LITHUANIA INCHING TOWARD FULL-BLOWN POLITICAL CRISIS.

Lithuania’s prime minister and internal affairs minister are clinging to their posts despite President Algirdas Brazauskas’ repeated demands for their resignation. Brazauskas yesterday extended until January 29 a deadline for Adolfas Slezevicius to hand in his resignation as prime minister, together with that of Internal Affairs Minister Romasis Vaitekunas. The president’s demand has been endorsed by 65 opposition deputies in the parliament (including six who defected from the ruling Democratic Labor party), six short of a majority. Meanwhile, the prosecutor general’s office has launched an investigation of Slezevicius and Vaitekunas on charges of abuse of power.

Slezevicius and Vaitekunas used privileged information to withdraw their money from LAIB bank just before it was ordered to close; both had been receiving double the going interest rate on their accounts. Vaitekunas then ordered the arrest of the two banks’ presidents (they have since been released). The officials have been able to openly defy the president and public opinion owing to the support of the leadership and parliamentary faction of the Democratic Labor party, led by Prime Minister Slezevicius. The latter admitted yesterday for the first time that the government has underestimated the damage to depositors and the economy from the collapse of the country’s largest commercial banks, LAIB and Litimpex. State funds as well as private capital are blocked and possibly lost as a result of their failure. The collapse of the two banks last month was preceded by the failure of the Aura and Vakaru banks. International Monetary Fund representatives and other western officials are being cited as favoring the continuation of Slezevicius in office in the interest of political stability; they are also reported to support governmental claims that the banks’ collapse does not amount to a crisis. (10)

Ukrainian-Russian Oil Transit Talks Stalled.