Constitution Watch
    A country-by-country update on constitutional politics in Eastern Europe and the ex-USSR
    
    Preparations for the October 2000 local elections dominated the Albanian political scene during the past few months. The international community has stressed repeatedly the importance of holding free and fair polls as a prerequisite for Albania’s further integration into European structures. The last local elections, in October 1996, took place in a highly charged atmosphere. Coming on the heels of parliamentary elections (held May 26, 1996), the local ballot—which the thenruling Democratic Party (DP) won by a large majority—was widely criticized for severe irregularities. (See Albania Update, EECR, Vol. 5, No. 4, Fall 1996.) Although circumstances have changed dramatically since then, and political passions have dissipated, friction still exists between the two main political camps, the ruling Socialist Party (SP) and DP, the largest opposition party. The simmering hostility between these two parties became evident when parliament (the Kuvend) attempted to reach an agreement on a new electoral code. Since the beginning of March, five representatives of the governing coalition, five representatives of the opposition (including two from DP), and international experts from the Council of Europe, the OSCE, and the International Federation of Electoral Systems convened for daily meetings at OSCE offices. The meetings, which were fraught with tensions, lasted a month. Without the intervention of the international community, the drafting and approval of the electoral code would have dragged on even longer. Among the issues surrounding the forthcoming elections, the composition of the Central Electoral Commission (CEC) was a particular object of contention. According to Art. 153 of the Constitution, the CEC is a “permanent organ that prepares, supervises, directs, and verifies all aspects that have to do with elections and referenda and announces their results.” Article 154 defines the commission’s makeup, which consists of seven members elected for seven-year terms; two members are elected by parliament, two by the president, and three by the High Council of Justice. Controversy erupted when the president, parliament, and the High Council of Justice named their CEC members (parliament naming one, with the other to be designated by the opposition), even though legislative work on the law regulating the commission’s activities
    
    Albania
    
    was still unfinished. DP and other opposition parties denounced the appointments as unconstitutional. Opposition leaders insisted that the parliament, president, and High Council should have considered nominations for CEC members made by all political parties as well as by representatives of civic organizations before making their decisions. The opposition sought to gain equal representation both in the CEC (one possible arrangement would have allowed for three members of the ruling coalition, three from the opposition, and a neutral chairman) and in lower-level electoral commissions, which actually have more power since they are responsible for tallying votes. As DP stressed, a compromise would have been consistent with recent precedents in Albanian politics; the Law on Local Elections (1996) and the amendments to the electoral code (1997) provided for parity in the composition of electoral commissions. The leaders of the ruling coalition pointed out, however, that past compromises were forged in emergency situations, and that the time had come to turn the CEC from a “political body,” dominated by politicians, into a permanent, nonpolitical organ staffed by experts. As the controversy intensified, two of the newly appointed CEC members resigned (one from the president’s quota and one from the High Council of Justice’s). The High Council of Justice replaced the member who resigned. The resignations hardly placated the opposition. Arguing that the parity principle had been violated, DP and its allies boycotted the last round of OSCEsponsored meetings. The draft of the electoral law was completed in the absence of opposition representation and was adopted by parliament in mid-May. Immediately after passage of the law, DP chairman Sali Berisha attacked both the SP government and the OSCE, alleging that OSCE representatives had been duped by SP’s political machinations. Some of the other small, opposition parties ultimately accepted the code, and the opposition National Front even nominated a lawyer to serve on the CEC (he was subsequently appointed by the president to replace the presidential nominee who had resigned). One of the CEC seats remains vacant. It was widely assumed that the seat would be offered to a DP candidate, but Berisha’s party has yet to submit a nomination to parliament. Legal observers note that parliament cannot ignore its constitutional duty to name the member, and several of the
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    other opposition parties seem to be considering submitting a nominee for the “opposition” seat. Meanwhile, the CEC has begun operations with only six members. The newly adopted electoral code is perhaps one of the better legislative achievements in recent years, partly because of substantial cooperation between local jurists and international experts. The Council of Europe has approved it as a whole. The law contains important innovations, such as provisions regarding any recount of votes, determining the validity of elections, and protecting the nonvoting members of lower electoral commissions. New, more-efficient procedures for voter registration have also been introduced. Finally, a special commission charged with drawing the boundaries of electoral districts was set up. This commission will have to reduce the number of electoral districts from 115 to 100 and ensure that the rampant gerrymandering that occurred during the 1996 general elections is not repeated. A foreign-funded Electoral Assistance Program has been established to help with these projects. Vice Prime Minster Makbule Ceco was named head of the program, and the Ministry of Local Government is in charge of maintaining contacts with the international community. Berisha opposed this project, at first, even accusing foreign officials of criminal activities. And he ordered the DP-controlled local governments to embark on a parallel registration of voters. But, eventually, he backed down, perhaps under heavy international pressure or realizing the impracticability of such a project. Preparatory work for the approaching elections—in which local politicians, governmental and opposition officials, and international monitors are actively involved—is still under way; it is too early to assess the success of these projects. Throughout the entire electoral process—from the drafting of the code to the CEC’s election to all aspects of the registration process—Berisha has continued to hold open-air meetings in Tirana’s public squares, calling for early elections and the cabinet’s resignation. Lately he has extended his efforts to other parts of the country, and, most importantly, to Vlora, the center of the revolt against his government that engulfed the country in 1997, when the financial pyramids collapsed. (See Albania Update, EECR, Vol. 6, Nos. 2/3, Spring/Summer 1997.) There was a significant police presence during Berisha’s rally in Vlora’s main square, where daily demonstrations against him had occurred scarcely three years before. Seemingly exhausted, Berisha spoke for only a few minutes and then left the city, refusing the government’s offer of a helicopter to take him back to Tirana. Berisha also planned a trip to Kosovo in May, and his followers staged a mass demonstration at the northeast border of Albania, near the city of Kukes. Some demonstrators even entered Kosovo, but Berisha
    
    himself was stopped at the border by KFOR troops under orders from Bernard Kushner, head of the UN Mission in Kosovo (UNMIK), who stated that Berisha’s presence in Kosovo posed an unacceptable security risk. Berisha returned angrily to Tirana, denouncing UNMIK and hinting that its members had criminal associations. SP Chairman Fatos Nano had also planned a trip to Kosovo, several months before, and was similarly advised not to visit the province; subsequently, Nano dropped his plans for a Kosovo visit. Changing government ministers seems to have become almost routine. In his nine months in office, Prime Minister Ilir Meta has replaced the heads of six ministries, including the minister of privatization and the minister of state (without portfolio). (See Albania Update, EECR, Vol. 9, Nos. 1/2, Winter/Spring 2000.) In May, Minister of Transport Ingrid Shuli tendered her resignation; she was widely criticized for failing to carry out important road-construction projects, many of which have been funded by the European Union. Another series of cabinet changes was announced on July 5. The minister of public works, Arben Demeti, was fired, and personnel changes occurred at the Ministry of Justice and the Ministry of Defense. This last wave of changes has been generally well received. They are seen as an attempt to bring more-competent officials into government. The impending elections will undoubtedly reshape the political scene even further. The Party for Democratic Action and the Union of Human Rights, both members of the governing coalition, have indicated they will field their own candidates in the local elections. So far, at least, the other two coalition members, the Social Democratic Party and the Agrarian Party, are sticking closer to SP. Berisha seems determined to retain a firm grasp on DP, although the group of reformers headed by Genc Pollo continues to receive foreign encouragement and support. On May 25, three days before the new Electoral Code was to go into effect, the SP-dominated Council of Ministers took advantage of a provision in the 1996 electoral law and appointed its own candidate to replace the absent DP mayor of Lushnja, a city in central Albania. According to the new law, however, when a mayoralty is vacant and local elections are less than six months away, the local council (which DP controls in Lushnja) elects a temporary replacement. Acting in accordance with the new law’s provisions, the local council proceeded to elect another acting mayor. Thus, there are now two acting mayors in the city. Local officials refuse to cooperate with the SP-named acting mayor or with the Electoral Assistance Program, and this has seriously hindered the process of voter registration. The Association of Municipal Mayors brought a complaint against the central government’s action to the Constitutional Court. On June 19, however, a
    
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    three-member panel of the Court announced it would not forward the petition to the full Court for a hearing, thus effectively denying it. The panel claimed that Art. 115 of the Constitution, which was the basis of the association’s complaint, only gives standing to the discharged mayor himself, who must then bring the complaint within 15 days of his discharge, in which case the termination by the Council of Ministers is suspended until the Court’s decision. (The article states: “A directly elected organ of a local government unit may be dissolved or discharged by the Council of Ministers for serious violations of the Constitution or the laws. The dissolved or discharged organ may complain, within 15 days, to the Constitutional Court, in which case the decision of the Council of Ministers is suspended. If the right to complain is not exercised within 15 days, or if the Constitutional Court upholds the decision of the Council of Ministers, the president of the Republic sets a date for elections of the respective local unit.”) Since the former mayor is now in Italy, he cannot file a complaint with the Court. It bears emphasizing, however, that although the Constitution clearly states that only the discharged mayor may bring a complaint, the association’s action was not really about the discharge but rather raised the more important issue of who is authorized to appoint a new mayor. On July 3, the Lushnja City Council filed a complaint about the same case with the Constitutional Court, based on Art. 131.c (“The Constitutional Court decides on the compatibility of normative acts of the central and local organs with the Constitution and international agreements”). This article does seem to be directly applicable, given the contradiction existing between the council’s own decision of May 30 (which elected a temporary mayor) and that of the Council of Ministers five days earlier. It may also be argued that, in contrast with the mayors’ association, the local council has standing to initiate the case. It remains to be seen whether the Court will once again evade making a decision on the case’s merits. The underlying issue is whether the 1997 amendments, or part of them, had been overridden by the new Constitution (which came into force in November 1998). Article 178.1 of the Constitution provides that laws approved before the Constitution’s adoption will remain in force until repealed. Repeal can be by parliament, as with the Electoral Code, or by the Constitutional Court, on a complaint. Article 4.3 of the Constitution, which states that the Constitution’s provisions are directly applicable unless otherwise provided for, has been construed as a kind of exception to this rule; if a provision is absolutely clear and there is no indication to the contrary in the Constitution, it can be applied directly. It is not immediately clear whether constitutional provisions related to local
    
    governments’ autonomy may be construed to mean that, under the new Constitution, the Council of Ministers no longer has the power to appoint temporary mayors. Furthermore, there is no question that the new Electoral Code had not gone into effect at the time the Council of Ministers acted. The three-judge screening panel that made this decision is an institutional device created by the new Law on the Constitutional Court (March 31, 2000). In addition to detailing the procedures for cases brought under Art. 131 of the Constitution, the new law also provides an independent basis for requests for general “interpretations of the Constitution.” In this way, parliament has considerably expanded the scope of the Court’s prerogatives. In light of this new provision, the justices have issued a number of interpretations of the Constitution. Given this general activism, it is a bit odd that the Court has taken a very strict view of its limited competencies in important cases like the Lushnja case. Apparently, the scope and functions of judicial review in Albania remain murky. The controversial constitutional referendum that allowed President Alexander Lukashenka to prolong his term in office and disband parliament took place four years ago, and the country will soon face the test of a parliamentary election. Balloting for the 110-member rubber-stamp National Assembly (Nacyianalny Skhod, or parliament) is scheduled for October 15. In preparation, the Minsk-based OSCE consultative group has sponsored negotiations between the opposition and the government. So far, the negotiations have come to naught. The OSCE and the opposition set forth four preconditions for participation in the elections: that the electoral code be amended to make it democratic and transparent; that parliament be given meaningful functions; that the opposition receive free access to state media, including radio and television; and that all political prisoners be released and all harassment of political activists stopped. Instead, Lukashenka’s government offered a “broad public dialogue.” Over 100 different organizations were invited to the “dialogue”; major opposition parties ignored the invitation. On June 22, Lukashenka’s handpicked parliament unanimously approved a number of changes in the electoral code, some of which were heralded as an important result of this “public dialogue.” These changes clarified some rights of electoral observers, called for candidates to declare their income, and added some formalities to the early voting process. The OSCE mission, the EU, and other international organizations called these changes insufficient. The opposition was especially concerned that its most important demands were ignored, including, in particular, a mixed system of voting that
    
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    would see 50 percent of the deputies elected by party lists and 50 percent by direct voting in districts. Moreover, the right of political parties to 30 percent of the seats on electoral commissions was not approved, and no independent members or observers will be allowed to work in the central electoral commission. The situation is currently at an impasse, and the Lukashenka regime appears unlikely to make concessions. On July 2, at a meeting that included all of the regime’s opponents, the democratic opposition declared that it would boycott October’s parliamentary elections unless the OSCE conditions are approved. About 850 delegates—representing seven political parties, independent trade unions, and nongovernmental organizations—attended the meeting and issued a resolution stating that, given the current situation, elections will be a farce. So far, the only good effected by the upcoming elections has been the mobilization of internal and international pressures, which have been mounting since early spring. The beleaguered opposition has managed to organize three mass demonstrations—Freedom March, on March 15; Day of Independence March, ten days later; and the Chernobyl demonstration, on April 26. About 500 people were detained on March 25, among them more than 30 journalists, international observers, and diplomats. These arrests were strongly condemned by the international community. Meanwhile, a strongly worded resolution by the US Congress generated some heat. The resolution, adopted on May 3, warned that Belarus “has effectively become an authoritarian police state, where human rights are routinely violated.” It urged Belarusian authorities to hold an immediate dialogue with Belarusian opposition parties and to organize legitimate and fair parliamentary elections in accordance with OSCE standards. The resolution points out that President Lukashenka had illegally extended his term by means of the controversial 1996 referendum and created an illegitimate legislature. The document also states that the union treaty, already signed by Lukashenka and former Russian president Boris Yeltsin on December 8, 1999, “undermines Belarus’s sovereignty and the prospect of democracy.” The resolution calls on the American president to continue to provide funds for the Belarusian opposition, to finance NGOs, and to support information flows into Belarus. It also appeals to the US president “to raise the issue of financial support provided by the Russian Federation to the Lukashenka regime at the highest levels of the Russian government” and “to urge the Russian government, in accordance with its international commitments, to respect fully the sovereignty of Belarus, particularly in light of the illegitimate nature of the Lukashenka regime.”
    
    Belarusian and Russian parliaments and foreign ministries roundly condemned the resolution as “interference in the internal affairs and relations of sovereign states.” Later, however, several Russian deputies drafted an appeal asking Lukashenka to guarantee free and fair parliamentary elections this autumn. The appeal, signed by the leaders of three of the Duma’s nine factions, said that Belarus’s elections must meet international standards of democracy. Belarusian-US relations deteriorated still further in July, when US Trade Representative Charlene Barshefsky suspended Belarus from a program that grants favorable tariff benefits to imports from developing and emerging nations. Barshefsky said Belarus was suspended because it continues to suppress trade-union rights and harass union leaders. The move was a major blow to Belarus’s anemic economy. Last year, Belarusian exports to the US totaled $92 million and imports $26 million. Lukashenka condemned the decision and warned that adequate measures would be taken in response.
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    Belarusian-Russian integration seems to be going nowhere, at the moment. Having had his hopes of occupying the Kremlin dashed by Vladimir Putin’s election, Lukashenka has toned down his integration rhetoric. Putin, meanwhile, has limited himself to lip service to the idea. Still, there has been some movement. On June 27, at the Supreme State Council of Russia and Belarus, a new union budget was approved (2.2 billion rubles [$80 million], of which Russia contributes 65 percent and Belarus 35 percent). And the head of Russia’s central electoral commission, Alexander Veshnyakov, stated that elections to the Russia–Belarus Union’s parliament would likely be held in the second half of 2001. He also commented that a draft law setting the rules for the elections may clear Russia’s Duma by the end of this year. A meeting between Putin and Lukashenka, on the other hand, stopped short of solving any of the major hurdles facing the union—a single currency, a common customs zone, unified tariffs, and a joint budget. Russia’s lack of enthusiasm is understandable, since the economic gap between the two countries seems only to widen. The union’s general secretary, Pavel Borodin (who has been indicted by a Swiss judge for his involvement in money laundering while serving as property manager in the Kremlin), has said that another three to four years are needed before the union can be implemented. Belarus must first relax its currency controls and allow the Belarusian ruble to be traded on the open market (at present there are about seven different exchange rates in Belarus). Borodin also urged a series of other economic reforms.
    
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    Belarusian and international human-rights organizations have detailed numerous cases of arbitrary detention, arrests, politically motivated sentences, and other harassment of opposition activists and independent media. The high-profile cases of former prime minister Mikhail Chyhir, leader of the Social Democratic Party, Nikolai Statkevich, and deputy Valery Shchukin drew especially loud protests. Chyhir, who was arrested in 1999 during the shadow presidential campaign, spent more than six months behind bars before being released, tried, and given a three-year suspended jail sentence for “abuse of authority.” On May 19, the Minsk City Court barred the former premier from serving in an administrative position in any organization or company for the next five years. It also ordered him to pay a $220,000 fine. Chyhir appealed the sentence, as did the prosecution, which also announced a new, unrelated investigation of the former prime minister. On June 19, Shchukin and Statkevich were found guilty of disrupting public order during opposition demonstrations in 1999. They received one- and twoyear suspended sentences respectively; both opposition activists are now forbidden from leaving the country and are also barred from participating in the forthcoming elections. A June visit by the UN Special Rapporteur on the Independence of Judges and Lawyers, Dato Param Cumaraswamy, threw a spotlight on the Belarusian judiciary’s lack of independence. Cumaraswamy found that the “independence of judges is threatened by the presidential power to appoint and dismiss most judges. Judges must also pass a probationary period of five years after being appointed, leaving them uncertain of their tenure during this extended period. (Forty percent of all judges have worked for less than three years.) Low salaries for judges also leave them open to the possibility of corruption.” The special rapporteur was particularly concerned with the appointment procedure for Constitutional Court judges. The president appoints six of the twelve judges and also appoints the chair, who recommends the other six candidates to parliament. Cumaraswamy concluded that the Constitutional Court cannot possibly be seen as independent of the executive. Equally as dominated by the state were other members of the legal profession, including attorneys and notaries. The special rapporteur also examined the lawmaking process and expressed grave concern over the presidential practice of ruling by decrees that have the force of law. Dozens of temporary decrees have been in effect for more than three years, many of which contradict the Constitution and other laws. Cumaraswamy noted that one particularly worrying example of a temporary presidential decree is Decree
    
    40, on “Measures Regarding Harm Carried Out Against the State,” dated November 23, 1999. This decree allows for the confiscation of property in cases where an individual or legal entity is suspected of harming the state. “Harm” is not defined by the decree or by any law. Confiscation of property without a court decision violates the Constitution and the Civil Code, as well as international human-rights norms. The special rapporteur also expressed some concern over widespread human-rights violations. For example, the offices of the human-rights activists Vera Stremkovskaya and Oleg Volchek were broken into, and their computer equipment and files stolen. A reregistration requirement has resulted in many NGOs losing their registration; most are convinced that this process was driven by political motives. Journalists from nonstate media have been barred from certain court proceedings. Hundreds of demonstrators and journalists, along with foreign monitors, were beaten and detained during the Freedom March. In addition, the refusal to pursue criminal proceedings against the authorities in related cases calls into question the procuracy’s independence. This summer, on July 1, the Constitutional Court of Bosnia and Herzegovina, made a landmark—yet ultimately unclear—decision regarding the harmonization of the constitutions of the Republika Srpska, the Serbian entity, and the Federation of Bosnia and Herzegovina, the Bosniac–Croat entity, with that of the Constitution of Bosnia and Herzegovina. The Court apparently concluded that the language of Republika Srpska’s Constitution, which gave special rights to Serbs, as well as other legal provisions concerning Serbian language rights, were unconstitutional. Likewise, the Court decided, in effect, that the preamble to the Federation’s Constitution, which names Bosniacs and Croats as the “constituent nations” of the Federation, was not in line with Bosnia and Herzegovina’s Constitution. With its decision, the Court seemed to be ruling out the practice of granting distinct rights to the three national groups, even though the entire structure of the Dayton Constitution is predicated on just such special rights for Bosniacs, Serbs, and Croats. With the signing of the Dayton Peace Agreement on December 14, 1995, the Republika Srpska and the Federation were given three months in which to harmonize their constitutions with the Constitution of Bosnia and Herzegovina. (See Bosnia and Herzegovina Update, EECR, Vol. 8, No. 4, Fall 1999.) Because they had still not done so, after two years, the Bosnian member of the presidency, Alija Izetbegovic, requested that the Court review the congruence of 14
    
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    provisions of Republika Srpska’s Constitution and 6 provisions of the Constitution of the Federation with the Bosnian Constitution. The recent decision apparently addressed only some of the questions raised by Izetbegovic, and the Court will decide on remaining aspects of the request in due course. Once the Court’s decision is published in the Official Gazette, the entities’ assemblies will have to replace the disputed articles and assure the equality of Bosniacs, Serbs, and Croats in their territories. Five judges reportedly voted in favor of the decision—two Bosniacs and three international judges, while the other four judges—two Croats and two Serbs—opposed the ruling. Yet it is unclear to most observers both what the decision actually means and, given the absence of a published text, what it literally says. The decision, the draft of which was written by the Austrian judge on the Court, Professor Josef Marko, has not been published. The Court was clearly ordering the two entities to revise certain provisions of their constitutions, but the far-reaching repercussions of the decision are ambiguous. In some sense, by declaring that all three constituent peoples—Bosniacs, Croats, and Serbs— must enjoy equal rights throughout the whole of Bosnia and Herzegovina, the decision would seem to contradict many of the principles implicit in the governing structure established at Dayton. Some have even suggested that the decision could require the Republika Srpska to change its name. Vitomir Popovic, one of the judges from Republika Srpska, has stated that, with this decision, the Court has transformed its role from constitutional protector to constitutional framer. Moreover, he claims that the decision was largely political, handed down at the urging of international forces, and that it amounts to a revision of the Dayton Agreement, effectively transforming Bosnia into a unitary state.
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    Bosnia and Herzegovina has been left without a government (Council of Ministers) since February, when the Constitutional Court struck down the consociational system that had partitioned the position of council chairman among a Bosniac, a Serb, and a Croat. (See Bosnia and Herzegovina Update, EECR, Vol. 9, Nos. 1/2, Winter/Spring 2000.) Although the Constitution arranged it otherwise, the Parliamentary Assembly passed this law in 1997 because it had been unable to agree on a single candidate. But after the Court decision, parliament enacted a law in December 1999 providing that the chair would be occupied by one person (not a troika), and that the position would rotate every eight months among the three “constituent peoples.” Deciding on a candidate proved quite difficult.
    
    The Republika Srpska was given the right to name the first cochair. Essentially, the Serbian member of the presidency would name a candidate, who then had to be approved by the other two members of the presidency. Once they agreed on a nominee, the Parliamentary Assembly would vote on the candidate, and, if this person were approved as chair of the Council of Ministers, he would present a government to parliament. In April, Zivko Radisic, the Serbian member of the presidency, nominated Tihomir Gligoric for the post. Both Radisic and Gligoric were from the Serbian Democratic Party (SDP), which, until January, was a member of the Accord Coalition governing the Republika Srpska. SDP is the largest single party in Republika Srpska’s National Assembly, or parliament, with 19 out of 83 members. Republika Srpska’s prime minister, Milorad Dodik, opposed Gligoric’s candidacy, arguing that his coalition’s candidate should have been named. Dodik, however, could do little more than protest, and, in midApril, the three-member Bosnian presidency approved Gligoric’s candidacy. But it was too early too assume the process was going smoothly. Izetbegovic withdrew his support after members of the international community expressed their disdain for Gligoric. Apparently, he was considered too close to Belgrade and the Milosevic regime. Radisic then nominated Spasoje Tusevljak for the post. Tusevljak, who is not affiliated with any party and had lived in Sarajevo before the war, prior to fleeing to Belgrade, was also opposed by Dodik, who argued that it was strange that the candidate of Republika Srpska had never even lived in the Bosnian Serb entity. For its part, Izetbegovic’s Party of Democratic Action stated that Tusevljak was not the ideal candidate, but that it would support his candidacy in any event. Finally, on May 22, the three-member presidency formally nominated Tusevljak for the position, and, on June 6, parliament approved his candidacy. On June 22, parliament further approved his proposed government by a vote of 19 to 11. After five months of political stalemate, therefore, Bosnia and Herzegovina now has an operating government. The extended wrangling over the nominee, however, certainly raises fears that nominating a new chair of the Council of Ministers every eight months will throttle parliament’s work.
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    The country has also been focusing on upcoming elections. On November 11, voters will go to the polls to elect members of the parliaments of Bosnia and Herzegovina, the Republika Srpska, and the Federation of Bosnia and Herzegovina. In addition, Republika Srpska’s president and vice president will be elected, as will cantonal assemblies in the Federation of Bosnia and Herzegovina. Because Bosnia’s parliament has yet to
    
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    adopt an electoral law, the OSCE announced that elections would be held on the basis of temporary electoral rules and regulations it would present. By July 6, the application deadline, 52 political parties, one coalition, and two independent candidates have applied for participation in the elections. The OSCE must now review the applications to determine whether all the applicants have fulfilled the necessary conditions. As mentioned, in the absence of an electoral law, the OSCE Provisional Electoral Commission has issued numerous rules and regulations governing the elections. Each party must pay a deposit, gather a certain number of signatures, and submit its political platform. In addition, each party’s president must sign a statement promising to comply with the Dayton Agreement. The Serbian Radical Party has been banned from running in the elections in Republika Srpska, because its party lists included people accused of violating the Dayton Agreement. At the same time that the public goes to the polls, Bosnia and Herzegovina’s parliament must also vote on a new member for the tripartite presidency. Alija Izetbegovic, the Bosnian member of the presidency and its chair as well, announced in July that he would step down from his position midterm, two years before the end of his mandate. Izetbegovic, a hero to the Bosniacs during the long siege of Sarajevo, who had continued to run the government amid sandbags and artillery attacks, blamed his resignation on ill-health and conflicts with the international community. He accused the international community of pushing forward to establish a single Bosnia at the expense of Muslims, who, he claimed, have been marginalized. In his farewell speech, the president stated that his greatest accomplishment as a statesman was “preventing Bosnia from becoming a part of a greater Serbia.” Izetbegovic’s resignation had other interesting repercussions when it became apparent there was no legal structure to facilitate his resignation and the election of a new candidate. Izetbegovic quickly set about drafting a Law on Filling the Vacant Post of a Bosnia and Herzegovina Presidency Member, which was promptly adopted by parliament on July 31. According to Arts. 4 and 5 of the law, those members of parliament’s lower house (the House of Representatives) who are from the same entity as the outgoing president will nominate the president. In addition, Art. 6 requires that the upper house or “House of Peoples shall confirm the nominee elected in the House of Representatives by a majority of members of the House of Peoples belonging to the same constituent people as the nominee.” If the upper house “rejects two such nominees, then a third nominee shall be chosen and elected by a majority of the members of the House of Peoples belonging to the same constituent people as the nominee.” Moreover, the law also provides that if the position is vacated within 30
    
    days of a parliamentary election, the chairman or deputy chairman of the House of Representatives, who is from the same entity as the president, will serve until the newly convened parliament can vote. However, the OSCE and the Office of the High Representative (OHR) soon stepped into the fray, and, on August 7, overruled certain provisions of the law and issued their own amendments. Specifically, they stated that the law possibly violated the Constitution and gave too much say to the upper house, whose members are not directly elected. In a press release, they explained that the House of Peoples could purposely block a candidate and—possibly acting in concert with the outgoing president—put their own person in the position. Moreover, the law’s stipulation that a speaker or deputy speaker should fill the office temporarily if it is vacated within 30 days of an election also gave the outgoing president too much potential sway over the naming of the new candidate. Rather, the OHR stated, this period should be longer. Accordingly, on August 7, the OHR amended the law so that, if the House of Peoples rejected two nominees, the lower house, the House of Representatives, could name a third candidate who would fill the vacancy, without the upper house’s approval. In addition, OHR’s revision changed the 30-day period to 120 days. Local politicians were angered by the OHR’s decision. In an emergency news conference convened after the decision was announced, Adamir Jerkovic, an adviser to Izetbegovic, stated that the “international community openly promotes its own concept, which disregards the parliamentary will of our parliamentary deputies. . . . It is obvious that the international community itself wishes to elect a new member of the Bosnia and Herzegovina presidency and represent this as an alleged election.” Moreover, several politicians commented that the OHR should have allowed Bosnia and Herzegovina’s Constitutional Court to rule on the law if its constitutionality was in doubt. It is questionable, they continued, whether the OHR can summarily change a law adopted by the Parliamentary Assembly. Certainly, there is no provision anywhere in the Dayton Constitution that gives the OHR any right of constitutional review or control over the promulgation of laws enacted by the parliament. Over the last six months, the popularity of Prime Minister Ivan Kostov (Union of Democratic Forces [UDF]) and his government declined precipitously. Kostov’s approval rating fell from 58 percent in January to 29 percent in May, and the cabinet as a whole enjoys the support of just 27 percent of the public (down from 38 percent in January). While the economy has posted modest growth for two consecutive years, the public is obviously disappointed with the slow improvement in
    
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    living standards. And accusations of corruption continue to undermine trust in the government and tarnish its reformist image. Attempts to implement the government’s ambitious privatization program have produced mixed results. On the one hand, Deputy Prime Minister Petar Zhotev, who is also minister of the economy, has canceled several privatization deals that were widely perceived as unfavorable to the country. He streamlined privatization procedures in tourism and communications and successfully concluded the sale of Bulgaria’s biggest bank, Bulbank. On the other hand, most state enterprises were handed over at very low prices to worker-management companies, set up by the employees of the privatized firms, which, according to the Law on Privatization, enjoy a privileged position vis-à-vis other potential buyers. These companies, in which local UDF activists are often involved, consistently fail to improve their economic performance, and their new owners frequently end up selling their shares to foreign investors at a great profit. This mode of privatization does nothing to alleviate suspicions that the process benefits corrupt insiders. Government officials have repeatedly announced that uprooting corruption is their top priority, but they seem to act only when spurred by media reports and public scandals. In an attempt to placate its critics, the cabinet introduced, this summer, a draft Law on the Public Register, which enjoins all public servants to declare their income (the law was subsequently adopted by parliament). Responding to the charge that he is soft on corruption (a charge recently repeated by his former interior-minister-turned-critic Bogomil Bonev), Prime Minister Kostov declared that he will ask members of his team to resign only if the procurator’s office has initiated a criminal investigation against them. He argued that the principles of the rule of law would be violated if executive sanctions precede judicial proceedings. This script was followed, for example, when former deputy prime minister and chief negotiator with the EU Alexander Bozhkov was asked to resign after he was implicated in a corruption case. Overall, about a dozen high-ranking executive officials have been relieved of their duties after their names came up in various criminal investigations (the list includes deputy ministers, the heads of state agencies, and at least three of Kostov’s personal advisers). At the same time, several politicians believed by many to be corrupt—such as former deputy prime minister and minister of regional planning Evgenii Bakardzjiev—still keep their positions in parliament and in UDF’s party hierarchy, a circumstance that casts a shadow of doubt over the government’s resolve to fight corruption.
    
    Despite the rapid decrease of public trust in UDF, there are no signs of a government crisis. UDF’s parliamentary majority continues to act as a disciplined faction, and the level of coordination and consensus among government, parliament (the Narodno Sabranie), and president actually increased in recent months. The beneficial effects of this collaboration were felt primarily in the sphere of national defense and foreign policy. The reduction of army personnel and the conversion from Soviet to western armaments requires a series of concerted actions, which the legislators, government officials, and representatives of the presidency so far have been able to carry out. Overcoming their differences, high-ranking policymakers agreed to extend the mandate of the respected chief of staff, General Michov. Disagreements over the length of compulsory military service—according to the parliamentarians, it should be just six months, whereas President Petar Stoyanov and the military brass insist on nine—eventually led the president to veto parliament’s measure. Parliament, in turn, overturned the veto. This contretemps, however, does not seem to have caused visible tensions between UDF and President Stoyanov. Overall, to date, the legislation of military policy has been a positive example of consensual decision making. In an attempt to refurbish his reformist image, in June, Prime Minister Kostov launched a set of new economic policies aimed at stimulating economic growth. Various tax rates were cut, licensing procedures were simplified, and a program for encouraging small and medium businesses and foreign investors was announced. The government has also made public that it will seek low-interest loans in order to finance infrastructure projects and begin the reform of the national health-insurance system. These initiatives have been well received abroad; the EU Commission decided to open negotiations with the government on five chapters of the association agreement, and the European Parliament voted to scrap visa requirements for Bulgarian citizens traveling to the West (the latter decision is yet to be approved by the EU’s executive bodies). At least so far, the opposition has been unable to capitalize on UDF’s troubles. In May, the largest opposition party, the Bulgarian Socialist Party (BSP), used the corruption issue to initiate a no-confidence vote against the government. During the parliamentary debates that ensued, however, it became clear that BSP was unable to produce any evidence to substantiate its corruption charges. As a result, even the other opposition factions refrained from supporting the motion, which was rejected by 133 votes against, while only 67 voted in favor. Moreover, during a debate on the government’s foreign policy the following week, 189
    
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    of the 240 deputies voted in support of the pro-NATO and pro-EU initiatives put forth by the government. Repeated attempts to consolidate “the left” around a “third way” platform have invariably failed. The BSP is divided in two camps: the central leadership, which is inclined to seek allies among the socialdemocratic political formations, and local activists and rank-and-file supporters, who remain loyal to the party’s communist past. Another leftist party, the Euroleft, was incapable of overcoming intraparty tensions and split into two factions. Apparently disillusioned with his partners on the left, Euroleft’s leader Alexander Tomov seems predisposed to maintain good relations with the ruling center-right party and support some of the government’s initiatives. The Social Democratic Party is also divided. Even as its deputies in parliament vote with UDF, its leaders are working on a coalition agreement with BSP. The other important parliamentary player, the Movement for Rights and Freedoms, is keeping its distance from both UDF and BSP but also hints that it may collaborate with either in the future. While the alienation of the public from the political class is palpable, attempts to inaugurate new “civic initiatives” and form new political organizations have faltered. The latest attempts to spark the public imagination through the launching of partylike formations—the Civic Association of Democratic Organizations and Club 100—have quickly petered out, widely ridiculed as pathetic attempts by former politicians to reclaim their fifteen minutes of fame. Meanwhile, a controversial provision in the Law on Local Government and Local Administration has been used in a way that threatens to disrupt the work of municipal councils. According to this provision, popularly elected mayors may be removed from office if “they do not perform their duties properly for a period of six months” and if more than half of the members of a municipal council votes for impeachment. Such cases have already been reported (a notable example is the removal of the Dimitrovgrad mayor, who was affiliated with the Gergiovden Movement, and was toppled with the votes of BSP and UDF councillors). With the prospect of local wars between mayors and municipal councils looming large, parliament adopted an amendment to the law, according to which a two-thirds vote from councillors is required to remove a mayor.
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    amendment will restrict the immunity the Basic Law grants to deputies, magistrates, and judges (Arts.70, 132, and 147 of the Constitution). The EU insists that this measure is an indispensable component of an overall strategy for uprooting corruption. Nikola Filchev, Bulgaria’s procurator general, endorsed these plans, arguing that current attempts to penalize magistrates have been largely ineffective and, therefore, the criminal prosecution of corrupt judges should be made easier. (According to Art. 130 of the Constitution, judges are only liable to administrative sanctions meted out by the autonomous Supreme Judicial Council.) Additionally, it is expected that the constitutional amendment will clarify and simplify the procedure for initiating criminal investigations against members of parliament, especially those affiliated with parliamentary majorities. The second constitutional amendment, currently under discussion, regards local budgets and the financial prerogatives of municipal councils. According to the Constitution, municipal councils have a very limited autonomy in preparing their own budgets and cannot set the rates of local taxes (Art. 84.3). Since additional subsidies for municipalities are not allowed under the present Currency Board, some local governments have already declared insolvency and are unable to pay teachers and medical personnel. (For more on the Currency Board, see Bulgaria Update, EECR, Vol. 6, No. 4, Fall 1997.) After a meeting with the leaders of the National Association of Municipalities, Prime Minister Kostov announced that a special constitutional provision addressing the budgetary problems of local governance will also be put on parliament’s agenda. Constitutional amendments can be passed by a twothirds vote (161 votes), which means that UDF (which controls only 137 votes) will have to enlist the support of several smaller parliamentary factions in order to implement its program of constitutional revisions. Over the last few months, the government—which consists of the Social Democratic Party (SDP), the Croatian Social Liberal Party (CSLP), and four smaller parties—focused on cleaning up the mess left by the Croatian Democratic Union (CDU). This included, among other things, delving into the activities of the secret services. Tudjman and some of his CDU cronies were notorious abusers of the powers of the secret services to intimidate political opponents, which even included some CDU members. In the past, several members of CDU’s “liberal” wing resigned, alleging that the party’s hard-line faction had put them under surveillance. Last summer, Tudjman allegedly used the secret services to fix, to his favorite team’s advantage, the national soccer championship. On May 24, agents of the Ministry of Internal Affairs searched the premises of the Croatian
    
    Croatia
    
    As the process of integration with the EU accelerates, the issue of constitutional amendments has been put on parliament’s agenda. In July, Prime Minister Kostov declared that at least two constitutional amendments are necessary and that UDF will try to pass them before the end of the calendar year. The first
    
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    Information Service (CIS). (CDU commonly practiced its political intimidation by means of the CIS, which is part of the secret service.) Caught off guard, some CIS employees were found holding compromising documents. On the same day, President Stjepan Mesic (Croatian People’s Party [CPP]), together with Prime Minister Ivica Racan (SDP) and Djurdja Adlesic (CSLP), chairman of the committee for national security in the parliament (Sabor), announced a reorganization of the CIS. With this move, the CIS will return to a more traditional role—protecting the country’s national interests and confining its services to foreign affairs. It will no longer have jurisdiction in domestic matters. Racan named Damir Loncaric, who has no party affiliation, to head the CIS. Loncaric is a highly respected former officer of the Zagreb police, who had been forced to retire in 1995, presumably because CDU authorities considered him unreliable. Loncaric now has a free hand in appointing all CIS employees, from the highest-ranking officials to administrative staff. Similar government actions are expected in the Security and Information Service—the military information service—and the Office for Protection of the Internal Order—which oversees domestic affairs. Reports that have come to light recently reveal just how criminal the goings-on in the CIS were. In an unbelievable turn of events, President Mesic and the new government stumbled onto a massive trove of information in the presidential palace. Apparently, Tudjman recorded all of his conversations over the last nine years and kept an archive of documents detailing his machinations. The find, much of which has already been turned over to The International Criminal Tribunal in The Hague, purportedly details Tudjman’s and CDU’s involvement in war crimes and their plundering of the economy. The tapes also allegedly reveal that Tudjman and Slobodan Milosevic maintained a warm, cordial relationship even while Croatia and Serbia were at war with each other. The Hague will most likely use this new evidence in the Ahmici case. In April 1993, in Ahmici (a Muslim village in Bosnia), members of the Croatian Council of Defense (CCD)—the Croatian army in Bosnia— brutally murdered 116 civilians and destroyed their homes. In March, The Hague tribunal sentenced Tihomir Blaskic, a CCD general, to 45 years in prison for the massacre. The Tudjman archive reveals what many long suspected: CDU had sacrificed Blaskic to save the real culprits, who, in turn, enjoyed special government protection. The documents allegedly confirm that four members of the so-called Joker paramilitary unit of the CCD (Ante Sliskovic, Pasko Ljubicic, Miroslav Bralo, and Vlado Cosic) carried out the Ahmici massacre under orders of local Croatian politicians. (The four were even promoted after the war.) The CIS had helped protect the four men and
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    procured false passports and personal documents for them. Now living under their pseudonyms, their whereabouts are unknown. That the government turned the documents and tapes over to the tribunal clearly illustrates its desire for a new relationship with The Hague. To this end, on April 14, parliament adopted a declaration of cooperation with the tribunal. The declaration won passage because CDU members stomped out of parliament during the vote. CDU deputies were angry because the majority had refused to consider their amendment, which articulated CDU’s long-standing view of the war—and a source of bitter conflict with The Hague. This view concerns specifically the events that transpired in the Krajina region in the spring and summer of 1995, namely, the operations known as “Flash” and “Storm.” The failed amendment asserted that individual crimes committed during and immediately after the “War for the Homeland” (as the war is known in the official nomenclature) were solely within Croatian jurisdiction. The new government argued that the declaration properly makes individuals responsible for war crimes rather than placing collective blame on all Croatians or the Croatian state. CDU considered the declaration an affront to the dignity of the war; the party was not alone in this view. During parliamentary discussion of the declaration, organizations representing veterans protested, proclaiming the declaration an act of treason, shouting “we won’t go to The Hague so you can get foreign loans.” Again, as part of its changed relationship with The Hague, in early April the Croatian authorities invited the tribunal to begin its investigation in Gospic, a village that supposedly contains the mass grave or graves of roughly 100 to 150 local Serbs massacred by the Croatian forces in late autumn of 1991. Just after the massacres allegedly occurred, Ante Karic, the head of a government office in Gospic, submitted a report on the event to Tudjman and Josip Manolic, who was then head of the Office for the Protection of the Constitutional Order. In his report, Karic named two Croatian soldiers—Tihomir Oreskovic and Mirko Norac—as the chief culprits of the mass executions. After receiving the report, Tudjman ordered an investigation, of sorts, into the affair. As a consequence, in 1993 Oreskovic was brought to the Zagreb police headquarters and questioned but then released. In recent investigations, Manolic claimed that Oreskovic was released and the case terminated under the direct orders of the then–minister of defense, Gojko Susak (who stated that “this is not the way to treat our children”). Even though Carla Del Ponte, the chief Hague prosecutor, has not disclosed any names, it seems likely that her investigation will focus on Oreskovic and Norac, a probability that has already provoked strong
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    protests from rightist forces. Norac and Oreskovic are both career military men; Norac is a high-ranking officer and a decorated war hero. War veterans have been among the most vocal critics of the new government and, specifically, of its plan to reduce their benefits. The veterans or “Croatian defenders,” as they are called, who number approximately 450,000, enjoy numerous privileges. Their retirement benefits are roughly five times the national average. In March 1999, the average monthly pension was $140; the average monthly pension of a member of the Croatian Army was $450; and the average monthly pension of a war veteran was $640. Veterans also enjoy privileges that permit them easier access to employment opportunities; they are given state apartments; their children enjoy special stipends during school years; and they have the right to purchase certain stocks and shares. They also enjoy special tax and customs waivers when importing cars, machines, and other equipment. Those injured in the war are not required to pay any taxes. In 1998, the Ministry of the Croatian War Defenders spent approximately $60 million, or 5.1 percent of the total budget. When combined with funds from other ministries, spending on veterans and their families equals the monies spent on social support for the entire public. The government and the new minister of the Croatian war defenders, Ivica Pancic (SDP), have announced plans to reduce these benefits significantly. Although the plan’s details have yet to be released, the ministry has already announced it will reassess the status of war invalids. This program will reexamine the medical documentation of these veterans, in order to identify individuals who may have faked or exaggerated their disability (with falsified medical documents) and those who are invalids but did not become so as the result of the war. These first measures have already provoked much controversy and are being eagerly exploited by CDU to make its case to the public that the new government has no respect for Croatia’s war heroes.
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    Although it is by far the strongest opposition party (with 43 seats in the 151-member parliament), CDU does not present a united front against the government. On April 2, a CDU faction headed by Mate Granic (the former minister of foreign affairs) and Vesna Skare-Ozbolt (a former high official in the president’s office), both members of the so-called liberal CDU faction, left CDU and founded a new political party, the Democratic Center (DC). They were joined by former minister of defense Pavlo Miljavac (CDU). Granic and Skare-Ozbolt claimed that, as CDU members, they would not be able to make good on their electoral promises. Since Tudjman’s death, the party has divided into two factions, the one formed around Vladimir Seks
    
    (acting president of CDU since Tudjman’s death) and the other led by Ivic Pasalic (Tudjman’s most influential adviser). Seks and Pasalic share few ideological differences; their conflict is squarely fixed on control of CDU. Many thought the power struggle would find resolution at CDU’s fifth general convention on April 29–30. But convention events confused matters even further. CDU elected Ivo Sanader, a former minister of foreign affairs, as its president. Sanader’s previous work with Granic and his pro-European orientation held out the opportunity for CDU to become a normal, conservative European party. Yet Sanader’s election was counterbalanced by the election of several party hard-liners. Maja Freundlich was elected as his deputy, and Hrvoje Hitrec, Mate Simic, and Drago Krpina were elected vice presidents. All four are ultraradical anti-Europeanists, nationalists, and rightists. (Freundlich has been called a “Croatian Jörg Haider.”) This seems to suggest that the right faction has the stronger influence in the party’s leadership. Sanader and Freundlich represent completely different orientations, and, to be sure, they will have great difficulty finding common political ground. As a result, CDU will undoubtedly be hard pressed to articulate a coherent political platform and will continue to vacillate between the moderate center and the radical right. At the convention, Freundlich and her cohorts were met with much applause and approval, and CDU members vociferously derided the “international conspiracy against Croatia,” all the while condemning President Mesic and Prime Minister Racan. A disoriented CDU could make Racan’s life easier. But he will certainly face problems within the coalition from Drazen Budisa, who is the president of CSLP and Racan’s strongest partner in the ruling coalition. After his unsuccessful bid for the presidency, Budisa was left with no formal position in the government. He has publicly criticized Racan on various occasions and seems to be banking on the coalition’s potential failure and his own ability to win the upper hand after such an event. There is no doubt he is seeking to attract disgruntled CDU voters to his party and courts them openly. While Budisa was careful to visit Tudjman’s grave, to pay his respects, he missed President Mesic’s first parliamentary address on May 30. His party cohort, Jozo Rados, visited the grave of Gojko Susak, the most notorious of Tudjman’s ministers, generating much discomfort among coalition members. Budisa has also been successful in winning high-ranking positions for members of his party. The initial interparty agreement awarded SDP 50 percent of the leading functions in the administration; CSLP, 25 percent; and the four-party coalition (Croatian Peasants’ Party [CPeP], Liberal Party [LP], Istrian Democratic Party [IDP], Croatian People’s Party [CPP]), the remaining 25 percent. But a mere five months later the
    
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    tables have been turned: CSLP has 22 members as ministers, their deputies, and first assistants; SDP, 15; and the four parties, 10. Prime Minister Racan can ill afford to lose Budisa’s support, because he needs CSLP’s votes in parliament to maintain his governing majority. Racan is thus condemned to continued cooperation with Budisa, despite the costs. But Budisa must also tread a careful line so as not to provoke a parliamentary crisis and new elections. If the local elections in Zagreb, on May 7, are any indication, he would not fare well in a general election. Turnout for the Zagreb vote was a weak 33 percent. The results were as follows: SDP, 21 percent; CPP, 19 percent; CSLP, 15 percent; LP, 13 percent; CDU, 12 percent; and DP, 7 percent. The results indicate that the three most powerful parties in parliament (SDP, CSLP, and CDU) have lost some support since parliamentary elections on January 3. President Mesic’s CPP, headed by Vesna Pusic, was the only true winner in the Zagreb election. Analysts interpret this as a strong sign of popular support for Mesic, who is the sharpest critic of Tudjman’s CDU regime. He is the only figure in the current ruling structure openly to denounce rightist extremism. On May 26, at the initiative of the de facto governing coalition (composed of the Czech Social Democratic Party [CSDP] and the Civic Democratic Party [CDP]), the Chamber of Deputies (the Poslanecka Snemovna, or parliament’s lower house) adopted amendments to the electoral law by a vote of 117 to 45. Designed to boost the electoral chances of larger parties at the expense of smaller ones, the amendments were proposed by CSDP and CDP after these two parties had lost their three-fifths majority in the Senate and thus could not amend the Constitution, replacing the current proportional-representation system with a majoritarian one. The amendments introduce a number of changes that many argue will lead to the emergence of a two-party system. They increase the number of electoral districts from 8 to 35 and replace the Hagenbach-Bischoff electoral formula with the d’Hondt method. The d’Hondt system would allow a party that receives 30 percent of the vote to have an absolute majority in the Chamber of Deputies. If the 1998 elections had been held based on this new electoral formula, CSDP would have obtained 102 seats instead of the 74 it actually won; similarly, CDP would have won 86, instead of 63; the Communist Party of Bohemia and Moravia (CPBM), 4, instead of 24; and the Freedom Union (FU), 1, instead of 19. The new law also raises the electoral threshold for a four-party coalition that presents a united list in elections to 20 percent.
    
    Czech Republic
    
    As might have been expected, the smaller parties as well as President Vaclav Havel objected to the amendments. Havel argued that the amendments negate the Constitution’s spirit because they “introduce elements of a majority system,” and he further pointed out, as did other legal commentators, that the amended law makes the Senate elected according to a majority system redundant. CDP has always been hostile to the Senate, and it is likely that their 2002 election platform will call for its elimination. Nevertheless, the amendments won Senate approval by a margin of one vote. All CDP senators voted for the amendments, while some CSDP senators voted against it. CPBM senators walked out in protest, and all opposition senators voted against the amendments. Havel and the Christian Democratic Union–People’s Party (CDU–PP) have challenged the amendments before the Constitutional Court, arguing that they violate Art. 5 of the Constitution (“The political system is based on the free and voluntary foundation and free competition of political parties respecting fundamental democratic principles and rejecting force as a means for asserting their interests”) and Art. 18.1 (“Elections to the Chamber of Deputies shall be held on the basis of universal, equal, and direct suffrage by secret ballot, according to the principles of proportional representation”). CDP is also floating the idea of a constitutional amendment requiring the direct election of the president. When the Constitution was written in late 1992, President Havel preferred direct elections and a strong presidency. But because then–prime minister Vaclav Klaus (CDP) felt threatened by a potentially strong Havel presidency, the Constitution stipulates an indirect election of the president by both houses of parliament. Havel’s term expires in 2003 and, having already served the two-term limit, he cannot run again. Rumors abound that Klaus intends to run for the office. If so, he will undoubtedly push for a strong presidency elected by popular ballot. The CDU–PP and FU support such an amendment. Still, CSDP and CPBM oppose a directly elected president and, without the support of one of them, CDP, CDU–PP, and FU cannot muster the necessary three-fifths majority.
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    On May 16–17, an amendment to the Constitution that was designed to reform radically the Czech judiciary and a bill designed to reform the Criminal Code were both rejected by the Chamber of Deputies. (See Czech Update, EECR, Vol. 8, No. 4, Fall 1999.) Proposed by Minister of Justice Otakar Motejl, who is also a former Constitutional Court chief justice and the only politically independent member of the government, these measures would have created an
    
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    independent supreme judicial council to regulate and monitor the judicial system and introduced term limits for Constitutional Court judges as well as a mandatory retirement age for judges. Most importantly, the proposals would have eliminated the Office of Investigation, a bureaucratic layer between the police and the courts, and would also have reassigned some duties from the police to investigating judges. In the weekly journal Respekt, Tomas Nemecek explained that Motejl’s reforms were designed to expedite the judicial process and preclude certain cases that tie up the judiciary, as in proceedings, for example, where foreigners are kept in pretrial detention for months and then simply expelled from the country. Although Motejl’s proposals were intended to expedite the judicial process, observers allege that they also would have made it less thorough, brought numerous innocent people to trial, and released criminals for lack of evidence. Moreover, some commentators questioned the effectiveness of a supreme judicial council, since its members would be elected from the very body that it was meant to regulate, the judiciary. Nemecek argued that the judicial process could be expedited if the government paid for clerks and assistants to help judges with some of their routine work. He also suggested that the parliamentary majority’s opposition to judicial reform is suggestive of the cozy relations between legislators and the police, who would presumably want to prevent any reform that eliminates a stratum of police investigators and procurators. The rejection of judicial reform gave rise to criticism at home and abroad. President Havel argued that judicial reform was inevitable and the delay detrimental. The European Union’s representative in Prague, Ramiro Cibrian, reminded parliament that judicial reforms are a precondition for Czech accession to the EU and stressed their significance for fighting economic crime.
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    sole prerogative. The changes would also require the bank to consult with the government before setting inflation targets or changing the exchange-rate policy. But the amendments were killed in the Senate, on August 4, by CDP senators who agreed with the amendments in principle but disagreed with some of their precise wording. For example, senators suggested that the bank should not be required to consult with parliament on its actions but rather should be requested to cooperate with them in these matters. CDP and CSDP will now negotiate a new version that is likely to be debated in parliament’s next session in the fall.
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    CSDP and CDP also have plans to bring the central bank under greater government control. Both parties have stated that the bank has too much independence, and they object to the high interest rates that result from its determination to protect the value of the currency. On July 14, parliament’s lower house adopted CSDP-prepared amendments to the Law on the National Bank. The amendments, which were criticized by the EU and the European Central Bank for encroaching on the Czech National Bank’s independence, proposed changing the bank’s constitutionally defined goal from currency stability to price stability. The text also stipulated that all seven central-bank board members be chosen by the government with presidential approval. Currently, this is the president’s
    
    Several new laws on bankruptcy, public auctions, and public subsidies—designed to combat white-collar crime—came into effect on May 1. The Law on Public Subsidy (No. 59/2000) is intended to complement EU antisubsidy regulations and would prohibit subsidies of more than 100,000 euros ($93,340) per firm for more than three years without the national antimonopoly agency’s approval. The Law on Bankruptcy (No. 105/2000) is designed to prevent managers of bankrupt firms from stealing their firm’s assets. This would be achieved by allowing a judge to appoint a trustee before announcing the bankruptcy. The Law on Public Auctions (No. 26/2000) facilitates foreclosing on properties to cover bad loans. Further amendments to the Commercial Code, proposed by Minister of Justice Motejl, were adopted by parliament on May 30. The amendments are aimed at weakening the power managers wield over the assets under their control at the expense of minority shareholders and creditors. (Czech privatization created many minority shareholders with no actual control over the firms they formally own.) The amendments also double the minimum amount of capital required to charter a company and limit the number of companies one person may own exclusively. These measures should help limit losses to banks (and, eventually, the state), at least to those banks whose managers lend money to cronies who, in turn, strip the assets of straw companies and start new straw companies. Nevertheless, opposition members of parliament voiced concern that these amendments will inhibit the creation of new businesses. The economic devastation generated by the class of postcommunist managers was demonstrated in mid-June, with the collapse of Investicni a Postovni Banka (IPB), the third largest bank in the country. The Nomura Bank of Japan had purchased a 46 percent stake in IPB, the first major Czech bank to be privatized. But Nomura did not restructure or otherwise intervene in the bank’s management. Consequently, the managers acted unscrupulously,
    
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    lending money to their associates, often losing money, and expecting the government to provide them with subsidies to protect honest depositors. In this latest instance, the government provoked panic among depositors when it indicated that the state was not obligated to cover the losses of a private bank. On June 16, the Czech National Bank (the central bank) put IPB under “enforced administration” to protect depositors, while a special unit of masked policemen raided its offices and barred management from entering the premises. On June 19, the government then sold IPB to another state-controlled bank, Ceskoslovenska Obchodni Banka (COB). CDP parliamentarians, who are connected with IPB management, protested the government action and accused it of working on behalf of COB’s management.
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    On April 5, in a landmark decision, the Constitutional Court ruled unconstitutional a parliamentary decision to overrule a city-council action. The northern Bohemian town of Usti nad Labem had appealed to the Constitutional Court against parliament’s decision to demolish a wall that the city council had previously erected to segregate a Roma neighborhood from a nonRoma one. (See Czech Update, EECR, Vol. 8, No. 4, Fall 1999.) The Constitutional Court’s decision does not affect the wall’s demolition, which was already agreed to in negotiations between the government and the city council. Rather it establishes the division of powers between national legislative authority and municipal authority and supports regional decentralization. In another case, the Court rejected the appeal of a businessman against the National Property Fund, requesting the return of a factory he had received through privatization but never paid for. The factory was auctioned off by the state. In 1993, Ivo Exel had agreed to purchase a munitions factory from the state for a quarter-billion crowns ($6.5 million at today’s rates). He never paid the state for the factory, alleging that the state did not deliver the assets it promised in the privatization contract. Cases of privatization beneficiaries refusing to pay the state for their firms, citing its failure to deliver on its obligations, are common. The Court ruled that Exel’s human and constitutional rights were not violated and that the National Property Fund observed due process in auctioning off the factory. The case had lingered in the courts since 1994. There have been two important cases involving the European Court of Human Rights. In late April, this Court ruled against the Czech Republic in the case of a German businessman who had languished in Czech prisons for nearly three and a half years before he went to trial for allegedly attempting to buy real
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    estate with bad checks. The court ruled that the Czech Republic violated Art. 5 of the European Convention on Human Rights, which guarantees a speedy trial, and ordered it to pay the plaintiff 10,000 deutsche marks ($4,776) in damages and court expenses. On April 18, the European Roma Rights Center (a nonprofit organization) brought a landmark suit in this same Court against the Czech government on behalf of 18 Roma children from the Czech city of Ostrava who had been sent by the Czech authorities to schools for the mentally impaired. The Czech Constitutional Court rejected an appeal on their behalf, on November 8, arguing that the education officials’ decisions followed proper legal procedures. The center reported that in Ostrava, Roma children outnumber non-Roma in these schools by 27 to 1. The Czech government itself admits that approximately 75 percent of Roma children nationwide attend these schools. The case was brought under Art. 3 of the European Convention on Human Rights, which reads: “no one shall be subjected to torture or to inhuman or degrading treatment or punishment.” The Court’s possible condemnation of these common practices as degrading could imply that thousands of Czech Roma children would have to be integrated into regular schools. Further, the practice of sending Roma children to special schools is common in other states, such as Slovakia and Romania, so a ruling against the Czech Republic could reverberate across Eastern Europe.
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    Party financing has long been a source of corruption in Czech politics. In 1997, the CDP government collapsed over illegal funds, donated by murky financial interests, that CDP managers controlled in Swiss bank accounts. The only subsequent criminal proceeding was the prosecution of CDP’s young deputy chairman, Libor Novak. This trial ended with Novak’s acquittal in June, due to a lack of evidence. During the trial, Vaclav Klaus was called as a witness; he claimed to remember nothing. On May 25, parliament adopted a law that attempts to enhance the transparency of party financing. The law put a $1 million cap on the total amount in donations a party can accept in one year and, most significantly, prohibits state industries and other beneficiaries of the budget (such as subsidized organizations and municipalities) from making donations. Many people have long thought that the country’s economic crisis came, in part, because politicians made economic decisions based on the interests of those who paid them and their parties’ kickbacks from government subsidies received. Still, the new legislation cannot guarantee that corrupt transactions will not continue in the future in tax
    
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    havens with strict banking-secrecy laws, such as Switzerland, Liechtenstein, and the Dutch Antilles.
    ❖
    
    Several issues involving retroactive justice have come to the fore over the last few months. On May 15, the Votobia publishing house printed Kato: The Story of a Real Man, containing the communist-era secret-police reports of the present minister of foreign affairs, Jan Kavan. The book alleges that Kavan, whose code name was Kato, produced the reports while living in Great Britain during the 1960s and 1970s. Kavan has denied he was a conscious collaborator, claiming he was unaware of the true identity of the diplomat (a secret-police officer who worked in the Czechoslovak embassy in London) who was debriefing him. A Prague court accepted Kavan’s version in 1996. Kavan was recently put in charge of a committee that coordinates the activities of the secret services. Minister of Interior Stanislav Gross promised an investigation to uncover who leaked Kavan’s classified file. Votobia and its owner, the poet Tomas Koudela, have been testing the limits of the constitutional guarantee of freedom of speech. A few years ago, Votobia and Koudela were prosecuted for publishing a translation of an American cookbook from the seventies titled Cooking with Cannabis. In that case, they were convicted of spreading “toxicomania.” On April 26, the government gave $7.5 million to a fund set up by the Czech Federation of Jewish Communities to compensate Holocaust victims whose property had been seized by the Nazis. Until now, Czech victims of the Holocaust were not compensated for loss of property because the Czech government originally established 1948 as the cutoff date. The Austrian government agreed to pay compensation to Czechs who worked as forced laborers in Austria during the Nazi occupation. Compensation ranges from about $1,000 to $7,500, according to the nature of the labor (in agriculture, industry, or a concentration camp). The German government has created a similar fund to compensate Czechs who served in German labor camps. Prime Minister Zeman and Foreign Minister Kavan rejected demands from Sudeten German organizations to compensate them for their expulsion from Czechoslovakia after the Second World War. The controversy and the confusion surrounding the appointment of a new central-bank president dominated politics during April and May. Under Art. 111 of the Constitution, the Bank of Estonia (the central bank) is responsible for regulating currency circulation and maintaining monetary stability. It is completely
    
    Estonia
    
    independent of government control. But Estonia’s currency—the kroon—is pegged to the German mark, and thus the bank itself has limited influence over exchange rates. Since its founding in 1991, it has focused on regulating the banking sector, including a number of mergers as well as bankruptcies. On March 30, the bank’s governing board nominated Vello Vensel, a noted statistics professor from Tallinn Technical University, to succeed the incumbent, Vahur Kraft. The move was viewed as an attempt to give the bank a more academic basis since the previous two presidents had come from professional financial circles. A few days later, President Lennart Meri, following Art. 78.12 of the Constitution, confirmed Vensel’s appointment, and the new bank chief began preparing for his new job. But a short while later, on April 24, Vensel abruptly resigned his post, citing a sudden attack of high blood pressure and ill health. In an article published in the daily Postimees, four days after his unexpected departure, Vensel explained that he had met with outgoing bank president Kraft on the morning of April 24, at which time the two men calmly reviewed final preparations for the impending transition. Following the meeting, however, Vensel reported his blood pressure suddenly rose and that he then fainted. Fearing that these troubles might be part of a more serious condition, Vensel decided to submit his resignation to President Meri, who reluctantly consented. His departure stunned the entire banking community, since he had previously claimed to be in good health. Moreover, Vensel’s decision to leave the country immediately after his resignation, to travel to Sweden for medical advice, only served to increase suspicion that his exit was predicated on something more than dubious health. Speculation as to Vensel’s motives ranged from the possibility that he had some hidden, Soviet-era connection with the KGB to a simple case of jitters at the prospect of taking over the top banking post in Estonia. In one newspaper interview, outgoing president Kraft confirmed that his meeting with Vensel on April 24 had gone smoothly and that the two had agreed to meet again later that afternoon. But Vensel never returned to the bank. Another theory concerning Vensel’s swift departure claimed that one of Estonia’s two major commercial banks, Hansapank, had opposed Vensel’s appointment because of several failed loans the bank had called in from a company Vensel had participated in overseeing in 1994. But none of the competing explanations was ever borne out, and, after a few weeks, observers generally came to accept that Vensel’s poor health was the sole reason for his departure. The central bank’s board began a new search for candidates in the first part of May. After the bank’s vice president, Peter Lohmus, and Ardo Hanson, a
    
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    prominent Canadian-Estonian working for the World Bank, both declined offers to run for the post, attention shifted to two second-tier candidates, Mart Opmann, a former finance minister, and Kalev Kukk, a member of the bank’s governing board. Opmann had served as minister for four years under the centrist governments of Tiit Vahi and Mart Siimann and was also a member of the Coalition Party (CoP), which had led those governments. As a result, he was viewed as a somewhat political figure. But Kukk, too, was seen as political, since he is a deputy in the promarket Reform Party (RP); however, he also has a reputable background in macroeconomics and many years of experience in parliament (the Riigikogu). On May 18, the bank’s governing board selected Opmann by a wide margin, but President Meri rejected his nomination the following day, arguing that Opmann’s appointment would endanger the bank’s independence and that he lacked credibility in international circles. With that, Meri unleashed a minor constitutional struggle, since he had never overtly refused to confirm a nominee for high office during his eight years as head of state. (Once, in 1994, he had hesitated in appointing a pair of cabinet ministers put forth by then–prime minister Mart Laar, but he ultimately relented.) This time Meri informed the governing board directly, during a meeting on May 22, that he would not accept Opmann, and that the board would have to find a new candidate. In making his decision, President Meri relied on the specific wording of Art. 78.12 of the Constitution: “The President of the Republic shall . . . on the proposal of the Board of the Bank of Estonia, appoint to office the President of the Bank of Estonia.” The phrase “appoint to office”—as an action by the president—is repeated in relation to a long list of officeholders, including cabinet ministers, judges, and military commanders. In all these cases, the phrase “appoint to office” does not give the president the specific right to reject nominations; however, the article’s logic suggests that if the president did not have that right, his function in confirming candidates would be a mere formality. Though Meri had backed down when he first sought to assert this prerogative in 1994, he stood his ground this time, and, in the days following his decision, a number of prominent legal experts supported his action. Finally, on June 1, the bank’s governing board agreed to hold a third round of voting, and in a final attempt to resolve the crisis quickly, it reconsidered Vahur Kraft. By a six-to-one vote the board approved him as its new nominee, and President Meri immediately confirmed the appointment. Kraft was installed for a second term.
    
    Estonia’s Constitutional Review Chamber (CRC) issued six rulings during the first five months of this year, the most important of which concerned both the definition of a legal term in the Constitution and its effect on the right of Estonia’s legal chancellor to challenge the constitutionality of certain types of laws. The case involved an austerity budget adopted by parliament, in June 1999, that, among other things, cut some 103 million kroons ($6 million) from a fund used to purchase or build housing for people whose homes had been restored to pre-Soviet owners. The fund, which was mandated as part of the housing law of 1994, received an annual allocation from the state budget. (For a brief review of this decision, see Estonia Update, EECR, Vol. 9, Nos. 1/2, Winter/Spring 2000.) The full, 17-member Court grappled with two major issues, one substantive, the other procedural. First, the justices had to decide whether Art. 116.2 (“The Riigikogu shall not eliminate or reduce expenditure in the state budget or in its draft, which is prescribed by other laws”) of the Constitution meant that the budget had to include financing for all expenditures prescribed by previous laws. What latitude does the government possess in deciding whether a program, mandated by a preexisting law, no longer requires substantial funding or can be financed from discretionary sources without having to rescind or amend the preexisting law? Second, does the legal chancellor have the constitutional prerogative to contest specific expenditures in the budgetary law to the extent that they are not legal norms but merely budgetary allocations? Can the legal chancellor challenge fiscal decisions on constitutional grounds? Clearly, both issues proved highly controversial since, in the end, the Court issued not only a six-page final ruling but also three supplementary opinions, which, all together, involved 11 of the 17 justices. (Supreme Court and CRC rulings are unsigned, but individual justices may submit concurring or dissenting opinions.) The Court’s final ruling, on March 17, found in favor of the austerity-budget law and against the legal chancellor. On the substantive issue, the Court argued that the housing law itself did not specify a precise amount or percent of the annual budget that the state had to allocate for the law’s implementation. As a result, the Court claimed it could not determine whether leaving the housing law without any funding meant that the law would not actually be implemented and that this would therefore constitute a violation of the Constitution. The Court did insist that the government was still obliged to assist people in need of new housing, whether direct funding had been allocated or not. The Court simply seemed to be arguing that Art. 116 could not be read so literally as to
    
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    require a specific budgetary allocation if, for example, the government decided to implement the law using discretionary funds. The Court’s argument contained some contorted reasoning. In one of two dissenting opinions, three justices stridently attacked the majority’s logic, arguing that Art. 116 was meant precisely to prevent such arbitrariness in state policy, and that the stability of Estonia’s social and political development was at stake. They were unconvinced by the argument that the housing law required a specific funding sum in order to evaluate the likelihood of its implementation. On the contrary, the dissenters noted, it was unusual for any law to specify such an amount. On the procedural issue, however, the legal chancellor did achieve a minor victory, at least to the extent that a Court majority upheld his right to challenge allocations under the budget law. However, the controversy raised a serious terminological issue in the Estonian legal system. The argument against the legal chancellor was put forth by seven justices, who (again in a separate opinion) claimed that the use of the word “legislation” (oigustloov akt in Estonian, literally meaning “law-creating act”) in the Constitution’s Art. 139 referred only to those laws or parts thereof that include general legal norms. The term, the justices claimed, did not refer to any specific instance or onetime legal provision that might also be included in a law. Thus, based on this terminological distinction, the seven justices argued that the legal chancellor could not challenge specific budgetary allocations in the budget law and that his appeal was therefore entirely invalid. Moreover, in drawing this new distinction, the seven justices appeared to be significantly redefining the legal chancellor’s prerogative of constitutional review as compared with that of the executive’s and the lower courts’, which can also appeal to the CRC. The Constitution gives the president and lower courts the right to challenge “laws” (seadused). Although many legal scholars previously considered the term oigustloov akt to be merely a synonym for laws and general legislation, the seven dissenting justices insisted on highlighting a qualitative difference. This second debate drew another supplementary opinion, this time from Chief Justice Uno Lohmus, who forcefully argued in favor of the legal chancellor’s right to appeal all legal acts. Lohmus cited minutes from Estonia’s 1992 Constitutional Assembly, in which the drafters used oigustloov akt merely as a synonym for “legal act.” Moreover, Lohmus warned that a dangerous gap would develop in Estonia’s constitutional-review process if the legal chancellor’s role were narrowed. As a result, while the Court’s final ruling went against the legal chancellor on issues of budgetary regulation, he was vindicated, for the most part, in procedural matters.
    
    Among other cases heard by the CRC during the spring, the Chamber struck down a provision of Estonia’s Law on Alcohol, which required the automatic revocation of a business’s right to sell alcohol if its owner or one of its employees violated regulations governing the sale of alcohol. The case came on appeal from the Tartu Administrative Court, where a store owner had lost his license after one of his employees had sold a bottle of beer to a 15-yearold. The lower court had argued that the rule infringed on Art. 31 of the Constitution, which guarantees freedom of commercial enterprise. Entrepreneurs, the court argued, should not be punished automatically for offenses committed by their employees while on the job. In its ruling, the CRC rejected the lower court’s logic, but it struck down the legal provision on different constitutional grounds. The Chamber maintained that the law’s requirement—that a local government automatically revoke a business’s license to sell alcohol if some legal violation occurs—did not accord local governments sufficient flexibility to take into account extenuating or relevant circumstances in each particular case. Thus, a local administrator could not take into consideration the age of the minor or the amount or strength of the alcohol. The Chamber found that the measure violated Art. 11, which reads that restrictions on rights and freedoms “are necessary in a democratic society and shall not distort the nature of the rights and freedoms restricted.” The Chamber ruled that the law must be amended. In a final, important case, the Chamber considered a set of regulations adopted by the municipality of Keila that governed procedures for allowing individuals access to a firing range near the town. The case raised a frequent concern in Estonian law, the overstepping of legal authority. The legal chancellor had challenged the 1998 regulations since, according to the Law on Arms, only the central government can adopt such procedures. The municipality argued it had waited for three years for the responsible party, the minister of defense, to issue operating rules. As a result, the municipality claimed it needed to act to protect its populace. It subsequently rescinded the regulations, perhaps sensing it would lose its case at the CRC. The Chamber expressed sympathy with Keila’s arguments concerning safety but ruled that issuing the regulations violated the Constitution. On August 4, after ten years in Arpad Hungary office, President chief ofGoncz stepped down as state.
    
    Although the president is largely a figurehead, Goncz has enjoyed enormous popularity in office and has been routinely voted the country’s most popular
    
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    politician. The ruling parties’ choice of a candidate for the presidency had been looming in the background since their initial coalition agreement in 1998, which gave the Independent Smallholders’ Party (ISP) the right to nominate the candidate but also gave the Federation of Young Democrats–Hungarian Civic Party (FYD–HCP) a right of veto. (As laid out in Art. 29.B of the Constitution, the president is elected by the Orszaggyules, or parliament, following a procedure described below.) Observers had long assumed that ISP would nominate its president, Jozsef Torgyan, to be the coalition’s candidate. Yet many FYD–HCP representatives opposed Torgyan’s candidacy, who was widely considered unsuitable to represent Hungary on the international scene. In recent months, leading FYD–HCP politicians had begun to come out against Torgyan and seemed to hope that ISP would choose someone else since it would have been difficult to oppose his candidacy outright. On April 29, the ISP congress nominated Torgyan as its candidate by an overwhelming majority. Torgyan, however, did not accept the nomination, explaining that he valued his role as a minister and party president more highly than his right to be nominated as president. His refusal obviously came after some intense backroom negotiations between FYD–HCP and ISP; what exactly happened during these negotiations, however, is unknown. ISP then named Ferenc Madl, a 69-year-old law professor and confidant of late prime minister Jozsef Antall (Hungarian Democratic Forum [HDF]), as its candidate. Between 1994 and 1998, Madl served in the HDF-dominated government as minister for culture and education, among other posts. Torgyan’s nomination of Madl was surprising to many since their relationship—and that between Torgyan and HDF—was notoriously acrimonious. In 1995, when HDF nominated Madl as its candidate for president, Torgyan and his ISP faction stormed out of the chamber without voting. Since 1996, Madl has also been president of the Society for Hungarian Civic Cooperation, an organization of academics, professionals, and intellectuals who joined together to oppose the previous Hungarian Socialist Party–Alliance of Free Democrats (HSP–AFD) government and to build a right-of-center power bloc. Given this history, it was somewhat surprising that HSP and AFD did not nominate their own candidate, even if this person would have had a slim chance of victory. On the contrary, both parties announced their willingness to support Madl. Only the extreme right-wing Hungarian Truth and Life Party (HTLP) opposed Madl outright, stating that he gave too great a priority to international affairs. Article 29.B of the Constitution spells out the procedure for electing a president. It states that the “parliament shall elect the president by secret ballot.
    2000
    
    Voting may be repeated should this prove necessary. The candidate who receives a majority of two-thirds of the votes of the members of parliament in the first round of voting is elected president. Should no candidate receive such a majority in the first round of voting . . . a majority of two-thirds of the votes of the members of parliament shall also be required to be elected in the second round of voting. Should no candidate win the required majority in the second round of voting, a third round of voting shall be held. . . . The candidate receiving a majority of the votes—regardless of the number of votes cast—in the third round of voting is elected president.” In parliament’s vote on June 5, Madl fell seven votes short of a two-thirds majority (251 voted for; 105 against). In the second round, held the next day, he failed again. In a third round, held later that day, Madl became president by a simple majority. HSP and AFD obviously cast a majority of the “no” votes. Knowing they could do little to oppose his eventual victory, opposition deputies apparently hoped to show, at the least, their distaste for the government’s strong-arm tactics during the ballot. (The government parties explicitly refused to consult with the opposition about Goncz’s successor.)
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    On June 13, parliament passed amendments (Act No. XCIII of 2000) to the Law on Screening Persons Holding Certain Important Offices and on the Historical Office (Law No. XXIII of 1994). The amendments extend screening until June 30, 2004— in the original version screening would have expired this year. More importantly, the amendments also widen the circle of persons to whom the law applies. While the old version concerned a few hundred leading public servants (including deputies), the new version requires several thousand judges, state attorneys, and journalists—whether they work for state or private entities— to undergo compulsory screening. The law’s purported aim is to weed out from public service those who were either informers for the communist-era secret police or—due to their position in the state or party hierarchy—received briefings based on informers’ reports. The law also regulates access to the archives of the communist-era secret police, housed in the Historical Office. This law, Hungary’s only attempt at lustration, is actually quite toothless. The only sanction exposed informers must fear is publicity, which they can avoid if they resign their office once having failed the screening test. Furthermore, as experience shows, exposure does not necessarily hamper a politician’s career. During previous screenings, numerous HSP politicians—including former prime minister Gyula Horn—were found to
    
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    have received informers’ reports. In all cases, they refused to resign, and their standing in public opinion did not change perceptibly. Still, the law’s fairness and constitutionality is an issue. Subjecting journalists, who are in private employment, to screening extends the law well beyond public service. In its 1994 decision concerning the law, the Constitutional Court did not object to such an extension, but the judges ruled that the circle of those to be screened cannot be drawn arbitrarily in the nonstate sphere. Gabor Halmai, a constitutional expert, argues that the amendments could not include journalists employed by privately owned media without including church leaders, union leaders, or even pollsters, social scientists, prominent writers, actors, and athletes. The question remains unresolved. In other business, on June 20, parliament adopted a long-term plan to bring the country’s military in line with NATO standards at a cost of approximately 123 billion forints ($447.3 million). The three-stage plan, which will take approximately ten years, will see a reduction in army personnel (from 61,500 troops to 42,900) and the merging of the Office of Chief of Staff into the Ministry of Defense by 2003. In the second and third stages, military equipment will be upgraded, technical modernization accelerated, and living standards for soldiers improved. Although it is not part of the plan, the government has also stated its intention to reduce the duration of compulsory military service. HSP has demanded that it be reduced immediately to six months; the government agrees but proposes the reduction be implemented only in 2002. AFD, however, has pressed for the complete abolishment of compulsory service, arguing instead for the creation of a professional army, and has promised to organize a referendum on the issue. In a related matter, on June 13, parliament amended the Constitution to require government approval for the use of Hungarian airspace by foreign troops and the participation of foreign troops in military exercises on Hungarian soil. These questions were previously within parliament’s purview but were amended according to NATO’s requirements.
    ❖
    
    In recent months, the Constitutional Court has handed down a series of decisions concerning freedom of speech. While the Court upheld the prohibition of the display of authoritarian symbols and of the desecration of national symbols, the justices found that the prohibition against deliberately spreading panic was unconstitutional. In May, seven years after the complaint was first filed, the justices upheld the criminal prohibition of the display of certain authoritarian regimes’ symbols
    
    (Decision 14/2000 [V. 12.] AB). The petitioners challenged Art. 269.B of the Criminal Code, which states that it is a misdemeanor to disseminate, use in front of a large audience, or display a swastika, an SS sign, an Arrow Cross (the symbol of the Hungarian fascists during World War Two), a hammer and sickle, or a red star. These symbols may be used if they are serving an educational, scientific, artistic, historical, or informational purpose. The petitioners argued that the provision violated freedom of speech (Art. 61.1 of the Constitution) and that the list of symbols was arbitrary and, therefore, violated the prohibition against discrimination (Art. 70.A of the Constitution). The petitioners also referred to the pertinent provisions of the UN Covenant on Civil and Political Rights and of the European Convention on Human Rights. The Court emphasized that the challenged provision is among those that prohibit crimes against public peace. The justices argued that these symbols can induce fear in those who have suffered under past authoritarian regimes. As a result, they reasoned, the provision protects a constitutional value. The Court found that, given Hungary’s history, prohibiting the display of authoritarian symbols is a necessary and proportionate limitation on freedom of speech. The Court further ruled that the list of prohibited symbols is not discriminatory, since the law—concerned only with symbols—does not distinguish between persons on any grounds. The Court emphasized that Hungarian legislation has always treated wrongs committed by all authoritarian regimes alike and has not made a distinction between Nazi and Communist crimes. In a subsequent decision, the Court upheld the constitutionality of the criminal prohibition against the desecration of national symbols (Decision 13/2000 [V.12.] AB). Article 269.A of the Criminal Code provides that the desecration of the national anthem, flag, or coat-of-arms of Hungary is a misdemeanor. In a claim filed five years ago, the petitioners argued that the provision violated freedom of speech and that the desecration of national symbols was a new form of expression. In addition to the Constitution, the petitioners referred to the UN Covenant on Civil and Political Rights and the European Convention on Human Rights. In its decision, the Court stated that the legal protection of national symbols was the general practice among European states as well as that of some international instruments and jurisprudence. The justices noted that such measures might be especially necessary in regimes undergoing the transition to democracy. In addition, the justices stated that most parliaments have wide discretion in establishing measures of protection. In Hungary, national symbols are protected by the Constitution (Arts. 75 and 76). Noting the significance of national symbols in
    
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    establishing the identity of a political community and a nation’s independence, the Court stated that these national symbols, in Hungary, are tied to the achievements of democratic transition and embody the departure from communism. As there are no other means available for implementing the protection of national symbols, the Constitutional Court upheld the constitutionality of the challenged provision. In another recent decision, the Court declared unconstitutional the criminal prohibition against deliberately spreading panic. Article 270 of the Criminal Code provides that stating false facts or presenting or spreading true facts in a way that is capable of destroying public peace in front of a large audience is a misdemeanor. In a recent case, a lower trial court stayed proceedings and submitted a petition to the Constitutional Court, arguing that the provision allows for subjective and arbitrary interpretation, since it is impossible to ascertain which statements the provision applies to—those that are false or those that are true but, in either case, inspire panic. The Court noted, in its ruling, that public peace is an aspect of the rule of law and a precondition for a properly working democratic government. The Constitutional Court also stated that, in Hungary, the infrastructure supporting public discourse is well developed and adequate, and efficient mass communication exists, which further helps promote public discourse. Although there might be instances when the communication of some ideas becomes distorted, invoking criminal sanctions is not an appropriate response to such discrepancies. The Constitutional Court found that the challenged articles of the Criminal Code constitute an unconstitutional restriction of free speech. The Court stressed the fact that just because less severe means of legal protection are not available does not justify, or render constitutional, criminal sanctions. The challenged provision was also found to be insufficiently precise in its phrasing. Prime Minister Andris Skele’s government—consisting of the People’s Party (PP), Latvia’s Way (LW), and the Fatherland and Freedom Party (FFP)—entered spring on shaky ground, after this winter’s pedophilia scandal. (For more on the scandal, see Latvia Update, EECR, Vol. 9, Nos. 1/2, Winter/Spring 2000.) Given disagreements and mutual distrust among the governing-coalition parties, other tensions, too, have persisted. Skele’s annual-income declaration (required of all ministers, members of parliament, and high government officials) created a minor sensation, especially since it disclosed that he had received a $29 million promissory note from a trust company to which he had entrusted the management of Ave Lat, a food-processing company he owned. As Ave Lat was
    
    Latvia
    
    closely connected with several offshore firms, many questioned the legality of Skele’s finances and wondered whether he had secured the promissory note through the privatization of state-owned enterprises. LW and FFP asked Skele, who is from PP, to explain the transaction. But the prime minister was not forthcoming, further damaging relations with his coalition partners in parliament (the Saeima). Coalition relations worsened on April 6, when the minister of economics, Vladimirs Makarovs (FFP), annulled the signature authority of Janis Naglis, director of the state privatization agency, effectively terminating his term in office. The prime minister responded quickly, calling for Makarovs’s resignation and temporarily assuming his duties. Makarovs and FFP claimed that Naglis’s term had ended and cited the Law on Joint Stock Companies, which holds that the director’s term lasts for three years, although he may be reelected. Skele and his allies relied on alternative legal support, citing the Law on Privatization, which places no limit on the number of terms a director may serve. Minister of Justice Valdis Birkavs argued that the special Law on Privatization took precedence over the general Law on Joint Stock Companies. Makarovs allegedly was unhappy about the course of Latvia’s privatization process and faulted Naglis. Without delay, on April 6, the opposition moved to exploit the crack in the already weakened coalition, and 17 opposition parliamentarians from the Social Democratic Party (SDP) and the New Party (NP) submitted a proposal for a no-confidence vote against Prime Minister Skele. LW and FFP supported the coalition, although they stated that it should be reformed, complaining specifically that the rights and duties among the coalition members in the government and the prime minister were not divided in a rational and fair way. Their criticism was directed largely at Skele not at PP. Matters grew even more complicated when FFP renominated Makarovs as its candidate for the economics portfolio, in an obvious attempt to provoke the prime minister. (According to the coalition agreement, if the prime minister requests the resignation of an individual minister or if the minister resigns of his or her own accord, that minister’s party has the right to nominate the candidate for the minister’s replacement.) Naturally, Skele did not agree to Makarovs’s renomination. In return, FFP declared it would not support the government in the upcoming no-confidence vote. With FFP’s defection, Skele no longer commanded majority support in parliament, as the two parties remaining in the coalition—PP and LW—had only 45 of the chamber’s 100 seats. It appeared that the vote would bring the government down. LW took a wait-and-see approach, while Skele desperately sought to bring the small NP (8 seats) into
    
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    the coalition. His efforts failed, and just one day before the vote was scheduled to take place, Skele resigned. The third Skele government had lasted only nine months and, just as in previous governments, FFP played the central role in its downfall. Most critics faulted Skele’s recent cabinet for its unsuccessful attempts to reform the pension system, the illconsidered and incomplete attempts to unify the two state universities, and the decision to finance a new national library with a surcharge on electricity consumption. The pedophilia scandal, to be sure, cast a dark shadow over Skele and his government, as did the apparently substantiated suspicions that Skele had received some large sums of money from the privatization of state property. During their consultations with one another and with the president, following Skele’s resignation, the political parties clarified that LW and PP would constitute the core of a new governing coalition. FFP and NP would also participate, but the new prime minister would be an LW member. Initially, LW considered nominating Aija Poca, chairperson of parliament’s Committee on Budget and Finance and minister for state revenue in several past governments, but she declined. LW then nominated Andris Berzins, the mayor of Riga, who also has served in several governments (social welfare minister, in 1994–95, and employment minister, in 1995–96). After lengthy negotiations, all four coalition parties agreed to support Berzins’s candidacy to become the next prime minister; and the president invited Berzins to put together a new government. (According to Arts. 55 and 56 of the Constitution, the president nominates the prime minister, who then assembles a cabinet, subject to parliament’s approval.) On May 5, Berzins’s proposed government won overwhelming support in parliament (69 in favor, 24 against, with no abstentions); only those political parties outside the government coalition (the Latvian Social Democratic Workers’ Party and the pro-Russian For Human Rights in a Unified Latvia) voted against Berzins’s government. Several ministers from the previous government retained their positions in the new four-party coalition: foreign affairs, interior, culture, transport, and the special minister for cooperation with international financial institutions. LW now holds the premiership and three ministries; PP, five; FFP, four; and NP, two. Berzins declared that his government’s course of action would not seriously diverge from its predecessor’s, especially regarding the budget and the completion of the long-drawn-out privatization of the remaining state-owned enterprises. (The government recently earned $47.5 million from the sale of a quarter of its natural-gas-distribution company; the state electricity monopoly is slated for sale this year.) Berzins did stress that he would give social stability and equality
    
    a higher priority than did the previous government. During his first few weeks in government, the prime minister ruffled some feathers when, in an interview, he expressed support for the right of noncitizens to vote in local-government elections. Coalition members were not amused, as none support such a policy.
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    On April 13, the commission investigating the pedophilia scandal submitted its final report to the parliament. Earlier, the commission—or rather, commission chair Janis Adamsons—had claimed to possess testimony incriminating several public officials (including former prime minister Skele and Minister of Justice Valdis Birkavs). But the final report contained no real proof of wrongdoing and failed to provide any damaging information about high-ranking government officials. These unfounded allegations had already seriously damaged these officials’ reputations, however, and, to some extent, damaged the Skele government. Shortly before the commission’s final report, PP submitted a proposal to annul Adamsons’s parliamentary mandate, arguing he should forfeit his mandate for serving in the KGB. On March 3, the Riga Zemgale regional court ruled that Adamsons had been a “USSR KGB border-guard military-force employee.” But the ruling did not clarify whether this meant that Adamsons had been a KGB employee. Parliament’s Mandate and Submissions Committee has repeatedly stressed that USSR border-guard military-forces officers are not KGB employees. Ultimately, parliament did not annul Adamsons’s mandate, as only 34 MPs supported the inclusion of this proposal in parliament’s agenda, while 47 voted against, and 9 abstained.
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    On May 11, parliament voted (79 in favor, 1 against, with 15 abstentions) to approve the appointment of Janis Maizitis, a regional procurator, as the new procurator general. He was the second nominee for the position, since the first, Supreme Court justice Ilgars Zigfrids Septeris, fell just four votes shy of endorsement. Many opposed Septeris’s nomination after it was revealed he had sat as a judge on a matter in which he had an indirect interest. (His daughter was an employee of the defendant.) Some of the deputies also allegedly found Septeris to be an “unconvincing” nominee. On 28, complying of President Lithuania 84.20Aprilthe Constitution, with Art. Valdas Adamkus scheduled parlia-
    
    mentary elections for October 8. As a result, political parties took to forming preliminary coalitions while politicians fumbled to gain control over their parties.
    
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    Bringing to an end the long-running struggle for power in the Homeland Union (Lithuanian Conservatives) (HU[LC]), the largest party in the government coalition, former prime minister Gediminas Vagnorius quit the party on March 23, having concluded that his support among the party’s rank and file was seriously lagging and that he could not launch a successful challenge to the leadership of parliamentary chairman Vytautas Landsbergis and Prime Minister Andrius Kubilius. Vagnorius and 11 fellow defectors have created a new party, known as the Lithuanian Conservative Union (LCU). Following the departure of the 12 deputies, HU(LC)’s parliamentary faction dwindled to 49 members in the 141-seat parliament. Support for the government was further weakened by a split in the Lithuanian Christian Democratic Party (LCDP), which usually votes along HU(LC) lines. Yet Prime Minister Kubilius has managed to keep the government on track, pursuing a policy of budget consolidation through compromise and by winning occasional support from opposition parties, such as the Center Union (CU). LCU and the rebellious LCDP faction sometimes vote with Kubilius’s government, too. Jockeying for power has not been limited to the ruling parties. In May, two left-of-center opposition parties, the Lithuanian Social Democratic Party (LSDP) and the Lithuanian Democratic Labor Party (LDLP, the former Communist Party, which led the government from 1992 to 1996) forged a coalition. The left-of-center coalition’s fortunes improved when former president Algirdas Brazauskas, who was the chairman of LDLP, announced his return to politics. Brazauskas was promptly declared honorary chairman of the LSDP–LDLP coalition. Surprisingly, Arturas Paulauskas, the popular leader of the left-of-center New Union (Social Liberals) (NU[SL]), which made the best showing in the March local elections, refused to join the new coalition. Paulauskas opted instead for a loose coalition with CU and the Lithuanian Liberal Union (LLU), led by former prime minister Rolandas Paksas, now the mayor of Vilnius. This coalition is sponsored by the president, Valdas Adamkus. Adamkus has stepped into the electoral muck, meeting frequently with Paulauskas, Paksas, and CU chairman Romualdas Ozolas, speaking of the need for a “new politics,” without specifying precisely what this term means. LSDP leader Vytenis Andriukaitis has criticized Adamkus and likened him to former Russian president Boris Yeltsin for attempting to build a loyal political bloc. Adamkus’s efforts might be in vain, however. A debt scandal in Vilnius has cast a shadow on the coalition’s future. Reports are circulating that the city has amassed $25 million in debt; and many are laying the blame on Paksas.
    
    For various reasons, while lagging in opinion polls, HU(LC) has recovered some confidence as of late. First, Kubilius’s cabinet has been handling the recent economic crisis adeptly and appears quite competent. Second, HU(LC) performed better than most had expected in the March local elections. (Many predicted the party would win only around 3 percent of the vote, but they actually won 11 percent.) Third, Vagnorius’s departure put an end to the inner feuds that undermined the party’s morale. Fourth, with the split in LCDP, its disgruntled supporters by and large have turned to HU(LC), the only remaining firm political force on the center-right. All these factors have given HU(LC) the reasonable hope that it can comfortably clear the 5 percent threshold in the fall parliamentary elections. In other political news, Vytautas Sustauskas, a 55-year-old xenophobic populist, was recently elected mayor in Lithuania’s second-largest city, Kaunas. He heads a small radical movement called the Freedom Union, which took 24 percent of the vote in Kaunas’s local ballot. FU formed a coalition with Paulauskas’s NU(SL), which, as a new party, must engage in some political maneuvering to ensure its survival. Sustauskas’s prospects in a national election are doubtful, but his victory in Kaunas is a clear signal to the mainstream parties that the public is prepared to support extremism.
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    On March 20, Deputy Audrius Butkevicius was released from jail, after serving just half of his original five-and-a-half-year term for attempted extortion. In August 1997, Butkevicius was caught accepting a $15,000 bribe from a businessman who had earlier complained to the police of being blackmailed by Butkevicius. Butkevicius had denied all the charges against him, claiming that his indictment was a conspiracy masterminded by Landsbergis. Butkevicius has stated that he plans to bring his case to the European Court of Human Rights (ECHR). Opposition members of parliament, mainly from CU and LDLP, had already filed several petitions with the Constitutional Court. Butkevicius lost all these appeals. On March 30, the Court ruled that the procedure revoking Butkevicius’s immunity, which had occurred in fall of 1998, complied with the Constitution. On May 8, it also ruled that police may conduct sting operations (like the one that led to Butkevicius’s arrest) against ordinary citizens and members of parliament. According to the ruling, however, the president may not be subject to such operations, as that would contradict Art. 86.1 of the Constitution. (The provision states that “the person of the president shall be inviolable: while in office, the
    
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    president may neither be arrested nor charged with criminal or administrative proceedings.”) In other cases involving the European Court of Human Rights, on May 26, an ECHR fact-finding mission traveled to Vilnius to meet with former prisoner Juozas Valasinas. On March 14, the ECHR agreed to hear his complaint regarding prison conditions and the violation of the secrecy of his correspondence. Many suspect that the Lithuanian government will lose the Valasinas case. In February, it also agreed to settle the Sigitas Raiselis case out of court. Raiselis had argued that he was illegally detained under the Law of Preventive Detention, which has since been repealed. The Lithuanian government paid Raiselis $3,000 in compensation, and the applicant agreed to waive any further complaints. Raiselis’s case was the first from Lithuania to reach the final stage at the ECHR. To date, the ECHR has considered the admissibility of 13 cases from Lithuania—six were ruled inadmissible, and the remainder admissible or partly admissible. Cases have been filed variously on the grounds of the violation of the privacy of a prisoner’s correspondence, illegal detention, and various procedural violations. The most high-profile case concerns Henrikas Daktaras, the alleged “godfather” of the Kaunas mafia. In February 1997, Daktaras was sentenced to seven and a half years in prison on two counts of obtaining property by threat of force and suborning perjury. He was also fined $3,750, and his property was confiscated. Daktaras maintains that the Lithuanian media wrongly depicted him as a mafioso, making a fair trial impossible. In his complaint to the ECHR, he also asserted that the procurator (coincidentally, Arturas Paulauskas) had violated the principle of the presumption of innocence by repeatedly and publicly referring to the defendant as “criminal number one” and a “mafia boss” before and during the trial. On January 11, the ECHR declared the appeal partly admissible. The ECHR accepted for further consideration the complaints that the Lithuanian Supreme Court was not an impartial tribunal and that the procurator breached the presumption of innocence. Two other conspicuous cases, the one brought by Butkevicius and another by Arvydas Stasaitis, are in their early stages awaiting a decision on admissibility. While Butkevicius’s prospects for further consideration are not clear, many believe that the Stasaitis case will be accepted and that he will win his claim. In February, Stasaitis was released from prison after languishing there for over five years without having been sentenced. In October 1998, he was sentenced to imprisonment for seven years on charges of illegal currency trading, but, in September 1999, the Supreme Court overturned the sentence, ruling that the Criminal Procedure Code had been violated in several instances during the investigation against him.
    
    On May 2, parliament adopted amendments to the Law on Police Procedures. The amendments are meant to enhance the powers of the Special Investigations Service (SIS), a body created in 1997 as a Ministry of Interior anticorruption task force. The law removed the SIS from the ministry’s purview; it now reports to the president and parliament. The head of SIS will be appointed and dismissed by the president on parliament’s proposal. The law was also amended to agree with the recent Constitutional Court decision that members of parliament may also be placed under surveillance if they are being investigated on suspicion of corruption. On another legal front, the trial of 93-yearold Aleksandras Lileikis, alleged Nazi-era war criminal, resumed on June 23. Lileikis’s trial was suspended last September due to his poor health and inability to attend hearings, but, earlier this year, lawmakers amended the Criminal Code to allow defendants who are seriously ill to take part in hearings by technical means from outside the court. (See Lithuania Update, EECR, Vol. 9, Nos. 1/2, Winter/Spring 2000.) Lileikis was allegedly the head of the Vilnius security police and is accused of handing over hundreds of Lithuanian Jews to the Nazis for execution. He vehemently denies the charges, claiming he actually worked for the anti-Nazi resistance. A similar case is pending against Lileikis’s wartime deputy, Kazys Gimzauskas, who is 92, but no date has been set for resuming his trial as he was recently hospitalized.
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    On June 13, parliament gave near-unanimous approval to a law demanding monetary compensation from Moscow for five decades of Soviet rule. The legislation was introduced in May by parliamentary speaker Vytautas Landsbergis and would oblige the government to seek money from Russia for the effects of repression and environmental damage caused during Soviet rule. No specific sum of money was mentioned. On June 10, the Russian Ministry of Foreign Affairs issued a statement protesting the compensation law and insisting that Lithuania had joined the Soviet Union voluntarily. The law is largely symbolic, and almost no one expects future action to be taken. Over several issues higher Macedonia variousthe last related tomonths, education for minorities came
    
    to the forefront of Macedonian political life. Relations between the two major ethnic groups, Macedonians and ethnic Albanians (who comprise 23 percent of the population), seem to have taken a turn for the worse,
    
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    and disagreements between rival political formations intensified. While some important laws were passed in the recent months, the political system has been strained by the growing tensions. According to Art. 48 of the Constitution, ethnic minorities have the right to primary and secondary education in their mother tongue. But the Basic Law says nothing about higher education and the language of instruction in private schools. The two universities in Macedonia, in Skopje and Bitola, offer classes only in Macedonian. In the past, ethnic Albanians enrolled en masse at the University of Pristina in neighboring Kosovo, where instruction was in Albanian. But, after the Serbian crackdown on the university in the late 1980s and early 1990s, this option became unavailable. Ethnic Albanian students and professors, formerly affiliated with that university, repeatedly tried to form an Albanian-language institution of higher learning in Macedonia. In 1995, an Albanian university was formed in Tetovo (a northwestern city whose Albanian population exceeds 70 percent). Since the very beginning, this initiative stirred up heated political controversies. The Macedonian government refused to recognize the new institution; and an attempt to hold an inauguration ceremony, on May 17, provoked public unrest. Police intervened to disperse pro-Albanian demonstrators, and, during the ensuing disturbances, one ethnic Albanian was shot and killed by the police. This conflict immediately became the focus of intense political debates. Arben Xhaferri, leader of the Democratic Party of Albanians (DPA), which is a member of the ruling coalition, announced that the right to higher education in one’s own language is a “right granted to every citizen in a democratic state.” The Academy of Sciences issued an official document emphasizing that Macedonia is a unitary country where the official language is Macedonian and the official alphabet Cyrillic. According to academy members, any deviation from these principles may endanger the country’s stability and jeopardize its sovereignty. In parliament (the Sobranie), Stojan Andov, leader of the Liberal Party (LP), proposed that Macedonia would grant its Albanian population minority rights if Albania did as much for its Macedonian population. The proposal was promptly attacked by the two Albanian parties in the legislature, the DPA, which is a member of the ruling coalition, and the opposition Party for Democratic Prosperity (PDP). Party leaders criticized as outlandish the demand for reciprocity in the treatment of the 4,700 Macedonians who live in Albania when compared with the 600,000 Albanians who live in Macedonia. Coverage of these issues in the press was reminiscent of the verbal wars that wreaked havoc in the former Yugoslavia before its demise.
    
    In an attempt to alleviate the situation, the government announced that the school of pedagogy in Skopje, where Albanians can receive education in their own language, will be given a much higher standing in the educational system. In addition, it vowed to continue an affirmative-action program at the University of Skopje, which mandates that at least 10 percent of the student body consist of ethnic minorities. These measures failed to placate the Albanian parties. PDP demanded that Tetovo University be recognized as the third official university in the country. DPA endorsed the proposal of OSCE High Commissioner Max van der Stoel who, during a June visit, had proposed the establishment of a private university that would offer instruction in Albanian, Macedonian, and English. Despite their criticisms of governmental policies, the two Albanian parties have not been able to agree on a common position. In the aftermath of Van der Stoel’s visit, parliament began deliberations on a new Law on Higher Education (which, according to the high commissioner, “reflects Macedonia’s European orientation”). According to the draft proposed by the government, which is expected to be adopted by the legislature, state universities will offer instruction in Macedonian, and private universities will be allowed to teach classes in minority languages, provided that students at the latter also receive mandatory instruction in Macedonian. In addition, some classes at the two state universities—for example, in art, philology, pedagogy, and literature—will be taught in both languages. These issues have not been the only ones to rock the Macedonian political scene; the country has also been forced to cope with the burdensome legacies of the war in Kosovo. During a visit to Pristina in May, Prime Minister Ljubco Georgievski delivered an ambiguous message. He asserted that UN Resolution 1244—which declares that Kosovo is a part of Yugoslavia—should be respected, but at the same time, he hinted that his government’s position could be modified in the future. He also announced that a Macedonian trade mission (which will also be authorized to carry out certain diplomatic functions) will open in Pristina. This move was lauded by US Secretary of State Madeleine Albright but was immediately criticized by the anti-Western, opposition-controlled media in Macedonia. Meanwhile, skirmishes have continued to occur along the Macedonian-Kosovo border. In a widely publicized incident, four Macedonian border guards were kidnapped, allegedly to be exchanged for Kosovo Liberation Army activists held in Macedonian prisons. Even though the soldiers were released soon thereafter, the event alarmed the public. Their apprehensions were soon confirmed. On June 5, two
    
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    Macedonian soldiers were wounded when fire was exchanged across the border. This incident forced President Boris Trajkovski to admit that the “northern and western Macedonian border [with Kosovo and Albania] is about 300 km long, and it runs through a mountainous area that is very difficult to control with the poor resources currently available to the Macedonian government.” Antagonized by what it perceives as unwarranted concessions to ethnic Albanians and war refugees, the opposition—which consists mainly of the Social Democratic Alliance of Macedonia (SDAM), the Liberal Democratic Party (LDP), and the Democratic Alliance (DA)—launched, on May 18, an antigovernment campaign throughout the country. Opposition leaders insist that the present government be replaced by a “government of national unity,” and that early general elections be held immediately. Opinion polls show a decrease in the government’s popularity and increased support for SDAM. According to the opposition daily newspaper, Utrinski Vesnik, Prime Minister Georgievski confessed—in his speech at the special meeting marking the tenth anniversary of his party, the ruling Internal Macedonian Revolutionary Organization–Democratic Party for Macedonian National Unity (IMRO–DPMNU)—that his party had paid a hefty price for its victory in the recent presidential election and could lose the upcoming local elections. Apparently, he was referring to the fact that the party’s presidential candidate, Boris Trajkovski, won with the votes of ethnic Albanians, which may trigger a nationalistic backlash and undermine the party’s position in some parts of the country. Despite the ongoing political controversies, Macedonian lawmakers did manage to adopt an important piece of legislation. The Law on Public Administration stipulates that the state administration will be downsized from 70,000 to 30,000 employees. According to a special early retirement clause, officials who have been employed for 35 years by the state must retire (only university professors are exempt from this requirement). This clause prompted the Union of Administration Workers to protest the law’s constitutionality before the Constitutional Court on the grounds that it violates the principle of equality enshrined in the Constitution. It is quite clear that in a country with a per capita GDP of $1,800 and where unemployment is in the neighborhood of 40 percent, early retirement is not a popular measure. The Macedonian government may receive some $180 million at the forthcoming conference of Western donors in Brussels, which could ease the social tensions set off by the law’s adoption. Whether the Western community will deliver on its promise to donate $500 million for the country’s reconstruction,
    
    and thus further reduce stress within the society and help bolster the economy, remains to be seen. During last quarter, another energy crisis, amid Moldova endured the political climateMoldova a worsening marked
    
    by mass protests and social turbulence. In late March, Russia and Romania refused to continue to supply Moldova with electricity and gas until it had paid its outstanding energy debts. The government’s impoverished fisc was pushed deeper into debt to meet the Russian and Romanian demands. In April, thousands of students in Chisinau refused to attend classes until the municipality restored their publictransportation privileges. The municipal council caved in, but not before most political parties denounced the student protests. And a month later, disgruntled Afghan war veterans—a small but vocal and tightly organized constituency—demanded the resignation of both the government and parliament (the Parlamentul) and called for a national plebiscite to transform the country into a presidential republic. The veterans’ proposal for reforming the Constitution coincided with President Petru Lucinschi’s plan to amend the Basic Law to increase his power. The veterans’ leaders threatened to convene a “great national assembly”—a popular body with a fuzzy mandate and unspecified functions—but to date only one political party has vowed to support the initiative. As if these problems were not enough, in mid-May, the political scene was rocked by revelations from Ilie Ilascu, who is currently serving time in a Tiraspol prison on a conviction imposed by the secessionist Transnistrian authorities. Ilascu claimed that Moldovan state structures are infiltrated by KGB agents, that the files of these agents are stored in Tiraspol, and that almost half of Moldova’s intellectuals are KGB collaborators. These revelations, he claims, explain the Moldovan leadership’s lenient stance toward the secessionists in Tiraspol. Ilascu further asserted that Moldova suffers from a “moral rather than a political-economic crisis” and declared his support for legislative initiatives proposed by the Christian Democratic People’s Party (CDPP), which include a lustration law and a law ensuring access to secret-police files.
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    After much debate and controversy, on June 1, the joint commission for the revision of the Constitution adopted a proposal for constitutional changes. The commission is chaired by Geneva University professor Giorgio Malinverni (a member of the Venice Commission) and is composed of six representatives from the presidency, parliament, and the Venice
    
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    Commission. (The Moldovan commission was created nine months ago, when President Lucinschi began to push for a constitutional reform aimed at enlarging presidential power; for details, see Moldova Update, EECR, Vol. 8, No. 3, Summer 1999, and Moldova Update, EECR, Vol. 8, No. 4, Fall 1999.) The draft text adopted by the commission seeks to enhance political stability by strengthening the powers of the prime minister and the government vis-à-vis parliament but does not envision further enlargement of presidential prerogatives. The commission declared it had followed Western models rather than the trend toward increasing presidential powers, as seen in some countries of the Commonwealth of Independent States. The draft also provides for the establishment of a German-style constructive no-confidence vote— a parliament can remove a prime minister only if it elects a successor at the same time. In addition, the draft allows the cabinet to link the passage of draft legislation to no-confidence votes (a constitutional arrangement pioneered in France and Romania). The prime minister will have the authority to reshuffle and replace ministers without consulting the legislature. With parliament’s permission, the government may adopt decisions with legislative effect in certain policy domains for specified periods of time. Such decisions will take effect upon their publication in the official gazette, Monitorul Oficial, and need not be promulgated by the president. According to the joint commission, “the president, who oversees the observance of [the] Constitution and the work of state institutions, acts as a mediator among the state powers and between the state and society.” According to Art. 141 of the Constitution, the draft revisions must be endorsed by the Constitutional Court before being submitted to legislators, who then must vote on the proposal within six months. Constitutional changes must be approved by at least two-thirds of all elected deputies and enter into force 100 days after their approval (Art. 143). The commission’s draft departs from both the proposals endorsed by President Lucinschi (which sought to establish a presidential system) and parliament’s version of constitutional reform (which attempted to reaffirm legislative supremacy, while relegating the president to a secondary role). It remains to be seen whether the president and parliament will go along with the commission’s compromise solution. On May 18, parliament adopted legislation detailing procedures for amending the Constitution. The new law stipulates that drafts of amendments will be considered by parliament in at least two readings. In its first reading, a draft amendment is passed by a simple majority of present deputies; in the second, endorsement by two-thirds of all elected deputies is required for adoption. At that point, the amendment is
    
    submitted to the president for promulgation. Constitutional changes pertaining to Moldova’s integrity, security, and independence are adopted only after approval by a national referendum (Art. 142.1 of the Constitution). The changes also provide for a popular method of constitutional amendment. Petitions winning the support of at least 200,000 voters will be considered by parliament and the Constitutional Court (Art. 141.1 of the Constitution). The signatures must be collected by citizen groups (consisting of anywhere between 27 and 200 members, at least three of whom must have law degrees); they must be gathered within an eight-month period and be endorsed by residents of at least half of Moldova’s counties. The signatures must then be verified by the Central Electoral Commission, whereupon the petition is registered with the Ministry of Justice. The ministry is charged with evaluating the petition’s legality and publishing it in the press for public discussion. In mid-April, parliament adopted a law on Moldova’s participation in international peacekeeping missions. The project, proposed by President Lucinschi—who, according to the Constitution, is the supreme commander of the armed forces—was supported by 50 deputies from CDPP, the Bloc for Democracy and Prosperity in Moldova (BDPM), the Democratic Convention of Moldova (DCM), the Party of Democratic Forces (PDF), and various independents; it was opposed by 33 Moldovan Communist Party (MCP) deputies. The bill allows a specially trained unit of the Moldovan army to join peacekeeping missions after the armed conflict in the region of destination ends. Participation is financed by a combination of funds provided by the Ministry of Defense and international organizations, such as the OSCE and the United Nations. Moldova reserves the right not to participate in missions that would negatively affect the “republic’s national interests,” but the bill fails to specify in detail how to recognize such missions. Minister of Defense Boris Gamurari argued that the law created the legislative basis for fulfilling the country’s commitments under NATO’s Partnership for Peace Program. MCP opposed the law, arguing that it violated Moldova’s neutrality (Art. 11 of the Constitution). Gamurari responded that neutrality and peacekeeping are not incompatible, as the experience of such countries as Sweden, Finland, and Switzerland attests. During the same session, parliament readopted (80 votes to 3) amendments to the electoral code. Originally passed one month earlier, the amendments were not promulgated by the president. (According to Art. 93 of the Constitution, the president may remand a bill to parliament for reexamination but must promulgate a law that is passed by deputies a second
    
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    time.) Instead Lucinschi proposed lowering the voting threshold for independent candidates from 3 percent to 1 percent and canceling the provision stipulating that political parties could participate in elections only two years after their registration. He also objected to a provision prohibiting foreign-owned mass media from posting electoral advertisements during Moldovan electoral contests. On May 18, however, parliament rejected all of the president’s proposals and voted once again for the amendments in their original form. In addition to changes to the electoral code, parliament adopted several other related measures in the same session. On March 23, deputies voted (by 71 to 4) to raise the number of signatures needed to register a presidential candidate from 20,000 to 60,000. The signatures must be collected in at least six of Moldova’s 12 counties, with a minimum of 10,000 signatures from each county. The legislators also modified the threshold necessary to enter parliament— from 4 to 6 percent for political parties and from 4 to 3 percent for independent candidates. During parliamentary debates, Deputy Ion Morei argued that the amendment banning parties from participating in elections during the first two years of their existence violated Art. 41.2 of the Constitution (“all parties and other social/political organizations are equal before the law”). He vowed to challenge the constitutionality of the amendments before the Constitutional Court.
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    minimum living standards. Invalids and retired persons are exempt from the language exam, as are those who graduated from Moldovan schools. A security clearance is also required for citizenship.
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    On June 2, parliament adopted the Law on Citizenship proposed by Lucinschi three months earlier. The law establishes the procedure for obtaining and forfeiting Moldovan citizenship by foreign citizens and ethnic Moldovans. Moldovan citizens, under this legislation, may hold dual citizenship if the second citizenship is obtained at birth, or through marriage or adoption. (Unofficial data suggest that some 300,000 Moldovans also hold Romanian citizenship.) Moldovans who acquire the citizenship of another state do not have to relinquish their Moldovan citizenship if Moldova maintains a bilateral agreement recognizing dual citizenship with that particular state. As of yet, the country has not signed any such treaty, although draft texts with Ukraine and Romania are currently being prepared. Moldovan citizenship can be lifted by presidential decree if the holder has obtained it fraudulently, enrolled in another state’s armed forces, or obtained the citizenship of a state with which Moldova does not have a bilateral agreement. Citizenship is also lost if the holder “displays gross prejudices against the Moldovan state.” Foreign citizens may acquire Moldovan citizenship after a ten-year waiting period if they have proficiency in the Moldovan language and hold sufficient assets to meet
    
    On June 8, the Constitutional Court affirmed the constitutionality of Arts. 7 and 7.1 of the Civil Code, which penalize journalists and media organizations for “spreading information harming one’s honor and dignity.” The initial petition to the Court was signed by deputies Victor Cecan (MCP) and Vasile Stati, who argued that the provisions in question—adopted in 1964—were obsolete; their initiative was also supported by civic organizations, such as the Helsinki Committee on Human Rights. The deputies also challenged the provision that requires journalists to prove the veracity of their statements. But the Court upheld the constitutionality of the articles, reasoning that even if Art. 32 of the Constitution guaranteed freedom of opinion, that freedom “must not harm the honor and dignity of a person whose rights and freedoms, too, are guaranteed by the Constitution.” As a result, if the court rules the statement false or insulting, the media entity involved must publish a retraction within 15 days after the court decision. If inaccurate information is distributed by a legal entity, it must pay compensation not to exceed 200 times the average monthly salary in the country. Compensation levied against an individual may not exceed 100 times the average monthly salary. If a newspaper publishes the retraction before the court decision, the compensation may be substantially reduced or not paid at all. In a final note, on May 18, Trans-Dniester’s legislature adopted changes to its Constitution. Vitali Glebov, the president of the Chamber of Deputies, announced that, as a result of the changes, the unrecognized republic was now a “presidential republic” with a one-chamber legislature (rather than two, as was the case previously). The number of deputies was reduced from 67 to 43. Deputies and cabinet members are not allowed to occupy administrative positions in Tiraspol, the Transnistrian capital. After months of ongoing crises and political struggles, the two-and-a-halfyear-old Electoral Action Solidarity– Freedom Union (EAS–FU) governing coalition finally collapsed in June. The breakdown came in the charged political atmosphere of the run-up to the presidential election, slated for this fall, and in anticipation of the parliamentary elections, due in 2001. Problems between the two parties deepened as they struggled to nominate presidential candidates in the face of the sure win by incumbent president Aleksander
    
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    Kwasniewski (Democratic Left Alliance [DLA]). According to a July poll, Kwasniewski was supported by 60 percent of those polled. Within the government, EAS’s numerous organizations and parties could not agree on a single candidate. While many seemed to favor party president Marian Krzaklewski, other EAS members, such as the Popular Conservative Party and the Christian National Union, suggested nominating parliamentary speaker Maciej Plazynski. Fearing his own displacement, or even EAS’s disintegration, Krzaklewski eventually gained the upper hand and was named the party’s candidate. Disputes within EAS have quieted down, for the time being, but could explode again after the election. FU, for its part, simply could not agree on a candidate. Party leader Leszek Balcerowicz categorically refused to run, and Andrzej Olechowski, who was supported by many FU members and had pushed to be their nominee, was ultimately unable to gain the party’s support. Olechowski, who had advertised himself as a “supraparty” candidate, was in part damned by his past. He admitted to having served as an informer for the communist-era economic intelligence service; he also held several high-ranking positions in the former regime. Finally, on April 26, the party opted not to nominate a candidate. While the two parties struggled to control their own internal problems, as has often happened in the past, a large group of EAS deputies departed from the government line in a May parliamentary vote, helping the opposition kill the government’s proposal for a value-added tax. The rejection of the tax, which was strongly supported by Minister of Finance Balcerowicz, did not enhance relations within the coalition. Just a week later, the EAS–FU conflict escalated dramatically, this time focusing on central Warsaw, the country’s largest and richest municipality. Poland’s capital has a very intricate, complex system of government—Warsaw is divided into a number of municipalities, each with its own authorities, and subordinated to all-Warsaw authorities headed by a mayor. In addition, the city’s largest municipality, central Warsaw, is divided into districts, each of which has its own government. Thus, Warsaw is governed by a few hundred councillors at various administrative tiers; as many as 360 of these individuals belong to the central Warsaw municipality. Since the last local elections, Warsaw has been ruled by an EAS–FU coalition, with Pawel Piskorski (FU) as mayor. Some EAS councillors, however, had refused to support Piskorski in his recent bid for reelection, even though the EAS leadership had officially pledged to do so. Piskorski responded by forging an alliance, against EAS, with DLA. In the spring, Piskorski was elected mayor with DLA and FU votes, and the new coalition promptly began removing EAS members from the councils of—
    
    among other places—the central Warsaw municipality and its individual districts. (Local governments consist of both appointed and popularly elected posts.) The EAS-dominated board of the central Warsaw municipality sought to block or at least delay this process, for example, by refusing to attend the sessions. DLA and FU councillors then convened another session without EAS councillors and elected a new central Warsaw council and mayor. Antoni Pietkiewicz (EAS), governor of the Warsaw region (in the Polish administrative system, regional governors represent the central government in a given region, and supervision over local government bodies falls within their competence), ruled that the session convened by DLA and FU councillors had been illegal and that, consequently, its decisions were null and void. Accordingly, he requested that the prime minister appoint an emergency commissioner to govern the central Warsaw municipality. (If the local government cannot perform its functions, the prime minister may replace elected councillors with a commissioner to govern a municipality for a period of up to two years.) On May 17, Prime Minister Jerzy Buzek appointed Andrzej Herman as the municipality’s commissioner. Herman immediately began to appoint his own people to the municipality’s council. DLA and FU protested the decision. DLA demanded that Buzek be brought before the State Tribunal, while FU declared that it had lost confidence in the prime minister, questioning his government’s survival. (The State Tribunal, which is regulated by Arts. 198–201 of the Constitution, examines the constitutionality of the actions of various high-ranking officials.) Warsaw’s councillors labeled Buzek’s move an attack on local government, pointing out that the new commissioner should not take office until they, the councillors, had had a chance to appeal the decision, which they promptly did, turning to the Supreme Administrative Court. (According to Art. 184 of the Constitution, this court exercises “control over the performance of the public administration.”) For the next few days, there were two city governments. Scandalous incidents occurred: fights between members of the contending parties and offices occupied at night with the help of an armed security agency. On June 1, the Court ruled that the commissioner’s attempt to take over power had been premature, and that the local government council allied with Mayor Piskorski could act until the appeal against the prime minister’s decision and Herman’s actions were considered. Herman promptly resigned. During the worst of this scuffle, on May 28, FU’s National Board decided to withdraw from the ruling coalition and called on its ministers to resign. The following days were filled with feverish talks between EAS and FU that became increasingly irritating to the public as it became less and less clear what the
    
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    nature of the argument actually was. Apparently, among other things, FU demanded Buzek’s dismissal if they were to remain in the coalition. Krzaklewski promoted Boguslaw Grabowski, an economist with ties to EAS and a member of the Monetary Policy Council, as a candidate for the premiership. Even as FU began to lean toward his candidacy, it turned out that Krzaklewski had failed to consult with Grabowski, who had no intention of becoming prime minister. Even as the FU ministers were offering their resignations on May 29, party leader Leszek Balcerowicz declared that the prime minister could maintain the coalition by refusing to accept their resignations. Buzek indeed refused, and negotiations continued. One night it was agreed that Minister of Labor and Social Policy Longin Komolowski (EAS) would be prime minister; the next night Maciej Plazynski was named. Eventually, EAS proposed that Krzaklewski should become the new prime minister (he, however, preferred to run for president). FU, in the meantime, did not consent to his candidacy, even though it had been fervently encouraging him to assume that post for two years. The political back-and-forth ended on June 6, when the talks were finally severed, and the prime minister accepted the FU ministers’ resignations. Thus was Prime Minister Buzek’s cabinet transformed into a minority government. Under the new circumstances, the prime minister, previously criticized for indecision, showed an entirely new face. He began making decisions quickly, appointing new ministers within a week. Surprisingly, the popularity of both parties, notably EAS, grew following the coalition’s breakup. But can the minority government survive? Article 158 of the Constitution provides that a government may be toppled only by a constructive vote of no-confidence. In other words, if the parliament (Sejm) votes against a cabinet, it must recommend a new prime minister at the same time. It seems unlikely that the opposition will resort to this tactic, although they could make matters quite difficult for the government. (Article 159 of the Constitution states that the legislature can recall individual ministers by a majority vote.) In such a case, the president appoints a new minister, at the prime minister’s request, and the prime minister may even recommend the same person again. Such a situation would undoubtedly throw parliament into deadlock. The budget, to be adopted by the end of January, will be the real test for the minority government. If it is not adopted in time, the president dissolves parliament and calls early elections (Art. 227). In this scenario, the government could collapse in the fall, or the early spring of 2001. Over the period from late June to early July, the new minister of finance, Jaroslaw Bauc, presented the basic parameters for the new budget, which, although criticized by some economists, seemed reasonable. The vote on the budget, however, will most likely be motivated by political rather than economic considerations.
    
    On July 7, the Supreme Administrative Court ruled on the legality of the central Warsaw municipality. It found that the election of the municipality’s board by DLA and FU councillors had been illegal. (The earlier decision only stated that the board could remain in power until the appeal was considered.) As a result, all councillors lost their mandates, and the prime minister appointed a new commissioner until early elections could be held. The ruling proves beyond a doubt that the reactions of those who accused the prime minister of staging a coup against local government rule had been largely exaggerated. Even FU’s withdrawal from the ruling coalition seems much less justified now. Other aspects of the prime minister’s decision will be ruled on in the future. Other political matters long stalled because of intracoalition tensions have been freed up by its demise. Ever since a pledge to implement a mass-privatization program was incorporated into the EAS electoral platform, the idea has constantly resurfaced in political debates. But FU, and some of those in EAS as well, categorically opposed such a program. Yet, with FU gone from the government, and with their sinking popularity and upcoming elections in mind, on July 14, EAS joined with the smaller Polish Peasant Party to adopt a mass-privatization law, known as the Enfranchisement Law, by a vote of 222 to 213. The law’s intended aim is to enable all citizens to benefit from privatization. Both FU and DLA voted against the law, criticizing it as economically irrational and unjust. FU leader Leszek Balcerowicz called the law “grotesque and absurd” and labeled it a “triumph of populism.” According to the legislation, tenants of communal apartments and of apartments belonging to housing cooperatives will become the owners of the spaces they currently occupy. Those who have already purchased their apartments from the state will receive partial compensation in the form of coupons. The law also grants privatization coupons to individuals who have not otherwise benefited from privatization. A slew of lawsuits from those who have already bought their apartments is expected, and citizens seem to have a good chance of winning. Local governments will also lose a large amount of property, and thus a major source of income, with the new plan. Critics of the legislation point out that such plans have never succeeded, ending, rather, in spectacular failures, as was the case with coupon privatization in the Czech Republic. President Aleksander Kwasniewski may kill the law with a veto, and most observers suspect that the law’s proponents would not be able to muster the votes to override his veto. It is questionable, however, whether the president will veto an obviously popular measure in the run-up to the presidential election.
    
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    On May 22, the Warsaw District Court reached a verdict in the Zycie case. Zycie published an article alleging that KGB agent Vladimir Alganov had stayed at the Rybitwa boarding house, at the Baltic Sea resort of Cetniewo in August 1994, at the same time that President Aleksander Kwasniewski was vacationing there. Kwasniewski initially denied ever having met Alganov, then admitted that they had been acquaintances in the 1980s; he still refused to say that they had vacationed together. The president filed a suit against the daily, claiming it had tarnished his reputation. He demanded an apology as well as 2.5 million zlotys (roughly $500,000) in compensation. The trial was protracted. The president’s counsel argued that Kwasniewski had not been there, thus implying that the journalists had deliberately reported false facts, while the opposing side argued that a journalist is not obliged to establish the facts with absolute certainty but must only act with due diligence while collecting information—for example, by using reliable sources. Ultimately, the court found the newspaper guilty and ruled that it apologize to the president, although without ordering it to pay any compensation. Reaction to the verdict was sharply divided. Some commentators argued that the court had violated the freedom of the press by requiring journalists to establish the truth of their information, rather than merely showing due diligence when collecting that information. As a result, some argued, newspapers will be unwilling to publish leaked information in the future. Other commentators praised the verdict as setting the correct limits on the freedom of the press. On the heels of the local elections (which took place in June), parliamentary and presidential elections are slated for this fall. Thus, electoral concerns are at the forefront of Romanian politics. Opinion polls suggest the upcoming national elections may force the departure of the centrist coalition government, which has ruled the country since 1996, and return to power the communist-successor party, the Party for Social Democracy in Romania (PSDR), led by former president Ion Iliescu. Since the proportional electoral system makes winning an absolute majority very difficult, PSDR will need to find a coalition partner. Competition among the various parties for a government-partnership position precipitated a shift in politicians’ attention toward the local elections and considerably slowed the legislature’s work. Except for the austerity budget adopted in February, no important piece of legislation was even discussed this quarter. The major casualty was the longdebated Law for the Restitution of Nationalized Real
    
    Romania
    
    Estate, sponsored by Justice Minister Valeriu Stoica. The bill’s history stretches back to August 1999, when parliament (Parlamentul) convened for an extraordinary session to discuss its merits. Subsequently, work on the draft was repeatedly postponed, until the proposal was dropped from parliament’s agenda in the spring. (For background on the proposal, see Romania Update, EECR, Vol. 8, No. 4, Fall 1999, and Vol. 9, Nos. 1/2, Winter/Spring 2000.) The attempt to raise the electoral threshold for parliamentary representation from 3 percent to 5 percent—engineered by the Christian Democratic–National Peasant’s Party (CD–NPP) and PSDR—was also derailed. Even though the Chamber of Deputies (the Camera Deputatilor, or lower house) adopted the requisite amendments to the electoral law last year, the Senate never put the matter on its agenda. Legislative inaction forced the government to regulate various local-election issues by means of emergency ordinances. For example, in what was largely perceived as a cost-saving measure, the government decreed that the first round of elections for local councils would be considered valid no matter what the turnout. In the past, local elections were considered valid if the turnout exceeded 50 percent. This time around, the minimum turnout requirement applied only in the mayoral elections. These revisions of the turnout requirements were poorly publicized, leaving many voters in the dark—and with ironic results for the government (see below). The minister of civil service, Vlad Rosca, urged the government to allocate funds for the printing of voter-identification cards, but his efforts were in vain. According to the Law on Elections (originally adopted in 1991), citizens must present a voter-identification card to vote. But the cards have never been printed. Rosca claimed that votes cast without the card could be deemed invalid and warned that electoral results might be contested and possibly annulled as a result. Local elections took place on June 4 (first round) and June 18 (second round, for mayoral elections) and confirmed the forecasters’ predictions that the ruling Democratic Convention (DC) is nearly finished politically. Deserted by the National Liberal Party (NLP), DC consists mainly of CD–NPP, which alone bore the brunt of voter frustration. With an overall turnout slightly above 50 percent (less than 40 percent in Bucharest), the elections returned the worst results for CD–NPP and NLP since the disastrous 1990 elections. The two won roughly 1.2 million votes, compared with 2.2 million in 1992, 2.7 million in the 1996 local elections, and 3.7 million votes, when they ran under the DC umbrella in the 1996 parliamentary elections. DC lost in Bucharest, its stronghold since the first 1992 local elections, and in Iasi and Cluj, important regional capitals. NLP ran separately and won in Brasov, a major Transylvanian city. In the mayoral race in Cluj, the
    
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    capital and primary city of Transylvania, the DC candidate competed against incumbent mayor Gheorghe Funar, leader of the nationalist Greater Romania Party (GRP). Even though the government’s candidate was supported by PSDR and the ethnic Hungarian electorate (which constitutes approximately 20 percent of the city’s population), Funar still managed to eke out a 2 percent margin of victory, thus securing a third term as mayor. Timisoara was the only major city where DC scored a victory. In Bucharest, most of CD–NPP’s and NLP’s constituency did not even bother to vote in the first round, apparently thinking that, as in previous elections, only the second round actually mattered. Absent that second round, PSDR captured nearly half of the seats in the local council, its largest victory ever. DC’s candidate failed to reach the second round in the mayoral race, which pitted a PSDR candidate against incumbent Minister of Transportation Traian Basescu, who was nominated by Petre Roman’s Democratic Party (DP). Despite a relatively poor showing in the first round, Basescu won the runoff. The votes cast for regional councils—arguably the best indicators of the upcoming parliamentary election’s probable outcome—show that PSDR drew 28 percent of the vote; DP, 12 percent; Alliance for Romania (AR), 10 percent; NLP, 9 percent; DC (consisting mainly of CD–NPP), 9 percent; and GRP, 8 percent. In total, the successor parties of the former National Salvation Front—DP and the PSDR—fared much better than the center-right NLP and CD–NPP. Since a relatively large number of independents and candidates from smaller parties were elected, all the major parties scored below their current standing in opinion polls. In terms of the absolute number of voters, only the nationalist GRP enjoyed more support than in the 1996 local elections, most likely due to the recruitment of the charismatic Gheorghe Funar. The low turnout perhaps explains the fact that all of the other parties, including PSDR, had a worse electoral showing than at any other time since 1992. Additionally, turnout was probably affected by the serious financial scandals that plagued the country in the spring. After the small but very active International Bank of Religions suspended all payments in May, fears quickly spread that other bank failures would follow. This widespread apprehension triggered a run on the National Investment Fund (NIF), which abruptly collapsed. Amid speculation that the fund had become the victim of large-scale fraud and embezzlement, its managers fled the country, and disgruntled depositors besieged government offices demanding compensation. It was soon revealed that NIF, which was a private fund, had been sold in 1998 to two state banks, CEC and Centrocoop. CEC had even released a statement— never formally approved by its Board of Directors—
    
    encouraging its customers to invest in NIF and implying that such investments were guaranteed by the state. In the aftermath of NIF’s collapse, CEC’s director, Camenco Petrovici, was fired and then arrested. In the course of the criminal investigation that then ensued, it was revealed that CEC had created a parallel, intermediate entity, through which NIF assets were drained. Over the last several months, the Popular Bank was also mired in controversy. From a legal point of view, the Popular Bank is not a bank but rather a “credit cooperative,” created in 1996 as a “mutual-help” association, which is not bound by banking regulations even though it may engage in various banking activities (for example, making loans). Deposits in such institutions are not guaranteed by the state. Nevertheless, recent data show that more than 2,000 such “cooperatives” operate in Romania today, and more than one million depositors have entrusted their savings to them. Attempts by various deputies to create and enforce a set of rules regulating the credit cooperatives have been unsuccessful so far, and the National Bank (the central bank) has been unable to exercise oversight of their activities. Recently, the Popular Bank announced a sixmonth moratorium on all payments and is currently under investigation for breaches of financial discipline. The effect of the NIF and Popular Bank debacles was magnified by the earlier infamous Bancorex affair, which shattered the Romanian political scene. Bancorex, Romania’s largest foreign-trade bank, was declared bankrupt in 1999. Recently, French officials investigating the shady dealings of Adrian Costea— a Romanian-French oil dealer who apparently belonged to the inner circle of former president Iliescu—revealed that he had received $60 million in loans from Bancorex without providing adequate collateral. In addition to shedding light on the criminal mismanagement of Bancorex, the discoveries of the French officials strongly suggest that $2 million of the money appropriated by Costea was spent on Iliescu’s 1992 and 1996 presidential campaigns. Specifically, Costea used his French company, Groupe Santoinge Editions, to publish translations of Iliescu’s books abroad and to print and distribute pro-Iliescu electoral posters in Romania. Costea should have been paid for this service, but apparently he never was; and he never sought payment until being pressed by French authorities. The products disappeared from Romanian customs before any taxes and custom dues were paid. Moreover, a customs officer had been ordered to falsify documents and to destroy other evidence. Allegations also spread that Teodor Melescanu, a former minister of foreign affairs and a vocal opponent of President Emil Constantinescu, was also implicated in this affair. President Constantinescu himself, however, was also subject to criticism; he was charged
    
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    with having renewed Costea’s diplomatic passport. As the Costea affair unfolded, another scandal erupted. The BBC reported that a direct telephone line linked Iliescu with the Kremlin in the early 1990s. Apparently, the line was never used, but denials of clear evidence of its existence by the main actors involved led to more suspicion and renewed paranoia about a potential Russian threat to Romania. Under these difficult circumstances, the government of the technocrat prime minister, Mugur Isarescu, persisted in its efforts to revitalize the economy and elaborate a comprehensive strategy for Romania’s EU integration. The government managed to achieve a modest success in the first quarter of the year as the economy grew by 0.9 percent. Government officials forecast GDP growth for the year to be twice as large as the initially projected 1.3 percent. Monthly inflation has also declined to 1.8 percent. In contrast, institutional reform, and particularly the adoption of the EU acquis communautaire, is floundering. Minister of Justice Stoica presented numerous drafts to the legislators—including amendments to the Criminal Code, Civil Code, the Civil Procedure Code, and the Criminal Procedure Code— but he was unable even to rally members of his own coalition to support the projects. Likewise, draft legislation regulating property relations (including a draft Law on Citizens’ Rights that will establish a regime of land titles and a market for agricultural land) languishes in various parliamentary committees. Stoica tried to press for its adoption, suggesting that it could be adopted as an emergency decree tied to a noconfidence vote—by now an almost traditional method. (According to Art. 113 of the Constitution, the government may “assume responsibility before the Chamber of Deputies and the Senate, in joint session, upon a program, a general policy statement, or bill. The government shall be dismissed if a motion of censure, tabled within three days from the date of presenting the program, the general policy statement, or the bill, has been passed in accordance with the provisions under Art. 112.”) But, at this point, it is unlikely that the cabinet will embrace such a strategy. Since the ruling coalition is disintegrating, the risk looms large that attaching any bill to a no-confidence vote could easily result in a rejection of the emergency decree and thus trigger the government’s collapse.
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    government over wage increases. The “regies,” a concept imported from France in 1990 by then–prime minister Petre Roman, are state monopolies temporarily exempted from privatization. They were based on Art. 135 of the Constitution, which provides for special regulations of “sectors of national importance.” Recent disclosures revealed that executives of these lossmaking enterprises receive annual salaries as high as $100,000, and that the average wages in the “regies” are three-to-five times higher than the average wage in other state-owned firms. In response to public outrage and as an anti-inflationary measure, the government then passed Emergency Ordinance 58/2000, which prohibits the Electricity Regie from increasing salaries unless it turns a profit. The regie, however, challenged the government in court, arguing that the decree was illegal; and it won. In the aftermath of the court battle, Prime Minister Isarescu announced that the regies’ employees would continue to enjoy some of their privileges, for example, bonuses for “hard work.” At the same time, he announced that the government would soon adopt a modified version of the emergency ordinance. In response, the electricity union declared a general strike, intending to paralyze the national economy. These incidents bring into sharp relief a major problem that plagues the Romanian economy; unprofitable regies comprise almost a third of the national economy, and, for now, the government seems powerless to restructure or privatize them.
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    The newly established Council for the Study of Securitate’s Archives got off to a shaky start. The council is still without a headquarters, and the Romanian Information Service seems reluctant to turn over its records. Despite the legislative requirement that mayoral candidates be screened for any connection with the Securitate, only a very few candidates in fact have been subject to the procedure, and only one (nominated by the marginal Romanian National Party) was disqualified for failing to disclose his Securitate liaisons. Council members complained they were not allowed access to the files of candidates from the major parties. In addition, they announced that the files of former dissidents and current council members Andrei Plesu and Mircea Dinescu seem to have been tampered with. The council is hoping to play a greater role in the forthcoming parliamentary elections. On May 7, Vladimir Putin was inaugurated as the second president of the Russian Federation. Attended by former president Boris Yeltsin, the ceremony marked the first democratic (or apparently democratic) transfer of executive power in the 1100-year history of the
    
    Courts have again shown reluctance to endorse the government’s reform policies. Last year the Constitutional Court blocked the effort to lower the special, higher pensions of retired magistrates. This year, the Bucharest Appeals Court ruled in favor of the Electricity Regie Trade Union in its dispute with the
    
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    Russian state. The contrast between the visibly ailing and fragile Yeltsin and the young and vigorous new president could hardly have been clearer. Putin’s rise from political obscurity to the summit of power was extraordinarily rapid. He joined the Kremlin administration only in 1996, after directing the losing reelection bid of Saint Petersburg mayor Anatoly Sobchak. After holding several posts in the presidential administration, he was named head of the FSB (a successor to the Soviet KGB) in July 1998, and, just over a year later, he was tapped by Yeltsin’s inner circle to replace Sergei Stepashin as prime minister. Focusing most of his energies on prosecuting a new military campaign against Chechen separatists, Putin was credited with the strong showing of the Kremlin “party of power,” in the parliamentary elections of December. When Yeltsin resigned on New Year’s Eve and nominated Putin as acting president, the way was cleared for his campaign victory. Putin inherits a constitutional structure created by and for his predecessor. Conceived in the aftermath of the bloody confrontation between Yeltsin and the parliament, the 1993 Constitution concentrates political power chiefly in the presidency. Neither the legislature nor the prime minister can match the president’s constitutional clout. The prime minister is appointed and dismissed by the president. Although the Duma (the lower house of the Federal Assembly, or Federalnoe Sobranie) must confirm that choice, any stalemate over appointment leads only to the disbanding of the Duma. Supporters of the 1993 Constitution cited the need to prevent another violent showdown between the different branches of government as well as the need for the president to possess the necessary power to act decisively in furthering Russia’s economic and political transition from communism. The results produced by Russia’s so-called hyperpresidential system have been much more mixed than supporters of the new system expected. While there has been no repeat of the bloodshed of 1993 in Moscow, a coherent nucleus for formulating intelligent policies, taking initiatives and directing reform also never materialized. Instead, the later Yeltsin years saw the emergence of a virtual court within the Kremlin, with a corrupt revolving door of ministers, advisers, and favorites. Instead of recovering rapidly from the transitional recession, critical reforms of the banking, financial, and legal system stalled, the economy stagnated, and the living conditions for most Russians deteriorated sharply. Only the collapse of the ruble in 1998 and the serendipitous rebound of global oil prices finally brought some relief to the Russian economy. The waning of the second Yeltsin administration brought some agitation, on the part of critics of
    
    the constitutional order, for restoring balance among the branches of government. As late as the summer of 1999, constitutional-law expert Sergei Shakhrai and Federation Council chairman Yegor Stroev were calling for changes to the Constitution limiting the president’s powers to appoint and dismiss cabinets at will. Former prime minister Primakov advocated amendments to require parliamentary approval of the entire government rather than simply the prime minister and to restore the post of vice president (abolished in 1993). Although Yeltsin had urged any constitutional changes await the arrival of a new presidential administration, Putin’s inauguration reversed the proposed direction of constitutional reform. Rather than weakening the presidency, Putin has sought to rebuild the federal government’s authority, in particular the president’s. In his most succinct formulation of his priorities, in January, he depicted the system of state authority as “neglected, slack, and ill-disciplined” and called for a “dictatorship of law.” Putin’s first moves toward recasting the constitutional order involved a series of measures designed to reassert control over Russia’s regions and over regional elites. On May 13, he issued a decree creating seven federal districts. Each district will be administered by a presidential representative, whose task will be, according to the presidential press service, to “ensure the exercise by the president of the Russian Federation of his constitutional powers, to make the work of federal bodies of state power more effective, and to improve control over compliance with their decisions.” These new presidential “viceroys” are to replace the presidential representatives in each of the 89 Russian regions, most of whom had found themselves beholden to the local governors. The decree included a list of districts and their capitals: the Central Federal District (capital Moscow), the Northwest Federal District (capital Saint Petersburg), the Southern Federal District (capital Rostov-na-Donu), the Volga Federal District (capital Nizhny Novgorod), the Urals Federal District (capital Yekaterinburg), the Siberian Federal District (capital Novosibirsk), and the Far Eastern Federal District (capital Khabarovsk). The extensive lobbying among the regions for the honor of hosting the capital of the new federal districts suggests that regional leaders are taking the new federal districts seriously. Significantly, none of the capitals are situated in any of Russia’s 20 ethnic republics. Putin has stressed the importance of restoring equality of regions under the law, and this has been interpreted by many as putting an end to the privileged status enjoyed by the republics under the Yeltsin regime. The new federal districts closely match the seven military districts into which Russia is divided. Several
    
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    commentators feared that the reorganization could be the first step toward military control over civilian administration. At the very least, the overlap left many wondering about Putin’s implementation of his “dictatorship of law.” (Early versions of the plan based the federal okrugy on the interregional economic associations rather than the military districts.) The appointment by Putin of two army generals (including the commander of this past winter’s assault on Chechnya), two former KGB generals, and one interior ministry general as presidential representatives further worried observers about the fusion of military and civilian structures. One other noteworthy appointment was that of former prime minister Sergei Kirienko, who resigned his chairmanship of the Union of Right Forces faction in the Duma to become presidential representative to the Volga region. Putin’s government also introduced a series of laws designed to reestablish the “vertical system of authority” within the federation. The first to be considered affected the Federation Council (upper house of the Russian legislature). Putin sought to replace the current part-time body, in which regional governors and the heads of regional legislatures serve ex officio, with a full-time body composed of indirectly elected deputies. Under the bill, the regional executives and parliamentary leaders would each nominate a representative to serve as full-time senators. Both senators would be approved by the regional parliament in a secret ballot and would serve terms that ran concurrently with the bodies that nominated them. The reform would deprive governors of an automatic vote in the upper chamber and, of equal importance for some, strip them of their parliamentary immunity. Senators in the current council put forward an amendment seeking to make the proposed deputies more dependent on the governors by subjecting them to recall by the governors. But on June 23, the Duma passed the reform law without this amendment, by a final vote of 308 to 86. Under the bill, the new Federation Council would meet for its first session no later than April 2001. While many governors initially expressed guarded support for the plan, a growing sense of unease set in by the time the bill reached the Federation Council. In a heated debate on June 28, the senators rejected the bill by a margin of 129 to 13. Senators were angered that the Duma had refused 78 proposed amendments to the law, including most of the changes proposed by the Federation Council. Since 300 votes in the Duma were required to override the Federation Council’s rejection, a close vote was expected. The largest faction, the Communists, attempted to use its leverage over the outcome to derail federal efforts to create a rival left-wing political bloc headed by Duma speaker Gennady Seleznev. Yevgeny
    
    Primakov argued that the reforms, although technically subconstitutional, would have a profound impact on the constitutional allocation of powers, and in fact would undermine the rationale for giving the Federation Council the exclusive right to declare war, deploy armed forces outside the country, ratify a state of emergency, or appoint and dismiss the procurator general. Primakov argued for a constitutional amendment giving the Duma some voice in these decisions as well, and, on June 28, both houses called on Putin to establish a mechanism for developing constitutional amendments in light of the new reforms. In the end, a conciliatory commission proposed a compromise bill, which was first passed by the Duma and then, on July 26, by a Federation Council resigned to its fate. The new legislation is roughly similar to what was originally proposed. Each Federation Council member will be replaced by two permanent representatives—one named by the regional legislature and the other appointed by its executive branch. The new upper house is scheduled to be in place by January 1, 2002. The government also introduced two bills aimed at restoring some hierarchical accountability to the regional and local levels of government. One bill would allow the president to warn the head of a region if he had violated federal laws or civil rights and to dismiss the regional leader if he repeated the violation. The bill spells out four categories of acts under which the regional chief could be sacked, not all of which require a court hearing. The president would have the automatic right to name the replacement for a sacked regional leader. A complaint leading to the dismissal of a regional chief could also be initiated by the federal parliament, regional parliaments, the federal cabinet, or the state procurator’s office. In addition, a regional governor would be empowered to dissolve the region’s legislature if a court determined that the body had violated the law, the Constitution, or the rights of citizens, and no action was taken within three months of the court decision. In the same way, regional legislatures could pass votes of no confidence in regional executives if courts found them guilty of similar abuses. The bill cleared the Duma but was subsequently rejected by the Federation Council. On July 19, the Duma voted to override the Council, leaving only Putin’s signature to make the bill law. Taken together, these proposed laws and the establishment of the new federal districts represent the most significant attempt to shift the balance of power and authority in Russia since the adoption of the 1993 Constitution. While opposition has been muted outside the walls of the Federation Council itself, some prominent voices have charged that the new scheme represents a step on the road to authoritarianism. One of the most striking critiques came from leading businessman and former Yeltsin confidant Boris
    
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    Berezovsky, who characterized the new system as “ludicrous” and “irresponsible.” In an interview, on June 27, on a television station he controls, Berezovsky charged that “all the decrees, all the laws, proposed by Putin are directed at, again, enslaving people. People were given a whiff of freedom, and now they are to be forced to their knees again.” Berezovsky’s remarks are evidence of a deep unease among Russia’s political and business elite—the so-called oligarchs—that Putin may be planning an assault on their wealth and power. In the early weeks of the Putin administration, this fear intersected with new concerns about Putin’s intolerant attitude to criticism in the media. Putin’s harsh line on the media had been evident since he took office in August 1999, most strikingly in his scathing criticisms of Radio Free Europe’s Chechnya correspondent, Andrei Babitsky, and his approval of Babitsky’s kidnapping and ransom by Russian troops. (See Russia Update, EECR, Vol. 9, Nos. 1/2, Winter/Spring 2000.) When asked to explain the government’s illegal mistreatment of Babitsky, Putin answered revealingly, “Well, you say he’s a Russian citizen. Then let him behave according to the laws of his own country, if he wants those same laws applied to him.” That is to say, the Russian government need not obey its own laws when dealing with those whom it (before trial) considers guilty of crimes. (See Natalya Gevorkyan, Natalya Timakova, and Andrei Kolesinkov, First Person: An Astonishingly Frank Self-portrait by Russia’s President Vladimir Putin [New York: Public Affairs, 2000], p. 174.) Despite supporting tighter licensing requirements for media outlets, Putin had not challenged the independence of the only independent national television station in Russia, NTV, owned by oligarch Vladimir Gusinsky. On May 11, however, armed tax police raided the headquarters of Gusinsky’s Media-Most conglomerate, which owns NTV, as well as the radio station Ekho Moskvy, the daily newspaper Segodnya, and the weekly magazine Itogi. On June 13, Gusinsky himself was arrested. Despite protests from a rare and broad coalition of Russia’s business and media elite, Gusinsky was held without charges for three days, before being released on the condition that he remain in Moscow. According to authorities, the arrest was made in connection with a probe into the embezzlement of $10 million from Russian Video, a state-television company in Saint Petersburg. Two weeks later, Gusinsky’s deputy, Igor Malashenko, was briefly barred from traveling to Austria, where he was to deliver a speech. On July 27, all charges against Gusinsky were dropped, and he was allowed to leave the country on vacation. But an associate of Gusinsky’s, Dmitri Rozhdestvensky, has been held for 21 months without trial on related charges. Interpreting the “Gusinsky affair” became a popular pastime among the political classes in Russia. At the time, Putin was on a European trip, and he denied
    
    any advance knowledge of the arrest. While he cited the independence of Procurator General Vladimir Ustinov (a recent presidential appointee), he also openly questioned Media-Most’s close financial relationship with the state-controlled gas monopoly Gazprom. Some commentators, however, suggested that the arrest was a direct act of retaliation against the lampooning of Putin as a figurehead leader by the popular satirical NTV puppet show “Kukly.” While Gusinsky’s supporters asserted that his arrest was primarily an attack on media freedom, the rapid and vehement response of other oligarchs revealed their nervousness about a broader clampdown against “corruption.” Given the close fusion of politics, business, and crime during the Yeltsin years, the distinction between a politically motivated witchhunt and a law-and-order campaign is difficult to draw. The choice of Gusinsky as the first target was surely no accident, as it served to intimidate other independent voices in the press and also singled out one of the most prominent leaders of Russia’s Jewish community (Gusinsky was president of the Russian Jewish Congress). Owing in equal parts, perhaps, to his Jewish background and his own record of unsavory business dealings, Gusinsky’s arrest provoked few protests among the broader Russian public. Gusinsky’s release and subsequent exoneration were hailed in the press as a triumph for Russian “civil society,” but the outcome may simply reflect a change of tactics by the Kremlin. On June 21, Gazprom announced that it had acquired a controlling stake in Media-Most as collateral for loans made to the company in recent years. While Gusinsky disputed the valuation of these holdings, Gazprom’s announcement that it would seek prompt repayment of the loans represented a grave financial threat to Gusinsky’s media holdings. In addition to consolidating authority, Putin has signaled his interest in rebuilding Russian economic strength. Shortly after his inauguration, he appointed Mikhail Kasyanov, former first deputy prime minister and finance minister, as prime minister. On June 28, the Kasyanov government unveiled a long-awaited economic plan designed to take Russia to 2010. The plan adopts many of the radical neoliberal proposals embodied in a blueprint crafted by Minister of Economy German Gref during several months of top secret deliberations by a team of economists. Kasyanov had expressed skepticism of the Gref plan in May, and, after it was finally released, he drew a distinction between the 18-month program approved by the cabinet and the 10year plan, which remains under discussion. The plan promises significant changes in the tax and social security systems as well as the breakup of the electricity, natural gas, and railway monopolies, the virtual elimination of government subsidies and trade barriers, and new protections for shareholders’ property rights.
    
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    On July 19, the Duma approved the government’s radical overhaul of the tax system, and to the surprise of many analysts, the tax bill sailed through the Federation Council on July 26. Under the government’s proposals, a 13 percent flat income tax will replace the three-tier progressive income tax widely ignored by taxpayers. In addition, the government proposed a new consolidated “social tax” to be paid by employers, replacing the patchwork of workplace taxes currently in place. The social tax provoked protests by workers and trade unions, worried that the reform would lead to sharp cutbacks in social-welfare programs.
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    opening round of meetings with foreign leaders did not include a meeting with his French counterpart, however, reflecting France’s consistent and vocal criticism of the Chechen campaign. On July 21 and 22, at the G-8 summit in Okinawa, Japan, Putin had a bilateral meeting with every leader of the group of seven except for French president Jacques Chirac. The summit proved a success for Putin, who forged stronger ties with the major Western leaders. Putin was widely praised for his polished performance and for coming as an equal partner, rather than cap in hand, requesting debt relief. Over the last several months, the continuous bickering among members of the ruling coalition slowed government decision making and legislative work. As a result, several important legislative projects have stalled, most notably amendments to the Constitution, reform of the public administration, work on the law governing universities, social-policy reform, and the privatization of various monopolies (the banking, telecommunications, and the energy industries as well as the postal service). In addition, President Rudolf Schuster’s recent, serious health problems exposed a lacuna in the Constitution; it is unclear who should decide whether the president’s health problems are sufficiently serious to transfer presidential powers to the government and chairman of parliament. Given that the president must sign certain laws for them to go into effect, Schuster’s inability to carry out his functions is an additional impediment to the legislative process. Mounting tensions among the leaders of the parties that compose the Slovak Democratic Coalition (SDC) continued to fuel criticisms from both their partners in the governing coalition and the opposition. Prime Minister Mikulas Dzurinda, who is both the SDC chairman and a member of one of its constituent parties—the Christian Democratic Movement (CDM)—has launched a campaign aimed at making CDM more attractive to secular voters. This has put him on a collision course with the CDM’s conservative founder and leader, Jan Carnogursky, and considerably weakened both CDM and the SDC coalition. In January, Carnogursky’s opponents in CDM formed a new political party, the Slovak Democratic and Christian Union (SDCU), and, subsequently, six of the SDC representatives in the current cabinet joined the new party. This maneuvering prompted Carnogursky to conclude that SDC should be fundamentally restructured. The frictions within SDC afforded the postcommunist Party of the Democratic Left (PDL), the second-strongest member of the ruling coalition, the opportunity to secure several key economic positions
    
    The war in Chechnya that helped bring Putin to power ground grimly on. Despite the ending of large-scale military operations on Chechnya’s plains and in the largest cities, a deadly guerrilla campaign continues in the mountains to the south. In addition, the relative peace of the north has been punctuated by sporadic raids and suicide attacks, which continue to take a high toll on Russian soldiers and political leaders. Putin appointed Mufti Akhmed-hadji Kadyrov, a dissident Chechen leader, to head a temporary administration charged with rebuilding the republic. Chechnya’s president, Aslan Maskhadov, denounced Kadyrov as a traitor who should be executed. For its part, the Russian military, which had previously rejected calls for a political solution to the crisis, showed signs of growing weary with the war. On June 8, the commander of Russian forces in Chechnya, Colonel-General Gennady Troshev, called for a political solution in which a Chechen administration would continue the fight against the so-called terrorists. There are some signs on the Chechen side, too, that there might be a willingness to find a political solution. A Chechen envoy in Washington, Ilyas Akhmadov, who describes himself as the foreign minister of the Chechen Republic, stated that the Chechen side was ready for a cease-fire and negotiations. But it is far from obvious what terms could be worked out that would satisfy the political imperatives of both sides. International reaction to the war and allegations of human-rights abuses on the Russian side have grown quieter, as part of the campaign to establish warm relations with the new Russian president. The Council of Europe’s parliamentary assembly suspended Russia’s voting rights on April 6, after months of indecision. But the planned discussion of Russia’s suspension from the body at a ministerial meeting on May 10 was marked by a much more conciliatory stance on the part of the Europeans. President Putin subsequently met with Bill Clinton, Tony Blair, and Gerard Schroeder, each of whom relegated concern over the war to third place, behind new initiatives in arms control and economic cooperation. Putin’s
    
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    for its supporters. PDL’s conquest may turn out to be temporary, however. Resentful of this development, SDC charged that some of its coalition partner’s nominees were abusing their power. In a highly publicized case, Stefan Kosovan, chairman of state-owned Slovak Electricity (SE) and a PDL nominee, was dismissed by the SE’s general assembly, on March 14. The minister of economy, Lubomir Harach (SDC), announced that Kosovan had violated the budgetary rules of the company and withheld information concerning SE’s exports. On April 13, apparently encouraged by the fissures in the governing coalition, the opposition Movement for a Democratic Slovakia (MDS), the party of Vladimir Meciar, initiated a no-confidence vote. Prior to the vote, parliamentary chairman and PDL leader Jozef Migas announced he would vote against the cabinet, claiming it was responsible for “impoverishing and polarizing” Slovak society. Migas also expressed the desire that the current coalition form a new government that can maintain the country’s Western orientation while ensuring “better communication with the opposition.” The vote itself highlighted PDL’s own internal divisions; even though the government survived the vote, at least five PDL deputies supported the no-confidence motion. As PDL’s importance declines, its leaders’ actions are ever more erratic and unpredictable. In the aftermath of the no-confidence vote, Prime Minister Dzurinda rejected Migas’s demands for a cabinet reshuffle. According to Dzurinda, Migas’s pronouncements violated the coalition agreement. Deputy Prime Minister Pavol Hamzik, who leads the Party for Civic Understanding (PCU), offered the opinion that Migas’s proposal might harm Slovakia’s effort to join the EU. With similar arguments, the Party of the Hungarian Coalition (PHC), also a member of the ruling coalition, joined in the criticism of the PDL leader. At a meeting of the coalition council, the collective leadership of the coalition, the partners agreed to maintain their alliance. Migas, however, reasserted his opinion that the government should be restructured. Internal tensions in the ruling coalition inevitably reduced the legislature’s productivity. On March 16, deputies rejected a law that would have annulled the amnesties granted by then–prime minister Vladimir Meciar (MDS) to the suspects in the 1995 abduction of former president Michal Kovac’s son and the rigging of the NATO referendum in 1997. Sponsored by CDM, the bill was defeated when members of the ruling coalition joined the opposition in its rejection. The original saga began in 1998, when Meciar assumed presidential prerogatives and issued a decree giving amnesty to various cronies implicated in the two infamous affairs. (See Slovakia Update, EECR, Vol. 7, No. 1, Winter
    
    1998.) After the 1998 elections, Dzurinda cancelled Meciar’s decrees, but the Constitutional Court subsequently ruled that Dzurinda’s decree was unconstitutional. (See Slovakia Update, EECR, Vol. 8, No. 4, Fall 1999.) The recent law was intended to resolve the issue of the amnesties, but the plan was torpedoed by PDL’s partial defection to the opposition. PDL leaders announced that they would introduce their own bill dealing with the matter. On April 20, Meciar was arrested at his villa, in Trencianske Teplice, and charged with abuse of power. After detention, he was fined 10,000 crowns ($225), for refusing to answer questions, and then released. Provoked by what they saw as harassment, MDS and the Slovak National Party, another opposition party, initiated noconfidence proceedings against Interior Minister Ladislav Pittner. When only 51 of the 128 deputies present at the session voted in support of the no-confidence motion, MDS announced it would boycott parliament (the Narodna Rada) and stage nationwide protests in support of Meciar, who remains under investigation. One of the few laws that has been approved by members of parliament allows citizens access to unclassified, official information (adopted on May 17). In the absence of the boycotting MDS, the draft legislation was approved with 80 votes for, none against, and six abstentions. Jan Langos (Democratic Party [DP]), the law’s author, called it the “most important piece of legislation since the fall of communism.” He stressed that the fundamental principle promoted by the law is that “what is not secret is public,” and that it would “prevent a situation in which doors will be closed to some people and open to others.” Hopefully, the new legislation—which is modeled after a similar Czech law and will come into effect in 2001—will make the monitoring of government officials easier and allow citizens to reverse the clientelism and corruption that are rampant in the public sphere. The law’s passage was hailed by the various nongovernmental organizations. Although he expressed disagreement with some of its provisions, President Schuster signed the law in June. Debate over amending the Constitution has recently gained considerable momentum. Both the deputies and numerous civic organizations are participating actively in the national debate. It is widely assumed that the draft amendments proposed by the parliamentary Commission for Constitutional Change (which is composed of representatives from the ruling coalition who are constitutional-law experts) enjoy the best chance for success. So far, the opposition parties have declined to participate in the commission’s work. It should be pointed out, however, that the leaders of the ruling coalition have yet to agree on a specific set of possible revisions to the Constitution. For example, PHC has insisted on changing the first sentence of
    
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    the Constitution’s preamble from “We, the Slovak nation” to “We, the citizens of Slovakia,” but PDL opposes this initiative. According to the Constitution, amendments to the fundamental law are passed by a simple majority (76 votes) in the first two readings and by a qualified majority (90 votes) in the third reading. At present, it is hard to predict whether such a majority can be mustered. Among the important issues that the legislators will consider during their next session devoted to possible constitutional amendments—scheduled for September 1, 2000—are the duration of preliminary arrests, the scope of parliamentary immunity, and the process for electing the ombudsman. In addition, the deputies are expected to specify the procedure whereby a deputy may resign from parliament. (That clarity on this issue is necessary was apparent during the infamous Gaulieder affair, when a fake letter purportedly sent by Deputy Frantisek Gaulieder to parliament’s Mandate Committee served as a pretext for the committee to strip him of his mandate. For more details, see Slovakia Update, EECR, Vol. 7, No. 1, Winter 1998.) Changes in the judicial system are also being contemplated. An increase in the number of justices sitting on the Constitutional Court from 10 to 13 and an extension of their terms from 7 to 12 years have been proposed. Also on the agenda is the establishment of a new institution, the Council of Judges, which will consist of nine justices and nine members elected by parliament. At least one prominent judge, Chairman of the Supreme Court Stefan Harabin, attacked the proposal, arguing that it would violate the principle of separation of powers and would reduce the judiciary’s power. On June 13, President Schuster announced that he would not seek a second term in office. The next day, he was hospitalized with a high fever and, on July 18, underwent surgery for a ruptured bowel. His condition took a turn for the worse when he suffered postsurgery complications and developed double pneumonia. Amid accusations of mistreatment by doctors and his hospital, the president was rushed to a clinic in Innsbruck. Although his health has substantially improved, the incident has had several political repercussions. Both the minister of health, Tibor Sagat, and the country’s chief surgeon were forced to resign after a government report confirmed that the country’s president had not received competent treatment. In addition, the event raised questions surrounding the transfer of the president’s prerogatives in the event that the current officeholder dies or is disabled. Prime Minister Dzurinda and parliamentary chairman Jozef Migas were entrusted with most of the president’s powers, but the opposition MDS has refused to recognize this transfer of presidential prerogatives, questioning its legality.
    
    On June 7, the National Assembly (Drzavni Zbor, or parliament) elected Slovenia’s fifth government since independence, ending a two-month-long government crisis, one of the worst in the country’s postindependence history. The crisis was triggered when one of the parties in the ruling coalition, the Slovenian People’s Party (SPP), announced that it would withdraw from the coalition on April 15 and merge with the opposition Christian Democratic Party (CDP). Shortly after the announcement, Prime Minister Janez Drnovsek attempted to put together a makeshift minority government, but his proposal was rejected by parliament. On April 8, the government faced, and lost, a no-confidence vote. These party realignments reflected a jockeying for position in advance of this fall’s parliamentary elections. At heart, it was a struggle between right and left. The merger between SPP and CDP, which occurred as planned at an April 15 congress, created a new right-wing party headed by Franc Zagozen. The new party, dubbed SPP+CDP, promptly formed a coalition with the opposition Social Democratic Party (SDP) called Coalition Slovenia. The coalition was designed to threaten the eight-year-old grip on power by the Liberal Democratic Party (LDP), led by Drnovsek. In this endeavor, the new right-wing coalition met with some short-term successes. It managed to defeat Drnovsek and to have a caretaker government installed. But the coalition’s grip on power was tenuous, since it controlled only 44 of the 90 seats in the National Assembly (and, as described below, it has since collapsed). The current head of the theoretically interim government is Andrej Bajuk, a 57-year-old who is both a newcomer to politics and an émigré, having spent only short periods of time in Slovenia. Bajuk was raised in Argentina, to which his parents emigrated after World War II, and he worked for many years as a high-ranking official at the Interamerican Bank in Paris. Unlike his predecessors, he represents a complete break from the past, with no ties to the old communist nomenklatura. Bajuk faced a tough fight in his attempt to be elected as prime minister. He failed, by a small margin, to secure an absolute majority in the first two rounds of voting, raising the specter that President Milan Kucan, complying with Art. 111.4 of the Constitution, would be forced to dissolve the National Assembly and call new elections. Bajuk squeaked through on the third and final round, however, when 46 parliamentarians in the 90-seat parliament voted in his favor. He then faced another struggle—to have his set of ministerial candidates approved. Bajuk fielded a list comprising Coalition Slovenia members and people associated with the coalition. The list was narrowly
    
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    rejected on May 23. The commission supervising the counting, however, could not determine the validity of two votes. If they were declared invalid, the ministers would have been approved; as it was, the commission ordered a repeat vote. Dissatisfied with the second ballot, on May 25 (which they lost), the prime minister and the ministerial candidates filed a suit with the Administrative Division of the Supreme Court. They claimed a violation of their constitutional right to be elected and requested that the Court find that they had, in fact, been elected. Pending the Court’s decision, the prime minister had only ten days, according to Art. 266 of the Rules of Procedure, to select a new list of candidates and to file it with parliament. He requested a temporary injunction, to stop the clock, but it was denied. Thus, Bajuk, just before the expiration of the ten-day limit, submitted the new list of candidates, which was, in fact, the same list he had filed in the first round of voting. On June 7, the Supreme Court delivered its 11page judgment dismissing the suit on its merits. It found no violation of the candidates’ constitutional right to be elected, since such rights are protected only in the case of general elections (of deputies or local community representatives, for example), where individuals are elected by popular ballot. The question does not arise with the election of state officials who are chosen indirectly. Later that same day, however, Bajuk’s center-right government was approved by a vote of 46 to 44 in a second round of voting. So Slovenia finally had a new government. Six members of the new government belong to the recently created SPP+CDP (including Bajuk), five are from SDP, and five are unaffiliated but closely associated with SDP. Prominent members include Janez Jansa, SDP president, who is the minister of defense, and Lojze Peterle, president of the former CDP, who is the minister of foreign affairs. Three former Constitutional Court justices, Peter Jambrek, Lovro Sturm, and Tone Jerovsek, are now the minister of the interior, the minister of education and sports, and the minister of legislation, respectively. The minister of justice is Barbara Brezigar, a former senior procurator at the State Supreme Procurator’s Office.
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    The most hotly contested piece of legislation, however, has been the Law on Electoral Reform. An uneasy settlement was reached on July 25, when the National Assembly voted to amend the Constitution. The changes to Art. 80 of the Constitution call for a modified version of proportional representation. The amendment passed comfortably, with 70 votes, 10 more than the two-thirds majority required to amend the Constitution. But it did not pass quietly. Some deputies, including those from SDP, stormed out of the hall in protest, claiming the amendment contradicted the people’s will, as expressed in a 1996 referendum and interpreted by the Constitutional Court in 1998. In short, the effect of this amendment was to shift the political structure of the country toward a majoritarian system, decreasing if not eliminating the role of smaller parties. (For background and analysis of this controversy, see the article by Andrej Auersperger Matic in this issue, “Electoral Reform as a Constitutional Dilemma.”) The July 2000 constitutional amendment, breaking the deadlock over electoral reform, has finally allowed President Kucan to set the date for both the elections (October 15) and the beginning of the campaign season (August 16). But the amendment also caused the fragile right-of-center Coalition Slovenia to crumble. SDP abandoned the coalition, feeling betrayed by SPP+CDP, which had initially supported a plurality system, but then changed its position and voted for the amendment. A serious rift then appeared within SPP+CDP, as well, and Prime Minister Bajuk broke with the party in disgust. Both Bajuk and SDP believe the constitutional amendment belies the people’s will, as expressed in the 1996 referendum. On July 31, Bajuk stated that the country needed a new party to restore credibility to politics and announced the formation of his own center-right party, New Slovenia (NS). The new party will, among other things, staunchly support economic liberalization. NS will participate in the October 15 elections and has already attracted some support, most notably that of Foreign Minister Lojze Peterle. The April 16 constitutional referendum was the most important and controversial event in Ukrainian politics in recent months. (For a detailed description, see Ukraine Update, EECR, Vol. 9, Nos. 1/2, Winter/Spring 2000.) Initiated by President Leonid Kuchma, the referendum was an attempt to resolve the power struggle between the executive and legislative branches. In its immediate aftermath, tensions between the two did not significantly abate. President Kuchma shrugged off both internal and external criticism over the referendum. When the Parliamentary Assembly of the Council of Europe
    
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    The prolonged government crisis raised concerns that Slovenia would fall behind in passing the laws needed to stay on target for EU membership. Some 60 pieces of legislation must be passed by the end of 2000. There are also fears that the government’s privatization program will be significantly delayed. Some of the major enterprises scheduled for privatization include two banks, insurance companies, the state telecom, and power plants.
    
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    (PACE) threatened to suspend Ukraine’s membership in the Council of Europe if the referendum took place, Kuchma retorted that it would be held “under any circumstance” and accused PACE of treating Ukraine like a “colony.” The Foreign Ministry termed the outside interference a “manifestation of disrespect for Ukraine’s people, constitution, and legislation, as well as all its branches of power.” Kuchma’s gamble appeared successful: the referendum was held, and he won. Roughly 84 percent of the voters supported the right of the president to dissolve the parliament (the Verkhovna Rada, or Supreme Council) if it failed to adopt a budget within three months of its submission or to form a majority within one month following its election; over 90 percent supported reducing the number of national lawmakers from 450 to 300; 81 percent voted for the introduction of a bicameral legislature; and 89 percent supported abolishing deputies’ immunity from criminal prosecution. But implementing the results will undoubtedly prove difficult since amending the Constitution requires parliament’s cooperation. The generally propresidential parliamentary majority can count on 265 deputies, 35 votes short of the 300 needed to approve a constitutional amendment. In addition, parliament is divided over the referendum’s legal implications. One camp believes that the Constitutional Court’s decision that the results are binding means that parliament’s role is limited to implementing the technical aspects of the transfer to a bicameral system. The other contends that parliament must approve the implementation of the referendum results. If the deputies fail to reach an agreement on this issue, further parliamentary strife could ensue. Analysts’ predictions of a constitutional crisis have yet to be borne out, but the situation is tense and uncertain. On April 27, President Kuchma sent parliament a bill whose measures include downsizing the assembly from 450 to 300 seats, creating an appointed upper house, and lifting deputies’ immunity. As expected, on May 11, parliament voted 304 to 7, with 4 abstentions, to send the bill to the Constitutional Court. The Court has yet to reach a decision. Meanwhile, Kuchma urged parliament to introduce appropriate constitutional amendments no later than February 2001, threatening to introduce constitutional changes by presidential decree if the deputies did not. At the same time, the president seemed to offer a carrot: he declared he would not object if parliament introduced “some corrections” into the constitutional formulations approved by the referendum, and he assured deputies he did not plan to disband the parliament and call early elections. Representatives of the leftist parties have attempted to oppose the April referendum through two alternative referenda. In early March, they registered
    
    two initiative groups with the Central Electoral Commission. The groups are engaged in collecting the three million signatures needed to support the two plebiscites. One referendum, proposed by the Communist Party (CP), provides for the inclusion of a number of social guarantees in the Constitution, abolition of the presidency, and granting to the legislative branch the “exclusive right” to create executive bodies. The other referendum, proposed jointly by CP, the Progressive Socialist Party (PSP), and the Ukrainian Peasants’ Democratic Party (UPDP), would ask citizens to support the suspension of Ukraine’s obligations to the International Monetary Fund, passing a vote of no confidence in the president, and lifting the immunity of the president, deputies, and judges.
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    On June 1, a US federal grand jury indicted former Ukrainian premier Pavel Lazarenko, charging him with laundering state funds, which he allegedly embezzled while in office. Lazarenko maintained his innocence, claiming that the accusations were fabricated by his former political nemesis, Leonid Kuchma. The US Attorney’s Office announced that “according to the charges, between 1994 and 1999 Lazarenko transferred approximately $114 million that he had corruptly and fraudulently received into bank and brokerage accounts in the US.” The US indictment also mentions current Deputy Prime Minister Yuliya Tymoshenko as a “key figure in Lazarenko’s money-laundering conspiracy.” According to recent findings, a company controlled by Tymoshenko reportedly transferred $72 million to Lazarenko “specifically at a point in time when he was prime minister.” Also in June, Deputy Procurator General Mykola Obykhod announced that his office had opened a criminal case against Lazarenko on charges of arranging three contract killings. According to Obykhod, Lazarenko ordered the killing of prominent Ukrainian lawmaker and businessman Yevhen Shcherban, who was shot with his wife at the Donetsk airport in 1996. Lazarenko allegedly arranged the murder to be rid of a competitor. According to the Procurator General’s Office, Lazarenko’s aides are suspected of transferring money to the killers. Lazarenko was also accused of plotting the failed assassinations of two other high-ranking government officials, whose names were not disclosed. Lazarenko is currently in a US federal prison in California awaiting resolution of an extradition request from Switzerland. A Swiss court has convicted Lazarenko, in absentia, of money laundering. At the end of June, Kuchma called on the United States to extradite Lazarenko to Ukraine to face charges there.
    
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    Lazarenko, meanwhile, has lashed back. In January, the Financial Times quoted Lazarenko to the effect that $613 million in IMF funds were allegedly diverted from Ukraine’s central bank in December 1997 and invested in speculative government bonds. Lazarenko also claimed that some $200 million in proceeds were deposited in the Belgian and Swiss accounts of people close to President Kuchma. The IMF responded by requesting an audit of the Ukrainian National Bank as a condition for lifting its freeze on the $2.6 billion loan program to Ukraine. On February 11, the Financial Times reported that the Ukrainian government had placed its bank reserves in high-risk ventures, against IMF advice. The newspaper alleged that the bank had purchased government treasury bills in an attempt to support the domestic-debt market and had moved $150 million through several accounts to give the appearance that its reserves were larger than they actually were. On March 7, the central bank declared that an international audit had not produced any evidence that the bank misused IMF credits in 1997. The bank commissioned PricewaterhouseCoopers to conduct a second audit covering transactions between September 1997 and January 1998. On May 4, the IMF reported that PricewaterhouseCoopers had concluded that the bank did overstate its hard-currency reserves by an “amount that varied from $391 million in September 1997 to $713 million in December 1997.” IMF officials commented that the amount was overstated in an effort to win $200 million in loans that Ukraine might otherwise have been denied. The audit did not find that Ukraine had misused IMF loans, however, as was alleged in the Western press. Prime Minister Viktor Yushchenko denied accusations of exaggerating the reserves and commented that the problem was the result of converting from old, Soviet-era accounting methods to a more up-to-date system. In his words, “there have been different interpretations of the economic information.” Despite the overstatement problem, Ukrainian officials are still optimistic that the IMF will unfreeze its loan, citing Ukraine’s success in rescheduling its foreign debt, considerable GDP growth since January, and ongoing administrative reform. In other politically related allegations of corruption, in the middle of May parliament tried (but failed) to bring corruption charges against former speaker Oleksandr Tkachenko, who was ousted from his position during a parliamentary crisis this past winter. (See Ukraine Update, EECR, Vol. 9, Nos. 1/2, Winter/ Spring 2000.) A special parliamentary investigative team accused Tkachenko of mishandling more than $9.3 million of legislative funds. The team recommended that parliament ask the Procurator General’s Office to study the findings and determine whether a criminal case should be opened. Tkachenko dismissed the allegations, claiming that the investigative team was
    
    created by representatives of the new parliamentary majority in order to compromise the legitimate parliamentary leadership. Tkachenko stressed that he considered himself the legitimate speaker of parliament and urged the chamber to postpone any decision on the team’s appeal to the procurator general until the Constitutional Court ruled on the legality of his dismissal. Several days after the team’s findings were announced, parliament voted on the motion to send the case to the procurator general, but the decision was blocked by the leftist parliamentary caucus. The case may be considered again after the Constitutional Court hands down its decision on the constitutionality of Tkachenko’s ouster.
    ❖
    
    On February 17, parliament voted 252 to 18, with 22 abstentions, to adopt a zero-deficit budget for 2000, with revenues and spending set at approximately $6 billion. Leftist parliamentary factions boycotted the vote. The government hoped the IMF would resume its $2.6 billion loan program with the austerity budget’s adoption. But the IMF mission in Ukraine expressed doubts about whether Ukraine could achieve its planned revenues. IMF representatives urged the government to persuade parliament to adopt several laws that would make sources of budget revenue more realistic. On March 7, Kuchma signed the budget legislation. He stressed, however, that he was dissatisfied and that he had agreed to accept it only because the bill represented a compromise between parliament and the government. According to Kuchma, the budget did not “fully take into account the financial strategy” he presented in his annual address to parliament. Kuchma objected to the provision granting subsidies to all regions except the city of Kyiv and Crimea. Moreover, the budget did not reduce the tax burden on manufacturing and industry. Kuchma also expressed concern over increased expenditures, as compared with last year’s spending. The privatization initiatives of the government appeared—at least initially—to fare better. On May 18, parliament voted by 242 to 100 to adopt the government’s ambitious three-year privatization program. The plan, which was opposed by CP, the Socialist Left Center (SLC), and People’s Rukh (PR), provides for the privatization of some 600 large, strategic enterprises and is expected to yield revenues totaling $500 million in 2000, $1.5 billion in 2001, and $1 billion in 2002. On June 1, however, the leftists did manage to block a government-proposed bill to privatize Ukrtelekom, the state telecommunications company. The bill was supported by 222 deputies, four short of the 226 votes needed for approval. The communist and socialist factions boycotted the vote. According to the bill,
    
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    the state would retain majority ownership (50 percent plus one share) of Ukrtelekom. The company was the most important firm in the government’s list of enterprises slated for privatization this year. To be sure, the failure of the government to persuade parliament to approve Ukrtelekom’s privatization might possibly jeopardize the implementation of the entire privatization program. The government has also continued to press on with the issue of land reform. Following Kuchma’s December decree abolishing Soviet-era collective farms, Agriculture Minister Roman Shmidt, on March 28, reported that 10,551 collective farms had been reformed into 11,100 new agricultural enterprises, mostly joint-stock companies and cooperatives. The decree, however, did not provide for the unrestricted buying and selling of land, which could compromise its chance for success. The decree’s next step calls for the government to supply landowners with titles by the end of 2002. But according to Shmidt, the land reform will only be effective if farmers shed their “Soviet-era mentality.” On June 12, Kuchma submitted a bill to parliament creating an amnesty program for tax evaders. The bill proposes that private businessmen deposit their previously concealed cash and other sorts of assets in Ukrainian commercial banks, where they would be taxed at a rate of 10 percent. The amnesty offer would be valid for one year, but businessmen would be obliged to declare their revenues in the first six months following the law’s adoption. The bill includes a promise that those who declare their assets will not be punished for previous violations of tax regulations; prohibits officials from seeking information about the origins of income; and pledges that the earnings legalized under the new law will not be confiscated in the future. The decree aims to encourage investment in the economy, improve tax revenues, and halt capital flight.
    ❖
    
    On February 23, complying with the decision of the Constitutional Court, made in December, that capital punishment is unconstitutional, parliament voted to strike the death penalty from the country’s Criminal Code. On June 8, parliament amended the code, introducing life imprisonment to replace capital punishment. The parliament forbade life sentences for people younger than 18 or older than 65, as well as for women who are pregnant either at the time of committing a crime or when receiving their sentence. The last few months have seen federal president Slobodan Milosevic (Socialist Party of Serbia [SPS]) customize the Constitution in order to
    
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    ensure his continued hold on power. Recently adopted constitutional amendments allow him to seek additional terms as president and to strip the rebellious Montenegro of most of its influence in the federal structure. In addition, Milosevic has persisted in his attacks on the media and the opposition, which has continued its struggle to present a coherent antiMilosevic bloc in the September 24 elections. On that day, voters will go to the polls to elect the federal parliament and federal president, and, for the Serbian electorate, local governments. On July 6, the federal parliament approved several amendments to the 1992 federal Constitution (texts of the amendments were published in the Official Bulletin, No. 29). These constitutional changes represent Milosevic’s most ambitious attempt to redraw the divisions of power within the federation, diminishing the role of Montenegro. Amendment V, which replaces Art. 97 of the Constitution, states that the federal president may serve three terms (previously only one was allowed), thus allowing Milosevic to seek reelection. The amendment also annulled the stipulation in Art. 97 that the president is elected by the federal parliament. Under the terms of the new provision, the president is to be chosen directly by popular vote. Amendment III, which replaces parts of Art. 80, revises the election of deputies to the upper house; now deputies in the upper chamber will be elected by popular ballot, rather than by each republic’s parliament. The effect of this change is discussed below but, among other things, it privileges Serbian residents since they constitute approximately 90 percent of the population in the federal republic. In addition, the amendments have added an impeachment provision: a two-thirds vote will be required to impeach the president. A further amendment will allow parliament to remove individual ministers. Previously, only the government as a whole could be removed. In another legal change intended to boost Milosevic’s chances in the upcoming presidential race, the federal parliament adopted a law, on July 24, that did away with the turnout threshold in the presidential ballot. According to the changes, the candidate who garners more than 50 percent of the votes cast wins, no matter what percentage of eligible voters goes to the polls. This revision ensures that an eventual opposition boycott will have no effect on the outcome of the race. These amendments have recalibrated the federal balance of power. Previously, the members of the 40seat upper house, the House of Republics (Vece Republika), were elected by the republics’ parliaments—which, in the case of Montenegro, is ruled by an anti-Milosevic coalition led by Montenegrin president Milo Djukanovic’s Democratic Party of Socialists (DPS). It is unclear whether the Montenegrin electorate—now that they will vote directly for members of
    
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    the upper house—would elect pro-Milosevic deputies, although a sizable portion of the population does support Milosevic and the Montenegrin party, the Socialist People’s Party (SPP), friendly to him. But regardless of whom they elect, the constitutional change is a clear blow to the power and authority of the Montenegrin parliament, which, for over a year, has warred with Serbia about precisely this issue. These changes to the Constitution provoked a spate of attacks from Montenegro, the opposition, as well as the international community. On July 7, the Montenegrin parliament convened an emergency session and adopted a resolution, by a vote of 36 to 18, denouncing the changes and vehemently attacking Milosevic. Nonetheless, on the next day, the Montenegrin parliament rejected a proposal to hold a referendum on the republic’s independence. Even those who are strongly proindependence realize that such a vote could trigger a full-scale military attack by Milosevic’s troops; further steps toward independence also lack the support of the international community. For their part (on July 22, at a G-8 meeting in Japan), Western leaders announced that they would not recognize the results of an election held according to the altered Constitution. The rejection is mutual: Milosevic has refused to allow the OSCE—or any NATO member country—to observe the elections. Many fear that the election will be characterized by wide-scale fraud. The fact that Kosovo residents can vote by absentee ballot does little to quell these concerns. (Most doubt, however, that Kosovar Albanians will opt to vote in the ballot.) The debate among the Serbian opposition forces has been whether to boycott the elections or to participate, and, if so, whether they could agree on a common slate of candidates. Finally, 15 opposition parties—now known as the Democratic Opposition of Serbia— announced, in late July, that they would unite behind one presidential candidate, Vojislav Kostunica (Democratic Party [DP]), and would present unified party lists for the parliamentary and local elections. Kostunica, aged 56, is a former university professor who, with opposition leader and former Belgrade mayor Zoran Djindjic, created DP. Kostunica, who has been labeled “NATO’s candidate” by Milosevic and his allies, is known as a moderate nationalist and, in fact, has not shied away from vociferous criticisms of NATO and the recent military campaign in Kosovo, refusing to meet with leaders of NATO countries, although other opposition leaders have done so. He is strongly opposed to the activities of The Hague Tribunal, including its indictment of Milosevic, which he called “despicable and counterproductive.” Kostunica is widely regarded as one of the few politicians whose hands are clean of involvement with corruption scandals. One opposition party that has not fallen into place behind Kostunica is Vuk Draskovic’s
    
    Serbian Renewal Movement (SRM). SRM has steadfastly refused to take part in the united campaign and has named Vojislav Mihailovic its presidential candidate. Mihailovic, the current mayor of Belgrade, is better known as the grandson of World War II general Dragoslav Mihailovic—who was accused of collaborating with the Nazis—than for his own political career. Draskovic rejected allegations that he was deliberately trying to split the opposition vote, arguing that his party had no choice but to name its own candidate because the other opposition parties had thrown their hats into the race. Draskovic claimed that a boycott would have been a better—and more honorable— strategy. Indeed, as to the parliamentary elections, SRM took the side of Montenegro and has insisted on boycotting the elections for the legislature. In a recent poll that pitted Kostunica against Milosevic, the former got 42 percent, while the incumbent president received only 28 percent. In the polls that list an additional opposition candidate, however, Kostunica’s share falls to 27 percent while Milosevic’s does not increase substantially. Still, a second opposition candidate will not necessarily ensure Milosevic’s victory since if no candidate wins more than 50 percent in the first round, the two candidates with the largest share of the vote will proceed to a second round.
    ❖
    
    Throughout the spring and summer, government harassment of the media has continued. In early March, the federal Ministry for Telecommunications launched a crackdown on local television and radio stations for allegedly operating without proper licenses. The next months saw a wave of legal actions, draconian fines, and raids on various media outlets. TV Studio B, the Belgrade television station under SRM’s control, was among the first affected; it was temporarily pulled off the air, on March 6, and heavily fined. Also shut down were a series of radio and television stations in Pozarevac, Pozega, Nis, Pirot, and Bajina Basta. On March 15, Ivan Markovic, the federal minister for telecommunications, reported that 168 radio stations and 67 television stations were operating in Serbia without proper licenses and, in addition, owed the federal government nearly $3 million for the period October 1998 through February 2000. Between March and June, the Law on Public Information, passed by the Serbian parliament on October 20, 1998, was invoked 15 times, and numerous newspapers and television stations were fined under its provisions for slander and disseminating false information. The Srpska Rec, a weekly printed by Draskovic’s SRM was fined $10,000, on March 10; Kikindske Novine, a newspaper from the northern town of Kikinda, was fined $6,200, on March 31, and
    
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    another $2,000, on April 8; TV Studio B was fined $10,000 on April 10; and Belgrade’s weekly Vreme, $7,700, on April 11. Such actions continued through the summer. Perhaps the most chilling strike against the independent media came on July 25, when journalist Miroslav Filipovic was sentenced to seven years in prison for espionage and disseminating false information. The two-day trial, conducted by a five-member military court in the southern town of Nis, took place behind closed doors. Filipovic, who was a stringer for Agence France-Presse and also wrote for the London-based Institute for War and Peace Reporting and the Serbian newspaper Danas, was accused of, among other things, sending information on military mobilizations to foreign organizations, namely the Institute for War and Peace Reporting. Filipovic had reported on, among other things, wartime atrocities in Kosovo. His lawyer, who argued that his published articles, which included bylines, could hardly be considered espionage, has appealed the case. Amnesty International issued a statement, questioning why the trial was held in secret before a military tribunal, adding that the “military court trying him cannot be considered impartial nor independent.” Milosevic’s tightening grip on the independent media was accompanied by a comparable crackdown on the opposition. Since March, numerous opposition leaders have been brought up on charges. Cedomir Jovanovic (DP) was accused of insulting Radmila Visic, the Serbian vice minister for information. Dusan Mihajlovic, the head of New Democracy (ND), was taken to court for having called one of Milosevic’s speeches a “swan song.” A guilty verdict can mean fines or, in some cases, prison sentences. The student and youth organization OTPOR (Resistance), which has organized numerous public protests, has also been subjected to police harassment. The Serbian police began detaining OTPOR’s members on a daily basis. In midMay, it was announced that, since January 1, the police had detained more than 400 members of OTPOR who spent a combined 11,000 hours in detention. On July 12, the Serbian parliament ousted Judge Miroslav Todorovic, a member of the OTPOR presidency, from the Belgrade District Court, declaring that the organization “was conducting activities aimed at changing the country’s authorities by unconstitutional means.” The resolution also noted that, on one occasion, as a guest of a London judicial association, Todorovic stated that “he was ashamed to be a judge in Serbia.” Thirteen judges who publicly opposed Todorovic’s ouster were dismissed on July 12, including Supreme Court Judge Leposava Karamarkovic, for “activities incompatible with their judicial duties.”
    
    As part of its effort to criminalize all antigovernment activity, the ruling coalition proposed the Law Against Terrorism, on June 27. The bill would grant sweeping powers to procurators, including the authority to issue indictments and launch investigations based on a person’s supposed intent without the permission of the investigating judge or the safeguard of the standard evidentiary procedure. The bill also stipulated jail sentences for individuals “who distribute, keep with the intent of distributing, or make available articles . . . which incite acts of terrorism.” The bill did not define terrorism. Perhaps the bill’s most disturbing provision specified that certain acts are “not a crime if a person commits them with the intent of identifying or capturing another perpetrator.” In other words, the bill would allow vigilantism against an individual accused of being opposed to the government. This provision cannot help but bring to mind the numerous death threats some opposition activists received during NATO’s air strikes. The bill would also allow suspects to be kept in pretrial detention for 30 days. Currently, the Constitution stipulates a 24-hour period, while other legislation specifies three days. In a surprise move, however, the federal parliament withdrew the proposal on June 30. Most observers believe that this was the result of a conflict inside the ruling coalition. Apparently, Vojislav Seselj’s Serbian Radical Party (SRP) refused to support the bill, preventing the government from securing the necessary parliamentary majority. Rumors are that SRP did so in an effort to force Milosevic to share the spoils of Serbia’s largely state-controlled economy. Currently, only SPS and the United Yugoslav Left (UYL), which is headed by Milosevic’s wife, are collecting huge profits from state companies, such as NIS Jugopetrol (oil), Srbija Sume (forestry), and Elektroprivreda Srbije (electricity). Apparently, Seselj’s SRP wanted a piece of the pie. It is unclear what has happened on this front, since the bill was withdrawn.
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    The string of murders and attempted assassinations continued in Serbia and Montenegro. On March 20, Branislav Lainovic was shot dead in Novi Sad. Lainovic, who was an important figure in the 1991–95 wars in Croatia and Bosnia, had been close to Zeljko Raznatovic (known as Arkan), who was assassinated in Belgrade on January 15. On April 26, Zika Petrovic was gunned down in front of his house in Belgrade. Petrovic was a member of SPS and the director of the largest Yugoslav airline. Rumors have it that Petrovic’s notions of how to handle the airline’s privatization did not sit well with some. Neither murder has been solved. On May 14, Bosko Perosevic, an SPS member and the chairman of Vojvodina’s parliament, was killed—
    
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    apparently for private, not political reasons—in Novi Sad. And Vuk Draskovic was again the target of an attempted assassination. On June 15, someone fired seven bullets at Draskovic while he was home in the Montenegrin coastal town of Budva. Draskovic, who was hit by two of the bullets, survived and accused the regime of having organized this second attempt on his life. The Montenegrin police have arrested suspects but have not disclosed a motive for the attack.
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    ruling coalition, led by President Djukanovic, has declared it will boycott the September federal elections. To date, however, Montenegro has stopped short of independence. A declaration to that effect—pointedly not supported by the international community—would almost certainly trigger an armed conflict with Serbia. In early August, NATO members had discussed the situation in Yugoslavia, but apparently NATO has no clear plan of action should conflict erupt.
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    In Montenegro, the situation has been becoming steadily tenser, and there is nervous talk of Milosevic launching military operations against the republic in the coming months. As the federation heads toward the autumn elections, Serbia has stepped up political and economic pressure on its reluctant federal partner on a variety of levels. The most dramatic pressure has come in the form of the new constitutional amendments, described above. These amendments, which affect federal relations, are a direct affront—even a provocation—given that Belgrade has refused to reply to the Montenegrin proposal, put forward last August, to redefine the federal relationship, granting Montenegro greater independence. (See Yugoslavia Update, EECR, Vol. 8, No. 4, Fall 1999.) The Montenegrin leadership reacted to the constitutional changes with apprehension, although it has also declared that the Yugoslav federation is practically dead. The Montenegrin prime minister, Filip Vujanovic, characterized Serbian-Montenegrin relations as at their lowest level ever. President Djukanovic declared that the amendments destroyed the Yugoslav federation in its current form. In the resolution adopted at its July 7 meeting, the Montenegrin parliament called for calm, even as it condemned the constitutional changes, and asked the international community for help to resolve the crisis. The resolution confirmed Montenegro’s intention not to recognize any federal bodies. It also urged the army not to take action. According to reports by the Montenegrin news agency, Montena-Fax, Yugoslav army units had been on alert the entire week and might have carried out a military coup in Montenegro if the republic had declared independence. Around 15,000 Yugoslav troops are stationed on Montenegrin soil. Djukanovic has a loyal police force of similar numbers. Confrontations between the two have become commonplace. A few days later, on July 11, as the immediate threat appeared to be receding, Podgorica invited negotiations with the Serbian democratic opposition, commenting that, if the negotiations fail, Montenegro will embark on the path of independence. Events appear to be pulling in that direction, as Montenegro’s
    
    Public attention in Montenegro was briefly diverted from the looming federal crisis by local elections. On June 11, the electorate in the capital, Podgorica, and the coastal town of Herceg Novi went to the polls. The elections were scheduled after Liberal Union (LU) had withdrawn from the two municipal councils. (LU was protesting Djukanovic’s alleged softness toward Belgrade’s refusal to respond to the August 1999 proposal to redesign the federation.) LU also hoped that forcing a new election would allow it to increase its representation in the two municipal chambers and enhance its political prestige. These local elections carry a disproportionate weight because of the significance of the two cities. Podgorica is the Montenegrin capital and its largest urban center; its 150,000 inhabitants constitute 25 percent of the total Montenegrin population. Herceg Novi is one of the largest coastal electoral units, with 22,000 registered voters and is a stronghold of proMilosevic forces. Located on the border with Croatia, Herceg Novi is heavily populated with ethnic Serb refugees from Bosnia. The elections were, therefore, a litmus test for Montenegro’s two main political orientations: the proindependence wing (represented primarily by the ruling To Live Better coalition, consisting of DPS, the People’s Party [PP], and Social Democratic Party [SDP]), and the profederalist and pro-Milosevic wing (Momir Bulatovic’s SPP, the ultranationalist SRP, and UYL). In preparation for the elections the Serbian People’s Party (SePP) joined the pro-Milosevic block, which ran under the name Coalition Yugoslavia in both cities. On the other hand, the ruling coalition presented itself differently in the two cities. In Podgorica, all three partners stayed together; while in Herceg Novi, SDP opted to compete independently. Because the gap between the two political groupings is so enormous, and because so many voters were involved, some analysts characterized the elections as a straw poll for a referendum on independence. In fact, the parties themselves did not dispute this interpretation. The elections were monitored by the OSCE, as well as some domestic and international NGOs, all of which declared the elections to be free and fair. The final electoral tally did not come
    
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    as a surprise. The ruling coalition won in Podgorica with 28 out of a total of 54 municipal seats, while in Herceg Novi the Coalition Yugoslavia won 19 of the 34 seats (15 of which went to SPP and two each to SePP and SRP). Ironically, the biggest loser in the election was LU, which lost what little power it had held in both municipalities. The voting figures for Podgorica signal a slight solidification of support for the ruling coalition, which won 44,121 votes to Coalition Yugoslavia’s 34,858 votes. In fact, independence-minded groups appear to be steadily gaining ground in the capital. In the 1997 presidential elections, Djukanovic lost Podgorica with a total of 42,000 votes; Momir Bulatovic had some 45,500 votes. The trend was reversed in the 1998 parliamentary elections, in which Djukanovic and his allies pulled ahead of profederalist groups by a roughly similar margin. Still, even with the gains for
    
    proindependence groups in this latest election, the figures make clear that support for independence is not overwhelming, and that a move toward autonomy could unleash massive internal strife. Meanwhile, Montenegro has been working to strengthen its ties with the outside world. On June 24, President Djukanovic met with newly elected Croatian president Stjepan Mesic in the Croatian town of Cavtat. Djukanovic took the occasion to make a public apology to the Croatian people for Montenegro’s part in the wars of the Yugoslav succession. On the same day, the Montenegrin Minister for Foreign Affairs, Branko Lukovac, addressed the UN Security Council, independently of Belgrade. Lukovac made a plea to the council that Montenegro be allowed to represent its own interests. Currently, its interests are purportedly represented by the permanent Yugoslav delegation to the UN, headed by Vladislav Jovanovic, a Milosevic loyalist.
    
    These reports have been researched and written by the EECR affiliates and staff: Maja Brkljacic Vladimir Chura Srdjan Darmanovic Venelin I. Ganev Kathleen Imholz Karen Johnson Rumyana Kolarova Gunars Kusins Gianni LaFerrara Stevan Lilic Krenar Loloci Alexander Lukashuk Mirjana Maleska Darina Malova Tomasz Merta Mladen Momcilovic Alina Mungiu-Pippidi Laszlo Nemenyi Marko Novak Dusan Pavlovic Vello Pettai Graeme Robertson Alison Rose Steven Solnick Lavinia Stan Beata Struharova Aviezer Tucker Renata Uitz Virgus Valentinavicius Rhodri Williams
    
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