Central Europe Review: politics,
society and culture in Central and Eastern Europe
Vol 1, No 8, 16 August 1999

C E N T R A L   E U R O P E A N   N E W S:
News Review for the Baltic States

All the important news from Estonia, Latvia and Lithuania since 24 July 1999.

Mel Huang

* NOTE: The news review for the Baltic states will go on a two-week holiday. The next weekly news review will re-appear for the week of 28 August - 3 September.

This review of the week's events contains several parts. Click below to move to your area of interest:



The three Baltic bourses finalised a co-operative agreement on real-time trading information exchange. Currently only Estonia and Latvia are linked up for real-time exchanges, while Lithuania will be added in October. Representatives of the Swedish and Danish bourses also joined the meeting of the three Baltic bourse heads in Tallinn.

The Baltic Assembly, the inter-parliamentary group from the three Baltic countries, opened its permanent secretariat in Riga during the week. The group has been working together for nearly a decade, first as a common front in the struggle to renew independence.

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The Riigikogu held an extraordinary session on 11 August at the calling of opposition groups to debate a farm bill. Despite this, the body, led by the ruling coalition, delayed the debate until September while about 500 farmers protested outside, calling for protective tariffs and other measures to help prop up rural life. Sadly, two of the protesting pigs brought along to the Riigikogu have since been sent to the abattoir...

A group of Estonians returned to Siberia to commemorate the 50th anniversary of their deportations. The 1949 deportations have been consi dered one of the largest in European history, with tens of thousands from the three Baltic states sent to remote regions in Siberia.

The three-party ruling coalition made shocking fiscal proposals that would have been unheard of a year ago. First, the party discussed the introduction of import tariffs. Since designing the ultra-liberal trade regime back about seven years ago, the same group has thought the concept of tariffs to be anathema. Secondly, the most surprising, is the talk of possibly drafting a 2000 budget that is not balanced. That would violate the law and break the backbone of Estonia's economic policy and stability. Why? Just so the Reform Party can keep their campaign promise and eliminate corporate income taxes. The coalition will continue to discuss the topics, but promised some details in a week or so.

Unemployment fell to 5 percent in July, though the eastern Ida-Virumaa remains the highest in the country at 9.5 percent.

More allegations of improper acts were levied against the chairman of the board of the Port of Tallinn, Tarmo Ruben. In addition to a questionable loan cancellation, the press accused Ruben of offering "consultations" parallel to his former high-ranking position in the Economic Ministry - allegedly using inside information. Transport Minister Toivo Jurgenson finally sacked him later in the week, blaming "pressure" from the press.

Securities regulators are investigating a possible stock manipulation of Optiva Pank shares. Rumours floated on the market for several days on a possible foreign buy-out, pushing the stock up by 17 percent in 3 days. The central bank has since quelled the rumour temporarily.

Several Russian parliamentarians filed a complaint with the Council of Europe against Estonia's "treatment" of Oleg Morozov, a leader of the Russian Citizen's League. They claimed that Estonia is not allowing Russian diplomats to meet with Morozov and want him labelled as a "political prisoner." However, even the Russian Embassy in Tallinn and Russian Foreign Ministry counter that claim.

The Rene Kuulmann saga continues with yet another threat. Last week several wreaths came eulogising the passing of Kuulmann and his wife. This week Kuulmann received a doctored pornographic picture of what often happens to men in prison... but with Kuulmann's head plastered over the original.

With all the opposition politicians seemingly getting into drink drive problems, the government conveniently passed regulations placing drunk-driving cases on fast-track prosecution.

The US company Omnitrax got tired of waiting for Estonia to privatise its rail system and pulled out of Estonia. The privatisation of Eesti Raudtee (Estonian Railways) has dragged on for years.

A lost moose wandered around the Pirita region of Tallinn, once in awhile taking a dip in the beach. The authorities are keeping an eye out on the moose, as there is also a highway adjacent to the beach where the moose was spotted. Estonian papers seemingly need to place photos each time a moose is involved in a story, since Finns in Estonia are also given the nickname moose (põder in Estonian).

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Prime Minister Andris Skele issued a warning about a referendum on the amendments to the pensions law just passed, saying that pensions may be decreased due to a defeat in a referendum. Skele said there would be no financial source for pension payments if the government's reforms are defeated (see this week's Amber Coast for the full story).

The government surprised many, especially the head of the Latvian Privatisation Agency Janis Naglis, when they voted against the plan to privatise the Latvian Shipping Company. The cabinet could not gain majority support for the plan, with reports noting that Economic Minister Vladimirs Makarovs voting against the plan. This would effectively prevent the estimated 30-50 million lats earmarked for spending already in 1999 to be available. The sale of the Shipping Company failed once earlier this year when then-Prime Minister Vilis Kristopans mysteriously set the price per share at double its face value. However, Skele blames it on some of his ministers not being at the voting meeting, so they will try again next week.

Skele is more assured as a popularity rating puts his People's Party way on top with 30 percent support, while arch-rival Latvia's Way crumbles to 10 percent. At the same time, Skele is the third most popular minister in the cabinet - Transport Minister Anatolijs Gorbunovs remains most popular. Strangely, the ever-popular former Welfare Minister Vladimirs Makarovs suddenly became the most unpopular minister in the cabinet after moving to the Economic Ministry portfolio...

Latvia's CPI in July dropped by a massive 0.9 percent, the largest deflation in memory. Most of the drop can be attributed to a serious fall in prices of produce.

The Valmiera district council's head, Janis Miglavs, was arrested for vehicular manslaughter and leaving the scene of an accident. The regional head allegedly killed a young woman pedestrian and sped off, according to witnesses.

Unemployment falls to 9.9 percent in July, the first time it has dropped under the psychological barrier in several months. The lowest jobless rate comes from Riga at 5.4 percent, while the eastern Rezekne district boasts a disastrous 28.8 percent.

The government officially granted the 1 million lats needed to support the rehabilitation of the failed Rogas Komercbanka (RKB, Riga Commercial Bank). They managed to divert funding from a Swedish government grant originally earmarked for environmental purposes.

Justice Minister Valdis Birkavs is surrounded in controversy over ideas to close down the Constitutional Court by merging it into the Supreme Court. The press speculated over recent court decisions against some state apparati tied to Latvia's Way. In another merger. The government decided to merge the Latvian Medical Academy and Latvian University into one unit.

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The European Union hung a larger carrot out for Lithuania, saying it would grant 100 million euros annually for a timetable on the shutdown of Ignalina Nuclear Power Plant. The controversial power plant has been the target of the European Commission and members, especially anti-nuclear Austria. The government is set to announce a long-term energy strategy by month's end, which will cover Ignalina.

On 10 August Lithuania celebrated the 125th anniversary of the birth of Antanas Smetona. Smetona was the "father" of Lithuania, leading it into independence over 80 years ago. Smetona also served as the first and fourth president of Lithuania, which included a long period of mild authoritarian rule. Smetona fled the incoming Soviet occupation, but died in a house fire in Cleveland soon after. His remaining relatives are discussing ways to repatriate his remains to Lithuania.

Trade numbers for the first half of 1999 are not encouraging. Exports dropped by 23.5 percent from the first half of 1998, while imports dropped by 19.4 percent. Most drastically exports to the CIS dropped by 66.6 percent. Germany remains Lithuania's largest trading partner.

The Finance Ministry restated that budget cuts for 1999 will amount to 600 million litas. However, this will be presented for government debate only at the end of August, and will likely not be implemented until the very end of the third quarter in September.

US Senator Richard Durbin (D-IL) is trying to restore social security payments to President Valdas Adamkus. Adamkus, a former top official with the US Environmental Protection Agency, gave up his US citizenship prior to running for Lithuania's presidency. He stated he had no idea his old friend Durbin (though Adamkus was a Republican activist in Illinois) is trying to restore Adamkus's social security payments and also his Medicare benefits. Adamkus lives off his pension from his many decades as an environmental regulator and donates his presidential salary to charity.

Russian oil company Yukos re-iterated that they will transport 2.5 million tonnes of crude via Lithuania's Butinge Oil Terminal. During a meeting between Yukos executives and President Valdas Adamkus, Russia's second biggest oil company also hinted at entering the retail market in Lithuania.

The new runway at the holiday resort of Nida was greeted by protests from Greens. They claim the construction damaged the ecology of the unique area.

Famous Jewish playwright Grigory Kanovich celebrated his 70th birthday in Lithuania. He was born in Kaunas back in 1929 and has since been one of the most celebrated Jewish writers in the world. He writes in both Lithuanian and Russian. Kanovich currently lives in Israel.

A report shows the Seimas itself to be in debt by about 1 million litas. Apparently the parliament had trouble paying off its phone bill and owes about 100,000 litas for room and board for guests.

A Vilnius traffic policeman caused an accident while drunk, injuring another policeman. Details are scarce in the case where the Vilnius policeman hit a car that was stopped on the highway by a normal police patrol. Sadly, the parked car careened into another police official. Head of the Lithuanian police soon issued a rule saying that officers caught driving under the influence must be sacked immediately.

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Exchange Rates

As of 12 August 1999


Estonian kroons (EEK)

Latvian lats (LVL)

litas (LTL)

1 US dollar (USD)
1 British pound (GBP)
German mark (DEM)
Euro (EUR)


Czech koruna (CZK)
Hungarian forint (HUF)
Polish zloty (PLN)
Russian rouble (RUB)
Slovak koruna (SKK)
Slovenian tolar (SIT)
1 Est. kroon (EEK)
1 Latvian lats (LVL)
1 Lith. litas (LTL)

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Mel Huang, 13 August 1999

News Sources

Baltic News Service (BNS)
The Baltic Times
Radio Free Europe/Radio Liberty
Reuters news on Yahoo

Eesti Paevaleht


Lietuvos Rytas
Lietuvos Aidas
Kauno Diena

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