Baltic Report: August 22, 2003

NOTE TO READERS:
This issue covers events in the Baltic states from 2-15 August 2003.
CENTER PARTY VOTES AGAINST EU MEMBERSHIP.
At the congress of the Center Party in Tartu on 9 August, delegates voted to oppose Estonia's membership in the European Union, LETA reported on 11 August. The vote on the platform planks favoring EU membership, opposing it, or merely urging voters to participate in the country's 14 September referendum was 235, 341, and 227, respectively. Party Chairman Edgar Savisaar noted: "As a politician, I advised the congress to leave how to vote on the EU referendum up to each voter's conscience. But obviously the delegates did not want to behave like politicians." The leader of the pro-EU wing of the party, Peeter Kreitzberg, said that the vote at the congress did not surprise him, but he believes that the people will vote in favor of EU membership. The congress also re-elected Savisaar as party chairman.

ECONOMY MINISTRY OFFICIAL DISPUTES CENTRISTS' CLAIMS ABOUT EU.
Economy Ministry Deputy Chancellor Signe Ratso has said many of the arguments outlined in a statement criticizing the EU and adopted by the Center Party congress are inaccurate, BNS reported on 11 August. She disputed the statement's claim that the prices of goods in Estonia will rise to the level in Nordic countries without a corresponding increase in incomes. Ratso stressed that the EU has a market economy in which prices are determined by supply and demand and the population's purchasing power. Food prices in Estonia are half those of Finland, but its average wage is only one-fifth, Ratso said. Thus, it is likely that wages will rise at a faster pace than food prices when Estonia enters the EU. She also rejected the assertion that Estonia would only lose advantages in trade with non-EU countries by having to adhere to EU customs regulations, noting that Russia will not be able to continue placing double duties on imports from Estonia after it joins the EU.

FINANCE MINISTRY PREDICTS LARGE BUDGET SURPLUS.
Andrus Saalik, the head of the Finance Ministry's Economic Analysis Department, told reporters on 6 August that the government's decision not to have a second supplementary budget this year will probably result in a budget surplus of 424 million kroons ($30.9 million), or 0.4 percent of GDP, BNS reported. He predicted that the central government budget would have a surplus of 774 million kroons, while local government budgets would have a deficit of 350 million kroons. The surplus is primarily due to higher-than-anticipated receipts from corporate income taxes and increased collection of value-added tax (VAT).

PARLIAMENT AMENDS STUDENT SUBSIDIES ACTS.
An extraordinary session of parliament on 7 August passed a bill on student subsidies and loans, BNS reported. According to the bill, which passed by a vote of 52-28, some 9,000 students, or one-third of all full-time students, will be entitled to receive 800-kroon ($58) monthly subsidies this year. Amendments proposed by the opposition Moderates and Pro Patria Union that would have granted allowances to students based on need, rather than academic performance, were rejected, and it was decided that the number and size of subsidies would depend on the state budget each year. Parliament also approved amendments to the Social Maintenance Act that ended subsistence allowances for many students. The Estonian Student Unions Federation vehemently opposed these amendments, which passed by a vote of 51-34.

EU FUNDS FOR VIA BALTICA HIGHWAY MAY BE LOST.
Estonia might not receive the anticipated 328 million kroons ($23.7 million) in aid from the Instrument for Structural Policies for Pre-Accession (ISPA) fund for repairing the Via Baltica highway, LETA reported on 5 August, citing an article in the daily "Eesti Paevaleht." According to the agreement with the EU, the repairs were to have begun in April and been completed in October, but the necessary documentation has not yet been presented to the European Commission. Economy and Communications Minister Meelis Atonen said that several departments were to blame for the delay and added that "the EU is also very strict and apparently did not accept the opinion of Estonian experts." Ivar Sikk, the head of the external financing department of the Finance Ministry, noted that the EC agreed to an Estonian request for an extension on submitting the documentation, but only until the end of August.

OFFICIAL DISPUTES FIGURES ON ILLEGAL RESIDENTS.
Population Minister Paul-Eerik Rummo said on 5 August that reports of tens of thousands of illegal residents living in Estonia are incorrect, as the correct figure is approximately 5,000, BNS reported. He said there are currently 1,090,000 Estonian citizens and another 267,000 people with residency permits in the country -- 102,000 of whom are foreign nationals and 165,000 of whom are stateless. Rummo said the large number of stateless inhabitants is due in part to a misperception, adding that "meeting the citizenship requirements is not as difficult a process as some are trying to portray it." He expressed satisfaction that the pace of naturalization has increased, albeit only modestly. Russian Ambassador to Estonia Konstantin Provalov recently told a press conference in Pskov, Russia that there are 120,000 Russian citizens and 200,000 Russian-speaking stateless individuals in Estonia, BNS reported on 5 August.

FORMER MINISTERS REJECT PARTY CONGRESS'S CRITICISM OF EU.
Eight ministers in the previous Center Party coalition government with the Reform Party and parliament Deputy Chairman Peeter Kreitzberg issued a joint statement on 12 August declaring their intention to continue campaigning for Estonia's membership of the EU, BNS reported. The statement said the Center Party's decision at a recent party congress to oppose the country's EU membership is nonbinding. The former ministers are: Jaanus Marrandi, Sven Mikser, Harri Ounapuu, Siiri Oviir, Mailis Rand, Ain Seppik, Liina Tonisson, and Toomas Varek. According to the statement, the Center Party's decision contradicts its program and involvement in the previous government under which Estonia's negotiations for EU accession were successfully completed. Newly elected party Deputy Chairman Enn Eesmaa said the decision to oppose EU membership "was not a decision of the Center Party as a whole, but the mood of just one night."

STATE FINANCING OF POLITICAL PARTIES TO TRIPLE.
The six political parties that won seats in the March parliamentary elections will receive a total of 60 million kroons ($4.3 million) from the 2004 state budget -- triple the amount parties received this year, LETA reported on 14 August, citing the daily "Eesti Paevaleht." The amount equals what all parties collectively spent on their election campaigns, according to official statistics. The action was considered necessary to compensate losses the parties will suffer because new laws prohibit political parties from accepting donations from businesses. The state funds will be distributed in proportion to the number of seats the parties have in the parliament, amounting to a little less than 600,000 kroons for each of the parliament's 101 deputies. In the March elections, Res Publica and the Center Party won 28 seats each; the Reform Party, 19; the People's Union, 13; Pro Patria Union, seven; and the Moderates, six seats.

* A group of Russian citizens in Narva proposed nominating self-exiled tycoon Boris Berezovskii as a candidate for the Russian Duma from the 99th electoral district in Russia's Kingissepp region where they are registered on 11 August, BNS reported. Berezovskii thanked them for their offer and asked to be allowed not to make a decision until 10 September so that he could discuss the matter with fellow members of the Liberal Russia party. The main initiator of the action, businessman Andres Valme, plans to have an on-line video conference with Berezovskii on 26 August from the Rugodiv cultural center, BNS reported on 14 August.

* The commander of the Danish navy, Rear Admiral Kurt Birger Jensen, began a two-day visit to Estonia on 11 August meeting with Estonian defense forces commander Vice Admiral Tarmo Kouts and navy commander Jaan Kapp, BNS reported. The next day he visited the Baltic Defense College and the defense forces' united training institution in Tartu.

* A Russian government commission on 4 August signed an agreement on taking into service the Starozhinets port and border checkpoint and preparing the restoration of regular boat traffic between Pskov and Tartu, BNS reported the next day. Deputy head of the Pskov regional administration Dmitrii Shakhov expressed the hope that the checkpoint would go into service on 2 September. The documents still have to be signed by Pskov Governor Yevgenii Mikhailov.

* The government approved on 5 August Estonia's accession to the Optional Protocol to the Convention of the Rights of the Child which prohibits the sale of children, child prostitution, and child pornography, BNS reported. The UN General Assembly adopted the Convention on 25 May 2000 and it has been ratified by 50 countries. The government authorized the Estonian ambassador to the UN, Merle Pajula, to sign the protocol, which must also be ratified by the parliament.

* The government endorsed a bill that would ease Estonian language requirements for Russian-speaking prison guards serving at the perimeter facilities of the country's prisons on 12 August, BNS reported. The bill proposed by the Justice Ministry suggests that perimeter guards in the future would need proficiency in Estonian at the basic rather than at the medium level since they do not have to communicate constantly or write in Estonian. The action would allow prisons to keep their current staff and not have to find new personnel.

* Tallinn City Council Chairman Maret Maripuu, from the Reform Party, said on 11 August that the anti-EU platform adopted by the Center Party congress should have no effect on the Center-Reform coalition in the capital if the Center abides by the coalition agreement, BNS reported. The agreement calls for close cooperation with EU structures and Tallinn has opened a representation office in Brussels.

* Reacting to the decision of the Parnu city government to replace the controversial monument featuring a World War II soldier in a German Waffen-SS uniform, some veterans are planning to build a monument to Estonians who voluntarily joined the SS to fight for the country's freedom in the town of Turi, BNS reported on 7 August. The next day a monument to the soldiers of the White Guard forces of Russian General Nikolai Yudenich was reopened. Metropolitan Cornelius and members of both the Estonian and Russian parliaments attended the ceremonies.

* After a meeting with Central Criminal Police Director Andres Anvelt on 7 August, Police Director-General Robert Antropov decided to transfer him to the post of Police Board police director from 8 September, BNS reported. Antropov also named his recently appointed deputy, Lauri Tabur, as Anvelt's temporary replacement. Tabur has worked as the head of the Interior Ministry Internal Security Political Department.

* The government established a Crime Prevention Council and appointed Justice Minister Ken-Marti Vaher as its chairman on 5 August, BNS reported. The council has 27 members from the government, parliament, law enforcement bodies, local governments, nonprofit organizations, and research institutions.

* A poll by the EMOR research company at the end of July indicated that among people planning to take part in the EU membership referendum on 14 September, 62 percent supported membership -- 7 percent more than in June, LETA reported. The increase was probably due to the joint statement by President Arnold Ruutel, Prime Minister Juhan Parts, and Parliament Speaker Ene Ergma expressing support for EU membership.

* The Statistical Office announced on 7 August that the consumer price index (CPI) in July was 0.2 percent higher than in June and 0.8 percent higher than in July 2002, BNS reported. The price of food rose by 0.2 percent, but that of other goods declined by 0.5 percent while the cost of services increased by 0.8 percent.

CLAIM THAT U.S. CUTTING FUNDS FOR IRAQ MISSION REJECTED.
The NGO Human Rights Watch (HRW) issued a press release on 6 August saying a senior Latvian diplomat told the group that "the Bush administration has decided to withhold $2.7 million in promised supplemental funding to support Latvian troops in Iraq." The action allegedly was part of the suspension of military aid to countries that failed to sign bilateral extradition-immunity agreements exempting each others' citizens from prosecution by the International Criminal Court (see "RFE/RL Newsline," 2 July 2003). However, various officials in the Latvian Defense and Foreign ministries responded that the HRW's claim is incorrect and that the U.S. will continue to provide assistance to Latvian units in Iraq under an agreement reached earlier, the news agency LETA reported on 7 August. Armed forces press officer Uldis Davidovs said Latvia will not receive $2.75 million in U.S. aid intended for integration into NATO and for bolstering antiterrorism efforts, but that these funds were not related to actions in Iraq.

105 PEACEKEEPERS LEAVE FOR IRAQ.
Defense Minister Girts Valdis Kristovskis said at an official send-off ceremony at the Adazi military center on 5 August that the 105 soldiers departing for Iraq demonstrate Latvia's ability to participate in peacekeeping and stabilization missions outside its territory, LETA reported. Armed forces commander Rear Admiral Gaidis Andrejs Zeibots apologized for the fact that the premission training was hastily prepared and expressed the hope that such a situation will not be repeated. The soldiers are traveling by bus to Szczecin, Poland, where they will board a U.S. Air Force transport plane bound for Kuwait on 7 August. Most of the Latvian solders (98) are infantrymen bound for the Polish-led multinational stabilization force.

GOVERNMENT REMOVES ITS REPRESENTATIVES FROM RIGA FREE PORT BOARD.
The cabinet decided on 5 August to suspend the activities of the Riga Free Port board by removing the five officials who represented the Economy, Environment, Finance, and Transport ministries and the Latvian Development Agency, LETA reported. The remaining five members of the board, appointed by the Riga City Council, will not be able to approve any decisions until new state representatives are appointed. This is unlikely to occur before October, by which time the government expects the parliament to have passed its proposed amendments to the laws on ports and on the Riga Free Port, reducing the size of the board to five members: one appointed by each of the four ministries and one by the Riga City Council. Prime Minister Einars Repse said that the changes in the board's membership are necessary to improve the representation of national interests at the port.

ENVIRONMENT TO BE TOP PRIORITY FOR PLANNED CELLULOSE PLANT.
Deputy Prime Minister Ainars Slesers told representatives of the Finnish company Metsaliitto on 13 August in Riga that compliance with strict environmental requirements will be the main demand for the planned construction of a cellulose plant in Ozolsala, located in the Jekabpils District near the Dauguva River, BNS reported. The plant, for which construction costs are estimated at more than $1 billion, would be the largest ever investment project in Latvia. It was agreed that a Latvian delegation comprising political figures, environmental experts, and reporters, will travel to Finland to study the environmental impact of cellulose plants operating there. Prime Minister Einars Repse said the construction of the plant should use the latest technologies to reduce the possible impact on the environment.

U.S. MIGHT HELP WITH NUCLEAR-WASTE REMOVAL.
Latvian Radiation Safety Center Director Andris Salmins told BNS on 2 August that the removal of the nuclear-fuel waste from the experimental nuclear reactor at Salaspils could be partially financed by the United States. The reactor was built in 1961 for scientific purposes and has never been used for energy production. It was shut down in the summer of 1998, with its decommissioning scheduled to be completed by 2008. Salmins noted that the International Atomic Energy Agency (IAEA) along with Russia and the United States, organized a project for the return of Russian-produced nuclear fuel to Russia. U.S. experts visited Latvia, Romania, and the Czech Republic in February and March to assess the situation in each country and their possible participation in the project. Latvia would be expected to pay about 20 to 30 percent of the total cost of removing the Salaspils fuel, mostly for safety arrangements. If the removal of the waste is started soon, it would cost about 2 million lats ($3.5 million), but delays could result in higher costs due to the need to put the spent fuel into special containers before removing it.

LATVIAN, SWEDISH FOREIGN MINISTERS DISCUSS UPCOMING REFERENDUMS.
Sandra Kalniete and her Swedish counterpart Anna Lindh met in Stockholm on 15 August for talks that primarily focused on Latvia's and Sweden's upcoming referendums, LETA reported. Sweden will hold a referendum on 13 September on joining the European Monetary Union (EMU) and Latvians will go to the polls on 20 September to decide on joining the European Union. The ministers also discussed the EU Intergovernmental Conference beginning in October, which is expected to finalize a European constitution. At a conference of local governments that was organized by the Swedish Social Democrats, Kalniete delivered a speech on joining the EMU and spoke about Latvia's achievements on its way to the EU.

VISIT BY PARLIAMENTARY DELEGATION FROM SOUTH CAUCASUS.
A delegation of parliamentary deputies from Armenia, Azerbaijan, and Georgia ended a visit to Latvia on 4 August and departed for Lithuania, BNS reported. The group arrived in Latvia on 1 August and took part in a steering meeting for an initiative group of their parliaments on 2 and 3 August. The following day, the deputies discussed issues pertaining to EU integration and bilateral relations with the chairman and deputy chairman of the Latvian parliament's European Affairs Committee, Guntars Krasts and Oskars Kastens. The delegation voiced interest in the activities of the Baltic Assembly, as their countries aim to establish a similar assembly. The South Caucasus deputies mentioned that EU integration is one of the main foreign-policy priorities of their countries and said that they welcome the upcoming membership of the Baltic states in the EU and consider it important, as the states are "bound by a common past and history."

UNIT DEPARTS FOR PEACEKEEPING MISSION IN AFGHANISTAN.
A unit of nine Latvian soldiers, eight medics, and a liaison officer departed for premission training in Germany on 8 August, LETA reported. They are scheduled to travel to Afghanistan on 20 August to replace the Latvian medics who have been serving at a German military hospital since February. During the farewell ceremony at the Military Medical Center in Riga, Defense Minister Girts Valdis Kristovskis noted that Latvia is one of the many states making a positive contribution to countries where a democratic society is being established. Acting armed forces commander Colonel Karlis Kreslins told the medics that people in Muslim countries view soldiers from the United States differently than those from other countries, and that they should explain that they are from Latvia.

RULING COALITION TO BOOST PROJECTED REVENUES TO MEET DEFICIT TARGET.
Leaders of the ruling coalition parties on 12 August agreed to increase projected revenues in the 2004 budget, LETA and BNS reported, boosting the government's chances of meeting self-imposed deficit targets. Members of the Union of Greens and Farmers, Latvia's First Party, and For the Fatherland and Freedom/LNNK are suggesting that revenue projections be increased by 50 million lats ($88 million). However, Prime Minister Einars Repse, who has ordered across-the-board spending cuts, estimates that revenues will only increase by 10-20 million lats. "We have incompetent ministers," he said. "Work has to be organized so that the needs of the population are met within the limits of allowed funding. Lazy clerks only yell for more money but cannot keep their expenses within actual allocations." It was also decided that regular meetings of parliamentary groups will be held every Tuesday, during which budget issues would be discussed.

AD CAMPAIGN FOR EU REFERENDUM LAUNCHED.
The government task force Latvija Eiropa (Latvia in Europe) on 12 August launched a five-week campaign called "Nepaliec mala!" (Don't Stand Aside!) to promote participation in the country's 20 September EU referendum, LETA reported. The campaign, which will include television, radio, print, and billboard advertisements, will cost about 212,000 lats ($372,000). The three main target audiences of the campaign are said to be farmers, workers, and pensioners.

* Armed Forces Commander Rear Admiral Gaidis Andrejs Zeibots and Home Guard Commander Colonel Juris Kiukucans made an official visit to the state of Michigan on 6-10 August 10 for talks with Michigan National Guard Commander Major General Thomas Cutler, LETA reported. They discussed defense against weapons of mass destruction, environmental protection, cooperation projects between the armed forces of both countries, and U.S. National Guard experience in handling social matters. Cutler plans to travel to Latvia on 26 August.

* A delegation headed by Social Integration Minister Nils Muiznieks took part in the UN Racial Discrimination Eradication Committee session in Geneva on 13 and 14 August, BNS reported. It presented a report on the eradication of racial discrimination in Latvia and changes in Latvian legislation since the last report submitted to the committee in April 2002.

* The NGO Latvia's Human Rights and Ethnic Studies Center presented on 14 August a report asserting that Roma in Latvia suffer both direct and indirect discrimination, BNS reported. A survey, carried out with funding from the EU Phare program, indicated that most of Latvian society follows stereotypes in their attitude to the Roma, viewing them as deceivers, liars, and cheats inclined toward crime and theft. The Roma often suffer from discrimination on the labor market as shown by the high unemployment level and low level of education (only about 8 percent of Roma graduate from high schools). It is estimated there are 13,000-15,000 Roma living in Latvia of whom about 90 percent are citizens.

* Prime Minister Einars Repse and representatives from the State Chancellery and the European Integration Bureau (EIB) agreed in concept on 6 August that a new European Affairs Bureau would be established by January, taking over part of the functions and personnel currently of the EIB, BNS reported the next day. The main tasks of the new bureau will be developing suggestions for EU policies, preparing and coordinating Latvian-EU policies, determining priority fields for Latvia in EU policies, analysis of development and perspectives, as well as providing information and advice for the prime minister.

* The Union of Greens and Farmers and For the Fatherland and Freedom/LNNK sent a joint open letter to Prime Minister Repse on 7 August declaring their opposition to any cuts in the funding of ministries in the draft 2004 budget, LETA reported. They expressed support for raising expenditures although calling for a reduction in the corporate tax level to 18 percent for big businesses and to 15 percent for small and medium-sized companies.

* Riga City Council Executive Director Maris Tralmaks decided on 14 August not to grant permission for a protest against planned education reforms on Riga's Esplanade on 4 September, LETA reported. He explained that the intense traffic in the vicinity make the site unsuitable for a rally in which many children are expected to attend. He proposed that the organizers choose another site for the protest which opposes plans to make Latvian the main language of instruction in minority schools.

* The international rating agency Moody's issued an annual report on Latvia on 11 August which left the country with the same credit rating as last year, BNS reported. The ratings were A2 for long-term securities and bank deposits in foreign currencies, P-1 for short-term loans and deposits in foreign currencies, and A2 for government securities in local currency. The agency also gave an outlook of "stable" due to the country's upcoming membership in the EU, its secure financial system, and a "low and very manageable" state debt.

* The Transportation Ministry revealed on 13 August that the total maritime cargo turnover was 33.96 million tons in the first seven months of the year or 4.8 percent higher than in same period last year, LETA reported. Compared to 2002, the freight in Ventspils declined by 7.5 percent to 17.8 million tons while that in Riga rose by 22.6 percent to 12.6 million tons, and in Liepaja by 35.5 percent to 3.08 million tons.

* The Central Statistical Bureau announced on 12 August that in the first half of the year the total value of imports and exports were 1.38 billion lats ($2.4 billion) and 706 million lats, respectively, or 20.5 and 18.8 percent higher than in the same period last year, BNS reported. The most important import partners were: Germany (15.8 percent), Russia (10 percent), Lithuania (9.4 percent), Finland (7.4 percent), and Sweden (6.5 percent) and the export partners were: Germany (16.1 percent), Great Britain (15.6 percent), Sweden (10.9 percent), Lithuania (7.9 percent), and Estonia (5.9 percent).

* The Transportation Ministry announced on 13 August that in the first seven months of the year 29.13 million tons of freight were carried by the country's railroads, 22.5 percent more than in same period last year, BNS reported. International freight accounted for 27.82 million tons (25.1 million tons transited, 2.22 million tons imported, and 494,400 tons exported) and domestic freight only 1.31 million tons.

* The Central Statistical Bureau declared on 8 August that the consumer price index in July was 0.3 percent lower than in June, but 3.8 percent higher than in July 2002, BNS reported. The decline of prices in July was 0.4 percent for goods and 0.2 percent for services. The greatest fall was 15.3 percent for vegetables.

RUSSIA TO GIVE INFORMATION ON ENVIRONMENTAL IMPACT OF D-6 OIL FIELD.
Outgoing Russian Ambassador to Lithuania Yurii Zubakov, in a farewell meeting on 13 August, told Prime Minister Algirdas Brazauskas that Russia will provide Lithuania with the results of environmental-impact and safety studies conducted on the D-6 oil field in the Baltic Sea as soon as they are received, BNS reported. The Russian oil giant LUKoil plans to extract oil from the D-6 site, 22 kilometers off the Russian-Lithuanian Curonian Spit and seven kilometers from the countries' maritime border (see "RFE/RL Newsline," 24 July 2003). Zubakov also told reporters after the meeting that preparations have begun for Russian President Vladimir Putin to visit Lithuania, although an exact date has not yet been set. The visit would be a follow up to Lithuanian President Valdas Adamkus' visit to Moscow in the spring of 2001, and would be the first ever by a Russian president to Lithuania. Zubakov, who served in Lithuania for four years and will leave this week to take the ambassador's post in Moldova, will be replaced by Russian Ambassador to Kenya Boris Tsepov.

ARMY COMMANDER VISITS TROOPS IN IRAQ.
Major-General Jonas Kronkaitis returned to Lithuania from Denmark on 10 August after a three-day visit to Iraq, "Lietuvos zinios" reported on 11 August. He had traveled to Iraq on 7-9 August with Denmark's chief of defense, General Hans Jesper Helso, to meet with the 43 soldiers from the Grand Duke Algirdas infantry battalion serving with Danish troops in the British-controlled area of southern Iraq. Kronkaitis said that both Danish and British army leaders spoke very favorably about the performance of the Lithuanian troops in Iraq. At the request of the Danes, no advance information about the visit to Iraq had been provided.

WINNING BID FOR STUMBRAS DISTILLERY PRIVATIZATION ANNOUNCED.
The State Property Fund (VTF) announced on 6 August that local alcohol distributor Mineraliniai Vandenys (MN) won the public tender to purchase the Stumbras distillery, BNS reported. MN offered 152 million litas ($50 million) for a 91.95 percent stake in Stumbras and pledged an additional 30 million litas in investment. On 4 August, VTF declared that it was rejecting the bid of one of the five bidders because it received written information from competent Lithuanian public institutions about the bidder's unreliability. The company was not named, but it was believed to be Latvijas Balzams, run by the Russian SPI Group, which placed the highest bid of 158 million litas.

PRIVATIZATION OF STUMBRAS DISTILLERY DISPUTED.
The largest Baltic alcohol distributor, Latvijas Balzams (LB), filed a request with the Vilnius District Court on 7 August asking for a suspension of the decision made by the State Property Fund (VTF) the previous day allowing Mineraliniai Vandenys (MN) to privatize the Stumbras distillery (see "RFE/RL Newsline," 7 August 2003), "Lietuvos rytas" reported the next day. LB General Director Janis Gulbis also sent a letter to Prime Minister Algirdas Brazauskas proposing a meeting with government representatives on 9 September in London to discuss the situation before Gulbis appeals for international arbitration. Gulbis rejected VTF claims that his company is unreliable and said LB should have won the privatization tender as it had made the highest bid. Another bidder for Stumbras, Bennet Distributors, said it also plans to ask the court to order a new privatization tender since the VTF only offered MN the opportunity to improve its original bid.

GAZPROM RAISES ITS BID FOR STAKE IN LITHUANIAN GAS.
Russia's state-owned gas monopoly Gazprom on 11 August submitted to the State Property Fund a revised bid for a 34 percent stake in the Lithuanian natural-gas utility Lietuvos Dujos (Lithuanian Gas), BNS reported. Gazprom's new bid would pay 91 million litas ($29.8 million) with an additional 9 million-litas premium if Lithuania does not introduce any restrictions on gas prices for large industrial users before the privatization agreement is completed. Gazprom previously offered to pay 80 million litas, although German energy companies Ruhrgas and EON Energie jointly paid 116 million litas for a similar stake in June 2002. Meanwhile, Gazprom Deputy Chairman Aleksandr Ryazanov said the price of gas exported to Lithuania will be calculated using the same methods as those for EU states; i.e., Gazprom will set a price that will be subsequently modified by taking into account changes in the prices of alternative fuels.

SANCTIONS AGAINST CHECHEN FIELD COMMANDER IMPOSED.
Lithuania has banned entry to radical Chechen field commander Shamil Basaev and frozen his financial operations in compliance with a recent UN Security Council decision, BNS quoted Foreign Ministry spokeswoman Violeta Motulaite as saying on 14 August. The United States ordered a freeze on Basaev's funds on 8 August (see "RFE/RL Newsline," 11 August 2003). Meanwhile, the Chechen web site kavkazcenter.org, which is run by Movladi Udugov, who was fired after briefly serving as Chechen President Aslan Maskhadov's spokesperson and is extremely sympathetic to Basaev, resumed operations in early August after being shut down by the Lithuanian state security service in June, according to BNS on 13 August. The server for the website is located in the apartment of former Soviet-era dissident Viktoras Petkus.

FRANCE TO CO-FINANCE STUDY ON CONTINUING NUCLEAR ENERGY.
Parliamentary deputy Kazimiera Prunskiene told a press conference in Vilnius on 4 August that during her recent visit to France, she received promises from the heads of the French Energy Department to help finance studies on the possibility of Lithuania building another nuclear power plant, "Kauno diena" reported on 5 August. Prunskiene, who heads the parliamentary commission dealing with problems created by the closing of the Ignalina atomic power plant, noted that specialists from the companies Areva and Framatome ANP, a subsidiary of Siemens, are conducting preparatory work for the study, which is expected to cost about 700,000-800,000 litas ($233,000-267,000). The Lithuanian government has only provided 100,000 litas for the study.

ALMOST 100 PEACEKEEPERS BEGIN TO SERVE IN KOSOVA.
After more than a month-long training in Denmark, 97 soldiers from the Duke Butigeidis Dragoons Battalion were flown to Skopje, Macedonia, from where they were transported to the French-controlled sector near the city of Mitrovica in northern Kosova on 12 August, BNS reported. They will serve for six months in the Baltic Squadron of a Danish battalion in which soldiers from Estonia, Latvia, and Lithuania participate on a rotating basis. Their main tasks will be patrolling, convoying, escorting, and collecting illegal weapons as well as observing the implementation of international obligations, assisting humanitarian organizations, and ensuring the safety of the local population. Among the Lithuanian troops are 41 soldiers who are draftees, but intend to sign contracts to continue serving in the military as volunteers.

* Foreign Minister Antanas Valionis and Russian Ambassador to Lithuania Yurii Zubakov exchanged ratification letters of the border treaties between their states in Vilnius on 12 August, BNS reported. This completed the process which had begun with the signing of the treaties by Presidents Algirdas Brazauskas and Boris Yeltsin in Moscow in October 1997. Lithuanian is the only former Soviet-occupied republic with which Russia has officially settled its borders.

* The delegation of parliamentary deputies from Armenia, Azerbaijan, and Georgia arrived in Vilnius on 4 August to discuss issues of interregional cooperation with Lithuanian parliament deputies, BNS reported. The next day they had meetings with parliament Deputy Chairman Ceslovas Jursenas, Foreign Affairs Committee Chairman Gediminas Kirkilas, and the current head of the Baltic Assembly Giedre Purvaneckiene. The delegation also included representatives from the British nongovernmental organization LINKS, which has been urging the three Caucasus states since 2001 to follow the example of the Baltic states in increasing trilateral cooperation.

* Agriculture Minister Jeronimas Kraujelis signed a decree dismissing Evaldas Cijauskas as National Payment Agency (NMA) director on 11 August, BNS reported. In July the media reported that a fictitious poultry farm project in the district of Jonava had succeeded in obtaining almost 200,000 litas ($66,000) in SAPARD funds. The NMA is responsible for the distribution of SAPARD funds. Cijauskas initially refused to resign, but was left with no choice after it was revealed that his wife was given an interest-free loan from a businessman shortly before his company received 650,000 litas in SAPARD funds.

* Former President Valdas Adamkus said in a interview on Lithuanian state radio on 4 August that he will not be a candidate in the next parliamentary elections in the fall of 2004, BNS reported. He, however, pledged to work so that center-right candidates would win a majority in the parliament. Adamkus also mentioned that he had not decided whether he would run for a seat in the European Parliament next year. The daily "Respublika" had written the previous week that the Liberal and Center Union hoped that he would agree to head its list and, if elected, would be nominated as a candidate for the European Parliament's vice chairman.

* Lithuania's consul-general in Kaliningrad, Vytautas Zalys, told a press conference in Kaliningrad on 6 August that not a single resident of the Kaliningrad Oblast had been barred from entering Lithuania after 1 July when new transit regulations were introduced, BNS reported. He noted that in July some 65,532 Russian nationals traveling in transit from Kaliningrad to other regions of the Russian Federation and vice versa received 43,236 facilitated railway transit documents -- the other passengers held foreign passports with Lithuanian visas.

* At the request of the Danish company Trident Marine, the Vilnius District Court ordered the suspension of the privatization of the country's leading shipping company, Lietuvos Juru Laivininkyste, on 4 August, BNS reported the next day. The State Property Fund had rejected the bid of Trident Marine in July, explaining that it had received information from Lithuanian security institutions that the company was unreliable (see "RFE/RL Baltic States Report," 6 August 2003).

* The Statistics Department revealed on 7 August that preliminary customs data indicated that in the first half of the year the country's imports and exports were valued at 13.85 billion litas ($4.6 billion) and 10.35 billion litas, respectively, or 2.3 and 6.7 percent greater than in the same period last year, BNS reported. The most important import partners were: Russia (11.3 percent), Switzerland (11 percent), Germany (10.1 percent), and Latvia (9.2 percent), and the largest export partners were: Russia (21.7 percent), Germany (16.1 percent), Poland (4.9 percent), and France (4.3 percent).

* The Labor Exchange announced on 5 August that the number of registered unemployed persons at the beginning of the month was 153,900, or an unemployment rate of 9.5 percent, BNS reported. The unemployment rate was 0.1 percentage points higher than in July, but 1.2 percent lower than in August 2002.

* The national railroad company Lietuvos Gelezinkeliai (Lithuanian Railways) declared on 7 August that in the first seven months of the year it had handled 23.3 million tons of freight or 17.7 percent more than in the same period in 2002, BNS reported. International freight rose by 30 percent to 20.6 million tons while domestic freight declined by 28.2 percent to 2.7 million tons.

* The Statistics Department announced on 8 August that the consumer price index (CPI) in July was 0.8 percent lower than in June and 1.0 percent lower than in July 2002, BNS reported. In July the price of goods declined by 0.9 percent while services declined by 0.2 percent.