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Plus, Albania takes aim at suspected diploma mills and Uzbekistani bondholders get a nasty surprise.by Barbara Frye, Ioana Caloianu, and Jeremy Druker 7 August 2014
Countries in Central and Eastern Europe are likely to be hit hard by a Kremlin decree that restricts food imports from countries that have issued sanctions against Russia over its role in the Ukrainian conflict.
The order signed by Russian President Vladimir Putin on 6 August calls for a one-year ban but doesn’t name the countries to be targeted, according to the BBC. Given their recent stepped-up sanctions against Russia – including asset freezes, travel bans, and restrictions on goods and technologies – the United States and European Union members are likely to top the list.
The decree also does not outline specific products, instead charging government authorities with compiling a roster.
Countries in the region are already bracing for losses. Lithuania’s agriculture minister, Virginija Baltraitiene, said her country’s meat and milk industries would be the main victims of a Russian ban and the government would consider tax relief to compensate producers, the Baltic News Service reports. The national road carriers' association, Linava, predicted trucking losses at 8,000 euros ($10,700) per vehicle monthly.
At the end of July, Russia banned the import of most fruit and vegetables from Poland, ostensibly for health reasons, among them excessive levels of pesticides. Poland officials linked the ban to sanctions, but Russian authorities said the move was long in coming and unconnected to political developments.
Figures quoted by the BBC put fruit and vegetable sales to Russia from the EU at 2 billion euros a year and from the United States at 1 billion euros.
At least in Poland, people are having fun with the ban. A massive social media campaign included hundreds of Poles posting photos of themselves eating apples, RT reported at the time. Poland is the largest European producer of apples and claimed half of the Russian market prior to the ban.
Attempts to clear out the last remaining residents of the tent city set up last year on Kyiv’s Independence Square are meeting with fierce resistance, the Kyiv Post reports.
Estimates of the number of protesters still on the square – commonly called by its Ukrainian name, Maidan, or Euromaidan – range from the dozens to several hundred. That is a fraction of the thousands who camped out – and the tens of thousands who gathered for rallies – to protest the government of former President Viktor Yanukovych from late November until February.
This week, some protesters set fire to tires and threw cobblestones at city workers who had come to finish the job of cleaning up the area and at volunteers from the National Guard who reportedly accompanied them, according to the Kyiv Post.
“I don't know what these people stand for,” one worker told the newspaper. “The Maidan that started in autumn achieved its goals. Kyiv is a European city and now it’s all in a mess. But the bunch of homeless people who are left here, do not understand that.” The Post reports that residents of the capital have started to call on the government to clean up the area.
One protester still camped out said the holdouts were trying to persuade the government to establish the headquarters for the anti-terrorism operation in eastern Ukraine on the Maidan.
Another Maidan activist, Yehor Sobelev, told the Guardian this week that the protest movement might have to be reconstituted.
Sobelev, a journalist who now leads an effort to require “all Ukrainian public officials to undergo checks for past links to corruption and misgovernance,” said he is thus far unimpressed with President Petro Poroshenko, who took office almost three months ago.
“I see little evidence that he wants to change the corrupt system, just that he wants to lead it,” Sobelev told the Guardian. “I think there will be a new Maidan led by the people who come back from the front lines in the east, who have seen the effect that corruption and mismanagement has firsthand. And I’d be surprised if all our current political leaders make it through that Maidan with their lives intact.”
Albanian authorities are shutting down 18 private universities after an inspection found widespread awarding of dubious diplomas, according to Balkan Insight.
“We have issued 900 degrees for foreigners when there are no lectures in foreign languages,” Rama added.
One of the targeted institutions, Kristal University, was at the center of a scandal in 2012, when an investigation revealed that Renzo Bossi, the son of Italian politician Umberto Bossi, received a bachelor’s degree from the school allegedly without ever entering Albania or speaking Albanian. University officials denied that the younger Bossi’s diploma was phony.
Albania’s higher education system went through radical reforms in 2005, when university entrance exams were scrapped in favor of admitting anyone with a high school diploma. The change put a strain on the existing public universities and led to the mushrooming of private institutions. As many as 50 have opened in the country, according to Balkan Insight.
Lulzim Basha, leader of the opposition Democratic Party of Albania decried the crackdown as too drastic. “The decision comes without warning, lacks transparency, will be a shock to many students and will have a financial cost for many families,” he told Balkan Insight.
Uzbekistanis who bought bonds from their fledgling government in the early post-Soviet period are getting a bitter shock as they try to redeem them, Radio Free Europe reports.
The Finance Ministry has ordered citizens who bought bonds worth 24 billion soms in 1992, at the urging of President Islam Karimov, to redeem them by 30 November. At the time of the issue the government promised 12 percent interest, and it subsequently assured people the bonds were performing well, one economist told RFE.
What the government did not reveal was that it would make no allowances for currency devaluations. When the national currency succeeded the Soviet ruble in 1993, the exchange rate was 25 soms to $1. Today the rate stands at 2,320 soms to the dollar.
One elderly bondholder told RFE he would receive 1,173 soms for every 1,000 soms he invested. While that represents close to the promised 12 percent return, the man said his initial investment “could have bought him a car 20 years ago” but now would get him a half kilogram of beef.
Such transactions have sparked protests across Uzbekistan in front of branches of Khalq Bank.
“It’s pure fraud on the part of authorities,” a 36-year-old Tashkent resident who inherited a package of bonds from her parents told RFE. “In democratic countries people would sue the government for this.”
Bulgaria’s new regional development minister is warning that the country could lose EU funds but has not said how much money is at stake, Novinite reports.
Taking office on 6 August, Ekaterina Zaharieva said unlocking frozen EU funds for environmental and development programs will be among her top priorities. The government must find about 2 billion leva ($1.4 billion) to pay construction companies working on projects under those programs.
As a result of “systemic non-payment,” the Bulgarian Construction Chamber has advised companies working on such projects to stop work, according to Novinite.
Brussels suspended the environment funds in November amid repeated complaints by EU auditors of bookkeeping and contracting irregularities. Payments for development and tourism projects were halted in June, reportedly over procurement practices.
Some or all of Bulgaria’s EU funding has periodically come under a cloud since the country joined the bloc in 2007. Funds were frozen in 2008 over a lack of progress in the fight against organized crime and corruption. Members of a Brussels budget committee allied with Bulgaria’s then-opposition GERB party made a similar proposal in April.
Zaharieva said the work of the government and businesses has been “obstructed” over the past year and a half by drawn-out political protests and repeated changes of government. She is part of a caretaker government under Prime Minister Georgi Bliznashki, a law professor appointed this week after the Socialist-led government fell in late July. Bliznashki will lead Bulgaria until early parliamentary elections on 5 October.