Baltic Report: June 20, 2003

BALTIC, GEORGIAN DEFENSE MINISTERS SIGN COOPERATION PLAN.
Defense Ministers Margus Hanson (Estonia), Girts Valdis Kristovskis (Latvia), Linas Linkevicius (Lithuania), and David Tevzadze (Georgia) on 13 June signed a cooperation plan for 2003-04 during a session of the Euro-Atlantic Partnership Council in Brussels, BNS reported. The Baltic states pledged to advise and help Georgia in reforming its defense forces and bringing its military structures into line with NATO standards. They also agreed to assist Georgia in planning its defense policy, as well as in international relations, the NATO-integration process, developing democratic control over its armed forces, public relations, controlling crises, and legal and military-training issues.

RUSSIAN FOREIGN MINISTER WARNS OF NEW EUROPEAN DIVIDE.
Igor Ivanov said on 11 June that Russia, EU member states, and EU candidate countries share an interest in preventing the disruption of traditional contacts between Russia and the countries that join the EU, ITAR-TASS reported. Speaking at a ministerial session of the Council of Baltic Sea States in Pori, Ivanov said Russia, along with current and future EU states, must reject the creation of new dividing lines in Europe. "If we fail to disentangle a knot of serious problems by [the expected accession of EU candidate states on] 1 May 2004, all sides will suffer a loss," Ivanov reportedly said.

* The Cooperation Council of the Baltic Council of Ministers (BCM) made up of the Lithuanian, Latvian, and Estonian foreign ministers and the presidium of the Baltic Assembly (BA), consisting of chairmen and deputy chairmen of each country's parliamentary delegation, met in Vilnius on 9 June, BNS reported. It agreed that the BA and BCM should agree on joint priorities and the manner for adjusting cooperation documents after the countries join the EU. One suggestion was that one country preside over both the BA and BCM at the same time.

* Delegations from the three Baltic states and Russia met in Moscow on 10 June and agreed on how to divide their common quota for Atlantic redfish and squid assigned by the Northwest Atlantic Fisheries Organization, BNS reported the next day. Russia was given 65.98 percent with the other three each getting 11.34 percent. The division was needed so that the Baltic states could join the EU with each state having an independent quota.

* Hansa Capital Risk Director Tarmo Rooteman signed an agreement in Tallinn on 11 June with European Bank for Reconstruction and Development First Vice President Noreen Doyle for getting a 30 million euro ($35 million) loan to help finance small and medium-size businesses in the Baltic states, BNS reported. Rooteman said: "The focus will be on companies situated outside the capitals." The EU's Phare program will also provide funds to cover administrative expenses related to the leasing contracts.

NEW SECURITY POLICE CHIEF APPOINTED.
The government decided on 10 June to appoint Deputy Director Aldis Alus as the new director of the security police for a five-year term beginning on 16 June, BNS reported. Alus replaces Juri Pihl who was prohibited by law from serving a third term as security police director (see "RFE/RL Newsline," 15 May 2003). At the same meeting, the government also appointed Pihl as head of the State Prosecutor's Office and Robert Antropov as director general of the police board for five-year terms. Earlier in May, Interior Minister Margus Leivo had nominated Foreign Ministry Personnel Department head Andres Unga to replace Pihl, but this was opposed by the legal chancellor and the state secretary on the grounds that Unga did not have the required experience in the security or regular police. Alus, who joined the security police in 1990 and became its deputy director-general in 1997, had been Pihl's own first choice as his successor.

VISIT BY BULGARIAN PRESIDENT.
Georgi Parvanov began a two-day state visit to Estonia on 11 June with talks with his Estonian counterpart Arnold Ruutel, BNS reported. The presidents discussed bilateral relations and ways Estonia could support Bulgaria's accession to the EU in the next round of enlargement. After the meeting, Estonian Interior Minister Margus Leivo and Bulgarian Deputy Foreign Minister Lubomir Ivanov signed agreements on returning illegal immigrants and visa-free travel between their countries. The second agreement was needed to fulfill an EU requirement to have an official agreement on visa-free travel. Estonia unilaterally dropped visa requirements for Bulgarian citizens in July 1992 and Bulgaria later abolished them for Estonian citizens. Prime Minister Juhan Parts told Parvanov that he hopes the Bulgarian business delegation visiting with him will help boost economic ties.

VISIT BY MONTENEGRIN PRIME MINISTER.
Milo Djukanovic told his Estonian counterpart Juhan Parts in Tallinn on 9 June that the main aim of his two-day visit is to obtain a firsthand account of Estonia's reform experience, BNS reported. Noting that their countries have many common features, such as a small population and limited natural resources, he expressed particular interest in economic reforms, privatization, and the creation of a favorable environment for foreign investment. Parts promised to share Estonia's experience and help Montenegro develop contacts. Djukanovic met with Economy and Communications Minister Meelis Atonen, parliamentary deputies, Bank of Estonia officials, and representatives of the Enterprise Estonia Foundation before returning home on 10 June.

OSCE COMMISSIONER INTERESTED IN EDUCATION AND INTEGRATION.
OSCE High Commissioner on National Minorities Rolf Ekeus told Prime Minister Parts in Tallinn on 10 June that his three-day visit to Estonia will primarily focus on education and integration, BNS reported. Parts informed him about his government's education policy and the current naturalization situation. The number of naturalized citizens has been growing every year and he said he expected Estonia's membership in the EU to further motivate noncitizens to naturalize. Ekeus also met that day with Population Minister Paul-Eerik Rummo and Foreign Ministry Deputy Chancellor Tiina Intelmann. Ekeus visited the mostly Russian-populated northeastern cities of Johvi and Kohtla-Jarve on 11 and 12 June.

PARLIAMENT REAPPOINTS BANK OF ESTONIA COUNCIL CHAIRMAN.
The parliament voted 43 to 23 with two abstentions to reappoint Mart Sorg to a second five-year term as chairman of the council of the Bank of Estonia on 12 June, BNS reported. President Arnold Ruutel had nominated Sorg, but his appointment appeared uncertain earlier in the week when public ETV television reported that Res Publica planned to nominate another candidate. The party did not do so and did not instruct its deputies on how to vote. This was the last official meeting of the parliament's spring session, but an extraordinary session will be held on 30 June to deal with amendments to the Social Welfare Act concerning students' subsistence benefits.

* Russian Foreign Minister Igor Ivanov told his Estonian counterpart Kristiina Ojuland during the Council of the Baltic Sea States session in the Finnish city of Pori on 11 June that Estonia should not order retired Russian officers who had received funds from an international aid program to purchase homes in Russia to leave the country, BNS reported. He claimed that this contradicted the July 1994 Russian-Estonian intergovernmental agreement on social guarantees for retired Russian military personnel.

* International Pan-European Union President Otto von Habsburg delivered a lecture about the Pan-European movement and the European Union at Tartu University on 12 June, BNS reported. Prior to the lecture he met with members of the Estonian Pan-European Association and academic students' organizations and lunched with Tartu Mayor Andrus Ansip after the lecture.

* Defense Minister Margus Hanson assured NATO's Defense Planning Committee here on 12 June that his country will complete the defense reforms needed for NATO membership, BNS reported. He said that Estonia would continue to participate in international peacekeeping operations, maintain defense spending at 2 percent of GDP, and carry out reforms to ensure the ability of armed forces to cooperate in an international theater.

* The commander of NATO's Multinational Corps Northeast, Lieutenant General Zygmunt Sadowski, told Estonia's armed forces commander, Vice Admiral Tarmo Kouts, in Tallinn on 13 June that Estonia's development plan for membership in NATO is well-considered and sensible, BNS reported. He noted the Estonian scouts battalion as an example of a small mobile unit which the alliance will need in the future.

* Finance Minister Tonis Palts and John Kjaer, the head of the European Commission's delegation in Estonia, signed a memorandum on 9 June granting Estonia 195.5 million kroons ($14.4 million) from the Phare program, BNS reported. The memorandum envisions eight projects which have to be carried out within three years with Estonian co-financing of 56.3 million kroons. Another memorandum with Phare, which will be signed later in the year, will provide 477 million kroons. In 1999-2002 Estonia has received nearly 4 billion kroons of aid from Phare programs.

* The parliament's European Affairs Committee chairman and representative to the EU Convention on the Future of Europe, Rein Lang, called the Latvian decision to establish pork quotas and duties a "foolish step" which would undermine the trustworthiness of the Baltic countries as future members of the EU, BNS reported. He said that Estonia should not adopt any similar measures against Latvia in response, but continue its free trade principles.

* The parliament passed by a vote of 59 to 22 with no abstentions a supplementary budget of 1.1 billion kroons ($81 million) on 11 June, BNS reported. It includes 350 million kroons for the construction of a hospital in Parnu and a prison in Johvi which was obtained by reducing the budget cash reserve by a similar amount (see "RFE/RL Baltic States Report," 5 June 2003). Other major allocations were 145 million kroons for the "21st Century School" project and 107 million kroons for local governments. By a vote of 56 to 14 with no abstentions, the parliament also passed a bill which will allow the establishment of the posts of politically appointed assistant ministers.

* The Estonian Union of Russian Citizens, an organization not officially registered in Estonia, held a congress in Tallinn on 7 June which passed a resolution calling for a law which would allow all permanent residents of Estonia to participate in the EU membership referendum, BNS reported. Arguing that noncitizens pay the same taxes as citizens, the congress declared that it was unfair to allow only citizens to vote in the referendum. It also approved an appeal to the European Commission and the OSCE calling on them to pressure Estonia to establish more democratic conditions for acquiring citizenship and to join the Convention for Eliminating Statelessness. There are around 175,000 Russian citizens residing in Estonia.

* The government appointed Raivo Paavo, the secretary-general of the Confederation of Trade Unions, to a three-year term as state conciliator on 10 June, BNS reported. His nomination was also backed by the Central Association of Employers, but the Confederation of Employees' Unions supported Ago Tuuling. Paavo replaces Henn Parn, who resigned after being elected to the parliament in March.

* The extended council of the Moderates appointed the party's coordinator for South Estonia, Rein Org, as the party's new secretary-general, replacing Tonu Koiv on 7 June, BNS reported It also decided to propose to other political parties an agreement on exempting minimum pay from income tax by 2008 at the latest. The council criticized the ruling coalition's plans to reduce the personal income tax rate as the biggest winners from this would be rich people and that government revenues would be cut by billions of kroons.

PRIME MINISTER SURVIVES NO-CONFIDENCE VOTE.
By a vote of 27 to 55 with 17 abstentions, the parliament did not approve a no-confidence resolution against Prime Minister Einars Repse on 12 June, LETA reported. The opposition People's Party had accused the government of not fulfilling campaign promises, of planning an excessive budget deficit, and of authoritarianism for seeking to bring the Constitutional Defense Bureau and the Corruption Prevention Bureau under Repse's personal control (see "RFE/RL Baltic States Report," 11 June 2003). The three ruling coalition parties firmly backed the prime minister, with only the For Human Rights in a United Latvia faction joining the People's Party in seeking his ouster, while the National Harmony Party (TSP) abstained. TSP Chairman Janis Jurkans said that the effort to oust the government was prompted by a fear of the fight against corruption that Repse has launched.

GOVERNMENT PASSES DRAFT AMENDMENTS TO 2003 BUDGET.
At an extraordinary meeting on 9 June, the cabinet decided how to allocate the additional 32.4 million lats ($58 million) in the 2003 budget proposed by the Finance Ministry, LETA reported. The spending requests were sent to the parliament, which is expected to vote on their adoption on 20 June. The new funds are to be distributed to a wide range of areas, with the largest sums going to the health-care system (12.6 million lats), local government (4.9 million lats), the state highway fund (4.6 million lats), agriculture (4.3 million lats), and higher salaries for teachers (3.5 million lats). Agriculture Minister Martins Roze said that he will still try to raise the funds for agriculture to 6.6 million lats. About 1 million lats in anticipated revenues were not allocated so as to help keep the budget deficit below 3 percent of GDP as required by the "Maastricht" criteria.

LATVIA MAY ENLIST EU TO PRESSURE RUSSIA OVER BORDER PACT.
President Vaira Vike-Freiberga told parliamentary deputies from the People's Party at a meeting on 11 June that Latvia might ask the EU not to begin talks with Russia on visa-free travel before Moscow ratifies a border agreement with Latvia, BNS reported. She noted that Russia had ratified the border treaty with Lithuania only because it was a condition of an agreement with the EU needed to obtain simplified visa procedures for its citizens traveling via Lithuania to and from Kaliningrad Oblast. Vike-Freiberga said that Russia had responded to Latvia's numerous "goodwill" offers to improve relations by "producing a whole list of conditions precedent to opening any talks with Latvia." She mentioned that during recent conversations with President Vladimir Putin and Prime Minister Mikhail Kasyanov in St. Petersburg she reiterated Latvia's willingness to develop bilateral cooperation, but said that "for a dialogue to happen, both parties must be willing to talk."

SOCIALIST PARTY LEAVES LEFTIST ALLIANCE.
The political council of Latvia's Socialist Party (LSP) decided on 7 June to leave the leftist alliance For Human Rights in a United Latvia (PCTVL) and establish a separate faction in the parliament, BNS and LETA reported. The move in effect marked the end of the PCTVL, an alliance of three political parties that received the second largest number of votes in the October 2002 parliamentary elections. Its largest component, the National Harmony Party (TSP), quit the alliance in February (see "RFE/RL Newsline," 18 February 2003), leaving the PCTVL with only eight parliamentary deputies: five from the LSP and three from the Equal Rights party. The LSP faction was officially founded only on 12 June when TSP Deputy Igors Solovjovs agreed to join the faction, in effect taking the place of LSP Deputy Nikolajs Kabanovs, who quit the party and joined Equal Rights.

ACTING DIRECTOR OF ANTICORRUPTION BUREAU APPOINTED.
Prime Minister Einars Repse appointed Alvis Vilks, a department head in the Corruption Prevention Bureau, as acting director of the bureau on 10 June, LETA reported. The bureau's director, Guntis Rutkis, resigned for health reasons in May (see "RFE/RL Newsline," 15 May 2003). Repse initially appointed Deputy Director Rudolfs Kalnins as acting director, but the Constitutional Protection Bureau refused to issue him a permit for access to classified information. To increase the range of possible candidates for director, Repse proposed amending the law to remove the requirement that the director must have a law degree, but this was thwarted by the opposition and the coalition Union of Greens and Farmers, which asked for the creation of a supervisory council over the bureau. The parliament on 12 June by a vote of 57 to 39 adopted amendments to the qualifications necessary for the post of director of the Corruption Prevention Bureau, LETA reported. Prime Minister Repse's proposal to abolish the previous requirement that a candidate have a law degree was approved. According to the amendments, a candidate must be a citizen of Latvia with a university degree, sufficient work experience, proficiency in Latvian and at least two foreign languages; may not have a criminal record; and must meet the requirements for access to classified information.

* The commander of NATO�s Multinational Corps Northeast, Lieutenant General Zygmunt Sadowski, inspected the Latvian Navy and training center as well as the Baltic Divers' Training Center in Liepaja on 10 June, LETA reported. The next day he had talks with Defense Ministry State Secretary Edgars Rinkevics and armed forces commander Rear Admiral Gaidis Andrejs Zeibots on the compatibility of Latvia's armed forces with those in NATO. Sadowski also visited the air control center in Riga, a mobile riflemen training center, and the National Defense Academy.

* International Pan-European Union President Otto von Habsburg discussed developments in the newly united Europe with President Vaira Vike-Freiberga in Riga on 10 June, LETA reported. She thanked him for the support he had given the Baltic states as a deputy in the European Parliament from 1979 to 1999. During his two-day visit, Habsburg also met with European Integration Bureau Director Edvards Kusners, members of the parliament's European Affairs Committee, and representatives to the EU Convention on the Future of Europe as well as delivered a lecture on the "Challenges for European Expansion" at the University of Latvia.

* Welfare Minister Dagnija Stake presented Latvia's program to improve education and employment opportunities for disabled persons to International Labor Organization (ILO) Europe Regional Director Philip Batler in Geneva on 9 June, BNS reported the next day. Along with a number of Latvian union representatives, she was attending a UN international labor conference devoted to exchanging information about the latest developments concerning social matters and employment.

* Minister for Child and Family Development Affairs Ainars Bastiks made a working visit to Oslo on 10 June to discuss issues pertaining to support for families with children with her Norwegian counterpart, Laila Davoy, LETA reported. He also become acquainted with the system for protecting children's rights in Norway and visited several child and parental institutions.

* After undergoing premission training in Kuwait, the 39-member Latvian peacekeeping mission was flown on 11 June to the northeastern Iraqi city of Kirkuk, where they are likely to be stationed until November, BNS reported. The next day Defense Minister Girts Valdis Kristovskis told the daily "Diena" that the Latvian government would fulfill an American request to send about 100 soldiers to serve in the area of Iraq administered by Poland, probably in August.

* President Vaira Vike-Freiberga told the conference called "We Have Not Forgotten" at the University of Latvia in Riga on 13 June that it was important to inform the world about the Soviet genocide against the Latvian people, LETA reported. The audience included more than 400 people from Latvia and Russia who had been deported to Siberia as children. She said that it was crucial to gather and analyze information about the deportees with the aid of film, research, and personal accounts so that this crime would not be repeated in the future.

* Bank of Latvia President lmars Rimsevics told an economic conference in Riga on 10 June that if Latvia passes the EU membership referendum on 20 September the current pegging of the lats with the SDR (special drawing right) would shift to the euro on 1 January 2005. LETA reported. He said that if Latvia fulfilled the "Maastricht" criteria -- a budget deficit under 3 percent of GDP, inflation less than 2.7 percent, and interest rates for long-term securities less than 5.1 percent -- successfully in the subsequent two years the euro would replace lats in 2008.

* The president of the consulting company Konsorts, Uldis Osis, presented on 8 June the results of a survey indicating that Latvia will be able to use only 70 percent of the opportunities offered by the EU until 2007, LETA reported. The survey states that the EU will offer about 1.6 billion lats ($2.9 billion) in aid, but Latvia will be unable to draw up projects for such an amount. For example, the Latvian rural regions development fund will have problems receiving funding because the smallest amount of assistance to a project is 10 million lats. The survey indicated Latvia's per capita GDP in 2007 will be 3,474 lats with EU membership and only 3,018 lats without it.

* The Naturalization Department announced on 12 June that the number of people who were granted Latvian citizenship through naturalization this year was 3,108, with more than one-third (1,074) receiving it in May, BNS reported. More than 62,300 people have been naturalized since February 1995.

* The Central Statistical Bureau announced on 9 June that the consumer price index in May was 0.2 percent higher than in April and 2.5 percent higher than in May 2002, LETA reported. Items becoming more expensive included garments, used cars, fruit, and potatoes while prices of fuel, TV sets, radios, meat, fish, and eggs declined.

BULGARIAN PRESIDENT CALLS FOR COOPERATION ON ATOMIC ENERGY.
Georgi Parvanov began a two-day visit to Lithuania on 12 June with a welcoming ceremony in the courtyard of the president's office, ELTA reported. Subsequent talks with President Rolandas Paksas focused on bilateral relations, upcoming membership in NATO and the European Union, as well as the future of the two countries' atomic energy systems. The presidents agreed to urge their governments to speed up the signing of agreements on protecting investments and avoiding double taxation. Bulgaria and Lithuania have a common legacy of Soviet-built atomic power plants, at Kozloduy and Ignalina, respectively, which they have agreed to shut down to comply with EU demands. Parvanov noted that both countries want to build new, modern nuclear reactors but lack the funds, and suggested that they work together in seeking funding. On 13 June, Parvanov is scheduled to attend a business forum at the Economy Ministry, meet with parliament Chairman Arturas Paulauskas, and attend a dinner hosted by Prime Minister Algirdas Brazauskas before flying home.

VILNIUS MAYORAL ELECTIONS FAIL AGAIN.
The Vilnius City Council did not succeed in electing a mayor on 11 June, "Lietuvos rytas" reported the next day. Social Democrat Gediminas Pavirzis had been elected to the post in April, defeating incumbent Liberal Arturas Zuokas by a vote of 27 to 24 (see "RFE/RL Newsline," 10 April 2003), but held the post only a few days before his powers were suspended by the Vilnius District Administrative Court, which found the election illegal. Three parliamentary deputies had participated in the vote in violation of an earlier Constitutional Court ruling from December forbidding simultaneous membership in the parliament and local councils. Zuokas had expected to win because 26 council members had expressed support for him, but the vote ended in a 25-25 tie after Polish Election Action Deputy Tadeusas Filipovicius failed to appear because of health reasons. Another round of elections within the City Council will be held on 26 June.

HUNGARIAN PARLIAMENT SPEAKER VISITS.
A delegation from the Hungarian National Assembly headed by its speaker, Katalin Szili, completed a tour of the Baltic states in Vilnius on 10 June, ELTA reported. In an address to the parliament that day, Szili emphasized the need for national parliaments to play an important role in the expanding European Union, whose new constitution is to be signed after the 10 candidate countries become full members. The delegation arrived in Lithuania on 8 June and visited the northern city of Siauliai the following morning. Szili placed a cross on the famous Mount of Crosses near the city on behalf of the Hungarian parliament. Later that day she held separate talks with Prime Minister Algirdas Brazauskas and parliament Chairman Arturas Paulauskas. Szili noted that the good relations between their countries should become even stronger once they are both members of the EU and NATO. She confirmed that Hungarian Prime Minister Peter Medgyessy will visit Lithuania in the fall.

MILITARY COOPERATION WITH ISRAEL CONSIDERED.
Defense Minister Linas Linkevicius told reporters after a meeting with the chief of Israeli Air Defense Forces, Brigadier General Yair Dori, in Vilnius on 9 June, that agreements on military cooperation and the protection of classified information between their countries are in the final stages of preparation, BNS reported. Dori is heading a delegation of 200 military officers on a two-day visit to Lithuania as part of the "Witnesses in Uniform" program of the Israeli Defense Ministry, which each year sends troops to visit countries where Jewish communities were destroyed during the Nazi Holocaust. The officers toured the General Zemaitis Military Academy and visited locations related to Jewish history and Holocaust memorials.

* President Rolandas Paksas traveled to Augustow, Poland on 11 June to hold talks with his Polish counterpart Aleksander Kwasniewski and participate in the third economic forum of the Polish-Lithuanian Chamber of Commerce, ELTA reported. Kwasniewski told Paksas that the problems of their national minorities will disappear after the countries become members of the EU and NATO. Both presidents spoke at the forum which began the previous day and was attended by more than 200 businessmen and local government officials. Paksas stressed the necessity for the Lithuanian and Polish governments to lobby actively in Brussels and EU member-states to get financial assistance for regional infrastructure projects and called on businessmen to cooperate in seeking reconstruction contracts in Iraq.

* Russian President Vladimir Putin signed the Lithuanian-Russian agreements on the land border and on the exclusive economic zone and the continental shelf in the Baltic Sea on 10 June, BNS reported. The agreements, which were signed in 1997 and ratified by the Russian Duma and Federation Council in May, will go into effect after the two countries exchange ratification letters.

* Yukos Vice President Mikhail Brudno told reporters after a meeting with Prime Minister Algirdas Brazauskas in Vilnius on 10 June that a deal on changing the management, investment, and shareholder agreements of Mazeikiai Nafta had been reached, BNS reported. The agreements will lower the management fees due to Yukos and allow the refinancing of previous loans to reduce interest charges. The agreements still have to be approved by the Lithuanian government, but will probably go into effect in July.

* A delegation headed by Foreign Ministry State Secretary Evaldas Ignatavicius visited the Caucasian republics from 9 to 13 June, BNS reported. Discussions on fostering political and economic cooperation and the situation in the region were held with Azerbaijani Prime Minister Artur Rasizad and Foreign Minister Vilayat Quliev in Baku on 10 June, with Georgian Foreign Minister Irakli Menagharishvili in Tbilisi on 11 June, and with Armenian Foreign Minister Vartan Oskanian in Yerevan on 12 June.

* Visiting deputy head of the Social Democratic faction in Germany's Bundestag, Angelica Schwall-Duren, told European Committee Director General Petras Austrevicius in Vilnius on 11 June that Lithuania is a good partner of Germany in discussions on the future of the EU, ELTA reported. She expressed support for reducing the difference in the standard of living between EU member and candidate countries. Her talks with Prime Minister Algirdas Brazauskas focused more on the need to have a firm and effective EU foreign and defense policy.

* An IMF team headed by Patricia Alonso-Gamo completed a 10-day mission to Lithuania on 13 June, BNS reported. She noted: "Lithuania's economy is functioning well and the outlook is good if the right policies are implemented in the future." Areas needing more reform included health care and the pension system as well as greater activities in reducing unemployment, the shadow economy, and the widening development gap between Vilnius and other regions of the country.

* Almost 2,000 troops and civilians from nine countries participated in the opening of the international war games Amber Hope 2003 at the training facilities in Rukla on 10 June, BNS reported. The exercise, which is the largest in the Baltic states this year, will last until 20 June. In addition to 1,200 Lithuanian troops it also includes soldiers from Poland (280), Finland (250), Great Britain (150), and Estonia (54), as well as officers from Denmark, Latvia, Canada, and Germany. One of the main tasks of the exercise is to learn NATO operational planning and implementation in an international crisis.

* The World Bank's Board of Executive Directors approved on 10 June a grant of $6.5 million from the Global Environment Facility to finance the Heat Demand Management Project in Vilnius, BNS reported. The project aims at reducing greenhouse gases emissions from the Vilnius district heating system by implementing financially sustainable and energy efficient investments in the city's apartment buildings. It calls for introducing demand-side management measures such as thermostatically controlled radiator valves and heat meters in apartments.

* European Bank for Reconstruction and Development (EBRD) First Vice President Noreen Doyle held talks on further cooperation with officials of Siauliu Bankas in Siauliai on 9 June, ELTA reported. In 2000 Siauliu Bankas opened a 5 million euro line of credit with the EBRD which was used to grant loans to small and medium-size businesses and, in 2001, another agreement provided a credit line for agriculture development. The next day Doyle received assurances from Prime Minister Algirdas Brazauskas that the government will not oppose the acquisition by the EBRD of a 10-15 percent share of Mazeikiu Nafta and discussed possible EBRD financing of the construction of a power line between Lithuania and Poland.

* Montuotojas, Lithuania's largest company engaged in the installation of special steel and concrete structures, was the first Lithuanian firm to win a major contract in the rebuilding of Iraq, ELTA reported on 9 June. The order is for the construction of 90 oil reservoirs, whose cost would be about one million litas ($335,000) each. The contract will require sending at least 100 Lithuanian workers to Iraq.

* Deputy Foreign Minister Justas Vincas Paleckis told the parliament Foreign Affairs Committee on 9 June that Lithuania should open an embassy in Ireland, ELTA reported. He noted that this was the only EU member country (except for Luxembourg) in which Lithuania did not have an embassy and that there is an increasing number of Lithuanians working in the country. Moreover, Ireland, which will take over the EU presidency in the first half of 2004, plans to open an embassy in Vilnius.

* The Statistics Department announced on 9 June that the consumer price index in May was 0.2 percent lower than in April and 0.9 percent lower than in May 2002, BNS reported. The decline was primarily caused by lower food and fuel prices more than offsetting the higher costs for clothing and various services.