Baltic Report: January 28, 2003

NOTE TO READERS:
This issue covers events in the Baltic states from 7 to 17 January 2003.
PREMIERS CALL FOR REFORM OF BALTIC COUNCIL OF MINISTERS.
Prime Ministers Siim Kallas (Estonia), Einars Repse (Latvia), and Algirdas Brazauskas (Lithuania) agreed at their meeting at Kalvi Manor in northern Estonia on 15 January to reform the work of the Baltic Council of Ministers (BCM), BNS and ELTA reported. They proposed the formation of a cooperation council consisting of the countries' foreign ministers that would be responsible for directing BCM activities and adopting an Annual Activities Plan. The premiers also agreed on the need to save money by making joint defense purchases. They discussed the implementation of the Via Baltica and Rail Baltica projects, as well as the planned EU referendums, which Estonia and Latvia plan to hold in September and Lithuania in May. The Via Baltica project provides for a highway from the Kalvarija-Budziski border post with Poland through the three states to Tallinn, which should serve as the major route for Baltic road transport to Berlin and Western Europe. The Rail Baltica project calls for the improvement of rail travel between Vilnius and Tallinn which would later be expanded to a Helsinki-Berlin rail connection.

* The commanders of the three Baltic national guard volunteer forces, Colonel Arvydas Pocius of Lithuania's Krasto Apsaugos Savanoriu Pajegos, Colonel Juris Kiukucans of the Latvian Zemessardze, and Major Benno Leesik of the Estonian Kaiseliit, signed an agreement on cooperation in 2003 in Vilnius on 17 January, BNS reported. The volunteer forces have signed such agreements every year since 1995.

* Latvia's Statistics Office announced on 13 January that in the third quarter of 2002 the average gross monthly wage was $288 in Latvia, $321 in Lithuania, and $368 in Estonia, BNS reported. Compared to the third quarter of 2001, the average wages in these countries increased by 6.6, 6.0, and 10.4 percent, respectively. The statistics office also announced on 10 January that the annual year-on-year inflation rate in Latvia in December 2002 was 1.4 percent, compared to a 2.7 percent inflation rate in Estonia and a 1 percent drop in consumer prices in Lithuania.

* According to a survey among Central and Eastern European countries on the spread of mobile telephones, Latvia ranked 10th with less than 30 percent of the population using them, as their users grew by 38 percent during 2002, BNS reported. In Lithuania, mobile phones are used by 40 percent of the population with their number increasing by 84 percent over the year. In Estonia, about 60 percent of the population used mobile phones and their number grew by 18 percent in 2002.

COALITION SAID TO BE DOOMED AFTER ELECTIONS.
Speaking at a general assembly of the Reform Party in Parnu on 12 January, Chairman Prime Minister Siim Kallas said his party's ruling coalition with the Center Party is unlikely to continue after the March parliamentary elections, ETA reported. He said the Reform Party cannot accept the graduated income tax that the Center Party is pushing and wants to slash individual income tax across the board from the current 26 percent to 20 percent. Kallas also criticized the Center Party's unwillingness to take a clear stand in support of Estonian membership in the European Union. He also accused Res Publica of seeking the support of nonethnic Estonians by advocating less-stringent language requirements to gain citizenship. The assembly approved a list of candidates for the March elections that is headed by Kallas, parliament Chairman Toomas Savi, and Justice Minister Mart Rask.

MEMBERSHIP NEGOTIATIONS WITH NATO BEGUN.
An Estonian delegation headed by former Defense Minister Juri Luik in Brussels on 7 January participated in the first round of negotiations on NATO accession, BNS reported. NATO Deputy Secretary-General Guenter Altenburg led the NATO delegation. "The meeting brought no big surprise, but several important matters were coordinated," Luik said. Militarily, the talks dealt with Estonia's participation in NATO's collective-security system and the principles for Estonian diplomats and officers to work within NATO structures, including the NATO defense planning process. In political matters, the two sides focused on Estonia's contribution to enhancing overall security through international cooperation and participation in peacekeeping operations. In the second round of negotiations, which began on 16 January, ETA reported, the talks focused primarily on financial and legal issues. Estonia confirmed that 2 percent of its GDP will be allocated for defense expenditures. In regard to legal issues, the delegations discussed the roughly 10 international agreements and other documents that Estonia will accede to when joining NATO. Estonia also pledged to create the required legal basis for information protection and security as quickly as possible.

PARTIES AGREE: NO CHANGES IN CITIZENSHIP AND LANGUAGE POLICIES.
Representatives of Estonia's eight largest parties agreed at a roundtable meeting on 14 January that the country's citizenship and language policies will not be relaxed after parliamentary elections in March, no matter who comes to power, ETA reported. The decision was an indirect response to a bill proposed by the Estonian United Russian People's Party to change citizenship laws by exempting pensioners who have shown their loyalty to Estonia by not seeking Russian citizenship from having to take the language and constitution tests, BNS reported. Education Minister Mailis Rand suggested the Estonian-language exam might be made easier, noting that a report by a Council of Europe committee to combat racism and intolerance considered those tests too difficult.

ELEVEN PARTIES, NEARLY 1,000 CANDIDATES TO COMPETE IN PARLIAMENTARY ELECTIONS.
The Estonian Central Election Commission announced on 16 January that 11 political parties have registered 947 candidates for the 2 March parliamentary elections, with another 16 individuals running as independents, ETA reported. Lists with the maximum 125 names were submitted by the Center, Reform, and Moderate parties, the People's Union, Pro Patria Union, and Res Publica. The United Russian People's Party expects to field 106 candidates, the Independence Party 37, the Christian People's Party 30, and the Social Democratic Labor Party and Russian Party in Estonia 12 candidates each.

MASSIVE LAYOFFS EXPECTED IN FISHING INDUSTRY.
Nearly 3,000 Estonian fishermen have been sent on forced leave due to icy conditions in the Baltic Sea, and more workers might be laid off once the fish reserve is exhausted, the daily "Eesti Paevaleht" reported on 9 January. The fisheries industry in Estonia includes 113 companies with 9,000 employees, 85 percent of its production is exported. Estonian Fisheries Union Managing Director Valdur Noormagi said that only two fish canneries, Maseko and Hiiu Klaur, are still operating, but they have raw materials to last just 10 days. He added that next week the union will officially ask the state to support the fishing industry with 15 million kroons ($1 million), but the state has insisted that private companies must cope on their own.

REFORM PARTY PROPOSES RADICAL REFORMS.
In a booklet published as part of the Reform Party's election campaign for the 2 March parliamentary elections, party Chairman and Prime Minister Siim Kallas proposes university-level tuition, the partial privatization of universities, and the creation of a professional army, ETA reported on 9 January. He suggests that higher learning effectively be separated from the state through privatization and tuition. The state would introduce a system of student loans to shoulder some of the burden. Kallas also calls for creating professional armed forces, rescue services, and border guards. Center Party Deputy Chairman Peeter Kreitzberg called the education proposals extreme liberalism of a kind not seen anywhere in the world. He said a large share of tuition fees in the United States is covered by scholarships and support that is unavailable in Estonia, while the European model emphasizes the development of state-subsidized universities.

PARTIES REJECT PRIME MINISTER'S CRITICISM.
Res Publica Chairman Juhan Parts reacted sharply to recent criticism by Reform Party Chairman and Prime Minister Siim Kallas (see "RFE/RL Newsline," 13 January 2003), accusing Kallas of lying, BNS reported on 13 January. He countered Kallas's suggestion that Res Publica has no genuine party platform, saying the Reform Party has adopted Res Publica ideas such as the abolition of politicians' perks. "Res Publica wants to teach the noncitizens living here to speak Estonian," Parts said in a reference to Kallas's claim that Res Publica wants to drop language requirements for non-Estonian speakers and enable a naturalized Estonian to be elected president.

MINE-CLEARING MISSION IN AFGHANISTAN EXTENDED.
The government decided on 14 January to extend the mission of a team of mine-clearing experts in Afghanistan by another three months or until 8 May, BNS reported. No parliamentary approval is required. The extension was requested by the U.S. Embassy in Tallinn. The five bomb experts and three canines are tasked with enhancing security of airfields used by U.S. armed forces.

* During a private visit to Estonia, Russian Audit Chamber chief and former Premier Sergei Stepashin told the daily "Postimees" that Moscow should lift the double tariffs applied to Estonian imports, BNS reported on 8 January. He said that he would bring up the matter with Valentina Matviyenko, the Russian co-chair of the Estonian-Russian intergovernmental commission. Stepashin noted that "there is more in common in the interests of Estonia and Russia than there is what is different."

* Narva Deputy Mayor Vladimir Kalachov and Russian Consul General in Narva Aleksandr Safronov made a joint appeal to Leningrad Oblast Governor Vladimir Sedyukov to help speed up border crossing in the city, BNS reported on 10 January. The customs post in Narva is capable of letting through up to 300 vehicles a day, but the Russian checkpoint in Ivangorod can only manage to handle 80-90 vehicles.

* The Foreign Ministry sent a note to its Russian counterpart on 17 January asking for explanations about the payment of compensation to victims of Soviet political repression living in Estonia, ETA reported. The note was accompanied by 98 copies of compensation applications which had been sent to the Estonian Red Cross since December.

* European Commission delegation head John Kjaer and Finance Minister Harri Ounapuu on 16 January signed two cooperation programs worth 71.5 million kroons ($4.8 million) on 16 January, ETA reported. The first will provide 24.6 million kroons from the Phare program for cleaning up the nuclear waste at the former Soviet naval base at Paldiski with Estonia providing co-financing of 4.4 million kroons. The second will give Estonia 46.9 million kroons to promote cooperation between local and regional nongovernmental bodies in Poland, Lithuania, Latvia, and Estonia with special stress on the development of human resources.

* The chairman of the U.S. Commission on the Preservation of America's Heritage Abroad, Warren Miller, and Culture Minister Margus Allikmaa signed an agreement in Tallinn on 16 January on the protection and preservation of cultural heritage in both countries, BNS reported. The agreement provides for establishing a joint heritage commission that will draw up a list of objects and sites that need protection and preservation and see to their protection.

* By a vote of 73 to none with no abstentions, the parliament on 15 January upheld President Arnold Ruteel's December veto of the social welfare act, ETA reported. The original bill would have cut the number of individuals receiving state support by one-third. The act would have limited students' eligibility for allowances by regarding students aged up to 24 as being dependents of their parents except when they are married or have children.

* The Russian oil company Noil Group, which is connected to Russia's Gazprom, is planning to build two oil and gas refining plants in Sillamae which will employ several hundred persons, ETA reported on 17 January. The first plant making oil chemical products will be completed by the end of the year while the second for natural gas will be completed in 2004. The site was selected because Estonia will become a member of the EU and a deep-sea port will be built there from which all the products can be exported.

* The government decided on 7 January to postpone making a decision on whether the country will participate in EXPO 2005 in Japan from 25 March-25 September 2005, ETA reported. Japan officially invited Estonia to participate and Estonia has to respond in March. At a cabinet meeting that day the Economy and Communications Ministry said that spending some 50 million kroons ($2.9 million) on participation was not justified. A total of 51 countries, including Latvia and Lithuania, have announced that they will participate.

* The Finance Ministry announced on 13 January that a total of 36.25 billion kroons ($2.4 billion), or 105.59 percent of the planned budget, was paid into the Estonian state budget during 2002, BNS reported. There was a budget surplus of 2.69 billion kroons.

* The Statistics Office announced on 8 January that the consumer price index in December was 0.2 percent lower than in November, but 2.7 percent higher than in December 2001, ETA reported. In December, the price of foodstuffs increased by 0.3 percent but those of manufactured goods and services declined by 0.3 and 0.6 percent, respectively.

* The Statistics Office announced on 7 January that 543,700 tons of grain were harvested in 2002 or slightly less than the 558,400 tons in 2001, ETA reported. The main grains were barley (249,800 tons), wheat (154,100 tons), and rye (43,400 tons). The potato harvest fell from 343,100 tons in 2001 to 285,700 tons. The harvest of rape seed grew from 41,300 tons in 2001 to 66,000 tons.

MULTIMILLION-DOLLAR APPEAL IN COPENHAGEN COURT LOST.
The Copenhagen Maritime Affairs and Commercial Court announced on 7 January its rejection of a Latvian request to overturn an international arbitration decision forcing it to pay millions of dollars in compensation, LETA reported. The International Court of Arbitration in Stockholm in 2000 ordered the country to pay more than $4 million to Sweden's SwemBalt company for dismantling the ship "Feederchif" in Riga in 1996 (see "RFE/RL Newsline," 15 November 2000). The company brought the ship to Riga in 1993 to establish a trade center on board the vessel, but the planned projects failed and the city, fearing the ship might sink and block traffic in the port, scrapped it. Justice Minister Aivars Aksenoks expressed surprise at the court verdict and proposed that lawyers be consulted to advise whether Latvia should appeal the decision to the Danish Supreme Court.

LEADERS DIFFER OVER REORGANIZATION OF SECURITY SERVICES.
After her weekly meeting with Prime Minister Einars Repse on 14 January, President Vaira Vike-Freiberga was not ready to divulge to reporters the specifics of an apparent dispute over how the country's security services should be organized, BNS reported. She stressed, however, that Latvia's security services "must be politically independent." Vike-Freiberga said she opposes placing the security services under the supervision of the prime minister, as Repse has suggested, stressing, "These institutions absolutely must be politically independent." She said the government should have the right to exert control over the secret services because it sets out priorities and goals of the country, but added that more serious discussion is needed before any final decisions are made. Vike-Freiberga also rejected a proposal by Repse to make the Constitution Protection Office (CPO) responsible only for NATO-related information-security issues. That approach "would not be the most advantageous," she said, since NATO has already recognized the CPO as the country's national-security agency.

CABINET TRIPLES MINISTERIAL SALARIES.
The cabinet adopted regulations on 7 January that increase ministers' salaries more than threefold, LETA reported. The monthly wages of the prime minister and deputy prime minister were increased from 650 lats ($1,100) to 2,200 and 2,100 lats, respectively. The salaries of ministers were raised from 615 lats to 2,000 lats; those of state ministers from 540 lats to 1,500 lats; and of parliamentary secretaries from 450 lats to 550 lats. Noting that cabinet salaries have not been raised since 1997, Prime Minister Repse said the old pay levels were inadequate and incompatible with the duties and responsibilities of ministers. The previous prime minister, Andris Berzins, called the salary hikes "immoral" and noted that his cabinet rejected proposals to increase their salaries, believing that pensions and teachers' wages should be raised first.

RUSSIA TO INCREASE OIL, GAS PRODUCTION...
Energy Minister Igor Yusufov said on 12 January that Russia will follow the lead of OPEC countries, which announced they will increase oil production by 1.5 million barrels beginning 1 February, nns.ru reported on 13 January. Yusufov said it is Russia's policy to compensate for any oil shortages that might develop on world markets and to keep oil prices stable. The ministry released its annual report, which said that Russia produced 2.274 billion barrels (379 million tons) of oil in 2002 and will produce 2.340 billion barrels (390 million tons) in 2003, "Kommersant-Daily" reported on 13 January. Natural-gas production will be increased from 594 billion cubic meters in 2002 to 604 billion this year, the report states. In order to increase competition and reduce prices, the ministry has proposed the creation this year of an energy stock exchange, the daily noted.

...AS RUSSIAN OILMEN COMPLAIN THEY CAN'T BOOST EXPORTS.
The heads of several Russian oil majors on 10 January sent a letter to Prime Minister Mikhail Kasyanov asking him to look into policies enforced by the state-run oil-transport monopoly Transneft that they claim are preventing private oil companies from increasing exports, strana.ru reported on 13 January. The oilmen, LUKoil's Vagit Alekperov, Yukos's Mikhail Khodorkovskii, Rosneft's Sergei Bogdanchikov, and Surgutneftegaz's Vladimir Bogdanov, complain that Transneft is ignoring their interests and barring the export of oil through the Latvian port of Ventspils in order to increase support for the government's Baltic Pipeline System and the newly built oil terminal in the Leningrad Oblast port of Primorsk. Transneft Vice President Sergei Grigoriev charged that "the oil companies want to increase exports by any means and do not care about the interests of the country," according to strana.ru. Deputy Prime Minister Viktor Khristenko announced on 15 January that the policy of no exports via Ventspils by pipeline will not be changed for the first quarter because it is technically impossible, BNS reported.

LATVIA TO RAISE RUSSIAN PIPELINE RESTRICTIONS AT WTO?
Latvian Transport Minister Roberts Zile will ask the Foreign Ministry to review the possibilities of complaining to the World Trade Organization about Russian oil pipeline monopolist Transneft's decision to prevent the transshipment of oil by Russian oil companies through the port of Ventspils, BNS reported on 17 January. Zile said that all signs indicate that this action by Transneft is a violation of the mission and declared principles of the WTO -- an organization Russia wishes to join this year. Prime Minister Einars Repse told Reuters on 16 January that Latvia will not succumb to Transneft pressure to sell it part of the remaining 43.6 percent state share in "Ventspils Nafta" at its preferred price.

GOVERNMENT APPROVES PRIORITIES FOR 2003 BUDGET.
At an extraordinary session on 13 January, the center-right cabinet defined priorities for the 2003 budget and earmarked 51.79 million lats ($87.7 million) to pursue those objectives, LETA reported. The proposed spending represents less than one-fourth of the previous demand of 223.47 million lats. More than 40 percent of the sum (21.51 million lats) is related to Latvia's EU-integration effort. The ministries receiving the largest amounts were those of Interior (8.88 million lats), Finance (5.74 million lats), Agriculture (5.5 million lats), and Education and Science (2.98 million lats). New Era Prime Minister Einars Repse said that even after the national budget is passed by parliament he expects that it will be amended and more funds added if additional revenues are found. Finance Minister Valdis Dombrovskis predicted that financing in priority areas will not change much as the budget is drafted, though some redistribution is likely.

FORMER PREMIER SKELE WITHDRAWS FROM POLITICS.
Parliament deputy Andris Skele, who served as Latvia's prime minister three times and was the founder and former leader of the liberal People's Party, announced to parliament on 16 January, his 45th birthday, that he is giving up his legislative seat and withdrawing from active political life, LETA reported. The announcement was not a complete surprise, since Skele did not seek re-election as People's Party chairman in November. He suggested that he might withdraw from politics, as his participation was a factor in the party not being invited into the ruling center-right coalition -- even though it placed third with 21 seats. His parliamentary seat was taken over by the mayor of the northeastern city of Valmiera, Maris Kucinskis, who was sworn in after Skele's announcement.

PARLIAMENT REJECTS PUBLIC HOLIDAY FOR RUSSIAN ORTHODOX CHRISTMAS.
A legislative vote fell short of the absolute majority required for approval of a bill aimed at making Russian Orthodox Christmas a public holiday, LETA reported. Lawmakers voted 39 to zero with 54 abstentions in favor of a state holiday on 7 January, which marks Christmas according to the Julian calendar. Fifty-one votes were required in the 100-seat chamber. The chairman of Latvia's First Party (LPP), Eriks Jekabsons, presented the bill and called for its passage as a sign of respect to the 360,000 Russian Orthodox Christians in Latvia. The bill was also supported by the leftist opposition party For Human Rights in a United Latvia. Deputy Aleksandrs Kirsteins of the People's Party said his party supports celebrating Orthodox Christmas in "the modern way" -- according to the Gregorian calendar, on 25 December -- similar to the date observed in Greece and Romania. He said tsarist Russia forced Latvia to return to the Julian calendar, adding that other holidays, including New Year's, would have to be celebrated twice if the country acknowledges it.

PRESIDENT PROPOSES CANDIDATE TO HEAD MILITARY.
Vaira Vike-Freiberga on 15 January proposed to parliament the appointment of Rear Admiral Gaidis Zeibots as commander of the country's armed forces, BNS reported. The 57-year-old Zeibots has been deputy commander since 2002 and is also the senior officer in Latvia's delegation for NATO accession talks. He previously commanded the Latvian navy. The current armed-forces commander, Brigadier General Raimonds Graube, called Zeibots the most suitable candidate for the post and a well-educated professional who is familiar with the situation within the armed forces. The Union of Greens and Farmers faction in the parliament immediately expressed its support for the nomination, which seems likely to be approved by the parliament.

* British Parliament Defence Committee Chairman Bruce George made an official visit to Latvia on 16 and 17 January, BNS reported. The first day he held talks with Foreign Minister Sandra Kalniete on Latvia's integration in NATO and the EU's Future of Europe Convention. George's trip was on the initiative of the British Embassy in Riga which, together with the parliament's Defense and Interior Committee, organized the seminar "A Review of Baltic State Defense Strategies" on 17 January. In opening the seminar, Defense Minister Girts Valdis Kristovskis said that Latvia will have to change its defense structure to integrate more fully into NATO.

* Prime Minister Repse assured Council of Europe Parliamentary Assembly (CEPA) Monitoring Committee Chairwoman Josette Durrieu in Riga on 16 January that the rights of Russian speakers in the country will be protected, LETA reported. She expressed the hope that Latvia would ratify the Convention on the Protection of National Minorities, speed up the pace of naturalization, and improve the education law according to the recommendations made by CEPA. During her two day visit, Durrieu met many government officials, the Russian ambassador in Latvia, and pledged to return at the end of the year to review the work of the new government.

* During an extraordinary session on 13 January, the cabinet appointed State Police Chief Juris Reksna as Interior Ministry state secretary, LETA reported. Interior Minister Maris Gulbis had proposed Reksna to replace Andris Staris, who resigned for personal reasons in November. The 43-year old Reksna has a degree in law from the University of Latvia and gained additional education in Spain and the United States.

* The parliament's EU Information Center and Lattelekom launched a hotline for EU-related inquiries on 15 January, BNS reported. Any Latvian resident can dial the "Eiroinfo" number 7211111 and obtain information about the EU. Lattelekom operators will answer simple questions immediately while the center will prepare responses to more involved questions and reply by telephone, fax, e-mail, or mail.

* The Naturalization Board announced on 7 January that from the mid-1990s to the end of 2002, 59,239 people received Latvian citizenship under the naturalization procedure, BNS reported. Among the new citizens there were 8,055 minors who became naturalized along with their parents and 995 children born to Latvia's noncitizens after 21 August 1991. Russians made up 69 percent of the new citizens with Belarusians accounting for 10 percent and Ukrainians 8 percent.

* At the request of Prime Minister Repse, the parliament by a vote of 50 to 20 with 21 abstentions officially appointed three ministers on 16 January, LETA reported. Raimonds Vejonis was officially approved as environment minister, Ivars Gaters as Minister for regional development and local government, and Aris Auders as health minister. Vejonis had been approved earlier as Minister of Environmental Protection and Regional Development, while Gaters and Auders had been state secretaries in their respective ministries.

* An extraordinary shareholders meeting of the state-owned electrical utility Latvenergo on 17 January replaced all but one member of its council, BNS reported. The remaining member was Economy Ministry Deputy State Secretary Andris Liepins. The new council members include former Agriculture Minister Roberts Dilba, Institute of Physics and Energetics Director Juris Ekmanis, Deputy Prime Minister office head Juris Radzevics, and Maras Bank Council Chairman Vilis Vitols.

* Support for European Union membership in Latvia grew in December, according to a BNS report on 14 January citing the national European Integration Bureau (EIB). According to an EIB/"Latvijas fakti" survey, 47.7 of Latvian residents would support EU membership in a referendum, while 33.2 percent would oppose EU membership and another 19.1 percent gave no answer. Of those residents who have decided how they would vote, the survey found that 59 percent favor EU membership, while 41 would vote against it.

* The Central Statistics Bureau announced on 9 January that in December the consumer price index increased by 0.2 percent compared to November and by 1.4 percent compared to December 2001, LETA reported. The price rise in December was due to a 1.2 percent increase in the price for food products, especially vegetables, dairy products, eggs, and potatoes.

* The Central Statistics Bureau announced on 13 January that in the first 11 months of 2002, the value of imports and exports was 2.27 and 1.30 billion lats, respectively, LETA reported. Compared to the same period in 2001, imports grew by 12.8 percent and exports by 11.5 percent, resulting in an even greater trade deficit.

* Using data from the Finance Ministry and the official report of the State Treasury, LETA reported on 17 January that the national consolidated total budget deficit for 2002 was 2.57 percent of the gross domestic product (GDP). The deficit is less than the 2.8 percent of GDP approved by the budget law, but greater than the 1.8 percent of GDP agreed to with the International Monetary Fund.

PRESIDENT-ELECT CHANGES TACK ON FOREIGN POLICY.
Rolandas Paksas told an assembly of foreign diplomats and representatives of international organizations in Vilnius on 15 January that he plans to make changes in the country's foreign policy, BNS reported. One of the Liberal Democratic leader and former prime minister's first moves after his electoral victory on 5 January was to "send off a signal to the world that foreign policy will not change" (see "RFE/RL Newsline," 6 January 2003). Paksas underlined that the current priorities of integration into NATO and the EU, along with good relations with neighboring countries, will remain unchanged. But he added that there will be modifications. "Special emphasis will be put on developing regional cooperation with some regions in Russia, especially the northwestern part and other remote regions," Paksas said. He predicted greater cooperation with Ukraine, where in addition to bilateral economic cooperation, he will encourage "establishing contacts between NGOs and governmental organizations, including the parliaments, [and] governmental and presidential institutions." Paksas asserted, "Lithuania is ready to help Belarus in seeking closer contacts with the EU, but the Belarusian government has to follow the recommendations of international institutions, thus ensuring implementation of democratic and legal processes in the country." He also said he will seek new markets for Lithuanian products and investment opportunities in Africa, Asia, and Latin America.

THREE PARTIES SIGN MERGER AGREEMENT.
The leaders of the center-right Liberal Union, the Center Union, and the Modern Christian Democratic Party signed an agreement in Vilnius on 14 January to merge their parties, ELTA reported. The agreement calls for those parties to cooperate on local councils, form a single faction (caucus) in parliament, and participate together in elections to the parliament and the European Parliament in 2004. The founding congress of the new party is scheduled to take place on 31 May. Prior to the signing, the parties held meetings at which the merger was presented and approved by substantial majorities, according to "Lietuvos zinios" of 15 January. The vote in Kestutis Glaveckas's Center Union was 46 to two with seven abstentions, while Eugenijus Gentvilas's Liberal Union supported it by a vote of 75 to two with three abstentions. "Kauno diena" speculated on 9 January that while the topic has not been discussed, Adamkus might chair the new party.

OUTGOING PRESIDENT TRIES TO RALLY THE OPPOSITION.
In a meeting with Liberal Union Chairman Eugenijus Gentvilas and Homeland Union (Conservatives of Lithuania) Deputy Chairman Andrius Kubilius on 10 January, President Valdas Adamkus proposed that liberal and conservative forces establish an opposition coalition that would be capable of winning parliamentary elections in 2004, ELTA reported. Adamkus suggested that the alliance, which would be open to other parties, form a shadow cabinet and elect a parliament leader for the joint opposition. The parties, moreover, should form a joint list for parliamentary elections or, "in the worst case, make two lists but distribute among themselves single-mandate districts." Kubilius said such a coalition should prove more successful than past efforts, since it will be based on common values and not personal initiatives. Adamkus will be replaced in late February following his defeat at the hands of former Prime Minister and Liberal Democratic leader Rolandas Paksas (see "RFE/RL Newsline," 6 January 2003).

FIRST ROUND OF MEMBERSHIP TALKS WITH NATO HELD.
A Lithuanian delegation headed by Foreign Ministry Secretary Giedrius Cekuolis participated in Brussels on 13 January in the first round of talks on NATO integration, ELTA reported. NATO Deputy Secretary-General Guenter Altenburg led the NATO delegation. "These are talks for joining the organization, and Lithuania cannot bring changes to the Northern Atlantic Agreement. It will observe the major principle of NATO: 'All for one and one for all,'" Cekuolis said. He noted that Lithuania will keep its pledge to allocate 2 percent of GDP for defense in 2001-04 and to assign one of its battalions for NATO operations if needed. The second round of talks is scheduled for 23 January.

TRANSPORTATION SNAGS SEEN ALONG RUSSIAN-LITHUANIAN BORDER.
The latest agreement on rail traffic between Russia and Lithuania is causing problems at the border, RosBalt reported on 7 January, citing Kaliningrad Oblast First Deputy Governor Mikhail Tsikel. According to Tsikel, part of the problem is that foreign ministries of both countries exchanged diplomatic notes on the subject as late as the end of 2002, and therefore the instructions have not been completely implemented by border and customs officials. In addition, Russian citizens do not seem to be aware that they need a Lithuanian transit visa to travel by train to Kaliningrad. However, Tsikel says that so far no Kaliningraders have been removed from their trains, and 40 citizens of CIS countries have also managed to return home across the Lithuanian-Belarus border. In November, President Putin and EU officials announced an agreement under which Russian citizens traveling by train between Kaliningrad and the rest of Russia will receive single-transit travel documents (see "RFE/RL Newsline," 12 November 2002).

TANKER DEEMED TO HAVE RUN AGROUND OFF KLAIPEDA DUE TO NEGLIGENCE.
A Lithuanian Navigation Safety Administration commission investigating why the Argentinean tanker "Princess Pia" ran aground after leaving Klaipeda on 11 December, informed the Transport and Communications Ministry on 7 January that the tanker was not technically prepared to go to sea, ELTA reported. The tanker's captain did not inform the Lithuanian pilot that the ship's radar was showing inaccurate readings and the misinformed pilot turned the tanker prematurely, the commission concluded. The commission also criticized the captain for neglecting his own duties as the vessel was leaving port. The tanker had a double bottom and none of the 49,500 tons of fuel oil leaked out, although it took five days to free the ship by pumping out some of the cargo.

INITIATIVE TO HOLD REFERENDUM ON NATO MEMBERSHIP FAILS.
Central Electoral Committee Chairman Zenonas Vaigauskas on 9 January announced the failure of an initiative to hold a referendum on Lithuania's NATO membership, ELTA reported. He explained that its organizers failed to submit the necessary 300,000 signatures ahead of the three-month deadline on 8 January. The leader of the initiative, parliament's Education, Science, and Culture Committee Chairman Rolandas Pavilionis, who has expressed his opposition to Lithuania joining the alliance, called on parliament to hold a NATO referendum together with the required plebiscite on EU accession. Lawmakers have not set a date for the EU referendum, although parliament Chairman Arturas Paulauskas has proposed 11 May.

LIBERAL DEMOCRATIC PARTY SELECTS ACTING CHAIRMAN.
The board of the Liberal Democratic Party appointed Deputy Chairman Valentinas Mazuronis as the party's acting chairman on 14 January to replace Rolandas Paksas, who had to give up his membership after winning the presidential election, "Kauno diena" reported on 15 January. The 50-year-old Mazuronis is an architect and a member of the Siauliai City Council. Party First Deputy Chairman Henrikas Zukauskas was also proposed as a candidate, but the board followed Paksas's suggestion and chose Mazuronis so that parliamentary deputy Zukauskas can remain as a link between party members and Liberal Democratic deputies in parliament. Mazuronis reportedly stands a good chance of being elected party chairman at the upcoming congress on 9 March.

KLAIPEDA SUSPENDS OPERATIONS.
Strong winds and ice drifts at the port of Klaipeda halted operations mid-afternoon on 16 January, BNS reported. An unloaded refrigerated freighter that tried to leave port earlier in the day was soon icebound, and it took several hours to free the vessel and tow it back to port. Ilona Kabosyte of the Marine Information Center noted that such closings are very rare, the last such occasion was 10 years ago. The port resumed partial operations the next day, allowing large ferries and other ships with adequate-capacity engines to enter and leave the facility.

* Foreign Minister Antanas Valionis visited Slovenia, Croatia, and Bulgaria from 13 to 17 January, BNS reported. The aim of the visits was to strengthen cooperation between Lithuania and the countries which are members of the so-called Vilnius Ten. He held talks with Slovenian Prime Minister Anton Rop, Foreign Minister Dmitrij Rupel, and parliament Chairman Borut Pahor in Ljubljana on 13 January. Valionis then traveled to Zagreb and during the next two days met with Croatian President Stipe Mesic, Premier Ivica Racan, Foreign Minister Tonino Picula, and European Integration Minister Neven Mimica. The tour was completed in Sofia where he met with Bulgarian Premier Simeon Saxecoburggotski, Foreign Minister Solomon Pasi, and parliament Chairman Ognian Gerdjikov and discussed bilateral relations as well as their common goals to complete the ongoing NATO membership negotiations.

* The Environment Ministry issued a press release on 14 January expressing doubts that the plans of LUKoil to extract oil from the D-6 oil field in the Baltic Sea not far off Lithuania's coast meet ecological requirements, ELTA reported the next day. The probability of an accident in the comparatively stormy southeastern area of the Baltic Sea is high, and so is the probability that spilled oil will reach the Lithuanian shore causing irreparable damage to the Kursiu Nerija national park, which is included on the World Heritage List because of its unique nature.

* During a visit to Kyiv by a delegation of Lithuanian parliament deputies on 17 January, its head Valerijus Tretjakovas and a deputy of the Ukrainian parliament signed a protocol on establishing an interparliamentary assembly, BNS reported. The protocol will still have to be ratified by the two parliaments.

* Russian Foreign Ministry representative Aleksandr Yakovenko told reporters in Moscow on 10 January that the ministry was displeased with the Lithuanian statement that it will not accept some documents as valid for crossing the border from 1 February. They are documents confirming the identity of military personnel, birth certificates of children under 14, as well as student identity cards or driver's licenses. Russian nationals will be required to show Russian internal passports, diplomatic passports or a valid seaman's identity card.

* The parliament held a solemn session on 13 January marking two occasions: the 20th anniversary of the passage of a resolution by the European Parliament (EP) backing the independence of the Baltic states and 12th anniversary of the attack by Soviet troops of an unarmed crowd around the Vilnius television tower which resulted in 15 deaths, BNS reported. An international conference "Baltic Freedom: Approach of the West" held the previous day was attended by former EP member Otto von Habsburg, EP Vice President Guido Podesta, and representatives of the Nordic Council, Baltic Assembly, and Polish Parliament.

* President Adamkus and about 40 parliament deputies signed letters urging the United States not to halt the funding of broadcasts of the Lithuanian Service of Radio Free Europe, BNS reported on 15 January. They had learned that President George W. Bush is submitting a budget which, if passed, would result in the end of broadcasts to Lithuania as well as Estonia and Latvia on 30 September 2003.

* The Statistics Department announced on 9 January that in December the consumer price index rose by 0.4 percent compared to November, but fell by 1.0 percent compared to December 2001, BNS reported. Rimantas Rudzkis, chief analyst at Vilniaus Bankas, said the deflation resulted in great part from a change in the pegging of the national currency, the litas, from the dollar to the euro in February. The litas appreciated against the euro by about 6 percent from early 2002 to October and against the dollar by 13-14 percent.

* The Statistics Department announced on 10 January that in the first 11 months of 2002 imports were valued at 25.8 billion litas ($7.6 billion) or 12.4 more than in same period in 2001, BNS reported. Exports in the same period grew by 10.2 percent to 18.7 billion litas.

* The port of Klaipeda handled 19.74 million tons of cargo in 2002 or 14.5 percent more than in 2001, BNS reported on 10 January. The greatest increase was in the export of oil which grew by 30.5 percent to 6.68 million tons. Excluding oil, overall cargo handling rose by 7.8 percent.

* The Finance Ministry announced on 15 January that national budget revenues in 2002 totaled 10.47 billion litas ($3.1 billion) or 30 million litas more than planned, BNS reported. Finance Minister Dalia Grybauskaite said that the main factor influencing the successful collection was the growing economy of the country.