Russian helicopters seen in Georgian airspace

The Foreign Ministry has expressed concern at Russia's continuous breach of its undertakings under the Six-Point Ceasefire Agreement and its reluctance to sign the non-use of force agreement with Georgia. It went on to accuse the Russians of masterminding terrorist attacks based in the occupied territories (South Ossetia and Abhazia), as well as repeated intrusions into the Georgia's airspace. The ministry said these served as clear evidence of aggressive intentions toward Georgia.

On 7 September the Ministry of Foreign Affairs released a statement regard violation of the Georgian airspace by Russian helicopters. “At 1:05 pm three Russian MI-8 military helicopters breached Georgian airspace over the Tanie Gorge near the Shatili village in severe violation of the fundamental principles of international law, as well as sovereignty and territorial integrity of Georgia. The helicopters intruded 3 km deep into Georgian airspace and circled around the Georgian border police checkpoint for approximately 15 minutes. Afterwards the helicopters left Georgian airspace.”

The ministry believed that the action was clearly aiming at provoking a response from the Georgian side, and intended to escalate the security situation. The Georgian side, it said, had acted responsibly and with restraint, as further deterioration of the security was not in the interests of Georgia and the wider region.
Under these circumstances, it becomes obvious that new provocations should be expected from the Russian side.

The Ministry appealed to the international community to both provide a proper assessment of the recent violation of Georgian airspace by Russian armed forces and to insist on full implementation by Russia of the August 2008 Cease-Fire Agreement.

President hosts top first year students in his vineyard

At the weekend of 10-11 September President Mikheil Saakashvili hosted a group of students in his vineyard. These were first-year students who had gained the highest scores in the national entrance exams. Minister of Education, Dmitri Shashkini was also present at the occasion.

The President emphasised the significance of the engineering professions and natural sciences - the best ten students were enrolled at these faculties this year.

The President bought half a hectare of land with a vineyard on it in the Kvareli district of the Kakheti Region for 30,000 lari (about £11,400) last year and three months ago began to build a house there. Students were the first guests of the president on this new land.

President presented the best ten students with personal computers. He suggested that they use them to create new computer programs for school pupils; the Ministry of Education would purchase those programs and introduce them into the school program.

Dmitri Medvedev recalls Georgian conflict three years earlier

According to Russian President Dmitry Medvedev the night of 8 August 2008 was one of the hardest in his life. In an interview in the Black Sea resort of Sochi, Medvedev recalled the period of war in 2008. “On the night between 7th August and 8th August, I received a phone call from the defence minister. I was on vacation at the time, sailing down the Volga River. And the whole world was looking forward to the Olympics that were about to take place in China. The Minister told me that Georgia had launched a full-scale combat operation. To be honest, my initial reaction was complete doubt. I told the Minister: “We should check this. Is Saakashvili completely out of his mind? Maybe it’s just a provocative act, maybe he is stress-testing the Ossetians and trying to send us some kind of messages?”

The interviewers asked Medvedev to comment about the fact, that before starting the war a lot of inhabitants of South Ossetia had been evacuated. “Some of them may have been away, certainly. But my answer to your question is –the number of casualties should never influence your decision on what retaliation measures you are going to take.”

Was asked about whether it was the intervention by the French President Nicolas Sarkozy that persuaded him to halt the Russian forces’ march towards Tbilisi.

“Of course not. No head of state is capable of talking another head of state into anything. Let me stress again: taking cities was never our goal. Our goal was to stop the war machine which was at the same time aimed at two breakaway territories and regrettably at our citizens. What Sarkozy did was very kind. He called me and said: ‘I heard there was conflict, do you want me to fly over to Moscow?’ I said I would be happy to see him. He told me: “I am currently chairing the EU. I'll come over to discuss the incident.” … He came to Moscow and we talked. I explained my position to him. He told me: ‘I understand and I agree. Some things I will be able to say in public, some I won’t. But regardless of that I want to have a part in stopping this conflict.’ I told him: ‘All right, let’s plan together.’ I told him he could take the plan to Georgia. The best thing about what he did was probably that he had the courage to come to Russia at a time when literally everyone was talking about what we had done. He was brave enough to go on to Georgia with our initiatives and he garnered a satisfactory reaction from the Georgian authorities, President Saakashvili first and foremost. That was his contribution to the diplomatic cause that helped to solve the conflict. To this day I am very thankful to President Sarkozy for having done that. His role is very important, but he never said anything like ‘maybe you should stop here’. He understood that my decisions were my own.”

President Saakashvili's office said that following the interview given by Medvedev it had been flooded by questions from journalists, prompting president's spokesperson, Manana Manjgaladze, to comment. “We've once again listened to the Cold War-era phrases about Western conspiracy against 'Soviet Russia'. All of this causes the concern of Georgia and not only of Georgia. It is regrettable that the President of a neighbouring country speaks in such manner not only about Georgia, but about other neighbours and their statehood as well and expresses complete disrespect towards partner countries.” She said that it was ‘alarming’ that the Russian President “still justifies with cynicism the ethnic cleansing and occupation” carried out against Georgia.

Experts to observe melting glaciers in Georgia

For purpose of avoiding possible natural disasters, a geological expedition has been planned to the Devdorak Glacier in order to examine the process of ice melting there.

It was reported on 9 August that the decision was adopted by the Ministry of Environmental Protection. Representatives of the environmental ministry are expected to observe the alarming situation on the glaciers for a period of one month.

Devdorak is a valley glacier on the north-eastern slope of Mount Kazbek in the Caucasus mountain range on the northern border opf Georgia. The glacier is 7.2 km long and about 300m wide with an area of 4.1 sq km. It ends at an elevation of 2,257 metres. Its surface is dissected by icefalls and fissures. Experts say both the Gergeti and Devdorak glaciers are characterised with catastrophic pulsation.

Three leading photographers convicted for spying

Three leading photographers have all pleaded guilty and received suspended sentences on espionage charges. They were Georgia's official presidential photographer, another photographer who was an Internal Affairs Ministry contract employee, and the Tbilisi representative of the European Pressphoto Agency (EPA). The three had been in pre-trial detention since 7 July, suspected of photocopying and collecting state-classified documents for delivery to Russian military intelligence (GRU) contacts.

On 22 July, the three were released from the courtroom after a 45-minute trial, based on a plea-bargaining agreement signed that same day by the defendants, their respective lawyers, the prosecution and the court. Presidential photographer Irakli Gedenidze, the Interior Ministry's former photographer on contract Giorgi Abdaladze, and EPA's Tbilisi representative Zurab Kurtsikidze were sentenced to prison terms of either three or two years. The court then suspended the imprisonment sentences and put the defendants on probation terms for up to four years, allowing them the right to exercise their profession in Georgia while on probation. Abdaladze's wife received a 6-month suspended sentence for minor complicity.

According to the Prosecutor's Office, the defendants fully co-operated with the investigation and corroborated information about Russian intelligence activities against Georgia. The value of this information earned them mitigating circumstances. Under Georgia's criminal code, the defendants were liable to prison terms of up to 12 years. Apparently, the plea-bargain and the court's lenience are intended to encourage agents or other collaborators with Russian intelligence in Georgia to seek similar mitigation.

The trial had to be held in camera because the evidence consisted of classified documents photocopied by the defendants. Some documents were too sensitive to be submitted in evidence for the trial. Documents that were submitted to the court included a floor layout of President Mikheil Saakashvili's residence, lists of cleaning personnel of the presidential buildings, a schedule of the president's appointments and itineraries of his visits in the country, a schedule of coordinated actions by the state guards' service and the Internal Affairs Ministry, a plan of security measures for Estonian President Toomas Ilves's recent visit to Georgia, transcripts of Azerbaijani Foreign Affairs Minister Elmar Mammadyarov's recent top-level meetings in Tbilisi, as well as lists of Georgian citizens employed by the United Nations, OSCE and the Council of Europe.

The prosecution also submitted a list of phone calls between Kurtsikidze and two supposed GRU officers.

President Saakashvili’s predecessor, Eduard Shevardnadze, had been the target of two assassination attempts said to have been organised in Russia and openly welcomed by Moscow's officials at the time.

Gedenidze, the presidential photographer, made an early confession on 9 July. Abdaladze, the Interior Ministry's former contract photographer, pleaded not guilty and declared a hunger strike initially, but recanted and confessed on 18 July. Their lawyers were present during those confessions.

Russia objects to US naval cruiser visit to Batumi

Russia has strongly objected to the visit of a US naval cruiser to the Georgian port of Batumi, arguing that it is a provocation because the US ship is part of a missile defence system to which Russia is strongly opposed.

The USS Monterey in the Black Sea for joint US-Ukraine exercises including "counter-piracy operations; non-combatant evacuation operations, as well as board, search and seizure trainings." Other countries taking part in the late June exercise were Azerbaijan, Algeria, Belgium, Denmark, Georgia, Germany, Macedonia, Moldova, Sweden, Turkey and the UK.

The US Embassy said the visit was a normal training mission, conducting joint maritime training with several countries adjoining the Black Sea. It was part of the continuing US commitment to Black Sea regional stability and maritime security.

Russia argues, however, that the Monterey is equipped with the Aegis radar system, and as such would be part of the European missile defence shield that the US wants to build around Russia. The visit, Russia says, is a wolf in sheep's clothing, and the Russian Foreign Ministry had expressed concern that the US would at the same time be conducting reconnaissance operations near the borders of Russia.

“Whatever the explanations are,” the ministry said, “it is clear that the Georgian authorities will see the incident as encouragement for their ambitions for revenge against the Russian allies of Abkhazia and South Ossetia, which is unlikely to help stability in the region.”

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Prime Minister defends his policies in European Parliament

On 18 January Prime Minister Viktor Orbán told a sceptical European Parliament that his government's legal dispute with the EU can be resolved swiftly. He was speaking a day after the EU Commission had launched legal proceedings. The Commission said that new laws on the central bank, the judiciary and data protection authority, which took effect this January, had put those bodies' independence at risk.

In a short speech to the Strasbourg parliament, Orbán said he was engaged in "restructuring of enormous scope and importance" in Hungary and "it is understandable there are debates about that". He did his best to play down the dispute with the European Commission, arguing that its objections related to technical points not to Hungary's controversial new constitution. He insisted that his government had been forced to make changes because Hungarian institutions had been "on the brink of collapse" when his party came to power in 2010.

MEPs on the left and centre sharply criticised Hungary's conservative prime minister. Former Belgian Prime Minister Guy Verhofstadt, leader of the European Parliament Liberal group, urged the parliament to vote next month to suspend Hungary's voting rights in the Council of Ministers. He said the dispute with Hungary was not just a technical matter. "It's about checking the conformity of the constitution and cardinal laws with European values."

Currently attempting to negotiate an IMF aid package, Orbán cannot afford to lose EU backing. Hungary is struggling to service its debts and wants to reach a new deal with the EU and IMF on a standby loan worth up to €20 billion euros. Hungary's total debt has risen to 82% of its output, while its currency, the forint, has fallen to record lows against the euro.
The head of the IMF, Christine Lagarde, has made it clear that aid will be dependent on Hungary complying with EU conditions.

Orbán's party Fidesz has a two-thirds majority in parliament, giving it considerably more power than any previous government since the collapse of communism in 1989. It has used this majority to force highly controversial changes through parliament. But now his government has been given a month to make changes to the controversial laws. Failure to do so would be grounds for the European Commission to levy fines or take Hungary to the European Court of Justice.

EU Commission President José Manuel Barroso said he had received a letter from Orbán in which "he has indicated to me his intention to modify the relevant legislation". Nevertheless, he added, "beyond the legal aspects, some concerns have been expressed regarding the quality of democracy in Hungary, its political culture, the relations between government and opposition and between the state and the civil society."

EU opens legal action against Hungary over new laws

The European Commission on 17 January opened legal proceedings against Hungary over reforms to its central bank, data protection and judiciary. The Hungarian cabinet was given a month to respond to EC concerns.

The government responded saying that it would try to "resolve the problematic questions as soon as possible", so as to avoid an escalation of the legal dispute. Prime Minister Viktor Orbán argued that all "convincing arguments" will be listened to, and laws will be changed if necessary.

Two formidable critics of the government of the Fidesz party now hold influential positions in Europe - Commissioner Olli Rehn and Martin Schulz, newly elected Speaker of the European Parliament.

There are fears that Hungary's new data protection authority will come under Fidesz influence and that a plan to make 274 judges retire early will undermine the judiciary's independence by enabling new pro-Fidesz appointees to replace them. A new media authority set up by Fidesz is also highly controversial.  The changes are part of a new constitution which took effect on 1 January.

Thousands of Hungarians demonstrated early in January over what they claim is Fidesz authoritarianism.

Klubrádió turns to court on lost licence

Independent radio station Klubrádió started legal action in mid January to challenge the loss of its frequency after a decision by the Media Council in December. The popular liberal talk station’s frequency was awarded to a new, unknown company, Autórádió Mûsorszolgáltató, for 12 years. Autórádió won the bid with a 75 million forint (£203,600) offer over bids of 55 million forints (£149,310) by other prospective stations. Autórádió has capital worth only 1 million forints.

Klubrádió owner András Arató told the daily newspaper Népszabadság on 17 January that Autórádió’s bid had not included a valid business plan.

After the Media Council’s decision on 20 December, spokeswoman Karola Kiricsi said Klubrádió had received maximum points for the proportion of music offered, public service, programming plans and experience, but that weaker scores on other criteria caused the bid to fail. She did not clarify what these other criteria were. According to the Media Council decision, Klubrádió is to close on 31 March.

The Media Council in nominally independent but has been staffed by nominees of the Fidesz party. It has drawn criticism from EU institutions. Ryan Heath, spokesman for EU Digital Agenda Commissioner Neelie Kroes, said the loss of Klubrádió’s frequency cannot be examined in isolation from the wider debate on the media in Hungary.

The Italian Journalists’ Federation also criticised the “silencing of such independent information channels as Klubrádió” and the “concentration of communication” in government control. On 18 January the Federation organised a sit-down strike outside the Hungarian embassy in Rome.

Bleak fate in prospect for national airline Malév

The national carrier Malév has been ordered by the European Commission to repay within four months some 88 billion forints (£239 million) in state subsidies received by the airline between 2007 and 2010.  Unless an investor or financially strong partner willing to put money into the loss-making, heavily indebted airline can be found, Malév’s fate looks bleak.

The airline is certainly not capable of repaying the amount from its own resources. The state is no longer able to bail out Malév because the financing of the airline from tax money has been banned once and for all by the European Commission.

The Hungarian government now has four months to find a solution. Sale of the airline is currently not on the agenda. Although the Chinese carrier Hainan Airlines earlier put in an offer, the negotiations were discontinued. The daily newspaper Népszabadság reported that the Hungarian side was primarily responsible for the negotiations breaking off because it considered Hainan’s offer to be far too low.  The airline’s head János Berényi told Népszabadság that the ruling of the EU Commission did not at present affect the daily operations of the airline. Financing was still in place for Malév flights.

The Ministry for Infrastructure Development promised that a decision will be made on Malév within a week. The EC procedure against Malév was initiated years ago by the budget carriers Wizz Air and Travel Service, on the grounds that the huge state subsidies given to Malév distorted competition. During the procedure, the government attempted consistently to prove that the financial aid was in line with EU law. Malév was renationalised in 2010.

The Malév Group employs around 2,600 people and works with about 500 Hungarian companies on a contractual basis. The airline contributes around 70 billion forints (£190 million) to state revenue annually. Malév accounts for roughly 40 per cent of flights at Liszt Ferenc International Airport. The airline carries just under three million passengers annually and offers connections to 45 cities worldwide.

Chained opposition MPs detained by police

On 23 December police broke up a demonstration by green liberal opposition MPs who chained themselves together outside parliament.

Twenty-seven activists were detained by Budapest police. Eleven MPs were among them, including former Socialist Prime Minister Ferenc Gyurcsány. The head of the Socialist Party, Attila Mesterházy, was also among those detained.

The opposition objects to key laws on elections, taxation and the central bank, which Parliament has been preparing to adopt. They say the laws will tighten the grip on power of the ruling Fidesz party.

Prime Minister Viktor Orbán's right-wing Fidesz has an unprecedented two-thirds majority in parliament. For the new laws it has used a fast-track procedure leaving little time for debate.

Activists from the LMP party (Politics Can Be Different) blocked the car park of parliament for two hours, in an attempt to prevent MPs entering, before police removed them. The protest delayed the start of the parliament session.

The European Commission, European Central Bank and credit rating agency Standard & Poor's (S&P) have voiced fears that Orbán's planned reforms of the Hungarian central bank could undermine its independence. S&P downgraded the country's debt to junk status on 22 December.

The government is seeking a new loan from the EU and International Monetary Fund (IMF), but negotiations have soured over the controversial new financial legislation.

Constitutional Court rules new laws violate basic rights

On 19 December Hungary’s Constitutional Court vetoed parts of the media and criminal codes that were internationally criticised for curbing press freedom and the independence of the judiciary. It was a confrontational response to a series of new laws rushed through Parliament by the easy two-thirds majority held by the government.

The court also annulled a new law regulating religious organisations on procedural grounds, the court in Budapest said in three separate rulings that day. The church law, which would have come into effect on 1 January, only included 14 Christian churches and Jewish congregations, forcing all others to seek recognition from MPs in parliament.

Since coming to power last year, Prime Minister Viktor Orbán’s MPs have set about curbing the powers of the Constitutional Court, ousting the Supreme Court’s chief justice, writing a new Constitution, replacing an independent Fiscal Council with one dominated by party allies and created a media regulator whose directors were exclusively picked by ruling party officials.

The media law “unconstitutionally limited freedom of the written press,” the Constitutional Court said in its ruling, citing more stringent regulation for newspapers versus other media. The court also scrapped a regulation that would force journalists to reveal their sources in most cases.

UN Special Rapporteur Frank La Rue said in April that in Hungary political influence and the threat of fines might result in self-censorship, adding that there was a “framework of control” over the media.

The regulation of the press is constitutional “in its aim and system,” the state Media Authority said in an e-mailed statement today in response to the court’s decision, adding that the court’s decision won’t “substantially” affect the authority’s work “in upholding the freedom of press and speech.” Karola Kiricsi, spokeswoman for the Media Authority, fiercely criticised international media for what she called "a political attack" on the authority.

The newspaper Nepszabadság reported on 16 December that the European Commission, had “serious concerns” about Hungary’s judicial overhaul. It cited a letter the previous week sent to Hungary’s government by EU Justice Commissioner Viviane Reding.

Despite crisis, Hungary wants to join eurozone

President Pál Schmitt confirmed in mid December that his country remained committed to adopting the euro. He took the view that the current financial crisis in Europe was not caused by the common currency, but by overspending by some eurozone nations.

“There’s an ancient Hungarian saying: ‘Do not stretch your blanket beyond what it can bear’ ”, he said on 15 December in an interview with The Washington Times. “In Hungary, we also need to take heed of this saying.”

President Schmitt cited a provision in Hungary’s new constitution that caps the country’s debt-to-GDP ratio at 50 percent.

He noted that before Hungary can adopt the euro, it has to meet certain criteria on debt, inflation and long-term interest rates required by the Maastricht Treaty that set up the currency in 1999. “It continues to be in our interest that we become members of the monetary union,” he said. “Not only our reserves, but our international contracts, our international trade, is conducted significantly in euros, so therefore it is in our interest to keep a strong euro.”

“We’re still far from being able to join,” he admitted, predicting that Hungary could not adopt the euro until “close to the end of the decade”.

The president’s comments come at a time of significant economic distress in Hungary, which is to seek assistance from the International Monetary Fund in talks starting early next year.

The previous week Moody’s had downgraded Hungary’s bond rating to junk status for the first time in 15 years, accelerating the recent plunge in value of the Hungarian currency, the forint. The Hungarian currency has lost 13 percent of its value against the euro since July, reaching a record low on 14 November.

The forint’s volatility was one of the key reasons for adopting the euro, the President said. “The stability of the currency obviously provides greater stability for every member of that union. I feel even now that belonging to the eurozone provides some sort of safety.”

Banks and Government to share foreign currency loan burden

The government and commercial banks in Hungary have agreed to share the burden on foreign currency mortgage loans, Economy Minister György Matolcsy said on 15 December.

Banks will assume two-thirds of the loan burden above 180 forint per Swiss franc, costing them 600 billion forint over five years (£1.67 billion), Matolcsy said. The government’s share would be one-third, amounting to 300 billion forint, he said.

Foreign currency mortgage loans overdue by more than 90 days will be converted to forints and one-fourth of the outstanding amount will be written off, Matolcsy said.

The agreement is a “milestone” and “open to everyone” and should boost the forint, Mihály Patai, President of the Bank Association said. The duration of the agreement would be five years.

Ambiguous attitudes to EU financial pact

Prime Minister Viktor Orbán started on a “battle” to regain Hungary’s “financial self-rule” when he spoke at the EU summit on 9 December. But a week later he appeared to have lost the battle, as negotiations for a new IMF deal got under way.  Initially it had appeared that Orbán was alone in siding with British Prime Minister David Cameron in rejecting outright any form of fiscal responsibility pact. But Orbán subsequently passed the buck to the Hungarian parliament.

The government’s “unorthodox” policies to slash the national debt without traditional austerity measures have run up against hard economic reality. The government returned to the International Monetary Fund negotiating table on 14 December in the hope of gaining a second bail-out. Any IMF deal would come with the usual strict IMF conditions, inevitably meaning further austerity measures. Hungary is the only 2004 EU member state with a western European level of government debt. No-one has been persuaded that the strength of its economy can sustain that level of debt. Hungarian bonds were marked down to “junk” status by one of the “big three” ratings agencies – Moody’s.

The situation became even more unrealistic when prime minister Orbán looked for a moment last week to be the only EU member state besides the UK to refuse point blank the new fiscal responsibility pact. In the end, Orbán joined the Czech Republic and Sweden in handing over the decision to the national parliament. There is however a key difference between Hungary and the other two - the Czech government survives in a minority situation; the Swedish government is another coalition. By contrast Orban’s conservative government in Hungary commands a two-thirds parliamentary majority.

The government’s approach to deficit reduction A stiff levy on banks and “crisis taxes” on the profitable telecoms providers, energy firms and supermarket chains. Hungary has dismissed the opinion of the European Commission that the law relating to telecommunications firms is illegal and must be scrapped. The de facto nationalisation of close to 3 trillion forints of assets in formerly compulsory private pension funds. Transferring your savings to the state was optional, but those who did not now stand to lose much of their entitlement to a state pension, although contributions will still be collected. A flat rate of income tax at 16% – criticised by the opposition for favouring the wealthy, effectively reversed in September with the introduction of a “temporary contribution” for higher wage earners. A “Work Start” scheme that puts the long-term unemployed to work on community projects at sub-minimum wage was piloted this year. Some 200,000 are expected to be drafted into the programme in 2012. Those who refuse to participate face the loss of all social security benefits.

Pride in history cannot be taken for granted

A Visegrad Fund survey co-ordinated by Slovakia’s Institute for Public Affairs and released in mid December has found Hungarians to be less proud of their history than might be expected. Contrasting with previous perceptions of Hungarians’ pride in their nation and ancestors, only 57% of respondents said they felt proud or very proud of their thousand-year history and 5% rather or very ashamed.

The survey had covered four central European neighbours. By contrast, over three-quarters of Poles in the survey declared pride in their past. However Hungarians could at least take consolation in the fact that their Slovak neighbours appeared to feel even less pride in their own history: admittedly Slovak history has a much shorter life span, but only 43% declared themselves to be proud of their national history and 7% reported being ashamed of it. Poles and Czechs proved much more optimistic, with over half seeing their history as progress.

Asked what personalities they were most proud of, Hungarians overwhelmingly went for historical figures, starting with the country’s first king St István, and then on to 19th-century revolutionaries including Lajos Kossuth and the poet Sándor Petőfi. Nearer to the present, only half of respondents agreed that it was good that communism had fallen. János Kádár, Hungary’s communist leader for 32 years until 1988 was perceived positively by 27% of young adults. In the Czech Republic, Slovakia and Poland analogous personalities were seen positively by only 4 to 12 %.

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Russia opens anti-missile radar in Kaliningrad

On 29 November Russia opened a new radar station in its west European exclave of Kaliningrad. The installation is capable of monitoring missile launches from the North Atlantic.  President Dmitry Medvedev was present at the inauguration ceremony.

A defence ministry official said the radar will go on combat duty from 1 December. Russia also plans to deploy Iskander tactical missiles in Kaliningrad in future.

Medvedev had last week said in his address to the nation that he had ordered the launch of the radar as part of Russia's response to United States plans for a European missile shield. Medvedev had said on 23 November that Russia would move "advanced offensive weapon systems" to its European borders in response to a planned US-backed NATO missile shield if talks on the project fail.

Two days after the presidential statement, the chief of the Russian Aerospace Defence Forces, Lt-Gen Oleg Ostapenko, said that a new radar station, capable of monitoring missile launches from the North Atlantic, as well as the future European missile defence system, is ready to be opened in the Kaliningrad Region. The radar station was ready to go into operation as part of the national missile early warning attack system.

Russia also plans to deploy Iskander tactical missiles in the Kaliningrad region in the near future.

The Russian government has been seeking written, legally binding guarantees that the missile shield will not be directed against it. The Americans, however, have refused to provide those guarantees to Moscow and said it will not alter its missile defence plans.

Schools for foster parents to be set up

Seven facilities, helping and teaching families who want to adopt a child, will be established in Kaliningrad, the regional government said on 15 November.

Under the government's new program for 2012-2016, designed to assist adoptions, adoptive parents would be able to receive support from psychologists, teachers, lawyers and social workers.

"The programme envisages establishing a complex system of selecting, tracking and preparing citizens willing to adopt children, and further assistance to such families," Kaliningrad's education minister Anastasia Khrebtova said.

The previous four-year program helped to decrease the total number of orphans in the region by 10.5% in 2007-2011. As of early 2011, the Kaliningrad region had 6,500 orphans, but more than 70% have been brought up in foster families, enabling a child to grow up in a family environment without being legally adopted.

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Kosovo police and protesters clash near Serbian border

Police in Kosovo fired tear gas and water cannon to disperse hundreds of demonstrators on 14 January. The demonstrators were trying to stop traffic cross the border from neighbouring Serbia. Albanian supporters of the Self-Determination Movement, an opposition parliamentary party in Kosovo, had travelled to Kosovo's border with Serbia intending to block the flow of Serb goods into Kosovo. It was a protest at what they said was Serbian obstruction of Kosovo's independence since its secession in 2008.

They tried to block two border crossings. In the town of Podujevo near the main Merdare border crossing, heavily-armed riot police fired tear gas and water cannon after some 500 demonstrators blocked the road and ignored calls to disperse.

The protesters responded by throwing rocks. Dozens were detained, and some protesters and police were injured, a Reuters witness said. The security operation was led by Kosovo police, without any apparent involvement of NATO peacekeepers or European Union police who also patrol the country of 1.7 million people.

Serbia lost control over Kosovo in 1999. But Serbia's opposition to its existence has slowed Kosovo's development as an independent state, obstructing its representation in regional and international bodies and the free movement of people and goods. Tensions resurfaced in mid-2011 over the status of a small slice of northern Kosovo abutting Serbia and populated mainly by Serbs who were able to continue in effect as part of Serbia.

A few days earlier Prime Minister Hashim Thaçi said that he would not allow members of the Self-Determination Movement to block Kosovo's borders. "Announcements by the movement's leaders about violent attempts to take control of Kosovo border posts were the worst possible for Kosovo at this time," Thaçi said. He added that members of Self-Determination "should understand that violent acts are not the means for getting into power".

Barricades in northern Kosovo partly removed

On morning of 27 October Serbs in Northern Kosovo removed part of the barricade on the Kosovska Mitrovica-Ribariće road in the village of Zupče. The barricade has been located on the road leading to the Brnjak administrative crossing.

Large logs were removed from one traffic lane, allowing two KFOR vehicles to pass through. An armoured KFOR vehicle and several soldiers had been located about 300 metres from the barricade that the Serbs were dismantling.

According to the plan adopted by the four northern Kosovo mayors and the Kosovska Mitrovica District head, barricades would the same day also be partially removed from the east bridge over the Ibar River in Kosovska Mitrovica and from the entrance to Leposavic.

According to the plan, the roads should be open for transportation of fuel and food for KFOR troops but not for EULEX members.

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Votes on state appointments to be open

The Saeima (parliament) approved on 19 January the third reading of amendments to the Saeima Rules of Procedure. They stipulated that several state officials would from now on be elected by open vote and not by secret ballot. The bill stipulates that members of the Saeima Presidium, the ombudsman, the auditor general, judges, the head of the Constitutional Protection Bureau, the prosecutor general, the head of the Corruption Prevention Bureau, the head of the Central Election Commission and a number of other officials must from now on be elected by open vote.

Amendments to the constitution were forwarded for further consideration by Saeima committees which would stipulate that the state president and Constitutional Court judges should also be elected by open vote.

Moves to recognise Russian as a state language

President Andris Berzins has submitted to Saeima (parliament) constitutional amendments on granting the status of a state language to Russian. At the same time, the President also sent a letter to Saeima Speaker Solvita Aboltina, in which he emphasised that “making Russian the second official language would mean abandoning Latvia as a nation state, which in turn would contradict the spirit of the Constitution and the ideas that served as a basis for the proclamation and restoration of Latvia’s independence”.

Berzins said that he had passed the matter to the Constitutional Rights Committee and requested its assessment of the issue. The President confirmed that he was ready to participate actively in uniting society. The Central Election Commission announced on 19 December that the necessary number of signatures for staging a referendum on granting the status of a state language to Russian has been collected.

Meanwhile MPs had passed a bill demanding a referendum on the subject, which if it prevented the recognition of Russian, a populist likelihood, would contradict the constitution, a matter for the Constitutional Court. The Constitutional Court promised to act as swiftly as possible to make sure that its verdict did not come only after the potentially anti-constitutional referendum. The Constitutional Court’s chairman Gunars Kutris said on 15 January in an interview broadcast on the TV3 channel that the court aimed to rule on the status of the state language referendum promptly and possibly suspend the referendum.

Census shows rise in ethnic Latvian population

The proportion of ethnic Latvians living in Latvia has increased by 4.3% since 2000 - from 57.7% to 62.1% of the total population, according to preliminary data from the 2011 population census, reported in mid January. The total number of ethnic Latvians living in Latvia at the moment is 1,370,703. The number of ethnic Russians living in Latvia has dropped from 29.6% in 2000 to 26.9% in 2011. The total number of ethnic Russians living in Latvia is 556,422.

The number of ethnic Belarussians living in Latvia has fallen from 4.1% of the total population in 2000 to 3.3% in 2011. There are currently 68,174 ethnic Belarussians living in Latvia. The number of ethnic Ukrainians has dropped from 2.7% in 2000 to 2.2% in 2011. The number of ethnic Poles has fallen from 2.5% in 2000 to 2.2% in 2011. The number of ethnic Lithuanians living in Latvia has fallen from 1.4% in 2000 to 1.2% in 2011.

Increasing internet access

In the first quarter of 2011, 64% of Latvian households had access to the Internet, compared withg 73% of all European households. The EU statistical office Eurostat reported in late December that Internet access had considerably increased both in the EU and in Latvia over the past five years. In the first quarter of 2006, the Internet was in 42% of Latvian and 49% of European households.

This year, the highest proportion of Internet access was registered in the Netherlands - 94%, followed by Luxembourg and Sweden - 91% each, and Denmark - 90%. The lowest internet access rate was recorded in Greece - 50%, Romania - 47% and Bulgaria - 45%. In 2010, compared with the neighbouring Baltic states, the Internet was available in 71% of Estonian and 62% of Lithuanian households.

Demand on welfare in Riga increased in 2011

The City Council’s Welfare Department reported in December that 47,444 citizens of the capital Riga were given the status of ‘needy resident’ in 2011 (based of 11-month statistics), which is 11% more than in the same period the previous year. The number of needy residents remained very high, and it had been growing by an average 6% every month from January 2010 to April 2011. Since April 2011, though, this number had been decreasing by an average 565 persons, or 2%, each month. If this trend persisted, the number of needy residents in Riga could return to the level of August 2010, when 30,488 people had the status of needy residents with the Riga Welfare Services. 54% of needy residents were of legal working age, and it is this group that had been decreasing the fastest. According to the State Employment Agency’s data, the number of unemployed residents registered with the agency’s Riga branch had dropped from 37,935 in February, to 30,139 in November 2011.

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Disappointing revenues from income tax and excise duty

Prime Minister Andrius Kubilius claimed on 18 January that poor revenues from income and excise taxes were due to smuggling, though it has decreased. The PM also said that attention should be paid to the fact that last year more money than expected was collected from VAT.

“We are going to analyse and solve the problems. One of the reasons for poor revenue from the excise tax is smuggling. However, we have achieved some significant results in restraining smuggling,” Kubilius said.

Finance Minister Ingrida Simonyte said that the national budget plan was a little underspent - by 220 million litas (€63.7 million euros). This meant that the deficit limit would not be exceeded, and “we will not borrow more than we have been planning to borrow. That is very important,” she said.

Simonyte explained that a lower amount of money had been collected from income tax, due to behavioural issues. She said that the plan for collecting the excise tax had been too ambitious, and that smuggling was not efficiently or effectively being prevented.

Last year, Lithuanian border guards intercepted 6% more smuggled cigarettes than they did in 2010. The State Border Guard Service (VSAT) statistics reveal that the flow of tobacco smuggling from Belarus had grown, whereas smuggling from Russia had declined. In 2011, officials intercepted about 2.2 million packets of contraband cigarettes, which is 6% more compared on a year-on-year basis. Tobacco products had been the most popular smuggling item, as last year 87.4% of smuggling attempts prevented by the VSAT were related to cigarette contraband. Most of the prevented attempts to smuggle were at the border with Belarus (328 attempts), followed by Russia (123 attempts, a rather large decrease from 2010) and inside the country (123 attempts).

Lithuanian Government website

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World Bank says Macedonia is the 3rd most improved economy in the world

The Republic of Macedonia is the third most improved economy in the world this year, according to the World Bank Doing Business Report 2012, following Morocco and Moldova. Macedonia in the report, published on 20 October, moved 12 places from the 34th to the 22nd place. It is a leader in the western Balkans and has performed much better than 19 EU countries.

Presenting the report for the government, Finance Minister Zoran Stavreski said "This year's report shows that Macedonia moves ahead by achieving success. Macedonia is the third most improved economy according to the world-renowned report assessing the business climate for 2012, in which an incredible jump of 72 places have been made compared to 2006."

He added that Macedonia marked continuous progress in relation to many indicators, noting that it came as a result of demanding reforms, measures and activities carried out the past five to six years. "The report will motivate us additionally to make efforts in identifying the areas where more headway can be made, where business conditions can be improved with additional reforms," Stavreski emphasised.

Lilia Burunciuc, country manager at the World Bank Office in Macedonia, said that the breakthrough contributed to improving businesses and creating new jobs. “It takes time for reforms to translate into changes in the economy, but we can already see some positive signs reflected in the recent pick up of economic activity and increase in foreign direct investment.”

Progress over the past 6 years had been made in creating a regulatory environment more favourable to business. Four areas of progress were highlighted by the report: dealing with construction permits, registering property, getting credit (credit information), and resolving insolvency.

National census stopped due to irregularities

Macedonia's parliament passed a law through an expedited procedure on 15 October to suspend the Census Law. The action came after the census was stopped on 11 October, following resignations of the State Census Commission four days before the scheduled end date for census. The members of the State Census Commission resigned collectively because of perceived attempts by ethnic Albanians to use practices contrary to the Census Law. " Had we not done so, we would have not obtained relevant data," SCC President Sobodanka Gievska said.

The decision echoed the decision of the former SCC President, Vesna Janevska, to resign a day before the census commenced – citing expected irregularities.

The significance of the problem lies in the Ohrid Framework Agreement, which defines collective rights and privileges for ethnic Albanians if they constitute over 20% of Macedonia's population. It has become widely believed that the previous 2002 census was based on falsified data.

"You just cannot have some census workers follow the law, while others follow the Albanian political parties' instructions," a Skopje census worker commented. Kanal 5 television editor Goran Momirovski explained "It should not have started in such conditions. It is better to end it like this rather than start a new conflict over say 0.5% Albanians above the constitutionally required 20%."

EU bid still bogged down in name dispute

For the third year in a row, the European Commission has recommended the launch of accession talks with Macedonia. The latest progress report, released on 12 October, again concluded the country is ready to start negotiations.

Whether that actually happens, however, depends on the European Council - which has been unable to reach a consensus due to Greece's objections. The Greek government refuses to accept its neighbour's constitutional name, claiming it infringes on Greece's heritage and implies a territorial claim.

At the same time, there has been irritation because the latest report pointedly leaves out the adjective "Macedonian". President Gjorge Ivanov promptly sent a letter of protest to EC President José Manuel Barroso over the omission. "With such gestures, the European Commission can only complicate the already complex nature of this imposed dispute," Ivanov said.

According to former Foreign Minister Slobodan Chashule, it is now clear that Macedonia continues to face an obstacle despite the success of its reform process.

Despite the controversy, some see the report as generally favourable. "Setting aside the omission of the adjective ‘Macedonian’, this year's progress report is fair," said Deputy Prime Minister for European Integration Teuta Arifi. Others, however, say the EC was overly critical. The part of the report addressing the economy, for example, gives positive marks to Macedonia's macroeconomic stability and monetary policy, but negative marks for the high unemployment and public spending.

Prime Minister Nikola Gruevski suggested that Brussels is not playing fair. "The new tactic ... to pressure Macedonia on the name issue by claiming we do not do enough reforms and to over-emphasise the weaknesses is wrong and will not bear fruit, but will give the opposite result." He insisted, however, that Macedonia remained committed to its strategic goals of EU and NATO membership, and to the reform process. "Even if the reforms do not bring the expected result regarding our NATO and EU entry, they are good for the country, for bettering the citizens' quality of life," Gruevski said.

Macedonia takes over chairmanship of Decade of Roma Inclusion

Macedonia assumed chairmanship in mid July of the Decade of Roma Inclusion 2005-2015, an international programme involving 12 European countries to improve Roma integration and welfare.

The Decade brings together governments, transnational organisations and NGOs to improve Roma participation in education, employment, housing and healthcare, but also commits governments to address other core issues like discrimination.

“Macedonia's chairmanship will focus on Roma education and housing in the upcoming 12 months”, National Implementation Co-ordinator Nedzet Mustafa said. He emphasised that since 2005 the Roma community had experienced positive progress throughout Europe. During its chairmanship, Macedonia will organise several international workshops and conferences on developing Roma employment initiatives.

The Roma are Europe's most numerous minority, 12 million strong, concentrated primarily in Romania, Bulgaria, Hungary, Spain and Turkey.

In Macedonia, the number of Roma is 53,000 or 2.6% of the total population, but only in this country have they been recognised as a distinct ethnicity in the preamble of the constitution. The Skopje neighbourhood of Shuto Orizari is Europe's first Roma municipality and the only one in the world where the Roma language is official.

World-renowned singer Esma Redzepova said that Macedonia's systematic support for Roma issues – including the Roma primer, dictionary and grammar – should be the basis for replication globally. "The first song I performed setting me on the path to be recognised eventually as 'queen of the Roma song', was through the airwaves of, and with the support of Radio Skopje," she said.

One of the problems facing Macedonia during its chairmanship concerns the number of Roma who seek asylum in the EU. To retain its visa-free status Macedonia must meet strict recommendations to address asylum-seekers. For this the government has undertaken a variety of employment and social support measures.

According to Belgium's Immigration and Asylum Ministry data issued last month, the number of asylum applicants has fallen to less than 500 this year, down from 4000 in 2010.

Roma - implementing the EU Framework

Macedonian Government website

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Protest rally against the current administration

Thousands of people gathered on 22 January in the National Square of Chişinău to rally against the current government. The rally called by Iurie Rosca, the leader of Popular Christian Democrat Party (PPCD) brought in people came from different districts of the country. He had called upon citizens to protest against the constitutional referendum to be organised at the end of April. Rosca announced that he planned on gathering more people and continuing protests until the end of April .

Chants of “Down with the Alliance (for European Integration)!” and “Alliance – leave!” reflected anger at the current government leadership. Protestors allegde that the level of corruption had increased, as well as the poverty level.

Vladimir Voronin, the leader of Communist Party and former president, stated that he would be willing to support the demonstrations. At the same time, AIE leaders said that it was a human right to protest, as long as the demonstrations were peaceful.

Doubts over freedom of press in Transdnestr after leadership change

Grigori Volovoi, a journalist at the independent TV station Dnestr TV, broadcasting from the secessionist capital Tiraspol, claimed to have been humiliated while trying to work on a story about the change of administration at the Tiraspol Ministry of Security.

Volovoi said that the struggle for an independent press focused on Vladimir Antyufeyev, the former Minister of Security in Transdnestr and a KGB officer during the Soviet times. Antyufeyev, a Russian citizen, came to Tiraspol to take part in the Transdnestran independence movement in September 1991 and played a key role in forming the internal affairs and security organisations of the seceded government.

Video of his attempt to report was uploaded to YouTube showing an officer of the Ministry forcing the cameraman to turn off his camera. He asked them for permits and then ordered them to follow him inside the security service building. Parts of the video were recorded on a mobile phone while the professional equipment was impounded.

Grigori Volovoi is the chief-editor at the independent newspaper for the Transdnestr region. Between 1990 and 1994 he was an MP in the Moldovan Parliament.

Higher wine exports to EU in 2011

The information and media service of the Economics Ministry reported on 23 January that exports of alcoholic drinks to the European Union had increased by 59,400 hectolitres in 2011 compared with the year before. 93% of the quota set by the EU had been reached. More than 65% of these exports went to Poland, the Czech Republic and Romania. In 2011, the EU increased the quota for Moldovan alcoholic production from 100,000 to 150,000 hectolitres.

There were alsoi exports of wheat, barley, maize, white sugar and wines to the EU. The export of maize went up by 5,000 tons against 2010, with the 30,000-ton quota being fully used. The main destinations of the maize export were Greece, Italy and Cyprus. The EU's quota for wheat was 40,000 tons of which 67.6% was used, with the export of wheat dropping by 7,340 tons against 2010. The same decreasing trend was recorded for barley, with the country exporting only 8,819 tons of the 35,000 tons allowed. The decrease in exports of wheat and barley to the EU appears to be the result of low prices for these goods on the European market. Most wheat and barley was exported to Italy.

Despite the decreases, the Economics Ministry announced higher quotas for exports to the EU in 2012. Thus, the quota for Moldovan wines will grow from 150,000 to 180,000 hectolitres, for barley from 35,000 to 45,000 tons, maize from 30,000 to 40,000 tons, wheat from 40,000 to 50,000 tons, and sugar from 26,000 to 34,000 tons.

Constitutional Court invalidates presidential election

On 12 January the Constitutional Court declared the 16 December presidential election and the parliament's decision to hold a repeat on 15 January as unconstitutional.

The court delivered the ruling at a request of non-affiliated MP Mihai Godea, who demanded the invalidation of the 16 December presidential election, on grounds that MPs had revealed their ballot papers, thus violating the secrecy of their vote.

In their pleadings before the court, representatives of the parliament and government said that the legal provision of the secrecy of vote is a right, not an obligation.

The presidential ballot scheduled for 15 January could therefore not take place.  The head of the commission for holding the presidential election, Tudor Deliu, said that the court decision meant that parliament should convene again in order to set the date of a repeat presidential election.

Moldova fails to choose a new president

Confidence-building measures between Moldova and Transdnestr backed by EU money

The Moldovan government has signed a grant agreement with the European Union meant to bolster confidence between the two banks of the Dnestr river, Moldova and the secessionist region of Transdnestr. The €13.1 million euros proposed in the agreement would be used for social, economic and environmental projects.

Prime Minister Vlad Filat and the head of the EU Delegation in Chisinau, Ambassador Dirk Schuebel, signed the document on 11 January. After the signing ceremony, Filat said that "the recent events in the security zone proved once again that the populated areas and people from this region need special care and attention, which will be paid to them through the implementation of projects of social and economic development".

For his part, Ambassador Dirk Schuebel said that "the confidence-building measures programme is aimed not only at promoting security, but also at helping to create the environment and means needed to promote co-operation between the two banks of the Dniester river".

Moldova fails to choose a new president

The Moldovan parliament has failed yet again to select a new president.

On 16 December parliament failed to select a new president, with interim President Marian Lupu, the only candidate, getting 58 votes, three short of the 61 votes required. The opposition Communist party boycotted the vote. There have been repeated failed attempts to elect a head of state.

The governing coalition the "Alliance for European Integration" has 59 seats. Just two more votes were needed but they would have to come from among the Communist party opposition. The party has refused to support a government candidate and instead called for new elections.

Moldova has had only an acting president since 2009. Two failed parliamentary elections were followed by failed presidential elections. Three coalition parties have in turn installed three acting presidents. A new ballot to choose a president will be held in January. If that vote fails, parliament would have to be dissolved for the third time in a row and new elections called.

Developments in Moldova, often referred to as "Europe's poorest country", are being closely watched in the European Union. "What the EU and Germany are asking from the coalition in Chişinău is this: 'See that you use this opportunity to agree on a good candidate,'" said Manfred Grund, a member of the German parliament from the centre-right Christian Democrats (CDU) and head of the German-Moldovan Forum.

Moldova's current pro-western government aspires to some day join the EU. If Lupu had been successfully elected this time, it could have been a step towards further European integration. The government in Chişinău does, however, have a persistent problem. Transdnestr, the seceded province on Moldova's eastern border, has rejected all bids to return to Moldova since splitting off in 1992.

Links:

Country information and history
The Parliament of Moldova
Independent Moldovan website and news service

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EBRD lowers growth prospects for Montenegro

On 19 October the European Bank for Reconstruction and Development (EBRD) downgraded the economic growth forecast for Montenegro from 2.1% to 2%.

EBRD expects that Montenegro’s gross domestic product will rise by 2.6% next year, as opposed to the 3% growth that had been expected earlier this month.

Investment opportunities offered to Italy and Britain

MIPA, the Montenegrin Investment Agency, reported on 11 October that Italian businesses were looking to invest mostly in wind energy and agriculture (machinery and other gear). Earlier in the year in May a delegation was sent by the Montenegrin government to Rome where they held a large forum presenting various investment opportunities to over 150 Italian businessmen. The forum was obviously a success because over half of them subsequently visited Montenegro.

Blagota Radulović, a manager in MIPA said that one company wanted to distribute agricultural gear in Montenegro, while another aimed to invest in wind energy by building wind turbines in Montenegro. Radulović also noted that representatives of UniCredit Bank, the largest bank in this part of Europe, had also visited and wanted to expand business in Montenegro as well, after previously investing in Croatia, Bosnia and Herzegovina and Serbia.

“We want them to invest and they want to invest. There’s a lot of potential and we hope for the best,” concluded Radulovic.

Meanwhile the Montenegrin minister of finances Milorad Katnić was in the United Kingdom on 10 October and held several meetings with UK officials. He talked with George Osborne and the government’s financial secretary Mark Hoben, concluding that, although the two countries were on different levels in almost all areas, they both shared the same principles. They also talked about the economic crisis and how to make the situation easier on the citizens.

Katnić also introduced investing opportunities in Montenegro and invited British investment. He said that energy, tourism and infrastructure had the highest priority.

Russian military ship visits Kotor Bay

The “Cezar Kunikov”, a large Russian military vessel docked in the Kotor Bay on 11 October. It is part of the Russian Black Sea fleet based at Sevastopol, and was the flagship of the Russian squadron which was involved in the Russian-Georgian naval skirmish in August 2008.

This visit was more peaceful. The “Cezar Kunikov” was there to mark the 300th anniversary of Russian – Montenegrin political relations. Apart from the Russian ship which was the main attraction, several other activities for the celebration included a concert of military bands and a performance for local people of Russian music.