruling coalition, said he expects heated debates over next year's budget both in the three-party ruling coalition and in the parliament.
* Prime Minister Mart Laar said that the government would not receive any funds from the expected profits of the central bank to help finance the budget for next year, ETA reported on 30 August. The central bank is unwilling to allow the money to be used, out of concerns that the government's deficit spending would burden Estonia's economy. This year's state budget hoped to collect 130 million kroons ($7.6 million) from the central bank, but the bank refused to transfer the sum referring to a 79.4 million kroon loss the previous year.
* Economic growth in Estonia was 7.5 percent in the second quarter of 2000 compared to the same period a year earlier, according to the State Statistical Office, AP and ETA reported on 1 September. Since the first quarter of the year showed a 5.2 percent growth rate, the latest statistics suggest that the Estonian economy is well on the road to recovery after the collapse of Russia's economy in August 1998. Analysts say that the strong growth rates, the highest among the Baltic states, are a reflection of increased Estonian exports to Western markets and increasing domestic consumer demand. Nonetheless there is concern because the country's current account deficit is expected to reach 7 percent of GDP as opposed to 6.3 percent in 1999.
* Estonia's unemployment rate fell from 14.8 percent in the first quarter of the year to 13.2 percent in the second quarter, ETA reported on 28 August. Northeastern Estonia has the highest unemployment rate in the country--19.2 percent.
* Estonia's second largest bank, Shispank, signed an agreement with the European Bank for Reconstruction and Development (EBRD) to receive a 6 million euro line of credit to provide loans to small and medium-sized businesses in Estonia, ETA reported on 31 August. The EBRD is requiring Shispank to loan at least 50 percent of the amount to small businesses outside of Tallinn.
* Foreigners who have an Estonian permanent residence permit will have to register their absence from the country at the Citizenship and Migration Department if they are abroad for more than 183 days a year, ETA reported on 29 August. The registration will be valid for up to two years provided it is within the term of the residence permit. A person's residence permit can be revoked if he/she fails to register his absence.
* With the new school year--which began on 1 September--Estonian language studies became obligatory in all non-Estonian language schools in all grades, ETA reported on 31 August. The parliament adopted the requirement in amendments to the school law last year. Until now Estonian language studies in non-Estonian schools were compulsory only from the third grade. The parliament's committee on culture and education reported that some 70 non-Estonian schools were already teaching Estonian from the first grade even before the law was changed.
* The city government of Tallinn did not receive any bids for the Tallinn city development area in central Tallinn near the port, ETA reported on 31 August. The city's aim was to sell the area for 100 million kroon ($6 million) and an investment obligation of 800 million kroons ($48 million). It encompasses 4.28 hectares of land and is seen as one of the prime locations in the capital.
* The profits of Estonian shale oil producers will almost double this year because of the rise in world oil prices, ETA reported on 1 September. This year, the turnover of AS Viru Keemia Grupp, one of the largest Estonian producers, will be near 367 million kroons ($21.5 million), double last year's figure, said Janek Parkman, board chairman of the company. AS Viru Keemia Grupp has started renovating a third oil shale plant to increase production while the demand for Estonian oil shale is greater than the Tallinn port is able to handle for export.
* The youth caucus of Estonia's Moderate Party said that the Center Party may be using the signatures they have collected under a referendum initiative against the sale of the country's Narva power stations to set up a database of potential party supporters, BNS reported on 29 August. Jorgen Siil, general secretary of the Young Moderates, said since the organizers of the initiative have not yet presented the lists of signatures to any official institution and also refused to show them to the government, signatories of the initiative should demand a police investigation.
* One of Estonia's two leading newspapers, "Eesti Paevaleht," which has so far failed to earn a profit, will change its format on 18 September, ETA reported on 28 August. Under the management's new cost-cutting plan, 22 employees will be laid off and the paper will be printed in a smaller format. Board chairman Hando Sinisalu told ETA that the paper will continue to focus on news, opinion, analysis, and issues in Tallinn and will not become a tabloid.
* Estonian police said that drug-related crimes grew to 513 cases in the first half of the year from just 129 cases in the first half of 1999, ETA reported on 30 August. The number of persons arrested for illegal possession of drugs grew from 468 in all of 1999 to 895 in the first six months of 2000.
* Estonia's first refuse management site that corresponds to European Union requirements will open in central Estonia in October, ETA reported on 31 August. The site covers 14 hectares and includes seven dumping areas; the first area will be open for five years and expects to handle 15,000 tons of refuse a year. The site took six years to prepare and it was financed by the Danish Environment Agency.

The Latvian Constitutional Court on 30 August upheld the law that bans former KGB agents and members of outlawed organizations as of 13 January 1991 from running for local and national office, LETA reported. The court said that both the constitution and international human rights documents regarding candidates for public office allowed for reasonable restrictions to be laid down in law, BNS reported. Aleksandrs Bartasevics, one of the 23 opposition lawmakers who filed the challenge, said that this prohibition makes Latvian elections less than free because numerous residents are banned from participating in them. Gunars Kusins, head of the parliament's Legal Bureau pointed out that "the ban is objective and proportional to the goal--to strengthen Latvia's national system and independence."

OSCE High Commissioner for Minorities Max van der Stoel on 31 August expressed his satisfaction with the regulations to Latvia's language law. In his statement, van der Stoel said that the regulations are "essentially in conformity with both the law and Latvia's international obligations," BNS reported. However, van der Stoel did ask the Latvian government to make some minor adjustments on issues such as interpretations during public events. Minister of Justice Ingrida Labucka told reporters on 31 August that when the regulations take effect, "nothing much will change in the life of residents." Labucka gave the example of the Daugavpils City Council, which has hired an interpreter to assist residents who have problems with the state language to draw up documents and file forms correctly. The law and regulations go into effect on 1 September.

The Legal Committee of the Latvian parliament on 29 August failed to support a motion to lift the parliamentary immunity of deputy Janis Adamsons to allow prosecution of the controversial lawmaker, LETA reported. After testimony from prosecutors, the committee voted 2 to 6, with one abstention. The parliament's Mandate and Submissions Committee also refused to lift Adamsons' immunity by a 2 to 4 vote. The decision by both committees is only advisory, and the motion can still be put to a full parliamentary vote. With most parties already declaring how they intend to vote on the issue, it appears the vote could be close, with the coalition For Fatherland and Freedom party casting the decisive votes. Adamsons is accused by prosecutors of libel for linking several high government officials--including then-Premier Andris Skele--with a pedophilia scandal. The full parliamentary vote is due on 7 September.
* The International Monetary Fund's latest mission to Latvia met with Prime Minister Andris Berzins to discuss the country's efforts to keep the government budget deficit for fiscal year 2000 to within 2 percent of GDP, LETA and BNS reported on 30 August. The planned 2001 budget in which the government hopes to lower the deficit to only 1 percent of GDP was also discussed The IMF team stressed the necessity of restricting the social budget to keep the fiscal deficit in check.
* The Defense Ministry is considering suing the Slovak munitions firm Katrim Stella for failing to comply with its contract, BNS reported on 31 August. Five years ago, the Latvian government guaranteed a $3.9 million contract for the purchase of weapons. The automatic rifles and grenade launchers the firm delivered to Latvia were defective and have been ruled useless. The Defense Ministry is seeking to have the firm take back the weapons and return the ministry's advance payment of 300,000 lats ($489,000).
* Diphtheria has been established as the cause of the epidemic which broke out among the first year students at the Latvian Defense Academy last week, LETA reported on 28 August. Over 80 students came down with symptoms of swollen tonsils and inflammation of the throat, and 43 were confirmed as suffering from diphtheria at the Latvian Infectious Diseases Center, Reuters reported on 29 August. Baiba Rozentale, director of the center, said that the first students diagnosed have contracted a mild form of diphtheria, but there may be carriers among the others. There are concerns about the academy's vaccination program because all the students except for one had been vaccinated against diphtheria this year, LETA reported on 30 August. Latvia has been battling sporadic outbreaks of diphtheria since 1994, urging the population to make use of its free vaccination program to prevent the disease, which can be deadly. All the cadets are responding to treatment with antibiotics and are expected to be released from the hospital within 10 days.
* Prime Minister Andris Berzins said that Latvia will experience a labor shortage within three to four years, LETA reported on 31 August. Berzins suggested in an interview over Latvian national radio that the retirement age should be raised to encourage older workers to stay in the workforce to help alleviate the coming shortage. Even though Latvian companies are reluctant to recruit older workers at this time, Berzins said that attitudes will change as the need grows.
* A campaign against illegal drug use was launched in Riga on 28 August, LETA reported. The public campaign is financed by the joint-stock company "Rigas slimokase" (Riga Health Insurance) and supported by the Riga City Council. The new campaign will distribute 100,000 booklets to parents of school children in early September highlighting the negative influence of narcotics on the human body. Outdoor anti-drug use posters have been placed at 26 sites throughout the city. Riga City Council chairman Andris Argalis told reporters that the municipality has had to get involved in fighting the spread of drugs since the government's measures have been ineffective. The Riga City Council recently established the Riga Narcotics Bureau, which works with school children to keep them from using drugs. Argalis said he wants Latvian law enforcement to step up the arrest of drug dealers.
* The Latvian Oncology Center in Riga has received a $1 million donation from a Latvian-born Australian to buy needed radiotherapy equipment required for the treatment of cancer patients, BNS reported on 1 September. Tatjana Buks, who gave the money to the Latvian Cancer Foundation with instructions to buy the necessary equipment, said that she decided to help after reading several articles on the lack of cancer treatment in Latvia published in the daily "Diena."
* Parliament member Valdis Birkavs criticized Latvia's judiciary for its handling of the case against former Banka Baltija Chairman Aleksandr Lavent, who has been in jail for over five years despite an ongoing court case. Speaking to Latvian Radio, Birkavs said, "of course it is a violation of human rights," adding this case could hamper Latvia's EU integration, LETA reported on 31 August. Recently, officials from the Israeli Knesset and Austria's Freedom Party have called the case a violation of Lavent's human rights. Lavent is charged with irregularities in the collapse of Banka Baltija in 1994--the fourth largest bank in Latvia at the time--and is due to make his closing statements on 1 September. Birkavs said that the judicial system can be put in order in a short time.
* The Office of the Russian Prosecutor-General informed its Latvian counterpart on 30 August that Moscow will not extradite two witnesses in the so-called "pedophilia scandal." The two young men allegedly made statements linking Interior Minister Mareks Seglins to the case, but Latvian prosecutors found them to be false, LETA reported. Russian officials detained the two In Moscow on 18 July after Latvian officials requested cooperation.
* The Riga Regional Court on 31 August convicted Ainars Eisaks of sex crimes, the first conviction among seven individuals charged in the so-called "pedophilia scandal." Eisaks, head of the "Logos Centrs" modeling agency, was sentenced by the court to five years imprisonment for "forcing or coercing minors to perform sexual intercourse" and "attempt at sexual gratification in an indecent manner," LETA reported. The same court, however, reduced his sentence under the Amnesty Law to only 2.5 years in jail. Eisaks was arrested on 27 December 1999. Eisaks' lawyer told BNS that they would appeal the court's decision.
* State Police Chief Juris Reksna said at a press conference on 30 August that the explosives used in the 17 August blasts at the "Centrs" department store were placed in plastic bags and left at the store's package storage facility, LETA and BNS reported. Reksna said the devices were homemade bombs that were triggered by a remote control. People linked to bomb making in Latvia are being questioned--"there are several hundreds" of such people, Reksna told reporters. The two explosions injured 35 people. The three most seriously injured were all employees of the department store--one of the three has died in a Stockholm hospital while being treated for burns on over 60 percent of her body.
* The Constitutional Protection Bureau has recommended to the Office of Latvia's Prosecutor-General to launch a criminal prosecution under Article 78, part 1 of the country's Criminal Code against the persons responsible for the "Kapitals" magazine article "Jews Rule the World," which has been found to be offensive to ethnic sensibilities and written in a neo-Nazi style, LETA reported on 30 August.
* One security guard was killed and another hospitalized with a serious gunshot wound to the neck after a shooting at the Latvian Foreign Ministry on 27 August, AP and Reuters reported. Police officials say that the victim confirmed that he was injured due to a weapon's accidental discharge. After calling for an ambulance to help his injured colleague, the other guard shot himself in an apparent suicide. Police have ruled out alcohol abuse as a cause of the incident and are still investigating the case. The 26-year-old who committed suicide had worked as a security guard at the Foreign Ministry for six years and was considered an experienced policeman, LETA reported on 28 August.
* The Latvian Economic Police have arrested the management of an employment agency which deceived 450 residents of rural areas by offering them jobs abroad, LETA reported on 30 August. The four men ran a firm called "Jauno zemnieku savieniba" (Union of News Farmers) and offered jobs mainly in Austria. The applicants lost some 120,000 lats ($199,200) since they had to pay a 30 lats registration fee and were later expected to pay the firm another 500 lats. The employment agency also defrauded over 1,000 Lithuanians.
* Latvian Radio and Television Center Technical Director Ramis Rutke said at a news conference on 28 August that the transmitters at Latvia's 368-meter high television tower are not overloaded and that there is no fire threat, BNS reported. Rutke said that the tower, the last one built in the Soviet Union, had its security system redesigned in 1995 and that there are yearly upgrades to the system. However, installation of a new fire prevention system meeting European standards has been delayed because Latvia has not yet adopted European Union requirements for fire prevention.
* The oil product companies Latvijas Statoil and Neste Latvija publicly charged that the joint-stock company Latvijas Dzelzcels (Latvian Railroad) has been operating in violation of the Law on Competition and has caused over $2 million in losses over the past five months, LETA reported on 29 August. The two firms have filed charges with the Competition Council claiming that Latvijas Dzelzcels has hampered the export of their oil products at the country's oil terminals. Baiba Rubesa, executive director of Latvija Statoil, told a press conference that a rival company could be behind the activities of Latvijas Dzelzcels.
* Baltcom GSM, a Riga-based mobile telecommunications company, is ready to provide mobile phone service in all three Baltic states, the president of the company, Peteris Smidre, told LETA on 31 August. Smidre said that the governments of Estonia, Latvia, and Lithuania are considering the issue of granting a license for such a regional phone service.
* The Riga-based computer company "Datoru serviss" has created a list of computer viruses that have been found in Latvia since the beginning of the year, LETA reported on 30 August. The company will soon offer information about CDs which are infected with viruses as well. The website is:
* The skull of an auroch--a large, extinct long-horned wild ox that was found at the Vanka River in Edole, western Latvia--is at least 2000 years old, according to Arnis Mugurevics, the dean of the Latvian University of Agriculture, LETA reported on 30 August. The horns and skull were found near the river in early August and subsequent examinations indicate that the skull belonged to a grown male. The aurochs, which roamed Europe, are thought to be the ancestors of domesticated cattle. Mugurevics said that the last live auroch was reported to have been shot in the territory of what is now the Czech Republic in 1627.

The Lithuanian parliament on 29 August took action on several bills vetoed by President Valdas Adamkus earlier this summer. It voted to overturn the veto on changes to the wage system for civil servants, politicians, and judges, but it failed to defeat a veto on a controversial mass media law that would have created a mass media inspectorate to protect the "mental and moral development of children and minors," ELTA and dpa reported. A law on the use of polygraphs was approved after adopting amendments proposed by the president. The parliament also passed a law on the status of the Klaipeda Free Port area after Adamkus and parliament Chairman Vytautas Landsbergis reached a compromise earlier in the day. Seventy-one votes are needed to override a presidential veto in the 141-seat Lithuanian Seimas. The parliament adjourned its extraordinary session on 31 August and will meet for the opening of the fall session 10 September.

As Lithuania deals with several high-profile cases of unpaid workers going on hunger strikes, workers at one such company complained that an opposition politician had tried to instigate a hunger strike by angry workers. Workers at the Zalgiris machine tool plant in Vilnius accused Eduardas Sabilinskas, a member of the popular center-left New Alliance (Social Liberals) headed by former Prosecutor-General Arturas Paulauskas, of trying to talk them into following the actions of workers at the Inkaras footwear factory in Kaunas, who engaged in a month-long hunger strike, ELTA reported on 31 August. The report added that Sabilinskas represents the interests of one of the company's creditors. Apparently the company owes 8.5 million litas ($2.125 million) to its workers. The workers have since filed a complaint to the Prosecutor-General's Office. The trend continues as workers from the Litoda leather factory in Plunge went on a hunger strike to protest wage arrears. The government has allowed the Lithuanian defense forces and police to purchase 500,000 litas ($125,000) worth of footwear from the bankrupt Inkaras factory, directing the money to pay the back wages of the striking workers, BNS and ELTA reported on 29 August.
* Lithuania signed on to the European Union's statement on observers for the upcoming Belarus elections, BNS reported on 31 August. The statement adopted by the EU says that the European states will continue watching the situation in Belarus very closely and later determine whether election observers should be sent for the October national elections. Petras Zapolskas, head of the Lithuanian Foreign Ministry's Information Department, said: "Lithuania is concerned with Belarus not being isolated but this depends on the country's efforts to ensure democratic processes, human rights, and freedom of the press."
* The Lithuanian government decided to reduce the wages of troops taking part in international peacekeeping operations, BNS reported on 31 August. Until now, Lithuanian soldiers participating in international operations received significantly higher salaries than they would get in Lithuania. Soldiers will be paid a set wage regardless of location; additional payments may be made for the specific character of the assignment, such as hazardous duty pay. Lina Lajauskiene, the head of the Defense Ministry's Finance and Budget Department, said that the cost saving measure is being adopted because only professional soldiers participate in international operations and that the motivation to participate should be the experience gained, not the wage level.
* The Polish ambassador to Lithuania, Eufemija Teichman, decorated a member of the Lithuanian parliament, Arturas Ploksto with the Polish Cross of the Knight for distinguished services to the Republic of Poland and for his efforts to improve Polish-Lithuanian relations, BNS reported on 1 September. Ploksto said, "this award indicates that my efforts to integrate the local Polish community into Lithuanian society are appreciated." Ploksto is deputy chairman of the Lithuanian-Polish interparliamentary assembly and the head of the Lithuanian parliamentary group for links with Poland.
* The Lithuanian government said that the Center Union's "attack against the sell-off of LISCO (Lithuanian Shipping Company) and foreign investors poses a threat for the future of the Lithuanian economy and raises suspicions that the Centrists are engaged in unlawful lobbyism," BNS and ELTA reported on 1 September. The Center Union, a parliamentary party, earlier in the week publicly vowed to annul any privatization deal concluded for the state-owned shipping company before the 8 October national elections. An earlier public tender competition for the sale of LISCO was canceled last year because the price offered by the bidders, $35 million, was too low, according to the government. The winner of the current tender, the Dutch-registered Israeli and Danish consortium called B.B.Bredo B.V., is offering $50 million for a 75 percent stake and hundreds of millions of litas in investments.
* The Russian Union, which belongs to the leftist electoral alliance with the Social Democratic and Democratic Labor parties in the forthcoming elections, had three of their candidates disqualified by the Chief Electoral Commission, ELTA reported on 28 August. Two candidates are under age and one candidate has a criminal record dating back to 1981. The law on parliamentary elections allows convicted felons of running for parliament if their term of punishment has ended and they disclose the conviction to the public before they register. The minimum age for candidates to the parliament is 25 years old. Zenonas Vaigauskas, chairman of the Chief Electoral Commission, said that only two political groups had submitted the names of their candidates--the Russian Union and the coalition named the National Front--as of 28 August. The deadline for submitting candidate and party registrations is 4 September.
* Lithuanian schools started the new school year on 1 September with 46,000 first graders entering the system, ELTA reported. There are over 580,000 students in the primary and secondary schools this year. Under the new educational reform students are required to buy their textbooks, which until now have been provided by the Ministry of Education. The vocational and professional schools have over 40,000 registered students this year and around 90,000 students are attending colleges and universities in Lithuania. President Valdas Adamkus visited three schools at the start of the school year: the Solom Aleichem Jewish School, where he told students, teachers, and parents that their school was also important as a cultural center, the Vilnius Technical high school, which he praised as an exemplary private school, and the newly opened Karvis primary school in Vilnius which Adamkus noted had been built despite the fiscal difficulties of the country.
* Lietuvos Telekomas, the country's leading communications company, signed an agreement with the Ministry of Education to provide 95 free phone lines to hook up computers in Lithuanian schools to the Internet, ELTA reported on 28 August. The three-year program also is providing 180 new computers to teachers around the country. Last month, Lietuvos Telekomas concluded a pilot project in which it provided access to the Internet at reduced prices to schools in northwest Lithuania for six months. The company moved forward on the current agreement based on the good performance of the pilot program. President Valdas Adamkus praised the company for showing corporate responsibility.
* Total state debt narrowed by 204 million litas ($51 million) in July and totaled 12.834 billion litas ($3.208 billion) or 29.1 percent of Gross Domestic Product (GDP), ELTA reported on 29 August. Direct liabilities of the state, undertaken on behalf of the states, made up 10.47 billion ($2.617 billion) or 81.6 percent of the debt as of 31 July. Indirect liabilities of the state, state guarantees of loans, totaled 2.364 billion litas ($591 million) or 18.4 percent of total debt.
* The Lithuanian government on 30 August agreed to establish a registry of taxpayers and adopted the necessary regulations, ELTA reported. The registry is to be developed by the State Tax Inspectorate under the Ministry of Finance. The registry is to be computerized and goes into effect on 2 October to ensure more efficient administration of taxes.
* Mazeikiu Nafta refinery reported an increase in the volume of crude oil refined during August, ELTA reported on 1 September. The plant was operating at near capacity to stockpile necessary oil products to satisfy domestic needs and fulfill contracts in anticipation of a planned overhaul of the refinery starting 24 September. The daily output of the refinery had been 13,000-14,000 tons of oil and the production level is to go as high as 20,000 tons daily during September. The plant is expected to resume operations in mid-October. The last plant overhaul was done in November 1997. U.S.-based Williams International, which owns one-third of the shares of the refinery and is also the managing partner, has made a detailed offer to Russia's largest oil producer, LUKoil, to pay a bonus for guaranteed, uninterrupted deliveries of crude oil to the plant. Williams is also conducting parallel negotiations with Yukos, a smaller Russian oil supplier, for a long-term crude supply. A contract has also been signed with Kazakh Karazhanbasmunai, an oil company in Kazakhstan, but the Russian Ministry of Transport has been unwilling to increase access to pipelines for the transport of the oil to the Mazeikiu Nafta refinery.
* Former President Algirdas Brazauskas, now head of the leftist electoral alliance known as Let's Get Together--formed by the Social Democratic and Democratic Labor parties--expressed indignation at U.S.-based Williams International for their new demands to the Lithuanian government, ELTA reported on 28 August. Brazauskas said that the government should reject any new financial obligations to Williams, noting that Lithuania has already loaned Williams almost 2 billion litas ($500 million) for the Mazeikiu Nafta refinery and related structures. There were press reports on 28 August that Williams had asked the Lithuanian government for an additional $75 million for unspecified purposes, ELTA reported.
* The daily "Respublika" reported that according to income declarations filed, there are seven millionaires among Lithuania's top government officials, BNS reported on 25 August. The head of the State Sports Department Rimas Kurtinaitis, who played professional basketball throughout Europe, is the richest at a declared 9.68 million litas ($2.42 million). In second place is Economics Minister Valentinas Milaknis, a former successful businessman, with 5.05 million litas, followed by parliament deputy and head of the Peasants Party Ramunas Karbauskis, at 4.87 million litas. The combined family assets of President Valdas Adamkus came in fourth at 2.75 million litas, while the family assets of Finance Minister Vytautas Dudenas came in sixth at 1.49 million litas; both were long-term residents of the United States.
* Algirdas Vydmontas, head of the Lithuanian Radio and Television Center, said that the experts who operate the Vilnius TV tower are taking all necessary measures to ensure the tower's safety and prevent a disaster similar to the one at the Moscow-based Ostankino television tower, BNS reported on 28 August. Vydmontas said that the Vilnius TV tower is equipped with a up-to-date fire prevention alarm system and the tower's separate sections are fortified with concrete to keep flames from spreading to another level. The Vilnius TV tower is 13 years younger than the one in Moscow, which caught fire because of a short circuit in the equipment of a paging company using the tower, according to experts cited by BNS.
* The Ministry of Justice announced it is preparing a response to Ole Espersen, commissioner for the Human Rights Council for the Baltic Sea States, who recently urged the government to amend its rules governing meetings of convicts with family members, ELTA reported on 30 August. The human rights commissioner criticized the small number of meetings for convicts as violating the principles laid down by the Council of Europe for treatment of prisoners. Espersen said that the possibility to maintain family contact increases the chances to rehabilitate a convict and reintegrate him into society after his release. The justice minister said that currently there are short-term meetings (up to three hours in the presence of a warden) and long-term meetings (up to 48 hours in an isolated room without the presence of outsiders) provided prisoners. In general, regime colony inmates may have six short-term and four long-term meetings per year, and those in penal colonies only two short-term meetings and three long-term meetings per year. Convicts who have served at least half of their sentences are allowed extra meetings provided their conduct and work is faultless.
* Povilas Vanagas and his skating partner Margarita Drobiazko were decorated with the Order of Grand Duke Gediminas on 30 August, ELTA reported. The skating couple are the current bronze-medal holders in the world and European figure skating competitions. They were recently married in Moscow where they live and train because Lithuania has no adequate training facilities.